1995 Legislative Session: 4th Session, 35th Parliament
HANSARD

The following electronic version is for informational purposes only.
The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

WEDNESDAY, JULY 12, 1995

Afternoon Sitting (Part 2)

Volume 21, Number 28

[ Page 16941 ]

The House resumed at 6:43 p.m.

[G. Brewin in the chair.]

Hon. E. Cull: I call committee on Bill 55.

MISCELLANEOUS STATUTES AMENDMENT ACT (No. 3), 1995
(continued)

The House in committee on Bill 55; G. Brewin in the chair.

On section 3 (continued).

L. Fox: I appreciate the opportunity to get in on the debate on this section. At the outset, let me suggest that in the best interests of the municipal taxpayers of British Columbia, I believe that the honourable thing for the minister and this government to do with respect to this section would be to withdraw this section, complete their negotiations, discussions and consultations with the municipalities, and then bring legislation in next spring. The effect of this legislation is to not take action with respect to the municipal portion of this until next year.

There are a number of principles contained within section 3 that I would like to see the minister address, not the least of which is.... I think this sends quite a message to other corporations that want to invest in British Columbia and may want to expand in British Columbia. If they have a large enough payroll, all they have to do is tell the Premier and this government that they're not prepared to expand their corporation unless some municipal tax relief is given by this government.

[6:45]

The other major concern I see with this bill is the exemptions that are going to be granted to one private corporation, CP Rail -- the other one being a federally constituted Crown corporation, CNR; but in a short time we could see that also being a private corporation. Yet at the same time we're seeing a new grant in lieu of taxes being offered to those communities along the BCR that previously didn't enjoy that privilege. Granted, this particular initiative will be less than what was expected by those communities along the BCR, but at least it's going to be something that they didn't have before.

When we look at the impacts of this section, we must understand that those railroads compete for business against the trucking corporations, which have been heavily taxed by this government. They are not going to achieve the same kind of consideration that the railroads are going to receive.

There are some other issues that municipalities would have wanted the government to address prior to coming down on them with a heavy hand and forcing a transition and a shift of taxes within those communities from the railroads. In my community of Vanderhoof, for instance, in talking to the mayor today, the shift of taxes from the railroad to the residential taxpayer is going to be $40,000, and that's quite considerable in a community of 4,300 people.

Getting back to the point, this government should have looked at its taxing policies on the railroads over the course of the last four years and what impacts they had, the first one being the corporation capital tax. I submit to the minister that the impact of that taxing policy alone on all three railroads within British Columbia is far greater than the relief that is going to be achieved under this initiative. When we look at the impact of the increase in the fuel tax that is going to have a far greater impact on the competitiveness of these railroads than this particular initiative and the hit that this initiative is asking the municipalities to assume.

Had this government dealt with what was within its mandate.... Indeed, the negative taxation policies which reduced the competitiveness, not only of railroads but also of business in general in British Columbia.... Had they addressed those issues first, and then gone to the municipalities and said, "Look, we need your support in achieving a climate which allows these utilities or these railroads to operate in a competitive environment," I'm quite sure that they would have been a willing partner in this discussion.

It seems to me that the approach here.... I think it's spelled out very well in a letter, dated June 29, to UBCM members from the president of the UBCM, Councillor Joanne Monaghan of Kitimat. I'd just like to read some of it into the record, because it spells out very clearly what the municipal sector feels and, indeed, what their approach to this legislation is:

"We asked the government in strong terms to not introduce such legislation that will interfere or limit railway assessments and/or local taxation powers. Since the provincial government had not consulted with local government about this proposed reduction in local revenues beforehand, we made it plain that introducing such legislation would greatly concern local governments throughout the province and could damage local-provincial relations. The substance of the UBCM's reaction as cited to the provincial government is as follows:

1. A poor approach to problem solving. Local government wasn't asked to be a part of the solution. Local government has been defined as "the problem" to be fixed. A foundation of cooperation was not explored.

2. Unfulfilled expectations. The 1995 provincial budget led us to believe there would be a consultation process to define problems and develop solutions, not just consultation on implementation.

3. Lead-up flawed. The committee set in place prior to the budget was not used properly and its mandate and purpose never clearly established.

4. Intrusion on local autonomy. Any moves especially undefined, to limit local taxing authorities will be seen as a major assault on local autonomy.

5. A short-term policy. The approach taken will require long-term government involvement in micromanaging municipal railway assessment and taxation. It may be an appealing approach in year one, but by year 15 will be a very poor way of assuring the desired results."

There are a further four reasons why the UBCM is concerned about this piece of legislation.

I think it's important when we address issues such as this that we don't react to symptoms and create a solution, that we go through a process of finding out what the problems are. The member for Peace River North mentioned earlier that there are a number of problems beyond the scope of this government in terms of federal initiatives, corporation initiatives and management. Local taxing authorities are a very large portion, admittedly, according to the numbers that the minister gave us earlier, but so are issues such as corporation capital tax, fuel tax and all of those other issues identified here today.

[ Page 16942 ]

I request, once again, that this government and this minister be responsible and show some leadership. Withdraw this section of the bill, complete the consultation with the municipalities, explore the limiting factors to the competition that these railroads face, and then bring a solution to this House that has the support and is in the best interests of all British Columbians.

R. Chisholm: I rise to say a few words on section 3. I think everybody has pretty well covered most of what needs to be said, but I'd like to bring a couple of points to the forefront.

I heard the Premier make his statement earlier. Other people were blaming the feds for what they did, and vice versa. As far as I'm concerned, the feds did whatever they did; that's immaterial to what the province does to municipalities. They are, after all, babies of this organization, and we should be consulting. We should ensure that we are consulting. After all, we are responsible for whatever they do, and we give them their powers. The federal government may not have discussed transfer payments with the provincial government, but that's immaterial. When it comes to the municipalities, we have obligations because we are responsible for them. These powers that we're talking about normally come under the umbrella of the municipalities. I dare say that we should think twice before we start tampering with them and why they were given in the first place.

We hear that there are other ways and other means, and I have to agree with the other speakers wholeheartedly. The corporation capital tax, fuel taxes and whatever other areas we can look at.... With a little bit of imagination, we could make up these things. All we'd have to do is start talking about the $10 million advertising budget and how far that would go towards this $20 million debt.

What I'm afraid might happen here is.... What is the next area that will be tackled in this manner? If this government really and truly believes in consultation, why don't they consult? Why aren't they out there? Why is this going before the UBCM 24 hours in advance? It's similar to the Election Act... the democracy of the people of this province.... Yet they haven't viewed it. It's the same principle. Why didn't the government send it out to the people of the province? Why didn't they send this out, and why didn't they discuss it with the UBCM? If they had, maybe we wouldn't be having these problems trying to get this bill through.

The final thing I'd like to say is: what area is next for this government? What area are they next going to end up destroying or end up with antagonism between government and some portion of society in this province? It's high time that they lived by their words and did consult. And it's high time that when they say they are going to consult, they do it, whether it be on the aboriginal question or with the UBCM, the one that we see now. If we had a lot less of these secrets around this province, maybe we wouldn't be having so many problems with various groups. With this particular bill, obviously it's going to be very antagonistic. If it does go through, obviously, by the amount of letters that I've seen from mayors of various communities, including my own.... They are very upset about the reduction in their tax base.

Take a look at a community like Chilliwack and start talking about reductions of $442,000 in the rail taxes. This is a community that has already lost CFB Chilliwack, a freezer food organization and bus lines, and it has already had a 24 percent reduction in forestry. I think it's high time this government went out to the communities and started talking. Even before you start talking about this, that community has already lost almost 2,000 jobs and almost $150 million. Yet here we go again; we have another reduction by this government.

This government was totally responsible for a lot of those things I was talking about -- some were federal, but the vast majority were provincial. It's high time this minister and this government talked to and negotiated with the people in question. Then maybe we can come up with some sort of solution that will be beneficial for all.

D. Mitchell: When I look at this amendment to the Assessment Act, I don't know how, as members of this committee, we can have strong opinions about it until we learn just a little bit more from the minister. I don't know if I can support it or not until I learn a little bit more about the specific amendment that's here. The Premier was actually quite persuasive earlier in committee today. I hear members talking about the need for more consultation. Where were they when I moved an amendment suggesting we needed more direct consultation? They weren't here.

[7:00]

Having said that, when we take a look at the actual section, it talks about adjustment factors. Until we know what those adjustment factors are, how can we decide, as opposition members in this assembly, whether or not we can vote in favour of this? Because those adjustment factors, I would imagine, would be fairly crucial to determining how municipalities are going to be affected by this change in the special rules for railway property.

Also, when we take a look at this section of the bill, we talk about excluding from the definition -- under the Assessment Act -- improvements for "bridges, trestles, viaducts, overpasses and similar things that carry track in place of a railway corporation." Until we know what the effect is of excluding those items from the definition of improvements, I don't know how, without having a fairly good briefing -- which I think we have the opportunity for in this committee -- anyone can decide firmly in their mind whether or not they can support this legislation.

So I would like to ask the minister if she could do just two things to help me decide whether or not I can support this, because the municipalities in the constituency I represent have certainly expressed concerns. Maybe the minister can tell us why we are excluding from the definition of improvements certain bridges, trestles, viaducts, overpasses, etc. What are the adjustment factors going to be for the property of a railway corporation? How are they going to be decided? What is the impact going to be in terms of municipal taxation? If we can get answers to those, then I would like to think that we, as members of this committee, could actually vote on this much more rationally.

Hon. E. Cull: I will just take a moment to put some more information before the members. We heard a lot of passionate speeches before dinner and in the last minute or two about the devastating impact that this is going to have on local governments. I want to point out to members that we're talking about less than half of 1 percent of municipal property taxes 

[ Page 16943 ]

here. We're talking about a very small amount of money. But we're also talking about a very significant industry that is under threat. I think members who represent communities that have railways understand that, and they understand that something has to be done.

There has been a railway liaison committee involving municipalities, the rail companies and government. It has been meeting for two years and talking about these issues and going nowhere on it. Consultation has to come to some conclusion. You can't keep consulting while the ship is sinking. Maybe the better metaphor is trains going off the tracks. You have to draw closure to it at some point, and someone has to make a decision.

In this case, we've made the decision based on the fact that there is a very strong and compelling case to be made for tax fairness. I said earlier that the average business tax rate is $13 per $1,000. Rail is being taxed at $45 per $1,000 on a weighted average, and up to $123 per $1,000 in some communities. There is a major issue of tax fairness there and with our competitors.

Some members have asked why we don't deal with the corporation capital tax instead. Let me tell you that if you convert it to dollars per thousand, the corporation capital tax impact on the rail companies is about $6 per $1,000. We're talking about a tax reduction here that would be equal to about $15 per $1,000. So even if you eliminated the corporation capital tax for railways, you would still not have fixed the problem. You would still have a tax inequity issue. You would create more problems in that respect.

It's important to put this into some context. There have been some members who have spoken about the significance of ensuring that we have a viable rail industry in this province. You know, what we're really talking about here, when you boil it all down, is making sure.... We're not talking about a tax break or tax concessions, as the member for Prince George-Omineca suggested; we're talking about a defensible taxation system that has the right values, the right distribution of values and the right tax rates. We'd say the same and do the same for any industry or class of taxpayers that came forward and said: "This is an anomaly. We are being treated unfairly relative to other users in similar circumstances." We're dealing with a tax fairness issue to begin with, and we are dealing with the need for the province to respond to a very serious threat to an industry that employs 5,000 or 6,000 people in British Columbia.

The member had some specifics that he was talking about -- adjustment factors. The adjustment factors that will be brought in.... It's simply a number. Unfortunately, the member.... No, he's still in the House; he's just not in his seat. The adjustment factors are simply a number that is applied once the conventional techniques have been used to determine the assessment value. If it generates an amount that is out of keeping -- the conventional costing techniques would be out of keeping; nobody would build a railway today with that kind of costing technique -- then we can come up with an adjustment factor that reduces that to something that everybody agrees is a more reasonable base to start developing taxation policy on. The adjustment factors are simply a number between zero and one-point-something that will be used to ensure that whatever the conventional system generates, we agree that we've got a fair system, and the municipalities will be involved in that.

The regulations don't exempt bridges and other structures; they provide for regulations to make adjustments. That's because in some cases bridges -- because they're the only property in their category -- are taxed at a rate that is almost indefensible. It is captive there, and unlike many businesses, it can't be moved.

G. Wilson: I'm going to come back to this question of adjusting factors and the prescribing of it. To be quite blunt, I think that the end goal is laudable. I think we can support what the government is attempting to accomplish. We understand the serious problem that will take place if product is diverted south and is carried through southern railways into southern port facilities, and we understand the need to do something about it. Within the Alliance Party, our biggest concern is where that difference of dollars is going to be picked up. How are we going to find those dollars, making sure that those dollars aren't going to simply be passed on to residential taxpayers in the municipalities, who are going to end up carrying the can? That's the big concern.

I think the Premier gave an excellent speech -- and a persuasive one -- and I congratulate him for that; he articulated his position very well. But I don't know that it gave a lot of comfort to people in municipalities by suggesting that not to go this route is going to create a greater hardship as a result of failure within the railway companies, a greater degree of unemployment and failures in the ports. While they don't want that, they also know that right now they're at their limit in terms of what they can afford to pay as individual property owners. So we're really caught in a bit of a catch-22. These adjustment factors, which the minister says is a number, are critical in order to know how we're going to make this work.

The last point I would say about that is that I really am perplexed. In the first section of our debate tonight we dealt with this notion of trying to get consultation with each municipality. I think the Premier underscored the need for that when he said that each municipality may be affected differently. He made it very clear that a differential rate is going to necessarily be applied because of the differences that will occur on the local level. That's the reason for the amendment by the member for West Vancouver-Garibaldi, which unfortunately didn't pass.

I find it hypocritical for those to argue now that they want greater consultation and that they condemn the government for not having consultation with the municipalities, as I heard from the Leader of the Opposition. The opposition Transportation critic rightly stood up and spoke in favour of it for all of the right reasons, and then had his vote changed when the Leader of the Opposition came in and voted against consultation with the municipalities, which I think the people in the province need to know.

D. Mitchell: He didn't vote.

G. Wilson: The Transportation critic didn't come into the House to vote.

We need to get beyond this notion now, and get down to the question of these adjustment figures. The people of the province are going to want to know that.... Hollow words are clearly demonstrated by one's vote in this Legislature, and when we look at the voting record, I think the people themselves can judge with respect to what was said and how the 

[ Page 16944 ]

vote was cast. I would appreciate it if the minister could talk about these adjustment figures, because they are really critical to those of us in the Alliance in determining whether we can, in the final analysis, support this section of the bill.

Hon. E. Cull: To try to answer the question as quickly as possible, the whole scheme is based on a couple of steps. First of all, the province is going to absorb a little more than 50 percent of the tax reduction. That will happen immediately. We have made our commitment. We're going to do that, and we are going to adjust that within our budget -- $8 million in a $20 billion budget. It's one of the things that will be managed into the budget as normal. In fact, I am confident that when we look at this over a period of time, our most pessimistic analysis shows that once we've netted everything else out it's likely to cost us about $3 million a year at the provincial level. If we get the kind of investment that we expect to get, we will end up actually having a net benefit to the province overall in revenues, because we will be able to keep those operations here. We'll have those people employed here, and that's good for our economy all around.

With respect to the municipalities, what we have said to them is that we understand, particularly for some municipalities, where the rail tax portion of their tax base is more significant than in others.... You can look at all the municipalities that have rail in them, and the rail tax varies from a tiny fraction of their tax base to a more significant number. We understand that, and that's what we want to work with them on, to discuss some form of transition over a period of four years, so that this $7 million or $8 million doesn't hit all at once at the municipal level. The province is willing to work with the municipalities to provide some way of ensuring that there will be a reasonable transition. That's all part of what has to be discussed with the municipalities, and it's currently underway.

The adjustment factors are related to the way that we do the assessment. If we look at the market value of the railways today, no one would actually build a railway if they had to pay that amount to do it. The way the conventional assessment of the system works overvalues rail property generally. It also has some interesting perversities with regard to urban and rural property, which don't make sense, either, when you start to have a close look at them.

What we want to do is go through a system by taking the conventional way of doing the assessment, and then, using a common, practical business analysis, come up with what should be a reasonable assessment for railways -- if you were able to make that informed person's reasonable judgment on what the assessment should be -- and then develop a formula that will reduce what the conventional system gives you to what you probably should be at. That's what the adjustment factor is.

I probably oversimplified it by saying that it is simply a number between zero and one -- a fraction, a point-something. It may be a little bit more complex than that. But to try to understand it, that's essentially what it is. You use the existing system, and you get a number that's up here. It's not reasonable; no one would build at those costs. So what is reasonable? And what is the formula to get you to that reasonable level? That's what's going to be done with the adjustment factors.

G. Wilson: One more quick question before I yield to others.

That adjustment factor, then, is the proportional difference between what may be seen as a real assessment and what may be an assessment decided on the basis of a review, which is going to be undertaken and negotiated -- effectively. It's a negotiated position. What is going to be the role of the individual municipalities in the final determination of that figure? How are the individual municipalities going to be affected in determining that final figure?

[7:15]

Hon. E. Cull: As I said earlier in the debate, the objective is to get to the end of this process and have everybody agree that that's the right way to do things. In an ideal world, municipalities would work with the province and reach agreement on what the factor should be and how best to apply it. If we are not able to reach total consensus with all the municipalities that are affected, that will only come about at the end of fairly intense consultation, where they get to examine the methodology that's been used, discuss with us the formula, discuss the consequences, discuss mitigation impacts on their own municipality and make sure that we understand exactly how it will affect their individual municipality and that we have examined every opportunity to lessen that to whatever extent is possible.

D. Symons: I must say at the outset, just before I get into the bill, that I'm very flattered to hear that the member for Powell River-Sunshine Coast pays such close attention to what I say in this House and obviously pays very close attention to how I vote.

When I was speaking before on this bill, I mentioned some concerns I had about subsections (1) and (3) and their interrelationship, because we find that section 27.1(3) says that the Lieutenant-Governor-in-Council may only make a regulation under this section after the minister has consulted with the UBCM, yet section 27.1(1) talks about things that are going to be excluded by the Lieutenant-Governor-in-Council. I'm wondering if the exclusion of bridges, trestles, viaducts, etc., will be on the table when you are meeting with UBCM members to discuss ways you can ameliorate the cost impacts this is going to have on the municipalities and their tax base. Are these items, then, because they really don't come into effect until after you have had those discussions, on the table, or are these excluded from discussions that you will be having?

Hon. E. Cull: We were discussing the last question. Maybe the member could just repeat his question for me.

D. Symons: What I was saying is that in section 27.1(3), you talk about how the consultation must take place first before anything can happen here, so regulation may only happen after consultation with the members of the UBCM. But we go back to section 27.1(1), and there are some exclusions there. Theoretically, with section 27.1(3) following, these exclusions don't take place until after you've had the consultation, so you're excluding from the definition of "improvements" -- and obviously improvements are things that are adding to the tax base -- bridges, trestles, viaducts, etc. The question I asked was: are these items in section 27.1(1)(a) that are being excluded on the table for the discussions when you come to discussing under section 27.1(3)?

Hon. E. Cull: The member has to read section 27.1(3) correctly. It says that you can only make a regulation under 

[ Page 16945 ]

the section.... The section is section 27.1, which includes section 27.1(1) that he's referring to. So yes, no regulations can be made under this section 27.1 until the consultation has been done.

D. Symons: I thank the minister for that answer, and indeed I read that into the question. But I don't think she answered my question, because section 27.1(1) talks about exclusions. I'm wondering: when you sit down to meet with the UBCM for this consultation that must take place under section 27.1(3), will these items mentioned as exclusions in section 27.1(1)(a) be on the table? Will you negotiate these if somebody says: "Well, in our community, we think that maybe we should leave the bridge in and not have it excluded from the definition"? If you exclude it from the definition, you're removing it, in effect, from the tax base. So basically you're saying that we have a starting point that we're going to discuss, but it seems the starting point has already made some changes.

Hon. E. Cull: Section 27.1(1) only allows regulations to do exclusions. It doesn't require, mandate or make exclusions. Section 27.1(3) says that regulations, including those regarding exclusions, can only be made after consultation. So consultation will involve all the aspects in this section, including exclusions.

L. Fox: I have a few questions to ask the minister with respect to the sections here. Before I do, though, I would like to ask the minister.... Earlier she gave us a figure saying that the corporation capital tax impact on the railroad was approximately $6 per $1,000. Not having the total assessment before me, I'm not sure what the aggregate amount of that would be. Can the minister tell me, in terms of that impact, what the total amount of dollars collected under the corporation capital tax are on the three railroads -- or individually if she has that breakdown?

Hon. E. Cull: The total assessed value, I am told, is about $1 billion. The calculation was done simply on the rate of 0.3 percent, or $3 per $1,000, for the corporation capital tax, and then we made some adjustments based on not all of the capital being subject to property tax.

L. Fox: So if I understand that correctly, then, the total collected from the three railroads is about $6 million. Is that what the minister is telling me?

Hon. E. Cull: It's very likely in that order of magnitude. I don't have the precise number with me. I've done it on the basis of calculation, but that's probably within the ballpark.

L. Fox: If I use the Premier's numbers, because they differ from the minister's numbers, the Premier suggested in his discussion earlier tonight that the province's share of the $20 million is going to be approximately $12 million to $14 million, and that the impact on the municipalities would be about $8 million. The minister would agree, then, that the impact on the municipalities could have been lessened substantially had the corporation capital tax and the provincial share of the taxes that were being collected been what was placed on the table by the government. If we look at the $12 million plus the $6 million in corporation capital tax, then we would have approximately an $18 million reduction to those railroads. Is that not correct?

Hon. E. Cull: It would be nice if all the tax consequences could be borne by the province, and we could get any of the benefits from additional property tax for new investments in the communities. I mean, there's a sharing going on here. The municipalities get some of the revenue, and the province gets some of the revenue through the property tax base, through taxes for school purposes and rural taxes. We're saying that this is a serious issue that affects the province and the municipalities, and we're willing to do our share. We are in fact willing to help the municipalities do their share. What you're suggesting is that we eat the entire amount, keep the municipalities whole and assist them to benefit from the additional property tax in the community -- and we're saying this is a matter that has to be shared by the two levels of government. We have invited the municipalities to discuss that with us.

L. Fox: Given my earlier question, would the minister not agree that the effect of the corporation capital tax, the levy of $6 million by the province on the railroads, has created this initiative, which is going to end up being downloaded onto residential taxpayers within their respective communities? That's the issue. We have on the one hand an initiative to tax a corporation, which has helped remove the competitiveness of that corporation against those who are down across the border. I remember the debate on that initiative, and this was one of the principles that members in all opposition parties suggested. They suggested that we are going to drive ourselves out of competition through initiatives such as the corporation capital tax. In actual fact, that has helped decrease the competitiveness of the railroads that are trying to carry on business within British Columbia. It has therefore led to this initiative, in which this government is asking the municipal residential taxpayers -- because that's who is going to have to pick up the reduction that's coming out of this particular clause to the railroads -- to pick up the impact of their corporation capital tax initiative. That is what's happening.

Hon. E. Cull: We're asking the municipal taxpayers and the municipalities to have fair taxes for the businesses in their communities. We have already gone over this. Two-thirds of the taxes paid by the railways are property taxes, not corporation capital taxes, corporate income taxes or any of the other taxes they might pay. They are property taxes. On average, the railways are paying three times the business tax rate. In some communities, it's up to ten times, on average. If there wasn't a tax fairness issue here, we wouldn't be addressing this. We would be dealing with this in a totally different way. There is a tax fairness issue here that must be addressed.

L. Fox: I think the minister will agree, given her background in planning, that railroads are, in many cases, holding properties that they could otherwise dispose of -- in many cases, a limiting factor to a community's expanding its industrial and commercial core. But they are holding these properties and therefore increasing their tax load by doing so.

I suggest to the minister that there are options available to CNR and CPR specifically to remove themselves of some of that burden by making those properties available in many communities along their lines for other individuals to purchase and develop. I don't think it's fair that they should continue to hold these large parcels of land -- not develop them, not be part of an overall community development process -- and at the same time look for tax reductions and, indeed, ask this government to pass that burden and the carrying of all that property on to the residential taxpayer.

[ Page 16946 ]

C. Serwa: Well, this is an interesting debate and discussion, primarily designed to save union jobs with the railways. That is the basis of the whole discussion.

But I'm going to ask a few questions, and perhaps the minister could respond. For my information, I'd like the following question answered: what percentage of a railway's operating costs are involved with property taxes?

Hon. E. Cull: I'm sorry, I can't answer that question.

C. Serwa: That's the start of the problem here. Here the minister and the government are making a decision for tax fairness. They have no knowledge, by being unable to answer that question, of how significant this major adjustment is going to be and how much or how little it will benefit the railways. That's an important question that the minister should have asked, right off the top. Is it significant or is it not significant? Is it as much as the corporate capital tax? Is it a little more? Is it 5 percent of their gross operating costs? Somebody somewhere has to have that figure, before they jump to the conclusion that we've got to fix it and we've got to fix it in this way. That's a question for which the answer should be known. I expect, before this debate is concluded, that perhaps the minister will commit to get that information to me, because it is important.

The minister has said the railways are paying $12,000 per kilometre in taxes. I presume that's on main lines; I don't know whether it's a statutory rate that applies to branch lines as well as main lines or not. But that's an interesting figure. If that figure is accurate -- that they pay taxes of $12,000 per kilometre -- I would like to know how much of that $12,000 would go to a regional district and how much would go to a municipality in the province, so that I have some basis of knowing or understanding how great an effect this is going to have in municipalities. Obviously, not a great linear amount of trackage goes through municipalities. That's vital information to know. Are we talking about a great impact on municipalities or a relatively minor impact?

[7:30]

How much of the $12,000 goes directly to the provincial government? That's another question I'd like answered, because unless we know this, we're standing here and debating this issue without any basis for really knowing or understanding the impact.

The concern I have here is that there are some choices to be made. I'm a free-enterpriser and part of a very competitive world. One of the things we did in British Columbia a long time ago was that somebody made a conscious decision that we would pay more to our employees in the woodworking industry than anywhere else. We have done so. That meant mitigating revenue to the province.

If there are other solutions in tax fairness, for example, then we're going to have to have some answers here. Is it going to be significant? What will it do to the communities and to the regional districts? What will it do to the trucking industry? That has to be a valid concern, because there are thousands of people in the province employed in that particular industry as well, and they will be impacted. If we could get the answers to some of those questions, it would certainly facilitate my understanding of the need for this section. I'm simply not going to buy that it is warranted because in some other jurisdiction the taxes are lower or taxes are higher.

The B.C. Assessment Authority is primarily responsible for ensuring that the tax load is equally distributed. If there is something out of line with provincial taxation and arriving at a $12,000-per-kilometre annual tax on the railways, then we obviously have to look at that. Some of the other members have quite accurately pointed out that we're not reducing the costs of goods and services from the province, the regional district or the municipalities. If the railways are going to have the opportunity of having their taxes reduced, then the burden is going to fall on other taxpayers and probably on residential taxpayers in the province. You can't make something out of nothing, and those are all valid concerns. Perhaps the minister can respond.

Hon. E. Cull: First, on the question of burden, I'll remind the member we're talking about less than half of 1 percent of the property tax revenue. The burden he's talking about is inflated in the way he's speaking of it.

I don't have aggregated amounts for corporation capital tax, but it's equivalent to about $6 per $1,000 versus $20 per $1,000 for property taxes. If you want to get an idea of the order of magnitude, it would obviously depend on the tax situation of the various railways, but the property tax is about three times the impact of the corporation capital tax. The $12,000 per mile of property tax breaks down roughly -- and these are rough figures -- so that about $6,000 or half of it goes to the province, about $4,500 goes to municipalities and about $1,500 goes to "Other," which includes regional districts.

The trucking industry doesn't pay taxes on the roads it has to operate on. In trying to make those comparisons, you have to think a little bit about the differences between the two industries. The rail industry can't pick up and move to a more competitive jurisdiction, but the business that runs on rail versus something else can move. We have to think about the real impact on the community. It isn't this half of 1 percent of the property tax; as some of the other members in the House have said far more eloquently than I, it is what will happen if the goods and services start to be trucked down through the United States and out through the U.S. ports. We will all be big-time losers. We will lose in the communities that have the rail and the ports in them, and we will lose overall as a province because it will reduce our economy.

C. Serwa: I have just one more question. You have given us a breakdown, and I presume that the situation in the breakdown is not truly representative. You are talking about $6,000 going to the province from all the trackage throughout the province. From all that trackage, $4,000 goes to municipalities? I can't buy that, because only a very small percentage of trackage goes through any organized municipality compared to the large number of miles or kilometres of trackage to other areas of the province. What percentage of the total tax paid by the railway in property tax would actually accrue to municipalities? Never mind the regional districts. What percentage would accrue to municipalities?

Hon. E. Cull: The member may be correct that the trackage of rail in incorporated municipalities is not that great, but the value that is being assessed in the switching yards -- in North Vancouver, for example, or in Golden or Port Coquitlam -- is where the real value and the real tax are. So $4,500 out of the $12,000 per mile is probably pretty close in terms of an estimate.

[ Page 16947 ]

D. Mitchell: I'm not sure if members of the committee are aware of this, or people who are observing this debate, but this is a very significant and historic debate we're having in this committee this evening. Who could imagine a social democratic government in British Columbia in 1995 arguing in favour of making railways in British Columbia more competitive in a deregulated environment, where the need to compete with competitors on both sides of the Canadian-American border is crucial? Who could have ever imagined it, given the populist nature of politics in western Canada and the antipathy, historically, toward railways as large business enterprises?

And who could ever imagine that, in the same debate, the advocates of free enterprise are hammering the railways and wanting to continue an uncompetitive tax burden on the railways? Who could ever have imagined the irony of this important historic debate and how the tables have turned? My, how the tables have turned! You know, there is a question of big corporatism in some respects. But I think there has been.... Tables have been turned. There has been a reversal of historical positions that have taken place throughout Canadian history. Any students of Canadian history should read this debate in years to come, because it tells you how things have changed. Some members might have different points of view on this, but just sitting and listening to the debate, it's really clear that the tables have turned.

We need to determine.... I'd like to go back just to get a slight refinement on a question. I have two brief questions for the minister. The first question is going back to a point made by the member for Powell River-Sunshine Coast about the adjustment factors. The minister said there was a formula that would be determined. Who determines that formula -- just to get a bit more clarity on this? And will the formula take into account the regional variations in British Columbia, which the Premier referred to and the minister has confirmed exist in British Columbia, in terms of different communities in different parts of the province having a different tax burden because of railway taxation? Who would determine the formula, and can the minister commit that it will take into account regional variations in terms of assessments in British Columbia?

Hon. E. Cull: I always enjoy the historical interjections of this member. I know that, being a student of political history, he's often able to make observations that may not be apparent to those of us actually engaged in the debate.

But it did occur to me as I was listening to him that there is a significant difference in what's happening here. Parties like the Liberals, the government before us and some of the ones at the federal level have always been in favour of cutting corporate taxes. But they've never actually asked for anything in return. In this case, we're asking for investment in return and are going to be getting benefits to people of the province as a result of this decision.

The government ultimately will make the decision. It is the Lieutenant-Governor-in-Council that has the ability to set the rates. It's similar to the way we do school taxes right now; school taxes are set through a cabinet order. But they will be determined in consultation with the municipalities.

And yes, there will be the ability, as there is with the school taxes, to have that kind of flexibility to recognize regional or local variations, as the Premier indicated.

D. Mitchell: One further question, then. It might be argued that, broadly speaking, there will be two kinds of municipalities in British Columbia affected by this legislation. There will be those that currently receive some property taxation paid to them by railways -- Canadian National or Canadian Pacific. And there will be those other communities along the B.C. Rail line that have never historically received a cent from the B.C. Railway, because B.C. Rail has been exempt. We're going to deal with that in the next section of this bill. Can the minister tell us whether there will be any difference in how those two different kinds of municipalities are going to be treated under these special rules for railway property?

I ask the question because communities in the constituency that I try to represent are on the B.C. Rail line. They're going to be paid for the first time, according to this bill, property taxation or a grant that, hopefully, somehow approximates the real rate of property taxation. But will they be treated the same way? Will there be equity? Or is there going to be some kind of an anomaly here? It's important for those communities along the B.C. Rail line to know that.

We can deal with that in more detail when we get to the next section of this bill. But philosophically or in principle, are there going to be two categories? Or are all communities in British Columbia going to be treated in the same way with the adjustment factors, without prejudicing the regional variations the minister has referred to?

Hon. E. Cull: Without prejudicing the debate we're going to have when we get to the next section of the bill, there is no reason why B.C. Rail and the other rail companies couldn't be assessed on the same basis using a formula and moving to the types of rates we're going to be using. There is a difference, though, in that CN and CP pay taxes whereas B.C. Rail pays grants in lieu of taxes. What we're trying to do with the B.C. Rail situation brings in a whole other set of problems -- that is, consistency with respect to what Crown corporations do. I'm biting my tongue, because there's a lot more that could be said about that, but that's really the next section of the act and so I suggest we come back to that at that point.

R. Neufeld: I only have a couple of brief questions about property owned by the railroads. My colleague for Prince George-Omineca touched on them briefly, and some other members also. Knowing the amount of property that B.C. Rail owns in the two communities I represent, Fort St. John and Fort Nelson, I would assume it's substantial. It's used for nothing, but it's a substantial amount of land that's left there for future purposes, I guess, at some future time. I sometimes wonder whether it's a wise move to keep all that land, because there are lots of people who would like to purchase it. I'm thinking of the case of CN and CP and their large land holdings. CN and CP are looking for the tax break to stay competitive and to keep jobs and investment in British Columbia, and we fully agree with that. But is there a way that they can divest themselves of some of their excess land? Possibly, some of that land may go back to some of the municipalities, because the taxpayers are going to have to pick up $8 million of this tax break.

Hon. E. Cull: We've talked about this a bit, or at least some of the members have raised this issue about properties that various railways own that are not being used for rail purposes at this time. They're not a yard; they're not a rail line; they're properties that could be developed. With respect to CN and CP, it's my understanding that most of those proper-

[ Page 16948 ]

ties are owned by a subsidiary. They are class 6, and they pay property taxes at the business class rate. So they're not affected by this. B.C. Rail is a different situation, because then we're into the vacant Crown land taxation issue. But again, that's the issue that is part of the next section to be debated in this bill, and that can be canvassed then.

[7:45]

R. Neufeld: I gather what the minister is saying is that what we're really looking at is the right-of-way for the track, and the yards specifically. All the other excess land these two rail corporations own are paying tax another way. Okay, that answers that question.

The minister said there's a great variation, from $45 per $1,000 to as high as $123 per $1,000. Just so I get a little handle on that, I'm not quite sure how some municipalities got as high as $123 per $1,000. I always thought there was something in the tax system that wouldn't allow this to go that far. Maybe the minister can explain that to me.

The second part of the question is: with the $20 million reduction in taxes for CN and CP, what does it reduce those rates to? If that's the level these companies need to operate at, how do we know that those rates will stay at that level and not escalate in another ten years to the same place they are today?

Hon. E. Cull: The reason that some of the tax rates.... They average $45 per $1,000 for this class and may go up to $123 in the most extreme example. There are no other participants in this class in many municipalities -- in other words, the railway is the only one in the class. When we're looking at, say, the business class, class 6, there are many properties and many different owners and a wide variety of people, all of whom will bring whatever political pressure to bear that they want to bring on their local council should the rate get excessive from their particular business perspective. The railways have sometimes not been in the same situation. As I said, it's difficult to pick up your railway and move it to the next competing municipality, which you could do, I suppose, if you were operating a business and felt that your taxes were too high. You could relocate, in some cases.

Interjection.

Hon. E. Cull: The member is pointing out that there are other industries that are in the same situation. Fortunately for them, they are not in the same property tax class.

Again, we haven't concluded work with the Union of B.C. Municipalities. The impact would bring it down from $45 per $1,000, but it certainly wouldn't bring it all the way down to the $13 per $1,000, which is the average for the business category. How much lower will it be? I'm not sure. It might be in the order of maybe $15 million.

At this point, there are some loose ends that have to be determined. They have to do with all the factors that we've been talking about tonight: adjustment factors, exemptions, what municipalities will do, transition over a period of time and the like. There is not a target at this point. It's part of what we are going to be discussing with the various affected municipalities, taking into consideration the various regional situations that have to be accounted for in the formulas.

R. Neufeld: It worries me that the government hasn't figured out some of those numbers. We're talking about a $20 million figure. We should be able to say on average that this is going to reduce the $45 to $20 and the $123 to $100, or something of that magnitude. That concerns me.

Secondly, how does the government envision that it's not going to go back up again? I understand what the minister said: the railways are only one part of a class in a lot of cities or towns. How are we assured that in one year or two years or three years it's not going to be $123 again, and we'll be looking at the same issue all over again?

Hon. E. Cull: If we just look at the $15 million, that is about $15 per $1,000. That would take you from $45 to $30, which is why I suggested the figure of $30. But because that figure is not calculated to the last cent, it could be a little more or a little less. That gives you a ballpark figure of about where it might be. There are some issues that have to be discussed with the municipalities that will potentially affect that figure.

The member asked a very good question: how do you know that this won't just creep back up or that there won't be another...? That's what this legislation is all about. There has been an attempt over two years, through the railway liaison committee, to find some other kind of solution to it; it has gone nowhere. This legislation is a way of saying that we are going to deal with this. We will lower our tax rate immediately, and we will spend the next number of months talking to municipalities about how they can do the same, so that we bring the taxes more into line with fair tax policy, our competitors' tax policy and the needs of keeping the rail industry alive.

D. Symons: Just going back a few minutes, the member for Prince George-Omineca asked a question relating the corporate capital tax to the taxes that could be affected on the railways through this legislation. I think the message he was trying to get out, or the idea he was exploring, was that maybe the corporate capital tax could have been an alternative to what you're putting before the House today. Your answer was to the effect that, well, the corporate capital tax is only a small portion.... I think the figure would have been about one-third of the effect of the property tax on the railways. But you're not talking about removing the property tax on railways; you're talking about adjusting it downward. So the figures you were giving when you were trying to say that, well, there's one-third...the two-thirds is quite different.... The figures are not all that different, considering you're only bringing that level down somewhat. So the corporate capital tax could still be closer to the savings that may occur because of this.

Interjection.

D. Symons: The minister is shaking her head no. I can hear her all the way over here, so maybe she'd explain why not.

Hon. E. Cull: The weighted average for the property tax is $45 per $1,000. The corporation capital tax for railways would be about $6 per $1,000. The reduction, if it did come down to $30, would be a reduction of $15. So if you try to take the corporation capital tax out, you're not quite all the way there.

However, I don't even know why these members are bringing this point up. I understand the policy of their party is 

[ Page 16949 ]

to eliminate the entire $300 million of the corporation capital tax -- except for, I assume, that which applies to banks -- and that would create a far larger problem for the province than simply dealing with a $7 million problem.

The Chair: On the speakers' list, I had the.... That's fine. I will recognize the hon. member for Surrey-Cloverdale. I beg your pardon, Surrey-White Rock.

W. Hurd: I have a brief question that could actually be asked on behalf of the hon. member for Surrey-Cloverdale. I will try to keep it down to half an hour.

I want to read into the record a letter of concern from the mayor and council of the city of White Rock and also the city of Surrey with respect to the impact this legislation would have on the Burlington Northern railroad and the Southern Railway, which run through the cities of Surrey and White Rock. I wonder if the minister could just clarify whether those two private rail companies will be captured or affected in any way by this particular section of the bill.

Hon. E. Cull: I'm not clear. Is the member going to read the letter into the record? I guess I missed the question.

W. Hurd: I have a letter of concern, seeking clarification, from the mayor of White Rock with respect to the Burlington Northern, but I've also had questions addressed to me verbally from the city council of Surrey seeking clarification with respect to the Southern Railway. This particular letter is addressed to the Premier, actually, seeking clarification on the effects of this particular section in Bill 55 on the Burlington Northern railroad and the Southern Railway, which are two private rail lines. Of course, Burlington Northern owns the right-of-way along the foreshore of White Rock, and its terminus is at the CN station in downtown Vancouver. I was just seeking clarification on behalf of those two community mayors and councils as to what impact this section would have on those two rail lines and on the revenues that the municipalities would derive from those two rail lines.

Hon. E. Cull: Staff have met with Burlington Northern and Southern Railway, and there does not seem to be any significant impact one way or another on these railways. With respect to Surrey or other large urban municipalities, the impact on their property taxes would be extremely small, given the size of the tax base and the relative size of the railway tax property to the overall tax base. If you have a look at the impacts on various municipalities, the larger the community, even with significant rail property in it, the smaller the impact -- it's in order of magnitude, and the rail property just becomes insignificant in the overall calculations.

W. Hurd: I think the concern being expressed by the mayor of White Rock was that some competitive advantage may be conferred on CN and CP at the expense of Burlington Northern. He was seeking clarification as to whether an unfair trading or competitive advantage was in any way being conferred on CN and CP, who are, I guess, direct competitors with the Burlington Northern railway. He was seeking clarification on that point, and I am seeking clarification in this committee on his behalf.

Hon. E. Cull: All of the commercial railways will be treated the same way, so there would be no advantage to Burlington Northern or Southern.

C. Serwa: I have a few questions on this, but I want to clarify something that my colleague from West Vancouver-Garibaldi said indicating that there was some role reversal here. It's not true; the New Democrats have always been strong on big government, big unions and big business. They work hand in hand, so I'm not concerned about that.

I'm going to ask a couple more questions of the minister in order to understand the magnitude of the challenge facing the railways. Perhaps the minister would tell me: of the total taxes paid by CN and CP railways last year for property taxes.... We're talking about a reduction of perhaps $15 million, but how does that relate to the total taxes paid? Is it significant or insignificant?

Hon. E. Cull: The total property taxes paid are about $44 million.

C. Serwa: When you say total, I presume that is to the province, to the regional districts and to municipalities.

Could the minister advise how many miles of track are involved in CP and CN lines that are presently taxed at this linear rate? In response to an earlier question of mine, the minister said that municipalities get approximately $4,000 or $4,500 of that $12,000 tax per statute kilometre. In answering another question she indicated that most of the properties within the municipalities are owned by subsidiary companies of the railways who pay under class 6. You can't have it both ways.

Hon. E. Cull: I think the member is misunderstanding the way the information has been presented. Looking across the country, for comparative purposes we have calculated property tax based on the track miles for the various railways. I don't have the aggregate number of miles that are in track. That's just a way of being able to say: "How do you compare B.C.'s property taxes to Alberta's?" You have to have some basis for comparison. It can't be based on what CN paid in Alberta and what it paid in B.C., because there might be a different amount of property. So we've used the mile to be able to do that.

[8:00]

The taxes are not paid on a mileage basis; they're paid on the assessed value or the commissioner rate for each part of the operation within the province. Those communities which have more valuable properties like switching yards, etc., would pay a higher tax than a municipality that simply has a track running through it.

C. Serwa: I have one last question, because I'm still not satisfied with the clarification. There are two different areas, and I want to talk specifically about the linear statute taxation of CN or CP main-line tracks going through British Columbia. Never mind what is in a municipality at the moment. What I'm trying to determine is the amount of taxes actually paid per linear mile or kilometre, because the assessment is fixed by statute. It's not a variable assessment. What is that cost per kilometre, for example? The ministry has had to have done its homework on this. I don't know where the figures have come from. It's very, very difficult to understand how something could go this far with the inability to answer really straightforward questions, and without either challenging information or being able to provide information to this side of the House.

[ Page 16950 ]

[H. Giesbrecht in the chair.]

Hon. E. Cull: The tax that is paid for tracks outside municipalities varies from regional district to regional district based on their tax rate. But if you aggregate it for the province, it's about $1,500 per mile. It will vary. In some regional districts it will be lower, and in other regional districts it will be higher. But essentially, that's the average across the regional districts.

L. Fox: I have a couple of further questions. What has been very clear throughout the discussion is that the government has made a unilateral decision that they're going to reduce a segment of the municipal tax base. They haven't done a lot of homework in terms of what the real problems are. Notwithstanding that, I guess one of the last observations I want to make and have the minister comment on is section 27.1(1)(a) -- I find that rather interesting. It reads: "...excluding from the definition of 'improvements' bridges, trestles, viaducts, overpasses and similar things that carry track in place of a railway corporation...."

Number one, I have difficulty understanding what "in place of a railway corporation" means. Number two, I find it amazing that these are not considered assets in terms of this legislation. Almost daily we hear from this government that we're acquiring assets when we build a bridge, a road or a school. I have some difficulty with balancing the objective where if it concerns a railroad, it's not a taxable or an assessable asset, yet when it comes to government borrowing money in their tax-and-spend policies, similar structures are considered assets.

Hon. E. Cull: The simple answer to that one is that no other jurisdiction in North America that we're aware of taxes on that basis. That's why the power is there to make regulations to exempt them from those "improvements." We're also, though, experiencing difficulties with some of the definitions: when is a bridge a bridge, and when is it a culvert-and-fill situation? There have been court cases that have actually tried to resolve that matter. Not clarifying it has some rather strange consequences that are unintended, from the tax policy standpoint, in terms of what actually gets built. You don't want tax policy to start determining whether you build a bridge or whether you do a culvert.

G. Wilson: Certainly from our point of view, this has been a really informative debate, and I must confess that we're moving dangerously close to even supporting this section. I have three questions for the minister.

The first question is with respect to the establishment of the formula. Are the municipalities affected going to be directly involved in the negotiations on how that formula will be created? Will they be involved in the creation of the formula?

Hon. E. Cull: Yes.

G. Wilson: The second question is: has the government consulted with the port of Vancouver and the port of Prince Rupert in terms of the impact of this legislation -- and if so, what is the extent of the consultation that has taken place?

Hon. E. Cull: The Gateway Council -- which takes in the various users, such as the port authority, Vancouver International Airport, the rail companies, etc. -- has been consulted on this and is in support of this, because of the obvious significant impacts of not taking action on the port of Vancouver. I'm not sure about the port of Prince Rupert. I'm not certain of exactly what consultation staff have had there, and perhaps I can get someone to answer that before the debate concludes.

G. Wilson: The last question then.... I actually didn't quite hear what the minister said in the first.... She said the Gateway...?

Hon. E. Cull: There is a council called the Greater Vancouver Gateway Council, which has.... Is the member aware of it?

G. Wilson: Yes.

Hon. E. Cull: Then I won't explain it.

G. Wilson: The last question that I have on this section is: can the minister tell us whether or not there has been consultation with the affected railways in terms of the capital investments they are prepared to commit to undertake as a result of this legislation, and how that capital investment might benefit, in fact, the affected municipalities? The Premier, in his estimates, made it clear that there was going to be a commitment to make sure that there would be, out of capital investments coming out of this legislation, dollars going into those affected municipalities. I wonder if there is even something like a list of those investments or some kind of understanding of what they may be, and when we might actually see them, so it's not such a tenuous promise as has been made to date.

Hon. E. Cull: There has been extensive discussion with the railways with respect to investments, and that discussion is continuing. It is not concluded. I can't table a list. Obviously, the railways themselves would want to finalize some of those things with their boards of directors and make the announcements, and not simply have them discussed here in this debate.

G. Wilson: With respect to those investments, does the minister have a kind of ballpark figure of what the value of those investments might be over the next year or three years, say, in British Columbia?

Hon. E. Cull: Yes, there is a ballpark figure. It's at least $100 million.

F. Gingell: I was just waiting until what I hoped would be the end of a rather long discussion on section 3. I'd like to suggest to the minister, in her role as Minister of Finance, that this particular subject deals with a tax reform that needs to be dealt with in a much wider spectrum than we're dealing with here. I think that members of the opposition, of all political stripes, have been concerned about the rather ad hoc way that we see this being carried out. This is a subject that has been a matter of discussion for some years, and it cannot be looked at in isolation. It needs to be seen as a larger package.

Besides saying that, I'd also like to respond to the issue the Premier brought up earlier in the debate when he spoke about the consequences of the Crow rate. It really shocks me 

[ Page 16951 ]

that the Premier has been asleep for 11 years, because getting rid of the Crow rate has been a matter of active discussion between farmers, all the provinces and the federal governments since.... Well, I first got involved in 1985, and I remember it well. Everyone has been aware that the Crow rate was something that had to be dealt with, so for the Premier to bring that up as something that was suddenly thrown at the province clearly leaves the question of what he's been listening to and how he's been following these important issues somewhat up in the air.

[8:15]

Section 3 of Bill 55 approved on the following division:

On section 4.

D. Mitchell: Section 4 of Bill 55 deals with the British Columbia Railway Act, and this is a significant amendment. In some respects it has been long-awaited, because historically B.C. Rail has never paid any property taxes.

According to this amendment, we are now going to see something called annual grants, not grants in lieu, which is terminology that has been used; the minister herself has used the phrase "grants in lieu of taxes." Under this amendment we see that "with the approval of the Lieutenant-Governor-in-Council" -- with the approval of cabinet -- "the company may make" -- not "shall," and I want to question the minister on the wording in this section; the company, B.C. Rail in this case, "may make" -- "in relation to property of the company or a subsidiary that is within an applicable area, annual grants to (a) municipalities and other local governments...."

I think it is important to understand the terminology of this amendment. I do note that I have an amendment to this section on the order paper that I'd like to move. But before I move that amendment, I'd like to make sure that I understand from the Minister of Finance why it is that discretion is being given to cabinet and to this particular Crown corporation that is not binding; the terminology here is the word "may," not "shall." And why are we using the term "annual grants," not "grants in lieu of taxes"? Is this grant going to be tied to property taxation at all? I think that the terminology is important, and before I move my amendment I'd like to get some clarification of that.

Hon. E. Cull: The words "annual grants" are the same as "grants in lieu." I use the word "grants in lieu" because I think that that's what most municipalities use, and they understand it, but other acts that provide for Crown corporations to make payments in lieu of taxes are sometimes referred to as payments and sometimes annual grants. There isn't a standard word that is used in legislation, and this wording will give the effect of what we want to do. While it says "may," it gives the Crown corporation authority to do so; but if the Lieutenant-Governor-in-Council makes the regulations to allow this to occur, the Crown corporation will pay the grants in lieu as the other Crown corporations do.

That brings me to the third part of the question, which is anticipating your amendment, I guess. I don't know whether we should speak to it before it's there or not. We spoke about this very quickly in the last section. There is another objective being sought here, and that is to try to get the Crown corporations onto a similar footing. Taxes are paid on behalf of this Legislature building to the city of Victoria, for instance, but there are other Crown agencies such as Ferries or Hydro, or some agencies that are not Crown but are public, like hospitals, colleges or universities, that all have different rules and different amounts that they pay. There isn't any particular logic when you look at it. It has been built up over a period of time and has resulted in a bit of a hodgepodge when it comes to what Crown corporations and other publicly owned properties do with respect to property taxes.

I have had a number of meetings with the Union of B.C. Municipalities on this. In the earlier discussion, I talked about the fact that in some cases I've had different groupings of municipalities coming in and saying, "This is the most important property tax issue," and they're referring to colleges and universities. Then the next group comes in and says, "No, this is the most important one, and we have a study to prove it," and they're referring to B.C. Rail. Then the next one comes in.

What we're attempting to do with the Crown corporations and public properties generally is to try to make something rational out of the system. We have to acknowledge that we cannot afford to do it overnight, and the Union of B.C. Municipalities understands that. They have accepted that what they want to negotiate with us is a process and a timetable that says what's the ideal and what's fair, and that shows that everybody is treated similarly. We would like a timetable to move us toward that in some reasonable time frame. There is nothing specified in here that ties it to an industrial tax rate or a particular class of tax rate, and that would be unusual in comparison to the others. What we are attempting to do, first and foremost, is to bring the Crowns into some kind of conformity with one another. Your issue may be one for a much later day.

[ Page 16952 ]

D. Mitchell: I understand what the minister is saying on this. This is indeed one important issue, and I agree with the UBCM position on B.C. Rail property taxation. I'm somewhat disappointed that the term "may" is in here, giving that discretion, although I accept the minister's explanation on this. I think that a lot of communities along the B.C. Rail line would have felt happier if this new law had mandated no option not to make grants in lieu of taxes from B.C. Rail mandatory, so that there is no discretion. The word "shall" should be here instead of "may."

Having said that, the minister says that the term "annual grants" in this amendment means grants in lieu, and I accept the minister's explanation of that. There has been some concern about whether grants are grants in lieu of taxes. The minister says they are, and her word in this committee will have to be the guarantee of that.

But when she says that what's being attempted here is to put B.C. Rail on an equal footing with other Crown corporations, that doesn't jibe with the section of this bill that we just dealt with. According to what the minister said about the previous section of this bill, we should be trying to put B.C. Rail on an equal footing with other railways in British Columbia -- not other Crown corporations, but other competitive rail operations. That's what we should be seeking to do, and I think I heard the minister say that there was going to be an attempt to put the B.C. Railway Company on an equal footing with other railways, whether it be CN, which is about to be privatized by the federal government, or Canadian Pacific, which has operated in British Columbia ever since there was a British Columbia. That should be the objective.

I think the grants that are referred to in this amendment which are grants in lieu of taxes, the minister says, should be tied to the local industrial tax rate for property, because that would put B.C. Rail effectively on something approximating an equal footing with the other railways. So hon. Chair, for that reason, I would like to move the amendment standing in my name on the order paper.

[SECTION 4, British Columbia Railway Act, proposed new section 1.5 (3) be amended by adding after the words "annual grants" the following words, "that approximate the local industrial tax rate for the property".]

I think this amendment has the effect of getting us closer to having B.C. Rail operating on an equal footing with other railways and paying a grant in lieu of taxes that is tied to something. It's not tied to what B.C. Hydro or the B.C. Ferry Corporation or other Crown corporations such as ICBC pay, because that doesn't make sense. But paying a grant in lieu of taxes to communities where B.C. Rail operates is close to what CN or CP pays, which is tied to the local industrial tax rate. Only with that kind of guarantee will the communities along the B.C. Rail line be satisfied -- some 20 municipalities and regional districts, I think. So in that spirit, I hope that the minister will accept the intent of this amendment.

Hon. E. Cull: I understand the intent of the amendment, and in some ways I may even have some sympathy towards it. The class the member has suggested is the wrong class. It would not be the industrial class. It would be the utilities class to put it in with other railways. I will be speaking against the amendment, because at this point we're trying to get them assessed the same as the other railways. That will come about as a result of the legislation we're passing. The whole question of the amount of grants and what the grants in lieu are and how you tie those back to the tax rate is something that is for negotiation with the Union of B.C. Municipalities.

The Chair: Before I recognize the member, the Chair was rather hoping the member wouldn't move the amendment, as the advice offered the Chair has been that the amendment is out of order. It would allow the recipient, the municipality, to determine the amount of the grant, thereby imposing an obligation on the Crown. So on that basis, the Chair would rule that the amendment is out of order.

D. Mitchell: The minister said that the utility tax rate would be involved here to make it consistent with other railways. I accept her opinion on that, and I would urge her to see that that's done.

On the previous section of the bill, the minister talked about the need to develop a competitive rail system and transportation infrastructure in the province. This crucial section of the bill deals with B.C. Rail, the third-largest railway in Canada and one of the most important and profitable Crown corporations today in British Columbia.

An Hon. Member: Not this year.

D. Mitchell: As profitable as it has been in recent years -- $40 million net income.

I think it is threatened by the same forces as CN and CP, which the minister referred to in the previous section. We want to ensure that the communities along the B.C. Rail line receive their fair share of property taxation. The grants that are referred to are non-specific. The minister says that they will receive a grant. That's the first time, so that will be an important precedent. Communities along the B.C. Rail line are looking forward to receiving a grant in lieu of taxation. If it's not going to be tied to the utility tax rate for the property, what is it going to be tied to?

[8:30]

The minister says that that's going to be open to negotiations which will take place with the UBCM and, hopefully, with the communities affected, taking into account different local conditions along the B.C. Rail line, which stretches from North Vancouver and the port of Vancouver all the way through the province. But what will the grant be tied to? What will the negotiations be based upon? We heard in the previous section about adjustment factors that are going to be taken into account in dealing with the other railways. Will there be similar adjustment factors here? Will there be a guarantee that communities along the B.C. Rail line will get at least their fair share of property taxation when compared with any other communities that have the ability to tax other railways in the province?

Hon. E. Cull: The reason that B.C. Rail exists and doesn't pay property taxes is that it has not been a commercial railway per se. It hasn't just been a commercial private sector enterprise. It's had a social policy function in opening up the province and extending rail into areas that would not have had rail if we had been waiting for the private sector to do so. Until a couple of years ago a subsidy was paid by the taxpayers to B.C. Rail. That has now been eliminated, and they're 

[ Page 16953 ]

managing to do that on their own. They are still pursuing a social policy mandate as well as a commercial mandate. That's one of the reasons we are not just lumping them all together and putting them onto the commercial footing and saying they go immediately to the CN and CP model.

How the property is valued, which we canvassed extensively in the last section -- some might say too extensively -- will be the same for B.C. Rail, because we'll need a similar basis for valuing the property. How we determine what is paid, what the grants are and what the payments are will not only relate to what the taxes would be if it was in the utility class -- which is something that obviously the municipalities will want to take a look at as they enter into these discussions. It also has to take into consideration the other part of the issue that I mentioned, which is other Crown corporations trying to get onto an equal footing there. It will also have to take into consideration the social benefits that are being provided for the province as a whole in having B.C. Rail as a Crown corporation and what we continue to do with that.

So we'll be negotiating with the municipalities what the grants in lieu should be. We'll be taking a step toward conformity with the other rail companies by moving onto a similar assessment determination process. We have told the Union of B.C. Municipalities that this is an issue of tax fairness, and it's an issue of making sure that all jurisdictions are getting what they should get for the services they have to provide, whether it's rail or other public services. But it's a first step in a long process. To do it overnight would simply be impossible under the fiscal realities of 1995.

D. Mitchell: One further question on this point. Presumably the minister and the government of British Columbia would have done some calculations and would have some projections as to what the total liability for grants by this Crown corporation to communities along the line would be. Even though there is a process of negotiation, I'm sure there must be a range. We know that the task force at UBCM has done some good work in the past and that there have been other estimations as to what the total payment of taxes by this Crown corporation would be if it actually had to pay property taxes based upon assessed value of property along the B.C. Rail line. Can the minister inform the committee if she has an estimate or projection based upon the plan that she has for grants in lieu of taxation by B.C. Rail to all communities affected?

Hon. E. Cull: Currently, B.C. Rail and BCR Properties pay about $1 million in grants in lieu. Vancouver Wharves Ltd., which was acquired by B.C. Rail, pays another $2 million to North Vancouver. We discussed a little bit earlier that some properties that are owned by B.C. Rail do pay taxes. So there's about $3 million being paid right now to a number of different communities. Incrementally, we estimate the increase will be somewhat on the order of $2 million to $3 million.

D. Symons: I have very few words to say on this section. I guess the first few words are: it's about time. As I mentioned earlier in the evening, I was at a meeting of the communities affected by B.C. Rail along the route. I was part of a subcommittee of the UBCM, and I was sorry not to see any government members at that meeting. They were discussing the issues that are here, and I think you should have got around to at least getting into the consultation side considerably earlier than you have. Nevertheless, better late than never, so let's go for it.

Hon. E. Cull: Not to let that one pass, there were the Minister of Employment and Investment, myself, the Minister of Municipal Affairs, and representatives from the Ministry of Transportation and Highways. A number of us had a lengthy meeting with the same group. They asked to meet with us specifically, and we did so.

G. Wilson: It's unusual in committee that we get into the detail of a debate that has become so compelling as to actually change people's opinions. I think it's encouraging when we see that there can be a level of debate and discussion that can actually make elected members make decisions that are perhaps different than their initial inclination when they come into a debate.

I must say that my initial inclination on this section was to say: "All right, we'll go for it; let's do it." Now I'm hearing from the minister that she's talking about an incremental value of about $3 million. That seems to me to be really low. I would have thought, based on the '93 assessed values, that we would have been looking at a rate of full value paid of about $20 million. If we're only talking about $3 million, that strikes me as being exceedingly low. In fact, it's a token.

Hon. E. Cull: Relative to the other railways, B.C. Rail doesn't have as much property. So while the amount seems small, it's related to the fact that there isn't as much assessed value to tax. The $2 million to $3 million is a doubling of what they're paying right now, and while it wouldn't take them all the way to full utilities class taxation.... As you know, we just extensively debated bringing that rate down, so it's a little hard to know exactly where that would be. It might be a lot closer than you think. The numbers do seem small, but compared to.... We were talking only a few minutes ago about only $40 million for all of the railways in the province, which are more extensive than B.C. Rail in terms of their properties.

D. Symons: Just one last question -- I thought my last one was my last one. We just passed some amendments in section 3 to do with the Assessment Act. Does B.C. Rail come under the Assessment Act? Therefore does everything that was passed in section 3 of this particular bill apply to section 4 as well? Various negotiations are going on regarding the various types of structures that may or may not be taxed by the municipalities. Will that also be in effect for B.C. Rail?

Hon. E. Cull: Anything that's assessed is assessed by the Assessment Authority, and the rules will apply. So to determine the value for paying grants in lieu, it will have to be assessed, and the rules that we just passed in section 3 would apply.

R. Neufeld: Quickly, the doubling from $3 million.... The incremental increase will be approximately $3 million. Would that mean that the $2 million that's paid by Vancouver Wharves will double to $4 million, and what we'll really see for the rest of the rail line is just another $1 million?

Hon. E. Cull: No, the doubling referred to the fact that B.C. Rail pays about $3 million right now. The incremental 

[ Page 16954 ]

would be up to another $3 million, so that would be $6 million; that would be double. Vancouver Wharves is paying full taxation right now.

C. Serwa: In listening to this, I'm reminded of the words of W.A.C. Bennett, when he said: "Equal opportunity for all; special privileges for none." When I'm saying that, I refer to the fact that B.C. Rail is different than all of the other Crown corporations. It's different, because it's in competition with other carriers -- one a national public carrier and one a national private carrier -- whereas the other Crown corporations fundamentally are monopolies. There is a significant difference there.

The minister's argument for special treatment for B.C. Rail was because of the social aspects of B.C. Rail. I'm quite confident that there are great social aspects from CN and CP as well, so I wonder about the validity of that argument.

It does seem to me that while this is at least a tentative step in the right direction, there are some questions that I would like to ask. First of all, the taxpayer has already picked up the debt of B.C. Rail. It wasn't as if this Crown corporation generated revenue and retired its debt; the public, the taxpayers of British Columbia, picked up that debt. The public, the taxpayers of British Columbia, also built the rail extension into northeast coal, and a significant amount of revenue has accrued to B.C. Rail because of that.

In short, it seems that the government would be far more sensitive to the unfair treatment, which we were discussing in the previous section, that impacts other railways. I recognize that there is a great deal of disparity with the various municipalities in British Columbia, and perhaps a high one with respect to taxation is the city of Vancouver. But if B.C. Rail had to pay property taxes to municipalities, perhaps the government would more closely watch this diversity of taxation and take more effective steps. It seems to me, seeing that it is in competition with the other railways, that it is not even fair to talk about a profit when the base costs are not even factored in. They're working on a subsidized product to start with.

The final thing I'd like the minister to respond to is: what sort of dividend will B.C. Rail pay to the province, in comparison to the $2 million or $3 million that the minister is talking about in lieu of taxes or grants to communities along the way?

Hon. E. Cull: The dividend was eliminated at the same time that we eliminated the subsidy. There's no dividend paid by B.C. Rail.

G. Wilson: Just one quick question; I want to come back to it, having had a chance to think a little about the minister's answer. It strikes me that virtually all the property tax currently paid by B.C. Rail, if I'm not mistaken, is paid largely out of their headquarters, which is in one municipality in North Vancouver. It's paid predominantly to that jurisdiction. Is the minister saying, then, with this section of the bill implemented, that there's only going to be an equivalent amount collected for all their railway trackage and property, or land holdings in Squamish, Prince George, etc. -- that it's going to be equivalent to what they're now paying for their headquarters in North Vancouver?

[8:45]

Hon. E. Cull: The member is correct. The $1 million that's paid to North Vancouver for their headquarters operation is paid just to the one municipality. The $2 million to $3 million more will be paid to other municipalities that have trackage or other rail property in them. So the benefits, right now, go essentially to one municipality. With this change, more municipalities will receive grants in lieu than currently do.

G. Wilson: There are going to be a number of municipalities, certainly a few councillors I've talked to, that are going to be a little disappointed at what is going to be coming their way, if that's the case. There was an expectation that there would be a considerably higher amount paid. I wonder if the minister might just very quickly provide a justification, then, for not moving them closer to what would be the utility rate, and why they wouldn't.... I recognize that there's a "social policy," or whatever it was the minister said, with B.C. Rail. But it still strikes me that there's an inequity there. The municipalities had anticipated considerably more than we're hearing from the minister tonight.

Hon. E. Cull: There are two factors, both of which I've talked about before. One is the comparability to other Crowns, putting them on that footing so there's some equity across the Crowns. The other is the matter that has been discussed with the Union of B.C. Municipalities, including municipalities affected not only by rail but by other grants in lieu from Crown operations: the immediate moving to full taxation is just not affordable. The municipalities understand that, too. They're looking for the commitment that we'll get there, that there will be a timetable and that there will be payments made. That's what I've committed to negotiating with them.

D. Mitchell: This amendment is an important first step. Communities along the B.C. Rail line, more than 20 municipalities or regional districts, have been calling for years -- generations, in fact -- to have this Crown corporation pay its full share or a share of property taxes.

Now we have expectations that have been built up. When the hon. minister brought in her budget earlier in this session with the promise that we would finally be moving in this direction, towards a grant in lieu of taxes, there was a confirmation of an expectation that the grant that would be paid by B.C. Rail to the communities would be something approximate to property taxes that would be paid. The estimate of those taxes on B.C. Rail properties, stretching from North Vancouver all the way to the Peace River country, is certainly a lot higher than the incremental $2 million to $3 million the minister is talking about.

While this is a good first step, my fear and my real concern is that a number of communities are going to be very mightily disappointed when they find out that what they're going to be receiving under this plan is a small fraction of the estimates made by UBCM and other groups over the years as to what something approximating a fair level of property taxation is. I think the minister is making a mistake by trying to compare this particular commercial Crown corporation with other Crown corporations; this doesn't bear any relationship to what the full utility tax rate would be. The comparability should be with other rail enterprises in British Columbia.

I think that the debate we had under the previous section confirms that the minister believes in principle that there should be a level playing field for all railways in the province, including B.C. Rail. My fear is that when I look at commu-

[ Page 16955 ]

nities in my own constituency -- whether it be West Vancouver, Lions Bay, Squamish, Whistler, the village of Pemberton or the regional district -- there's going to be some real disappointment. We're only talking about a fraction of the payments that those communities, those local governments, have been expecting, which they believed the government was promising in the budget that came down.

I've got to say to the minister that while I'd like to support this amendment in principle, because of the disappointment that she seems to be indicating is going to be delivered with this section, it's going to be impossible for me -- as a member who tries to represent a riding that's partially affected -- to support this kind of legislation. It's going to be a sad and disappointing day if this bill should be passed into law.

Hon. E. Cull: I don't know what figures the member is working from, because he just talked about it being a fraction of what the expectations are. If the expectations are of that size, they are even out of line with the existing system. If we were to tax B.C. Rail under the existing utilities class, it would only generate about $6 million worth of additional tax revenue. So when you're talking about a fraction.... I guess one-half is a fraction, but a fraction to me always sounds like something very small, as opposed to moving half the way to full taxation in one step.

When we dealt with the question of grants in lieu for colleges and universities, the Union of B.C. Municipalities accepted the fact that there was a $2.2 million pot and that it would not take them all the way to full taxation. But they accept that because it is better than where they were the year before. What they wanted was a commitment that the government was moving in a progressive way to addressing these issues.

There are many issues of Crown corporations not paying for the services provided to them in the community because of the hodgepodge of rules that has built up over the past. There are inequities between municipalities, some of which are fortunate enough to have a Crown corporation that pays grants in lieu and gets them additional revenue; others don't. What we're trying to do is address that issue, first and foremost.

As you've said yourself, it's a first step, and I think the municipalities understand that it's a first step. They're willing to sit down and discuss that with us in good faith -- that one step leads to another -- and as we can afford to negotiate with the municipalities, we'll proceed down this path to a fairer system for everyone.

D. Mitchell: Just one further question, then. I just want to seek some clarification, to make sure I understand this.

The minister says that head office, or existing taxation paid by B.C. Rail, is about $3 million in total. I guess one question worth exploring is whether or not that is now going to come down -- whether that existing $3 million is going to be reduced at all or whether it will stay the same.

The second question is whether the current tax liability of B.C. Rail, if it were to pay full property taxation for all the properties it owns, would be in the range of $6 million, as the minister says. That's one estimate that I've heard as well. And if she says that the incremental value that's going to be paid is perhaps as much as $3 million, so we're looking at something perhaps close to 50 percent, does that mean that a community such as Squamish -- which is a community in my constituency that I'll just use as an example because it has significant B.C. Rail properties and railyards -- which might have received something close to $800,000 or more if full property taxation was paid, might expect to see something like half of that, $400,000 or so, under the grants that are offered in this section? Would that be the order of magnitude that we're talking about?

Hon. E. Cull: I don't want to get into specific numbers for particular communities, even making rough guesses, because I'm certain that municipalities will be looking at this, and if I'm wrong, they'll be disappointed, particularly if I'm wrong in the wrong direction. But the kind of calculation you're doing.... Squamish, Fort Nelson and Prince George, all of which have significant B.C. Rail properties, will benefit significantly from the grants in lieu. It will certainly be more than what they're receiving now. B.C. Rail is paying the $1 million for its headquarters to North Vancouver, and they're not paying anything to anyone else. This $2 million to $3 million will go to benefit those communities that are receiving nothing right now but do have assessed properties within their jurisdiction.

F. Gingell: I wish to take the minister up and maybe have her explain a little on something she mentioned in passing, which was that dividends from B.C. Rail were eliminated at the time the subsidies ceased. That doesn't quite make sense to me. I wonder whether the articles of association or the memorandum of the corporation had been changed to forbid the payment of dividends to the shareholders. I believe that all the redeemable preferred shares have now been redeemed, and the only shares outstanding belong either to government or to government funds. If there are any preferred shares left, I'm sure those dividends would not have been eliminated. I wonder if any action had been taken by changing the articles or the memorandum, or if there was some government fiat that stopped the payment of dividends, and I wonder why you made the remark.

Hon. E. Cull: I'm not aware of whether there was any change to their memorandum or articles to do that. I made the remark simply because the member seemed to be under the impression that B.C. Rail was paying a dividend to the government, and I was correcting the record.

D. Mitchell: I have just one further question on this. The minister will remember that during the Ministry of Finance and Corporate Relations estimates this year, we had an interesting and informative exchange over the possible privatization of B.C. Rail. I guess that the only way B.C. Rail would pay its full share of property taxation under the current circumstances would be if it was completely privatized. The minister has indicated that something like 50 percent of full taxation is going to go to communities. That is a good first step, I suppose, and on that basis I think I can support this.

But can I ask the minister: is the attempt to put B.C. Rail on a similar or equal footing to other railways operating in British Columbia possibly a prelude to its potential privatization?

[ Page 16956 ]

Hon. E. Cull: No, there isn't a connection between what we're doing here and any studies that might be done with respect to B.C. Rail. It continues to operate a number of non-commercial or non-economic runs, the run to Fort Nelson being one and the Royal Hudson being a second.

Section 4 approved.

On section 5.

D. Mitchell: You're moving awfully fast. When you deal with a bill as complex as Bill 55 and you want to move from one section to another, it's really like moving a separate bill all in itself. For that reason alone, we need to think a bit about section 5. Is the hon. Attorney General going to be handling this, or will it be the Minister of Finance? Does the Attorney General need any officials with him now?

Hon. C. Gabelmann: The Attorney General does, but they are on their way and the member should begin.

D. Mitchell: Section 5 of Bill 55 deals with the British Columbia Transit Act and with the plan for commuter rail service put forward by the hon. Attorney General's colleague, the Minister of Employment and Investment. The problem is that it deals with it after the fact. This is the first time this has come to this assembly, even though the Minister of Employment and Investment has already gone quite a distance toward developing the government's new commuter rail service, which has a big implication for the lower mainland and the Fraser Valley. If the Minister of Employment and Investment has already done so much in this area and made significant announcements, taken out newspaper ads and preached the praises of the new commuter rail service, then why is this legislation even necessary after the fact? Can the hon. Attorney General -- who may wish to introduce his officials as well, when he gets a chance -- tell us why this is even necessary, given the fact that his colleague has already made so much progress in this regard? Why are we doing this after the fact?

[9:00]

Hon. C. Gabelmann: I don't know whether the member has ridden on this train yet....

Interjections.

Hon. C. Gabelmann: No? Nor have I, nor has anyone else. So it's prior to the fact.

D. Mitchell: Under section 5 of the act, we're adding a new definition relative to the phrase "public passenger transportation service." I wonder if we could talk about the definitions that are being added here, because we're talking, first of all, about an "operating agreement," which is one definition. I wonder if this should be amended to include a provision for the tabling of this operating agreement in the Legislature at some point. Wouldn't it be interesting for members of this assembly to actually see the operating agreement for this new commuter rail service? Secondly, why are we substituting a new definition for "public passenger transportation system"? I wonder what a "custom transit service" is, by the minister's definition. If he could enlighten us on that, it would useful.

Hon. C. Gabelmann: It simply allows for the commuter rail concept and operation to be brought in under B.C. Transit, which is not the case now. As to the first question, I don't know that tabling documents ever occurs in definitions sections.

[G. Brewin in the chair.]

D. Mitchell: I'm not talking about tabling an operating agreement now; I'm just wondering whether at some point it wouldn't be refreshing to have an operating agreement actually tabled in the Legislature for this new service -- which, I suppose, one could argue is tantamount to a Crown corporation. Let me ask a question about section 6, which adds a new section, section 10.2, to the act. Why is commuter...?

The Chair: Hon. member, I believe we are on section 5.

D. Mitchell: Hon. Chair, maybe you could tell us how you wish to proceed. Do you wish to proceed through this section by section?

The Chair: Yes. Shall section 5 pass? The hon. member for Richmond Centre.

D. Symons: I want to speak to section 5, but I would suggest that maybe sections 6 through 11 go together as a unit; it's just a suggestion. On section 5, in the definitions of "commuter rail service" and "operating agreement," the words "by the authority" are used. I gather from what's going to follow from section 5 that what we seem to be doing is taking away the authority for commuter rail that was initially an arm, if you like, of B.C. Transit, and putting the operation of it somewhat under the control of the cabinet, because they're going to make decisions on fares and other things in subsequent sections that we're coming to. But this talks about this system as being operated by the authority, and I don't see a definition of who this authority is. It's obviously not B.C. Transit. Exactly who is the authority that we're talking about here?

Hon. C. Gabelmann: The authority under the act is the B.C. Transit authority or a subsidiary.

D. Symons: I hate to do what I just said a moment ago about not taking the other sections into consideration yet, but it seems that what's coming in section 6 is that we're taking authority for the operation of this particular operation, commuter rail, away from B.C. Transit, because the Lieutenant-Governor-in-Council is going to have that authority in section 10.2(3) of section 6. So I'm not too sure, when you say "the authority" here -- when it's operated by the authority in all the agreements here -- that the authority you've mentioned has much authority left after we get to the next section.

F. Gingell: Shouldn't it be an upper-case A?

Hon. C. Gabelmann: The authority -- in lower case -- is the same as with SkyTrain. It parallels the operation of SkyTrain.

Interjection.

Hon. C. Gabelmann: Wait till we get to the next section, then.

[ Page 16957 ]

Section 5 approved.

On section 6.

D. Mitchell: Section 6 establishes the basis for cost-sharing in relation to the new commuter service. The member for Richmond Centre actually raises a very valid point here. When we look at this section, we have to ask: why is the province taking on what appears to be the complete cost of capitalization and for upgrading rights-of-way and for rolling stock -- unlike SkyTrain, as the hon. Attorney General has indicated it's just going to be the same -- but we haven't seen the province take on the burden or risk of setting fares? Under the current agreement, my understanding is that the regional transit commission would take a significant share, 68.6 percent, of the operating cost. But changes would be provided for negotiating the other 31.4 percent of the operating cost, which would equate to about $4 million of the total estimated $12 million. That's the point I was trying to make when I suggested that we should have the operating agreement tabled in this Legislature. Wouldn't it be interesting to see what kind of operating agreement had been signed between the province and the transit commission?

All of the revenue from fares is going to the province, it seems, so the transit commission will have to pay this annual $4 million or so out their own resources. They're not broke. They get revenue from gas tax, hydro surcharge and non-residential property tax, I suppose. But other regional transit users will be subsidizing this route. That's the concern I'd like to raise here. Other regional transit users could well be subsidizing this route. I don't think they're going to be asked to get any of the $4 million annually out of the Fraser Valley region.

So maybe the minister could tell us: what is the province going to be taking out of the region in terms of revenue? Do the minister or his officials have any ideas as to what they're going to be taking out of this region in terms of revenue, and whether other regions are going to be effectively subsidizing this transit service?

Hon. C. Gabelmann: Those are questions that should go to the minister responsible during his estimates next year. As far as this section of the bill is concerned, the provisions here are the same as exist in the existing legislation, with the exception of the fact that the commuter rail will be crossing both municipalities and the regional district. Because of the regional district involvement, different language is required.

D. Symons: I get to subsection 10.2(2) of this, where it says:

"For the purposes of this section, the Lieutenant Governor in Council may prescribe

(a) classes of expenditures which shall be taken into account in determining the annual cost of the commuter rail service referred to in subsection (1), and

(b) the portions of the annual cost to be contributed by the authority, the municipality and the regional transit commission under subsection (1) and, for that purpose, may prescribe that the authority, the municipality or the commission shall pay none or all or different portions of the prescribed classes of expenditures."

Now, we have quite a mouthful there. But it seems that we have here something considerably different than the operation of current transit systems in the lower mainland. Indeed, there is basically a formula set that prescribes how much will come from the fare box. That's in consultation with the community. But also the other part is set, that a certain portion of it will be raised within the community through fuel taxes or taxes on your hydro bill, and the remainder of it is subsidy from the government.

There seems to be absolutely no provision whatsoever in here for some similar thing for the operation of this as a whole. When we look back at subsection (1), it seems that you're going to hive this off into separate municipal portions for dealing with this situation that currently applies, basically, to the whole lower mainland regional transit authority. This seems to be a different set, where each municipality that's affected by commuter rail is going to have its own set of negotiations.

Hon. C. Gabelmann: No. Before I go on to that, I should clarify. I misspoke myself earlier in talking about regional districts.

The difficulty that has to be addressed by this particular section is the fact that the commuter rail goes outside the Vancouver Regional Transit Commission area. It goes into Mission, as well. Therefore everything in this section is the same as it is now, with the exception of the adding of the term "municipality." That is added to deal with the fact that the municipal transit system applies in Mission, and we need to be able to negotiate an arrangement with them as part of this integrated service. So I think it's straightforward. It's simply to deal with the fact of Mission.

D. Symons: I take the minister's point there. I think that's a valid point if you're saying that it's simply making the same rules for Mission in relationship to commuter rail as the rest of the service will have in relation to general transit issues.

Later on we're going to use the term "service area" -- I can't find it exactly at the moment, but it talks about areas that are serviced by commuter rail. If bus routes go from Abbotsford to Mission in order to get ridership up so that they can try and meet their projected ridership -- which is considerably overestimated, I think -- they're going to truck people in from various communities south of the Fraser River to rail terminals on the north side, such as from Abbotsford into Mission. Will Abbotsford, then, also be brought into this as a source of revenue compensating for the costs of the commuter rail service?

Hon. C. Gabelmann: The busing of passengers from Abbotsford over the river to catch the SkyTrain would be under the authority of the various municipal systems of B.C. Transit. So arrangements would then be negotiated to deal with that issue if in fact a bus line goes from one municipality to another. That's something that would be organized under the municipal systems part of B.C. Transit.

D. Symons: Just one last point on that. I'm reading the beginning of subsection (1): "Where a commuter rail service is operated in part in a municipality and in part within a regional transit service area...." I am given to understand that they're going to reconfigure the bus lines in the Fraser Valley in order to feed into the commuter rail terminals. If you do that, then basically those areas serviced by the bus lines 

[ Page 16958 ]

that feed into them will become part of this thing called a "regional transit service area." Then the remaining portions of this, which seem to affect financial support for commuter rail through that municipality, will kick in. Is that the case or not for communities that don't have commuter rail specifically, but could quite easily and conceivably have bus services that would take people to commuter rail stations? You're saying that it's a municipal issue, but the wording here says "within a regional transit service area" -- that is, regional transit serves commuter rail. Does that mean it's included?

Hon. C. Gabelmann: This issue doesn't deal with municipal systems. It doesn't deal with anything other than the commuter rail from Mission to Vancouver. That's what we're dealing with. We're not dealing here with interurban transit; we're not dealing with municipal bus systems.

G. Campbell: If I could just get the minister to deal with some of the principles as opposed to the drafting of this legislation for a minute, currently in the lower mainland there is a B.C. Transit board, a Vancouver Regional Transit Commission, and then there are municipalities. So I want to be clear that when we talk about "the authority," we are talking about the B.C. Transit board. In terms of subsection (2), you have pointed out that "the Lieutenant Governor in Council may prescribe..." -- and it goes on, as was mentioned earlier.

The questions I have are: have there been any discussions with the municipalities or with the regional transit commission? Is the government talking about the prescription for revenue-sharing being basically the same basis as currently takes place? Will the government be following the pronouncements that the Premier has made in the past, that any unilateral decisions will be paid for by the party that makes them? Or are they now deciding that they are going to move forward and impose solutions on both the transit commission and the municipalities that are directly affected or directly serviced by the commuter rail service?

Hon. C. Gabelmann: I think the best way of answering those questions is to say that the amendment that we're dealing with has actually been requested by both Mission and the Vancouver Regional Transit Commission, and that's why it is here.

G. Campbell: In terms of the consultations with those groups so far, have the consultations been formed around reaching a similar agreement to the one that currently exists with the transit commission, or are we looking at a totally different formula for funding the commuter rail service?

[9:15]

Hon. C. Gabelmann: I think the Leader of the Opposition knows that there have been extensive consultations with both the region and Mission. The formula that would evolve from those negotiations obviously isn't complete. It will be different, no doubt, from the existing arrangement, but not significantly different.

G. Campbell: Can I go to class 3 for a second? One of the critical components of the Vancouver Regional Transit Commission, at least, has been the integrated nature of both the service and the fare structures. One of the concerns that I have as a result of the suggestions that are contained in this piece of legislation is that we may lose that opportunity for integration. I would like the minister to explain how the government intends to integrate the services for commuter rail with the bus service, the SkyTrain service and the SeaBus service, so that we do not lose that sense of integration that currently takes place.

And maybe while you're doing that, you can point out how it will integrate with the municipal transit services that are going to feed into the commuter rail service, which are outside of the Vancouver Regional Transit Commission.

Hon. C. Gabelmann: It will be fully integrated with the Vancouver Regional Transit Commission fare structure. It has to be for it to work effectively.

As for the second question with respect to neighbouring municipal systems, I can't answer that question right now. That is something that will have to evolve.

G. Campbell: It will be fully integrated. Will the fare for the commuter service...? Say you come from Mission to downtown Vancouver: will there be an additional fare to take the SeaBus across to North Vancouver? Will there be an additional fare to connect into Richmond from downtown Vancouver? How do you intend to carry out that operation?

Hon. C. Gabelmann: The fare that one pays at Mission will get that passenger to anywhere in the greater Vancouver transit system coverage area.

F. Gingell: These sections of the act contemplate an arrangement whereby you allocate costs, and you get a portion of the costs recovered, or they are the requirement of the municipalities outside to contribute. The minister will appreciate that there are significant differences in what the opposition believes will be the subsidization required and the amount that the government thinks will be the case. Only time will tell; we shall find out.

Some arrangement must have been made with the municipalities to get them to agree to share these costs. Was that cost-sharing arrangement negotiated on the basis of your current estimates of what the required subsidization will be? Or have they agreed to come into an open-ended arrangement where they will pay a fixed percentage of the net costs of operating the line?

Hon. C. Gabelmann: I'm going to go through a series of points that have been prepared. Members will understand that I'm carrying this for the minister who is involved in the trade issues. It's an area I'm not particularly familiar with, as I'm sure the Leader of the Opposition, who is extremely familiar with this issue, would understand.

First of all, the funding formula has been developed cooperatively by all of the parties over the last few months. The local share of West Coast Express operating costs that the VRTC and the district of Mission would assume, including the cost of rolling stock and debt service, is 12.5 percent of total costs. The West Coast Express funding formula involves a fixed contribution by the VRTC of 31.4 percent, with the remaining 68.6 percent of operating costs to be assumed by the province. The province agrees to fund 100 percent of the cost of infrastructure and rolling stock. The VRTC share of West Coast Express operating costs is the same as its current 

[ Page 16959 ]

share of Vancouver bus operations. The VRTC will retain similar authority over West Coast Express as it does over other transit services. Finally, the province would receive all West Coast Express revenues to offset its 68.6 percent share of operating costs.

If the people who are helping me say that anything I have said is not correct, we'll soon hear, and if members have any questions, they can try me on for size.

F. Gingell: One recognizes that whether the government's estimates or the opposition's estimates are correct, the Vancouver Regional Transit Commission is going to have to come up with substantially greater amounts of money than it does under the present cost-sharing arrangement. As I understand it, these are all add-ons. This doesn't change the current cost-sharing arrangement. The Vancouver Regional Transit Commission collects its funds by way of gasoline taxes, hydro taxes and some other taxes, including property taxes. I was wondering whether the government was planning on allowing them some new source of revenue, or whether they anticipate that the rates that are used at the moment will be increased to provide these extra funding requirements.

Hon. C. Gabelmann: First of all, the share that the Vancouver Regional Transit Commission has is the same as its current share of Vancouver bus operations, so there's no additional cost there.

Interjection.

Hon. C. Gabelmann: I think that's a fair point, because it expands the service, and therefore there's an additional amount. That's the point the member made; we don't know the answer in respect to the risk. The local authorities will not have to bear the risk; it will be the province.

The other point that I forgot to mention is that the local share is fixed by tax revenue. So that isn't at risk, if the argument that the member makes about lower ridership than what the minister says it's going to be.... It isn't going to affect the local authorities.

F. Gingell: I appreciate that the cost-sharing ratios haven't changed, but I'm suggesting to you that the amount of money that will be required to pay all the costs of operating this much-expanded situation are going to be substantially greater. The VRTC and the municipality that presently is not contributing, but will be, are going to have to come up with substantially greater sums. As far as the VRTC are concerned, they have a group of taxation options right now, and I presume they will not change. They may have to increase the rates; they may have to increase the mill rate; they may have to increase the gasoline tax per-litre rate; or they may have to increase the B.C. Hydro charge to get the additional funds that they will be required to contribute.

My first question is whether any other form of taxation is contemplated to give them funds to help pay this. I'd like to add the next question on to it, which is that the municipalities coming into this will suddenly have a new cost that they have not had to fund in the past, costs that within their adjacent municipalities are funded by a gasoline tax, a Hydro tax or a property tax. Do you intend to give them the same rights of taxation, the same ability to raise taxes, in order to raise their portion of the costs that they will contribute toward the West Coast Express?

Hon. C. Gabelmann: I'm not certain that I got all of the question, and if I didn't, I'll ask the member to ask me again. Clearly the local share is funded by the tax sources, and the member identified what they are. There are now discussions underway with Mission with respect to those issues. Those discussions are not finalized. Clearly the member is correct. There is a requirement for additional moneys because there is an additional service, but theoretically the moneys paid get the service. Commuters are not going to have to take their cars should they choose to take the train, and that benefits not only the people who take the train but also the others who take their cars, because presumably it takes some of the pressure off the road system.

G. Campbell: I just want to get a couple of things clear from the minister. As I understood the little briefing note that you were reading there -- I took notes -- you were saying that the transit commission is going to cover 12.5 percent of the operating costs, including rolling stock. I assume that means that you're going to lease the rolling stock and that it would be part of the operating cost. Do you want me to go one at a time here?

Interjection.

G. Campbell: Okay. Is that correct?

Hon. C. Gabelmann: The local share of West Coast Express operating costs that VRTC and Mission would assume includes the cost of the rolling stock and debt service, and that's 12.5 percent.

G. Campbell: What costs are covered in the 31.4 percent that you mentioned earlier?

Hon. C. Gabelmann: That 31.4 percent is a percentage of operating costs only.

Interjection.

Hon. C. Gabelmann: The 12.5 percent is rolling stock and debt-servicing capital. Capital and operating are separated.

G. Campbell: My understanding, then, is that 12.5 percent of the debt costs and the lease costs will be covered by the local jurisdictions, and then the 87.5 percent will be covered off at the 31.4 percent to 68.6 percent. Is that correct?

Hon. C. Gabelmann: I didn't understand this, either, and in reading it quickly, I may have confused not only myself but all of us. The total local share of West Coast operating costs, including the costs of rolling stock and debt services, is 12.5 percent.

Interjection.

Hon. C. Gabelmann: I hope I'm learning as much as members of the opposition are as we do this. Rolling stock and debt service are part of operating costs. I think I was assuming that they were capitalized, but they are not. So the local share 

[ Page 16960 ]

of the operating costs, which includes the costs of the debt.... I guess it includes the cost of paying the train drivers and all of the other operating costs, the cost of debt servicing and the cost of the rolling stock, which I assume is leased.

[9:30]

Interjection.

Hon. C. Gabelmann: That's a different issue. The local authorities, the VRTC and Mission, would pay 12.5 percent of those costs. I think we're now clear on that point.

G. Campbell: What's the 31.4 percent?

Hon. C. Gabelmann: The first thing I'm going to do is ask one of the Sergeant-at-Arms staff to make half a dozen photocopies for members of the opposition. Let's do that. If there are any other questions.... We'll just go to other questions and then come back to this, if that's all right with the member.

G. Campbell: I appreciate that. I think that will probably help us. I appreciate the minister helping us out that way.

Can I just ask a question about the fares? Fares are typically part of the regional transit commission's revenues. They're held for that. I understand that fares are going to be in a different situation in terms of the West Coast Express, the commuter rail service. I guess what will happen, then, is that there will be an impact on the existing transit commission, and the existing Mission services will have to be picked up by other fares or other means of generating revenue in the Mission service or in the regional transit area.

Fares have traditionally been kept as a source of revenue to fund the local share of transit, at least in the Vancouver Regional Transit Commission and, I believe, in other transit service areas as well. What I thought I heard you say was that all of the fares from this particular commuter rail service will be going to the province to help offset their costs. If that is the case, does that not mean that the regional transit services -- and I'll just use that as a generic term meaning both Mission and the VRTC -- will have to find additional fare or taxation revenues to cover off the service costs they have that are generated by this new service?

Hon. C. Gabelmann: The answer is yes. The hydro charge or the gasoline charge or the property charge.... What else is there? There's non-residential property, hydro and the gas tax. The member knows that's where that will come -- the same as it does now in the system.

C. Serwa: I was listening to some of this debate downstairs on television, and frankly, it's not coming across very well.

Nevertheless, it's my understanding, from responses to some of the questions, that the rolling stock has been paid for by the province; it does not come out of operating revenue for operating costs.

It's a pity that this discussion is not taking place in the Douglas Fir Room, because in spite of the minister endeavouring to do his very best, he is into an area that he's not familiar with. It's a shame that by leave of the House the technical questions couldn't perhaps be answered by staff, because it would help to clear up the explanation, which is difficult to translate for someone when it's not their field.

Hon. C. Gabelmann: I appreciate the member being sympathetic to my plight -- and it truly is a plight.

The locomotives are a capital expenditure; the coaches are leased and are part of the operating. If I didn't make that clear earlier -- and I may well not have made it clear -- I hope that does.

D. Symons: I've got a B.C. Transit document here that came out on December 2, 1994. They've got a section in here that talks about commuter rail operating costs of $10.48 million for the service year '95-96. Basically, as it was explained to me when I was obviously incorrect in interpreting this, the minister responsible told me that it's just for the five months of that first startup stage, from November 1 through to the fiscal year ending March 31.

If you prorate that to a year, we have an operating expense of about $25.2 million. If we take the current funding formula that's used by B.C. Transit and the province, we find that the province is paying 31.2 percent of operating costs. If we take 31.2 percent of the $25.2 million, we get somewhere around $7.5 million, which seems to be at variance with the figures just passed out on the sheet -- it would help if I could find it in this mess on my desk. There's something toward the middle portion of this that talks about $1.8 million; it's about three-quarters of the way down on the list. Based on the funding formula, the Vancouver Regional Transit Commission's share of the West Coast Express operating cost would be $1.8 million and the province's $10.7 million. This is the total funding for operating.... I'm not quite sure how this works out in comparison to the numbers I just worked out a moment ago.

Hon. C. Gabelmann: The confusion may arise as a result of startup costs -- one-time-only costs that aren't prorated. That may be where the member is getting off track, if I might put it that way.

F. Gingell: If I could ask the minister to look at the third paragraph here, it says that the local cost of the West Coast Express operating cost that VRTC and the district will assume, including the cost of rolling stock and debt service, is 12.5 percent. Then in the next paragraph, the last sentence says that the province agrees to fund 100 percent of the cost of infrastructure and rolling stock. We have rolling stock in there twice, and once the province promises to pay 100 percent of it, but in the paragraph above it says that the VRTC and the district of Mission are going to pay 12.5 percent. Which is correct? Or are we talking about different types of rolling stock?

Hon. C. Gabelmann: The third paragraph refers to the total cost of West Coast Express. The fourth paragraph refers to the total cost to the municipalities. And then....

Let me try this another way. I must say I wish that conference in Kelowna was over....

An Hon. Member: It is.

Interjections.

[ Page 16961 ]

Hon. C. Gabelmann: And may I ask the member why he didn't bring my colleague with him?

Interjections.

Hon. C. Gabelmann: He was probably doing something very important.

Let me try to wrap the two paragraphs together another way. The local cost-share of operating is 31.4 percent. The provincial cost-share of operating is 68.6 percent. The local share of capital cost is zero percent. The weighted total sharing of all costs -- capital, operating, everything -- is 12.5 percent. Now I think even I understand it.

G. Campbell: Well done. The minister is a quick study.

On the information that you've given us on fares, you are saying that all fares will go to cover the provincial cost with regard to the West Coast Express. Has there been any work done to show what the impacts of that will be on the other transit service areas that are involved with the West Coast Express?

Hon. C. Gabelmann: It has just been suggested to me that I advise members that the legislation is simply providing the framework for the financial plan. A lot of the questions that are getting asked are still involved in discussion. If this would help members, we will provide to members of the opposition tomorrow a copy of the proposed -- I can't read the writing; it's the end of the session -- financing plan. We'll get that to members tomorrow so that they have all the information.

D. Mitchell: Point of order. We've been trying to deal with this section now for a considerable length of time. I think some very good questions are being asked, and with all due respect to the Attorney General, who has no familiarity with this bill, this exercise is a mockery. If we can't stand down this section of the bill, if not the entire bill, and move on, we're making a serious mistake here.

In terms of the question of order, I would suggest to the hon. Attorney General, who I believe is also functioning as House Leader this evening, that with all due respect, if the minister responsible for the B.C. Transit Commission were here tonight, we would have been finished this long ago. We are delaying the exercise, we are delaying the House, and we're making a mockery of this committee.

I would move that we stand down this section and move on to either the next section or the next bill.

Hon. C. Gabelmann: We are dealing here with a framework for negotiating new arrangements. I've answered the questions with respect to the costs. I've indicated that the financing plan will be made available to all members tomorrow. That should satisfy members in terms of what is actually here in front of us in this legislation.

[9:45]

The Chair: It is my understanding that we normally stand down sections by consent of everyone, not by motion. I think, at this stage, that we have arrived at a bit of an understanding here.

D. Symons: I wonder if the minister might confirm for me that the regional transit commission, excluding commuter rail for the moment, currently has power to do the planning, the fares, the service performance and so forth. Is that part of the current regional transit commission's mandate?

Hon. C. Gabelmann: Within its own service area.

D. Symons: We find in subsection (3) that now for the West Coast Express, the Lieutenant-Governor-in-Council is going to take over those functions that you admitted a moment ago apply really to all the rest of the transit service in the lower mainland region. I wonder why you're doing this. Why can you not trust B.C. Transit to do what it is doing in the lower mainland with SkyTrain, with bus service and all the rest? Why can they not do it for commuter rail as well? Why did you feel that cabinet basically should have that control in its hands rather than giving it to the regional authorities that seem to be involved in raising the money for paying this 68.8 percent of it?

Hon. C. Gabelmann: This is not a VRTC operation; this is a partnership with them and Mission. The province is obviously involved as well. It's for that reason.

On a point of order, it's my understanding that hours and hours -- maybe as many as six -- were spent on these operational-type questions during the estimates earlier this session, and what we really should do is keep pretty strictly to the amendment.

The Chair: Point well taken. I would encourage the hon. member particularly, since he was ranging far afield from what was on here, that if he has other points he wishes to raise that are directly related, I'd appreciate hearing them.

D. Symons: I'm sorry, I would not want to disagree with the Chair, but it's indeed section 6 that I was asking about actually, I believe.

If we look at the situation relating to SkyTrain, I think there are some parallels here. There was a great deal of concern on the part of the members on that side of the House when SkyTrain was, according to their impression, imposed upon the Vancouver Regional Transit Commission by the government of the day, that it wasn't fair that they put it in and then left them to pick up the costs of operating it. It seems that's exactly what has happened here with commuter rail. It was not a decision of the regional transit authority to put in commuter rail. As a matter of fact, the commuter rail did not fit into the greater Vancouver regional Transport 2021 study at all. This was a government-imposed solution to the transit problems in that sector, not a consultative solution. What you seem to be doing here is saying: "Now that we've imposed it upon you, we are going to impose upon you also the responsibilities of paying what we consider to be your fair share of the costs of operating this system."

Hon. C. Gabelmann: We've answered that. There were negotiations with the local governments, with the authority and with Mission, and the province is taking the risk. All that has been explained before, so I don't think we need to repeat ourselves.

J. van Dongen: I'd like to get some clarification with respect to the involvement of the city of Abbotsford in these 

[ Page 16962 ]

funding arrangements. First, I would assume that as a municipality or as a city, the city of Abbotsford would not be involved. Is that correct?

Hon. C. Gabelmann: Yes.

J. van Dongen: Okay. The second question, and I'm not sure.... I would have to get the minister or his staff to confirm this. As I understand it, the city of Abbotsford is involved in a local transit authority or a little transit system together with Mission. Is that correct?

Hon. C. Gabelmann: Yes.

J. van Dongen: The city of Abbotsford is running its own system. Okay. So the city of Abbotsford would not be involved in funding on the basis of a regional transit commission. Could the minister confirm that?

Hon. C. Gabelmann: The member, in protecting the interests of his constituents, doesn't have to worry.

G. Campbell: I have one question about the answer we received earlier with regard to an integrated service, and I think it's relatively simple. In looking at the service agreement, the commuter rail service has been put in. It's part of an integrated service now, which includes the buses, SkyTrain, the SeaBus, etc. I'm sure the minister knows that about 90 percent of the transit in the regional transit area in greater Vancouver is in fact buses. In Mission, it's all buses, so that's 100 percent.

The question I have is: in what way can the service be reduced? Say the commuter rail service ends up being a very expensive service with high costs and very low impact in terms of transit. What will the mechanisms be for reducing it? Will the regional transit commission be in a position to reduce it, or will that only be done on the basis of the Lieutenant-Governor-in-Council?

Hon. C. Gabelmann: First of all, it's hypothetical. Second, it's not going to happen the way the member suggests. Third, there are negotiations going on that may lead toward answers, if they're necessary. Fourth, if it ever occurred, we would deal with it then.

Sections 6 to 10 inclusive approved.

On section 11.

D. Mitchell: I have a brief question on section 11, if I could. This section permits cabinet to exempt from specified taxes the land and improvements used for commuter rail service. I wonder if the Attorney General could briefly inform the committee why this is necessary. Are we doing it for all time? Are commuter rail service lands and property being exempted from taxes for all time? Would we ever see a situation where a grant in lieu of taxes would be paid, similar to what has just been achieved with B.C. Rail? And why is commuter rail service being exempted? Is it possibly because, as some suggestions have it, this service is being overly optimistic in terms of its forecast and requires this kind of subsidy to operate?

Hon. C. Gabelmann: Almost nothing except death and taxes is for all time, and what is being done here is parallel to what has been done with SkyTrain.

Sections 11 to 14 inclusive approved.

On section 15.

The Chair: On section 15, there is an amendment standing in the name of the hon. member for West Vancouver-Garibaldi.

D. Mitchell: Procedurally, are we moving on to the amendments to the Highway Act at this point? There are a couple of sections of the bill that I think you skipped over.

The Chair: Hon. member, I went through them all and asked if they were to be passed, and it was agreed. I heard no negative noises of any kind, so we're on section 15.

D. Mitchell: Fair enough. I think, just for clarity, it would be useful to know if you're dealing with sections within a section on a bill or with sections of the act.

The Chair: Sections of the act. That's how we do it. I haven't changed that since I sat down.

D. Mitchell: We haven't moved very fast with the bill yet either, hon. Chair.

The Chair: Well, it seems a lot of discussion has been necessary.

D. Mitchell: Are we on section 15 now?

The Chair: Yes.

D. Mitchell: On section 15, we're dealing with an amendment to the Highway Act. It's a fairly significant one, I think, because it allows the leasing of parts of highways to the B.C. Transportation Financing Authority. I'm not sure if the hon. Attorney General or the Minister of Transportation and Highways is going to be in charge of this.

Interjection.

D. Mitchell: Great. I'll give the minister a chance to get her official with her.

This section deals with allowing parts of highways to be leased to the B.C. Transportation Financing Authority. I guess there's an issue of policy here. I only want to deal with policy; I don't want to deal with scenarios or specifics. But what is being contemplated here is different from the practice that I understood has always occurred in the province. We're amending a section of the Highway Act that used to allow transfers of portions of highways to a person. We're deleting that section now so that portions of a highway cannot be transferred to a person or a corporation, and we're replacing it with something that says parts of highways can only be transferred to the Crown corporation known as the B.C. Transportation Financing Authority. I think the Minister of Transportation and Highways really owes the committee a brief explanation as to why this change is being made.

Hon. J. Pement: We're not deleting from the section; we're adding subsection (2) to the section. So it's not a case of deleting from the section. The member said that we were deleting.

[ Page 16963 ]

[L. Krog in the chair.]

D. Mitchell: Just to get to the point I was trying to make, I'll move the amendment standing in my name on the order paper.

[SECTION 15, Highway Act, section 15 be amended by adding, after the new proposed subsection (2), the following subsection:

(3) that leases transferred to the BC Transportation Financing Authority by the authority of subsection (2) be reported in the month following in the BC Gazette and annually in the Annual Report of the BC Transportation Financing Authority.]

On the amendment.

D. Mitchell: When I look at this amendment to the Highway Act, we're adding a subsection that says that the minister may lease to the B.C. Transportation Financing Authority a portion of any highway vested in the Crown, but he or she can do so without first giving any public notice and without the need for special circumstances. I think that's highly unusual.

What my amendment does is say that leases transferred to the B.C. Transportation Financing Authority by this subsection should be reported in the month following in the B.C. Gazette -- that's one way of getting the story out -- and annually in the annual report of the B.C. Transportation Financing Authority.

Maybe if it's urgent, it should be done. I'm not sure. There's a question of policy here as to whether we really want to do this, but if it is done, I think at least the principle of making it public in a timely fashion should be adhered to. On that basis, without questioning the policy but with regard to how this is going to be communicated, I hope the minister might accept this amendment.

Hon. J. Pement: We are not accepting the amendment. It's a case of process and a concern that the member has expressed with regard to information. The Build BC Act contains specific provisions with respect to reporting of the financial information. Under that act, authorities are required to comply with generally accepted accounting procedures, and those accounting principles set out requirements for disclosure of leases. The annual report of the BCTFA also contains that detailed information on investments of the authority, and the disclosure of leasehold information is therefore adequately dealt with in this legislation.

D. Mitchell: I don't want to belabour this point, but I've got to try to understand why the minister would bring in an amendment to the Highway Act, saying that she can lease to the B.C. Transportation Financing Authority any portion of any British Columbia highway, and specifically saying that she may do so without first giving public notice and without the need for special circumstances. Why is that extraordinary power necessary? Why does the minister need to be able to do this without first giving public notice? I think this is a relatively non-controversial amendment. I'm not sure why the minister won't accept it.

[10:00]

Hon. J. Pement: Again, this deals with how, not why. The amendment itself to the act deals with the process of how the TFA records an investment, not whether it invests in highways.

F. Gingell: It is really hard to think of a set of circumstances that would require this to be done on an immediate basis without sensible notice being given. The old section 15, which stays there and which deals with the province separating itself from a highway either by lease or by transfer, requires notice. One can appreciate that this isn't moving outside the family, as it were, because it's going from the provincial Crown to a Crown corporation. But it seems unreasonable to me that the people of British Columbia wouldn't have some automatic means of receiving notice.

You know, these reports filed by the Transportation Financing Authority, other government ministries, other government Crown corporations and other government Crown agencies are all late. The auditor general wrote a damning report on the lack of discipline of this government in filing the reports that they are required to file under a whole series of acts. You've all promised that you'll do better, but nobody has proven that yet. It seems strange to me that you would want to do this in secret and that you wouldn't want to do it in a very open manner so that people understand what is going on. We're not asking for anything other than notice, and that just seems to me....

Interjection.

F. Gingell: Yes, honest and open government.

Hon. J. Pement: I will just point out to the member that the Ministry of Transportation and Highways will still maintain the administrative jurisdiction and operational control of highways leased to the authority. That side of it is maintained by the Ministry of Transportation and Highways. Actually, through this mechanism, improvements to these highways can be made and shown as a leasehold improvement on the financial records of the authority and then be amortized over the life of that facility.

F. Gingell: So literally this whole scheme is a process by which you're going to move maintenance costs, which are normally charged against the consolidated revenue fund and included in the calculation of the surplus or the deficit for the year, off the consolidated revenue fund financial statements. You're going to push them off into the Transportation Financing Authority.

Hon. Chair, this is the one thing that concerns us. We talk about better reporting practices and more accountability. Yet this government continues to play a shell game, where they now take maintenance costs that would normally be charged as an expenditure of the Highways ministry under their voted budget, and they move them off the balance sheet and then claim that they've balanced the budget.

But we know that in this current year, there are $337 million worth of expenditures that would normally have been charged in the calculation of whether this province has a budget or a surplus, and they've moved them off into the Transportation Financing Authority. The minister can shake her head, but that is the truth of the matter. That is the absolute truth. When you compare the way the accounting was done in this province for a hundred years up until the creation of the Transportation Financing Authority, that's the way the books were kept. You continually make comparisons with the way you keep them now to the way they used to be kept, and you try to tell the people that it's the same. It's not, and it isn't being truthful.

[ Page 16964 ]

When we saw this, we were concerned that there were two objects here. The first object was to move maintenance costs off the consolidated revenue fund and hide them away in the Transportation Financing Authority. And you've confirmed that's the case.

The second concern we have is that you might take currently existing highway infrastructure or bridge infrastructure and put a toll on it. Now, that matter was discussed during the creation of the Transportation Financing Authority, and I must admit I asked for a briefing note from our own research department and it hasn't come. But from my memory, I remember specifically asking the question. The answer I was given at that time was that there was no intent by this government to transfer presently existing infrastructure and put tolls on them, but that you might consider as an option new infrastructure being tolled. If that part of my conspiracy theory is false, I would appreciate the minister standing up and confirming that it's not the case and that we shouldn't concern ourselves about it.

Hon. J. Pement: Obviously, the member's pretty good at making stories up.

Nevertheless, with regard to this issue, it's not maintenance. I'm not talking about moving maintenance costs over. That is the responsibility of my ministry, Transportation and Highways, and it continues to be there, as well as rehabilitation. This is about capital improvements. When you move a particular section over, you're talking about capital improvements in that process. That's what you're talking about.

F. Gingell: There isn't any point in carrying on with this. But I'd like to suggest that the term "capital improvements" is very subjective. I can suggest to you that painting my house is a capital improvement and make quite a good case for it, but I'd like to suggest that it's maintenance. If part of my house falls down and I rebuild that, you may say that it's rehab and a capital improvement, but I think that is maintenance.

But the assurance I was looking for from the minister is that there is no intention, under any circumstances, to use this section to toll a presently existing highway infrastructure.

Hon. J. Pement: Again, I'm going to say that this issue with regard to this particular amendment is on capital improvements and capital involvement. It's not to do with maintenance, and there's no intent to what the member said.

F. Gingell: I've asked the last question for the third time, and I haven't had a distinct, clear, enunciated response. There is no intention at any time to transfer currently existing highway infrastructure to the Transportation Financing Authority and put a toll on it.

Hon. J. Pement: We're talking about an issue when you put a system over to a lease situation. With the TFA, we're talking about capital processes -- in other words, that we're adding to that system. We have no intention of looking at an existing system and putting in a toll-type situation. With regard to tolls in general, no decisions have been made.

D. Symons: I just might remind the hon. minister of when we were discussing Bill 3. The passing of Bill 3 set up the Transportation Financing Authority, and one of the sections in it said that the minister is the chair of the board. We found that when we passed that act -- and it did pass -- that the Minister of Transportation and Highways, as defined in this as being the minister, was no longer a member of the board. What we pass today may not be the case tomorrow, because it can be changed by an order-in-council, which is the answer I was given when I asked how come the Minister of Transportation and Highways is no longer the chair of the TFA. That was the answer given to me: "An order-in-council changed it."

I might also remind the minister that a year ago, we were doing estimates for the Ministry of Transportation and Highways, and I was lamenting the fact that there is a woefully inadequate amount of money spent on rehabilitation of highways in this province. The minister responded to me by saying that there was going to be an extra $60 million coming in from the Transportation Financing Authority. I questioned the minister further on that by saying that I thought the Transportation Financing Authority was set up for doing capital construction, and we were discussing rehabilitation. The minister's answer at the time was that some of these rehabilitation projects are of such a major variety that we could consider them to be a capital expense, and that is why she is now bringing that money in from the TFA.

It seems now that what the minister is planning in this bill is to be able to take a current highway, move it out, do rehab work on it, put a toll on it and then after a while put it back. There seems to be no reason other than that for bringing in this particular section of this legislation. It will allow the minister to take a highway out that needs some work done on it. She can say that it's capital or that we're doing major work on it, but it could be adding shoulders on the road, doing a seal-coat or a variety of things like hot-in-place replacement of the top surface of it. All those types of services could be done and considered here as legitimate.

There's nothing in here that would preclude that happening, and the minister really hasn't answered the question on whether it will never be done. She has said simply that it's not going to be taken out, as the member for Delta South was asking, and then have a toll put on it. Right. The minister was going to do some cosmetic work on it and then end up charging that to the TFA, rather than it being the usual rehab work that would come through the Ministry of Transportation and Highways. If the minister wanted to pay for that, she would have another source of income other than coming through the general revenue and funding to the MOTH for doing that. She could end up doing it through the TFA and keep it off the books.

Hon. J. Pement: With regard to capital projects, let me give some examples to give an idea what a capital project is. They include construction of new highways, construction of additional lanes, construction of passing lanes, realignments, upgrading of a gravel highway to a paved standard -- which takes significant work on the road base, etc., to get there -- construction of grade-separated interchanges and crossings and installation of traffic management systems. In other words, capital expenditure.

D. Symons: Then I might ask the minister this. When I was asking these questions last year, and there was an extra $60 million coming in from the TFA that I was told by the minister was really rehab that could be classified as capital construction, was the minister misleading me at that time?

[ Page 16965 ]

The Chair: Point of order. The member for Okanagan East.

J. Tyabji: I've been listening carefully to the debate. We're on an amendment right now, and I'm not sure how it's relevant. I'd be happy to hear those comments once the amendment is dealt with.

The Chair: The member's comments are well taken. We are on the amendment to this section.

G. Wilson: I just have one very simple question to the minister. I missed the answer to the question about why the minister will not give public notice. If she could just answer that question.

[10:15]

Hon. J. Pement: This is just an issue between government agencies. It's not a case of different ownership of the system.

An Hon. Member: Well, then, withdraw the bill.

G. Wilson: I think that's not necessarily a facetious suggestion from the member for Peace River North. If it's really not an issue, then why on earth is it in this bill? Why are we amending it? Why are we even debating it? So it clearly is an issue. I think that the member for Delta South has outlined why it's an issue. It's because it has to do with accounting. Will the minister not agree that it would be sensible, given that there is going to be a different practice of accounting for those areas where that transfer has occurred, that public notice should be given?

Hon. J. Pement: Again, information will be given through the Transportation Financing Authority, as I spelled out to other members, with regard to these provisions. This is only a housekeeping amendment. It deals with the how, not the why. It deals with the process of how the TFA records an investment, not whether it invests in highways, and it's simpler than existing provisions. The alternatives are registration at land title offices, etc. It allows us to deal with the assets, etc., with the BCTFA.

K. Jones: Could the minister tell us whether this lease arrangement will be used as collateral for the TFA?

Hon. J. Pement: It's really simply a way of recording the investment that the TFA makes.

D. Symons: Just going back to the answer on the definitions of capital expense that the minister gave me a few minutes ago, my question would be, then: if indeed you've named those items as capital that you are running through, so you are precluding, supposedly, doing rehab and such by your giving me those definitions of capital, then why, as the legislation currently stands without this, can you not do those capital constructions through the TFA as it currently is mandated to do? Why do you need this section to take a portion of the highway, when indeed you already have authority through the TFA to do capital construction? There seems to be no need to take out a section of highway -- exclude it from the ministry -- to be able to do capital construction through the TFA. You have that mandate already.

Hon. J. Pement: Again, this is to record the investment of the TFA. As I said before, it is simpler than going to register in the land title office with a small section. We're talking perhaps about a portion, and it allows us to deal with it in a more timely manner.

G. Wilson: I think I have a solution to our problem here, and we can get this one done. Other than withdrawing the bill, which would probably be the most sensible solution, it seems to me that what we have heard is that this is just an internal housekeeping matter which really is of no consequence or substance, and therefore the member's amendment to first give public notice is really only going to provide for the suspicious minds of the opposition and will have no consequence to the minister. So let's pass this amendment, pass the section and move on.

L. Fox: Well, obviously it's getting late, but let me speak to the amendment. It's important that British Columbians should have notice as to what highways or sections of highways are being mortgaged in terms of our children's future. That's precisely what it is. We're mortgaging our children's future through the B.C. Transportation Financing Authority. It's only fair that British Columbians should be notified, so they can identify when they go down the highway where their children's future is.

Indeed, there was one time when we could take pride in driving down British Columbia's highways, because they were paid for and they were...

An Hon. Member: Looked after.

An Hon. Member: Except for the Coquihalla.

L. Fox: ...looked after -- and yes, the Coquihalla, in terms of economic development. I wasn't around when those decisions were made, but I think also there's some pride with respect to that.

I support the amendment, which requires even a lot less than what's required under the existing section. The existing section requires 30 days of public notice prior to the intent. All this amendment is asking, once that decision has been made and that lease has been granted, is that public notice be given -- that it indeed has taken place. It's a very reasonable amendment. The government should receive it in the way that it's intended, and that's to keep British Columbians informed.

The Chair: The Chair recognizes the member for Richmond Centre, on the amendment.

D. Symons: On the amendment this time. I'm sorry for the other times.

I wonder if I might just point out to the minister that in answering why the amendment wasn't necessary, the minister did mention that the TFA in its reports and so forth has all this information contained in it, so it's easily accessible. I just might remind the minister that during the estimates debates of the minister responsible for the Transportation Financing Authority, I asked where the annual report that's mandated in the act was. I haven't seen one yet, nor has one been put out yet, as the minister informed me. So you might say these things are available, but they have not yet been produced for public consumption.

[ Page 16966 ]

So I speak in favour of the amendment. At least there's some way of people knowing what's going on, before the Transportation Financing Authority finally gets around to putting out even its first year's annual report that might list some of these items.

Hon. J. Pement: I would like the member to realize that I said it will be reported in the annual reports of the Transportation Financing Authority. I'm sure you'll fairly soon see those reports.

J. Tyabji: The minister has just said that the annual report will include any transfers that take place. The question we're trying to get to and what the amendment speaks to is: at what point is the public going to be notified of any changes? If they're not going to be notified until the annual report, wouldn't the minister think -- just as an insurance policy -- that the amendment should pass and the public would be notified at whatever point they want? The Gazette is hardly a front-page ad in the provincial newspaper, but it is a bit of protection for those people who follow the workings of government. Those are the people who tend to get most upset when we pass changes like this and they are not notified.

Hon. J. Pement: Again, it's a case of the reporting process through the accounting process, through the capital plan in estimates -- information comes out with regard to estimates -- and also through the annual report. I think that that is fairly clear and open with regard to information.

Amendment to section 15 of Bill 55 negatived on the following division:

D. Mitchell: I move that the committee rise, report progress and ask leave to sit again.

Motion negatived on division.

J. Dalton: I have a question for the minister about the Lions Gate Bridge. As we all know, eventually....

[10:30]

Interjections.

J. Dalton: Maybe I could just wait for a moment.

The Chair: Order, please. Please continue, hon. member.

J. Dalton: I can't hear anything.

Hon. J. Pement: Point of order. I would like to point out to the Chair that we are not in estimates. We're on section 15 of this bill with regard to an issue that has nothing to do with the estimates of Transportation and Highways.

The Chair: The point is well taken.

J. Dalton: Is the minister anticipating what I'm about to ask? I don't understand the point of order. As far as I'm concerned, it isn't a point of order. Are you going to allow me to continue, hon. Chair?

The Chair: Hon. member, I've just recognized you, and you are continuing, I hope.

J. Dalton: Thank you. We know under this amendment that any highway vested in the Crown may be leased to the B.C. Transportation Financing Authority. Given the reluctance of this government to make any decision on the Lions Gate Bridge, I'm just wondering.... I'll make the question very simple, so the minister will get it. Would it be possible under this for the TFA to lease the Lions Gate Bridge from the Crown and put in a major rehabilitation, such as double-decking or at least repaving -- which God knows is long overdue -- or extending the bridge or widening it? We've had them playing around with the sidewalks, but that's superficial. Would this fit within the scenario that the minister has presented in this amendment?

Hon. J. Pement: Again, just in case the member missed the information, we talked about what capital projects are. We're talking about capital projects, not rehabilitation projects. I went through a list of projects: construction of highways, additional lanes, adding to a facility in terms of lanes, adding to any given facility.

J. Dalton: Double-decking the bridge was the very example I used. Would that fit within this example?

Hon. J. Pement: Again, if one is adding to a facility -- adding capital dollars to a facility -- that would qualify under this section.

D. Symons: Just going back again to this, if you're adding a passing lane -- and that's a capital expense, as you mentioned -- why is it necessary to basically annex to the Transportation Financing Authority the lanes that are already there? I still say that you can add the passing lane through the current legislation without taking the other kilometre or two of current lanes that are sitting there to do it. I am just wondering. There must be a further reason for bringing this in. You already have the authority to do everything you listed under those capital expenses, so there must be a further reason for doing it this way.

[ Page 16967 ]

Hon. J. Pement: It's just a way of recording the investment. There's nothing untoward about it at all.

Interjections.

The Chair: Order, hon. members -- both sides of the House, please.

D. Symons: Just taking an entirely different.... That seems to be the best answer I'm going to get, and it's not an answer. Normally if somebody leases property, there is a lease fee attached to it. So if the Transportation Financing Authority is going to lease a highway from the Highways ministry, are you going to charge for that lease?

Hon. J. Pement: It's a nominal consideration.

G. Farrell-Collins: I've been listening to this debate. One looks at this, and all that one can draw from this section being put in is that the government is intending to engage in extensive capital -- whatever the word was the minister used -- projects on these highways without making the public aware of whether that money is coming out of an operating cost or an annual budgetary process, or whether it's being mortgaged -- whether the financing for that is going to be done through borrowing money.

When one is this close to an election, knowing the way this government is spending money left, right and centre, knowing the millions of dollars it's spending on advertising.... The quote from the Minister of Employment and Investment -- the real Minister of Transportation and Highways in B.C. -- says that they're shovelling money off the back of a truck. As we head into an election, with this government as low in the polls as they are, I can see the lineup of government members outside the office of the Minister of Employment and Investment asking to have their little segment paved or the shoulders widened on this road -- all of the types of things that this province has been known for, that the Socreds were so bad for and that the NDP lambasted them for. The only thing is that you're going to do it worse. You're not going to do it with money that appears in the budget; you're going to do it with borrowed money. You're going to borrow money to give all the government MLAs that are in trouble the benefit, during an election campaign or lead-up to an election campaign, of having their little roads paved, having their little projects done; and you're going to get away with it. The reality is that the public is going to end up bearing the load on that; the public is going to end up having to pay off those loans after the next election. It's going to impact on our ability to deliver other services in B.C., and it's going to be because of this section in this bill and the irresponsible spending habits of this government.

L. Fox: Just one observation. I think all caucuses have had presentations from the comptroller general. We know that this government is considering capitalizing all the assets. It seems to me.... Perhaps the minister could answer whether this section isn't necessary to accommodate that initiative.

Hon. J. Pement: Again, we're currently making capital investments. This is really simply a way of recording it. We have a way of reporting to the public what we're doing through the annual report.

Section 15 approved on division.

On section 16.

K. Jones: Hon. Chair, could you tell us which minister would be dealing with this section?

The Chair: The Minister of Finance is noted in the bill, hon. member.

Interjections.

The Chair: I recognize the Attorney General.

Hon. C. Gabelmann: This is a finance bill, which is being carried tonight by the Attorney General. The Minister of Finance is the minister responsible.

K. Jones: It sounds like a horse race to me.

Could the minister tell us how this particular piece of legislation will differ for the thoroughbred racing people and the standardbred racing people?

Hon. C. Gabelmann: This doesn't make any difference. Live racing is unchanged in terms of the revenue to the Crown. The additional racing, both simulcast and teletheatre, has a different percentage of revenue related to the Crown.

K. Jones: Perhaps the minister isn't aware that there is a difference in the allocation of funds between the thoroughbred and the standardbred horsemen, and that they do get different treatment. So maybe you could answer the question more thoroughly than you did previously.

Hon. C. Gabelmann: The tax regime is the same for both thoroughbred and standardbred.

K. Jones: Could the minister tell us exactly what the purpose of this additional funding is?

Hon. C. Gabelmann: It is for the improvement of the horse-racing industry in British Columbia, which has had significant improvement in the last year or two. This will ensure its survivability and viability for decades to come.

K. Jones: Could the minister tell us exactly how this improvement to the industry is intended to be done? Is it through capital structure? Is it through funds to the horsepersons? Is it to the gate that's provided?

Hon. C. Gabelmann: All of the above and more.

K. Jones: Could the minister tell us what the "more" is?

Interjection.

The Chair: The member continues.

K. Jones: I'd like to give the minister the opportunity to continue. He said he would.

Hon. C. Gabelmann: At a point in the future, hon. Chair.

[ Page 16968 ]

The Chair: Thank you, Attorney General. In future, I might recognize you before you speak.

K. Jones: Could the minister repeat his last statement?

Hon. C. Gabelmann: I was just trying to engage in debate that I thought the member might find recognizable.

Let me just say very quickly that, together with the subsequent section of the bill, this is an effort to return thoroughbred racing in British Columbia to the industry, rather than have it as a government operation. In the course of doing so, the obligations that the Pacific Racing Association has with respect to Hastings Park, and the deal it has with the city of Vancouver, are significant with respect to continued rehabilitation of that site. The obligations are such that in order to ensure viability, additional revenues are required. They are not getting additional revenues from the live race, but they are getting additional revenues through the horse racing commission, which will be used both for standardbred and thoroughbred in British Columbia.

Those decisions have been made not by government but by the Racing Commission. It's designed to ensure that the viability of the industry will be secure. We believe that the horse-racing industry in British Columbia is a strong and valuable feature of our economy. It supports many people in the lower Fraser Valley, in particular. I and the government want to make sure that this industry survives, so we are changing the tax regime for these two new forms of betting that are now available: first, teletheatre in a number of locations around British Columbia; and second, the simulcasts that beam in races from Hong Kong, Santa Anita and other locations.

[10:45]

K. Jones: As you're well aware, I'm very interested in the success of the horse-racing industry in British Columbia, particularly since a lot of it occurs in my riding. I really have concerns as to how these actions would be taken. The question is: where will this teletheatre -- the TBC -- and the simulcast funding be going? Is it all going into Pacific Racing? Is it all going into the upgrading of the Exhibition Park track that has been promised? It was promised previously in the Pacific Racing Association Act that it would be rehabilitated. Or is that funding also going to go into rehabilitation of the track at Cloverdale or Sandown?

Hon. C. Gabelmann: The money is for both research and facilities, and it is for both thoroughbred and standardbred throughout British Columbia.

K. Jones: Could the minister tell us how these funds, or this revenue that is coming in, is going to be distributed? Is it up to the Racing Commission to just determine arbitrarily who will get what, or is it related to the money that comes in from each form of racing? Is it tied to a particular track's ability to raise funds? If Sandown, for example, has a race card, is it going to be from that, or is it going to be from the teletheatre or simulcast from Sandown? Are they only going to get what comes through their gate, or is it going to be spread around more thoroughly or more evenly, by whatever method is being used?

Hon. C. Gabelmann: The Racing Commission makes the decisions about allocation. They will make the decisions based on the proportion of each thoroughbred and standardbred. So let's say that if standardbred is 30 percent of the industry in B.C., then 30 percent of this revenue will go to standardbred, and 70 percent would go to thoroughbred. It would not be location-specific; it could go to any.... I think the member is particularly interested in standardbred. The standardbred proportion could go to any part of the standardbred industry in British Columbia, as long as it's for facilities, research and improvement of that particular industry. It doesn't all have to go to one or another, depending on what is produced by one or another of the existing tracks.

K. Jones: Is the split in the thoroughbred area, for instance, going to be going in a certain percentage to Pacific Racing and a certain percentage to the horsemen themselves?

Hon. C. Gabelmann: Some will go to the PRA, some will go to the Horsemen's Benevolent fund and some could go to some of the tracks in the interior. This is for the benefit and improvement of horse racing, and that includes not just the track itself but the entire industry.

K. Jones: Could the minister tell us what the percentages are both for the thoroughbred and for the standardbred?

Hon. C. Gabelmann: It's 70-30.

K. Jones: I don't think the minister was clear about what I was asking. What is the split between the operators or the track and the horsemen -- and, in the case of thoroughbreds, other tracks? In the case of standardbreds, I guess there would be other tracks as well. A certain percentage would go to Sandown, for instance.

Hon. C. Gabelmann: It's 70 percent to the thoroughbred side and 30 percent to the standardbred side. I can't give the member the split. This is an estimates-style question, but my staff and I would be very happy to make sure the member gets this information from the B.C. Racing Commission as quickly as they can put it together.

F. Gingell: Does this amendment that you're bringing forward qualify at this point as a new tax, which you promised you wouldn't bring in? It seems to me that this is one occasion where it is a new and additional tax.

Hon. C. Gabelmann: Absolutely not. In fact, it's a tax reduction.

Sections 16 to 18 inclusive approved.

On section 19.

F. Gingell: Can the minister please explain what this increase in issued and outstanding voting shares is for? What's the purpose of this?

Hon. C. Gabelmann: It is being raised from 4 percent to 10 percent to try to raise new capital and expand the equity base.

F. Gingell: We are talking about shares in B.C. Hydro and Power Authority, aren't we?

Hon. C. Gabelmann: No -- B.C. Gas.

[ Page 16969 ]

Interjection.

Hon. C. Gabelmann: Let me just try this on again. What is now B.C. Gas used to be part of B.C. Hydro, then there was the privatization. So it's part of that initiative of the former government.

F. Gingell: So this is an increase in the authorized share capital, or a change in the breakdown between voting and other forms of shares of B.C. Gas, which is a public company listed on the Toronto Stock Exchange.

Hon. C. Gabelmann: Yes -- and to bring it into compliance with the Company Act and the Securities Act.

Sections 19 and 20 approved.

On section 21.

J. Dalton: I've provided the committee with a copy of my proposed amendment to section 21.

[SECTION 21, with respect to the Legislative Assembly Allowances and Pension Act, by deleting section 30 (5) and substituting the following:

A member of the Thirty-fourth Parliament who, immediately before the date of the return of the writs, has not served for 7 years or for more than 2 Parliaments, is entitled to recognition of the member's service before the date of the return of the writs respecting a registered pension plan for members, and the member may be required to make contributions in respect of that service.]

On the amendment.

J. Dalton: I'll first outline what the amendment is. It's quite straightforward. In section 21 we are simply dealing specifically with sections 30 and 31 of the Legislative Assembly Allowances and Pension Act, and I'll direct the committee's attention to that. We are proposing that subsection 30(5) be amended to strike the "the Thirty-fifth Parliament" and insert "the Thirty-fourth Parliament." Everything else is the same in the wording; it is as provided in the section as it stands in the bill.

The intent of the opposition amendment, of course, is to do what this government said in its July 5 press release that it was doing but in fact did not do. Our amendment is consistent with a private member's bill tabled by the Leader of the Official Opposition that dealt with the same issue. In fact, the timing of these two bills was very interesting. Bill 55 was tabled by the Attorney General for first reading, and the Leader of the Opposition got to his feet immediately after and tabled his private bill.

I'm looking at the government release of July 5. This, of course, was the day when first reading was given to Bill 55. Our concern here in particular is section 30 of the Legislative Assembly Allowances and Pension Act. We are told in this release that a bill was introduced that would bring an end to the existing pension plan for Members of the Legislative Assembly. Of course, it goes without saying that the release was referring to members of the thirty-fifth parliament, which of course is in this bill. Our amendment would change that to the previous parliament -- the thirty-fourth parliament.

I needn't remind the committee of the controversy that surrounds benefits that are paid to MLAs, and MPs as well, or of some of the public concern -- and even angst, in some cases -- about what MLAs and MPs are allegedly paid in the public's service. I don't think that's the issue that we should be addressing directly in this bill, even though this bill does open that up for whatever discussion members may care to have.

Personally, I have no difficulty.... I've heard other members addressing this issue. One of the party leaders -- of the third or fourth party that we see down the way -- certainly made a good point in previous discussions that the entire compensation package for public servants should be re-examined, in particular for MLAs, and we endorse that concept.

Coming to this particular point, the concern that we have in the opposition is that the government is not being right upfront by saying that they've amended the current MLA pension plan. They have ended the plan, but the benefits will be carried over into the next parliament, so to speak. As we see in section 21, section 30(5) as advanced in the bill: "A member...who immediately before the date of the return of the writs, has not served for 7 years or for more than 2 Parliaments" -- which is the current qualification to collect an MLA pension -- "is entitled to recognition of the member's service before the date of the return of the writs...."

Let's put this into context. Over on this side, we would like the writ to be dropped tomorrow -- or even today, if you care to. The government would probably like me to use an example where the writ would be dropped in October 1996. Whenever it may be, sometime between tomorrow and October 1996, the thirty-fifth parliament will end; the writ will be dropped. We may be using the new Election Act -- we don't know; we'll have to see how that washes -- and we will go to the polls.

Anyone who is not entitled to an MLA pension under the current plan -- which the government has allegedly ended in this bill, but in fact it has not -- will be entitled to recognition of that service respecting the registered pension plan for members, and the member may be required to make contributions. That's what the act says. What we would do in our amendment and what the Leader of the Opposition's private bill would do is eliminate, and be truthful about eliminating, the current MLA pension plan. The effect of our amendment, if accepted, is that no current MLA who is not entitled to a pension plan would be entitled to pick up the recognition that this current section, without amendment, provides.

I know some members are probably thinking to themselves -- and maybe some will have the courage to get to their feet and say: "Wait a minute, what about the service that we put in? What about the fact that we ran under rules, and now you want to change the rules?" Well, I think we have to be honest and true to ourselves, but more importantly to the taxpayer, and the taxpayer is not getting a fair deal with the current plan.

[11:00]

The current plan provides that you kick in after seven years or two terms. Let me just draw the committee's attention to the fact, because it's a useful term of reference for me, that I'm on the college pension plan, and I've served many years in the college. It's not dissimilar to this plan, because it's a public service plan, but certainly the college plan is not as generous as this one is. I have no intention, by the way, of taking 

[ Page 16970 ]

advantage of this current provision if, heaven forbid, we don't accept this amendment; I have no intention whatsoever. I'm quite content to remain with the college plan. I will buy up the years of service in which I have, shall we say, gone adrift somewhat, because I am no longer, of course, working at the college. But I am entitled to do that because I'm on leave, and I'm not going to take advantage of that as this provision would allow.

I know the minister will be defending her own press release. When she gets a chance to respond, she'll say: "Look, I did what I said I would do." Well, she has not done what she said she would do. The plan is too generous. It is not fair to the taxpaying public, who should get honest value for their dollar. The amendment that we are proposing would allow honest value for the dollar of people serving in public office. There is no justification, as far as I'm concerned, that would entitle a currently sitting MLA who is not in an MLA plan to buy up the service, so to speak, that this section allows. There's no justification for that.

This government has said: "Wait a minute, we've got a problem. The public is not happy with the current benefits paid to MLAs." Even though it may only be a perception in some people's view, the public therefore perceives that there's something wrong. I think we have to listen to that concern and address it.

What we would do, just to settle the minds of some.... We're not saying that people who serve in public office are not entitled to benefits. It's quite the opposite. What we are saying is that as part of our overall package -- this is just part of it -- the entire compensation package of MLAs must be revisited. It's not looking from the point of view that some members may be thinking of, which is: "Wait a minute, these guys just want to do through the back door what they're not prepared to do through the front door." That is not true.

We are prepared, as this amendment and our leader's bill demonstrate, to cast aside the current pension plan altogether and then strike an independent commission to revisit and re-examine the entire compensation of MLAs, and allow provision....I think of my college plan, for example. As I've already said, I'm entitled to maintain that plan, and of course I have to make contributions to it. That's fair, because nobody is going to argue that an MLA is not as entitled as any other public servant or someone in private business to a pension plan if they so wish, or to purchase something alternative, such as an RSP, which I also own. I think that's an excellent alternative vehicle.

Just to address the committee's attention to our intention here, we strongly argue that we do not feel the government are being totally upfront and honest when they say in this release that they've eliminated the plan, because they have not eliminated it. There's a carryover, as I've said, for all MLAs who don't kick in to the current MLA plan. That's not ending the plan; that's simply saying: "By the way, we're going to give special favours to the backbenchers in particular" -- most of whom, of course, like all the Liberal caucus, were elected to this parliament for the first time.

That is, quite frankly, an indirect way of doing what we say directly you cannot do. We do not condone that, the public does not condone that, and I think it is long overdue that all MLAs pay attention to the concerns of the taxpayer, not just from the point of view of whether they're getting value for government service but also from the point of view of whether they're getting value for the public servant that they elect on their behalf.

I believe that this amendment is well intended and is certainly going to take care of both current and future problems. And there will be future problems if this government does not recognize the angst of the public. They're going to have to go to the polls one day with either an old or a new Election Act. They're going to have to go the polls facing the valid concerns of the taxpayer that their so-called pension plan has not been eliminated, as this minister has told us. I would be interested in her viewpoint on this subject. I'm sure she has a viewpoint, and I can see that she's anxious to bounce to her feet and provide us with that.

Hon. E. Cull: Actually, I'm anxious because I don't think the member realizes what he's done with this amendment. I must say that part of me is somewhat tempted to support it, because it actually confers benefits on a unique group of the thirty-fourth parliament: those who happen to be by-election winners who did not get their seven years in. Being a by-election winner who did not get seven years in, this would give me some benefits. However, as I have to throughout this debate, I will put my personal interests aside. I have to deal with the comments.

The member has said that there are benefits that the old plan carried forward. He is not reading the section correctly. The existing plan dies at the return of the writ. There is no way that anyone can earn service after the return of the writ that applies to the old plan, so there's no carryover of the benefits. There is no way that anyone such as myself, who has not had the seven years or been re-elected twice before the return of the writ, can get any benefits under the old plan. That's just cut off and it's finished. So the member is incorrect in what he said about the benefits coming forward. His amendment would single out about five individuals of the thirty-fourth parliament who do not qualify with the seven years or two re-elections, and give them some retroactive pension benefits -- single them out uniquely from everyone else. I don't think that's fair or in keeping with what we're trying to accomplish here.

The opposition party have said that they support a commissioner having a look at remuneration and benefits, and would support a fair and decent benefit package for MLAs. I'm puzzled as to why they would, if -- and it is an if -- the commissioner recommends a pension plan that would not allow people who have served from 1991 until the next election to purchase benefits in that new plan. To do so otherwise doesn't really make much sense. Someone might have served before the thirty-fourth parliament, and they may have had pension benefits. If there's a hole from '91 to '96 and there are no pension benefits during that time, they could pick up with the new plan afterwards. That doesn't make sense. It wouldn't make sense in the private sector if we were dealing with public sector plans. We've been trying to deal with matters of portability.

This is a provision that simply provides for the possibility, should the commissioner recommend the pension plan, that if there is a registered pension plan -- and that means that it has to comply with the Income Tax Act -- members can purchase service from 1991. There is no continuation of the old plan and no doubling up of the two plans, but it provides for that continuity.

[ Page 16971 ]

The member's amendment does not achieve the objective he wants it to achieve. It creates a rather strange situation for five members of this Legislature. I'm puzzled as to why he would do that, and I think the amendment is ill-advised and poorly written as a result of that.

[G. Brewin in the chair.]

Amendment negatived.

J. Weisgerber: I'd like to introduce an amendment to this section as well. I've provided the table and the minister with a copy of the amendment. For the benefit of those members who don't have a copy, I will read it into the record.

The amendment would have the effect under section 21 of deleting subsections 30(4) and (5) and replacing them with a new subsection (4), which reads:

[(4) Subject to such provisions as may be enacted to affect all eligible members of the Thirty-fifth Parliament pursuant to subsection (6) [which is new] a member who, immediately before July 5, 1995, is entitled to an allowance determined under this part as it read on that date, provided that:

(a) The member has served for 7 years or for more than 2 Parliaments; and

(b) the member is age 65 or older.

(5) Pursuant to subsection (6), a member of the Thirty-fifth Parliament shall be entitled to recognition of the member's service before the date of the return of the writs in any provisions enacted respecting a registered pension plan for members, subject to

(6) A Members' Remuneration and Benefits Committee shall be established to review all facets of remuneration and benefits available to members and shall be empowered to implement such changes to the same, retroactive to October 16, 1991, as it deems appropriate to ensure taxpayers' interests are properly served and safeguarded.

(6.1) The Members' Remuneration and Benefits Committee shall

(a) be chaired by the Auditor General;

(b) include two other individuals appointed by the Auditor General;

(c) fulfil its above mandate by October 1, 1995; and

(d) table legislation that incorporates its revised remuneration and benefits policies for all members elected after October 16, 1991 for enactment in the first legislative session or sitting following the completion of its work.]

On the amendment.

J. Weisgerber: This legislation would have several effects. First of all, it requires that any member, to be eligible for a pension, regardless of any other consideration, has to reach age 65 before they collect the pension. In my case, the effect of that is to reduce the projected benefits at least by half.

I see the members of the Liberal Party introduce an amendment that has absolutely no effect on any member of their caucus. I see the government introduce an amendment to the bill, which guarantees benefits for the Premier and a large number of members across the way. The effect of this amendment for me.... The Canadian Taxpayers' Federation, which has projected benefits for eligible members, has projected mine -- if I should be lucky enough to survive to 75 years -- at somewhere in the area of $990,000. The effect of this amendment would be to reduce by half the eligibility and the amount I would receive. Indeed, for me it would delay eligibility for a pension by ten years.

The amendment would further have a committee struck in this session to examine all of the benefits -- pension, remuneration and other -- and bring forward recommendations that would apply to every member of this Legislature, regardless of when they were elected -- whether it was in 1972, 1983, 1986 or 1991. This is an amendment, I believe, that is far more in keeping with the need to move quickly to address public concerns about our pensions and the effect of those pensions on taxpayers. There is an opportunity to appoint someone highly respected in this province, the auditor general, to examine on behalf of taxpayers the cost of our pension plan and the appropriateness of our benefits.

I might point out that when this session started, and when resolutions were brought into this House, I tabled a number of resolutions that dealt with this same area. Resolution 8 standing in my name on the order paper today calls for the MLAs' severance plan to be immediately abolished. Resolution 13 was brought in in the early part of March, far before there was any action either by the government or the official opposition. It says:

"Be it resolved that the MLAs' pension plan be immediately amended to raise the minimum age for eligibility to age 60 or older; and

"Be it further resolved that an independent judge be appointed to reform the MLAs' pension plan to ensure that it is fair and affordable to B.C. taxpayers."

[11:15]

The point is that this is an area where I have been consistently calling for change. I have been consistently calling for a higher age requirement than the one that affects us today. I believe that the amendment is appropriate insomuch as it moves immediately to establish a minimum age -- age 65 -- to qualify for the pension plan. Again, I'll say that in my own case, it's at least ten years away. It goes further insomuch as it strikes a committee to look immediately at our pension and benefits and has the power to recommend, by way of legislation, changes that would affect every member sitting in the Legislature today.

I believe it's fair. I believe it addresses the issues that have been raised. I believe it represents a personal commitment, which is something I can't say for the other amendments that have been brought forward. I have and am prepared to put my own pension on the line to significantly reduce the value of the pension that I am entitled to today. It is in that spirit that I move the amendment and trust that other members will support the same.

Hon. E. Cull: I listened to the member with great interest. I'm not sure if everybody else in the House realizes, based on his statement, that he was announcing his retirement prior to the next election, because the superannuation commissioner advises me that to make the kind of savings the Canadian Taxpayers' Federation has calculated for this member, he will have to retire at the next election. I suppose we'll deal with that news as we do....

The member said that the Liberals brought in an amendment that didn't affect any of their members. That's true. The plan that we brought in does negatively affect a number of our members, which is similar to the impact that the member was talking about.

I'm opposing the amendment for a number of reasons. First of all, the requirement for the age of 65 or older would be more onerous than the pension benefits standards legislation 

[ Page 16972 ]

or public service plans. They have a rule that it's age 90 minus years of service, and you can collect a reduced pension as early as age 55. I'm not sure why we would put any MLAs in the situation of having standards that were not the same as what we offer to our own employees or to other employees of the public. The impact of subsection (5) in the amendment is the same as the section that we have in our own bill, so there's no quibbling with it, but it's not necessary to change the wording as we have it. There's a slightly different wording.

Let me just deal with section 6.1 briefly. The legislation that we're discussing tonight doesn't specify who the commissioner would be, except that they would be appointed under the Inquiry Act. Obviously the auditor general could be the person who would be appointed. But that is left to be decided in the future, and I think that is appropriate. The section that gives me the most trouble is section 6, which if I read it correctly -- and I've looked at this several times -- states that we should look at remuneration and benefits. I think all members agree that it doesn't make sense to look at the pension plan in isolation from the other compensation benefits that members of this House receive, so I accept the concept that we would want to look at this as a whole.

But I do have a lot of difficulties with the suggestion that it would all be retroactive to October 16, 1991. Everyone has a different opinion as to what appropriate remuneration in this House should be. But that could be an extremely large bill for the taxpayers and would be totally unacceptable -- that we'd be giving ourselves back pay for five years. I just could not support that at all, particularly given the types of settlements we have been negotiating, again, with our own employees through the Public Sectors Employers' Council, where we have just not allowed that type of retroactivity to be costed in under guidelines or to be acceptable in any other way. So there's a real problem in that section.

J. Weisgerber: Well, if that's the only thing holding the minister back, I encourage her to read again the last part of the sentence in subsection (6), because it says: "...implement such changes to same, retroactive to October 16, 1991, as it deems appropriate to ensure taxpayers' interests are properly served and safeguarded."

The effect of that is to say that if the auditor general and the committee he was chairing so decided, there would be legislated through this amendment the ability to go back as far as 1991 with one or the other of benefits, pension or remuneration. It doesn't oblige them to go back to 1991, but simply says it's if the committee deems appropriate to ensure that the taxpayers' interests are protected, served and safeguarded.

So I'm sure that the minister, having considered that again, will withdraw her objection to that amendment and, I expect from her comments, be inclined to support it -- although I recognize that she finds the age limit of 65 to be too high. But to suggest.... On the issue of bringing in a formula for age 90, most members only serve ten years, perhaps a few more or a few less. You would wind up being very, very old as a member of this Legislature in order to qualify on the age-90 combination of years of service and age. I think 65 is a number that British Columbians and Canadians can identify with. It's a high threshold, a threshold late in most people's working careers. It's done very specifically because it reflects the concerns that British Columbians have with our current plan.

Hon. E. Cull: With all due respect, I don't think you can pass off to a commissioner the responsibility of ensuring what the taxpayers' interests are. That is something that has to be determined by the members of this House. We have already seen recently, with judges' salaries, that an independent committee may have a very different idea than the members of this House do of what fiscal responsibility is with respect to the taxpayers. So I don't accept that, and I oppose the amendment.

Amendment to section 21 of Bill 55 negatived on the following division:

[11:30]

G. Campbell: We are clearly opposed to this section of the bill. We were also opposed to the last amendment, as you saw, because both of them totally miss the point of what people in British Columbia have been saying for some time now. They aren't questioning whether the pension should click in at 55 or 60 or 65 years of age. They're saying that we should eliminate pension benefits of the gold-plated nature that this House has voted for itself in the past. There is no question that it is time to eliminate the special deals for MLAs and elected officials, and I'm surprised that the members of this House haven't seen that as a real opportunity to re-establish the trust between the people of British Columbia and those who serve them. This is a public service job. The best that any of us have is a five-year contract, and I believe we have an obligation to mitigate the problem and to reform the excessive pension benefits that have been voted on by previous members of this Legislature to make sure that they took care of themselves, not the public.

I heard earlier tonight that members of the B.C. Liberal Party weren't in any position to receive a benefit; that is correct. We are not in a position to receive a benefit, and the fact of the matter is that we are willing this year, right now, to make sure that we are treated like all other British Columbians. We believe it is time to eliminate these gold-plated pension benefits that government has voted for itself and that many members of this Legislature have voted for themselves in the past.

Interjections.

[ Page 16973 ]

The Chair: Excuse me, hon. member. Just a moment, please. I would like order, please, in the chamber. Just show respect for the speaker, as we do for all of us.

G. Campbell: Many members of this Legislature have gone around the province and pointed out that it's time to reform these matters. What the government has done and indeed what the Leader of the Third Party has done is that they have suggested partial reforms, as opposed to dealing with the principle which people are demanding that we deal with. They want us to be treated exactly the same way as they are treated. They don't want a double standard anymore. They don't want elected officials to vote one thing for themselves, while they're asking the general public to do something else.

The only way for us to do that is for us to eliminate pension benefits for MLAs. That's what the bill I brought forward does, and we still have time in this session of the Legislature to pass that bill and to show the kind of leadership that people in this province want. Our bill was very clear. It will affect all of us in this House. It will say that all of us in this House are willing to make the sacrifices that some individuals may feel they've had to make. But what it will do is say that members in this House understand that the public expects us to put the taxpayer first, and that the public expects us to deal with ourselves by the same standards as they are forced to deal with in their lives, the real lives of British Columbians all across this province. It seems to me that we can't ask others to tighten their belts, to change the way they live and to believe that we are acting in the best interests of the taxpayers and people of British Columbia if we are not willing to take some real leadership.

I honestly believed that this government was going to do this. I wasn't sure before the bill was introduced, but when I heard the run-up to the bill as it was introduced by the Attorney General, I felt certain that the government was actually going to eliminate pensions for us, the people sitting in this House today -- not for the people who may come, but for us to set a real example and to lead by example. I believe we still have an opportunity to do that. It is not satisfactory to the public to look at some members of this House and see a $1.3 million pension, as the Premier is likely to get if he is defeated in the next election, or a $1 million pension, as the Leader of the Third Party is likely to get if he is defeated in the next election.

That is not what people expect. They do not want to see that kind of activity taking place in our Houses of government any longer. Therefore I believe it is time for the government to simply set aside this portion of their bill, stop pretending that they're dealing with reform and start recognizing that it's no longer good enough for them to take care of themselves while they tell others what to do. They should actually show some leadership and decide that they are going to eliminate pensions for all of us in this House, with the exception of three members who would not be caught by the bill that we put forward. With the exception of those three members, we can show true leadership, re-establish a connection between ourselves and the members of the public in British Columbia, and say that for this Legislature from this time on, there will be one standard for all British Columbians, whether they're serving in government or not.

Hon. M. Harcourt: I'll speak very briefly, because this has been debated very extensively. Essentially this issue boils down to all of us agreeing that we need to end the present pension scheme. What we are talking about is when that should take place. There have been some other suggestions about what any new scheme should be like, and I think we all agree that it should be like the normal pensions that any other British Columbian would be paying into -- a money purchase, equal payment, employer-employee type of scheme. That's what will be investigated over the next few months.

Therefore the real issue before us is when this present scheme should end. The difference between the opinion of the Leader of the Opposition and the considered opinion of the minister on this side of the House is that the Leader of the Opposition says it should end as of the date of the last election, October 1991. The government says it should end as of the return of the writ in the next provincial election.

The reason for that is very straightforward. After checking with our experts on pensions, what the Leader of the Opposition has suggested is unlawful. It is unlawful in common law to take these benefits away. You would have to invoke a very extraordinary power of the Legislature to bring in legislation to deprive people of those rights. We're not prepared to do that to the members of the House.

Secondly, it is unfair. It is saying to people who have.... And by the way, members of the Liberal opposition are paying into this present scheme. Obviously they don't have any objections to the nature of this scheme, so there is some division of opinion on this among the Liberal opposition. The fact is that what the member is suggesting for people who are vested in this scheme would essentially go back to 1986, and they would have approximately ten years or more of their benefits wiped out. Then not only would they have them wiped out, but they would not be able to be made whole by going back and pursuing the other alternatives that would have been at their disposal -- alternative pension schemes, investment schemes, RRSPs or other measures that they could have taken if they had known that this was going to be occurring. This is unfair.

So the suggestion that has come forward from the Leader of the Opposition is unlawful and unfair, and for that reason this side of the House is not prepared to take up that suggestion. We think the fairest and most lawful way to do that is at the return of the writ of the next election. That is why the proposal is before us as it is.

G. Campbell: Once again I think we see the double standard from this government. It was fine for the government to step in and demand that they renege on an agreement that was made with doctors retroactively, but it is not all right for members of this House to stand up and agree together that we are going to reform this pension plan so we eliminate pensions. That's absolute nonsense.

It is all right for us to decide. We can decide in this House. All of us, everyone that's here and everyone that's affected in this room today, can vote to eliminate that. That would not be an extraordinary abuse of power; that would be an extraordinary use of power, because this government would finally put the public ahead of themselves and their own self-interests.

The fact is, hon. Chair, that we are the Legislature. When we say that we will eliminate our pension funds, it's not that we're going to eliminate our opportunities for looking ahead and taking care of ourselves, just as other British Columbians 

[ Page 16974 ]

will have to do. We can set aside dollars. We can set aside for our own future through RRSPs, just as other British Columbians can. We will have the same maximums that other British Columbians do, and we'll be able to invest in our future as other British Columbians do. What we won't have is a gold-plated pension like certain members of this House voted for themselves prior to the last election.

The fact of the matter is that we can make those decisions today. Let's stop the excuses. This is just a matter of excuses and covering off for ourselves. The fact of the matter is that it's time for us to stop being self-serving. Eliminate our pensions by passing the legislation that's necessary to do that. We're all in this House; it should be unanimous legislation in its passage, so we can re-establish the connection between the people that are elected and the people that pay the bills.

All the Premier said was that he's going to continue to take the gravy for himself and will let others fend for themselves later. We can do much, much better than that. I know that there are members in this House who are willing to do much better than that, and I believe that we should do much better than that. We should reject this section of this bill, and we should bring forward the bill that will eliminate MLA pensions as of October 16, 1991.

F. Gingell: The biggest problem with this pension fund is that it is unbelievably rich. Those of us who have worked in industry and have experience in pension matters, as I have, know that a normal pension arrangement is something around 1.5 percent of earnings for each year of service in a defined benefit plan. What is our public service pension fund? What arrangement have we made for the people who work for the people of this province in our public service? I think it's partially 1 or 1.5 or 2 percent tied in with the Canada Pension Plan.

Any arrangement that we make that does not go back and wipe out the inequality and the unfairness to the people of British Columbia, that does not go back to a date that we can reasonably deal with -- which I suggest to you, hon. Chair, is clearly October 16, 1991, and not the date of the next election -- is purely and simply failing to recognize our responsibilities.

If this government were serious, they would bring in a pension plan somewhat similar to the public service plan -- the public service plan that everybody in this House feels is reasonable and fair for the people who work for us. To have one plan for them and a plan for the members of this Legislature that is almost three times as good -- it allows someone to earn a lifetime pension after only 16 years of a 40-year work span -- is clearly amoral.

This is an opportunity. The leader of our party has shown us the way. We should take the bit between our teeth and do what is right. Our opportunity is now. I suggest that all members of this House.... I do not question the motives of any member of this House. We're all here for one reason: we hope to contribute to making British Columbia a better place. Yes, we come from different perspectives, but I know that every member of our caucus and every member of the government caucus and all of the independents are here for the same reason.

We have an opportunity to show that we mean what we say and to deal with this in a fair and equitable manner. This bill and these amendments do not do it, but we shouldn't let this opportunity pass.

G. Wilson: I've listened with interest to two amendments and now to this amendment that is proposed in Bill 55. I can't help but wonder what any British Columbians who are still awake at quarter to midnight must be thinking of this debate.

Talk about self-serving! We've got the official opposition ready to give up pensions which not one of them is eligible for in the terms and conditions under these pensions now -- certainly not until after the next election, a period which they deem is not worthy.

We've got the leader of the Reform Party saying: "No, no, my pension benefits are better and they look after the public purse better, and therefore here's my set of amendments." We've got the government bringing in a proposed amendment to the Legislative Assembly Allowances and Pension Act right on the last day, in the last evening at a quarter to midnight in what may indeed be the last session before the election.

This government doesn't need legislation to put in place an independent commission to make recommendations on pensions. This government could have done it in 1991, in 1992, in 1993, in 1994 or even in this year. This Legislative Assembly has a committee called LAMC....

[11:45]

An Hon. Member: It won't meet.

G. Wilson: They say it won't meet. If it won't meet, it's because the collective will of the people on it will not make it meet. There was no pressure by any member of this Legislative Assembly over the last four years to have LAMC come forward and recommend an independent commission to deal with the matter of pensions and MLAs' severance.

Interjection.

G. Wilson: We hear from the member for Richmond East to ask Chuck Connaghan when the commission was done. He did not deal with pensions. When Connaghan came forward, he did not deal with pensions. The documentation that came forward was not acted on, and indeed the government decided to take no action, because at that time the freeze on MLA's salaries was a politically correct thing to do. We have got to be just a little suspicious, if anybody is observing this, as to what the real motives are for this debate in this legislative chamber tonight.

Do I believe that MLAs should have a pension? Absolutely I do, and I don't mind going on record and saying that they should. They should have a pension that is comparable to what can be provided in the public service. Do I think there should be a complete, independent review of the full remuneration package of MLAs? Absolutely there should. If we don't.... I think people will know I've said that if you're going to pay peanuts, you're going to hire monkeys.

Let me tell you that if the people in the private sector look at the remuneration benefits for being an MLA, on top of all the other nonsense we get for serving the people of this 

[ Page 16975 ]

province -- the kind of public scrutiny that we're given, the kind of abuse that we take, the kind of personal attack that is often directed as we try to, as the member for Delta South says, serve the best interests of the people of British Columbia.... Anybody in their right mind in this province is going to look at this business of being a politician and think we've got to be out of our minds.

Entry into politics should be a noble service for the people of British Columbia. It's anything but that. When you look at the hooliganism that goes on during question period, which is what most people see, because it's the only part that's replayed at midnight -- if anybody stays up to watch it.... People have to wonder: do they deserve a pension?

I tell you that if this government is committed and if the members of this opposition are committed, let's just dispense with this section of the act. Let's commit today to hire a commissioner tomorrow to come forward and make recommendations with respect to MLA remuneration, and let's commit in the next spring session to review and adopt those recommendations and put them into place.

If we do not take that, if we're going to stand here and pretend that we need legislation to do something that this government has had all opportunities to do, then it seems to me that we've done a disservice to every sitting member of this Legislature and to every citizen who watches us.

People who come into public office deserve to be paid a respectable wage. They deserve to have a pension. If they are carrying a pension from a different organization, it should be portable into this institution. Should it be gold-plated? Absolutely not. Should it have unnecessary indexing? Absolutely not. They should nevertheless not be penalized because they have taken time out of their lives to provide service to the people of British Columbia. That's what we need to put in place. We don't need legislation to come up with an independent commission. This is just a joke. Every one of us sits in here in conflict of interest -- every single last one of us who proposes what we should or shouldn't have.

If the government is serious, it would pull this section of the bill, commit to having an independent commission and strike it tomorrow. Then let's all unite behind it and hope we're going to come up with a sensible remuneration package that will recognize that there should be pensionable benefits for Members of the Legislative Assembly. It's something that the people of British Columbia will recognize as being independent in nature and not crafted by any special interest in this House, and it's a process they can buy into and recognize is going to deal with a market-driven kind of pension system.

Hon. Chair, let me close. I have no idea, and nobody in this House does either, what my or any other individual's fortunes may be in the next election. I can tell you it is a privilege to serve in this chamber and to serve the people of British Columbia, notwithstanding in what capacity they ask us to serve. It is a privilege, no matter what kind of fate befalls us after we have been successful at the last writ. If we're going to attract the very best people into this business, and if we're going to bring in people who are prepared to give time out of their commitments and their careers to come into this legislative chamber, then we had better get sensible about making sure there is a sensible remuneration package and pension benefit available to them. Anything short of that, or playing cheap politics with it, which is exactly what we've been doing in this chamber tonight, is a disservice to this institution and to the members elected to serve in it.

G. Farrell-Collins: I listened to the member for Powell River-Sunshine Coast when the bill was up for second reading, and I have listened to him again tonight. The points he makes are logical, but I just disagree with him. Of the points made by the Premier, one can argue the logic, but I just disagree with him as well. When I decided to run for office, I didn't really know how much you got paid. I didn't really know there was even a pension plan. Quite frankly, I wasn't concerned about them. I don't think you should be worried about those things. I ran to be elected to serve the community and the province as best I could, and at a base level I think that's what everybody ran to try to do. In the end, that's what they're trying to do.

If we're going to try to attract people to this House with dollars, a gold-plated pension plan, or with benefits and perks or a doubled pay scale, however you want to put it, then we're attracting people here for the wrong reasons. If you're here for the money, you're here for exactly the wrong reasons. I'm not saying that anybody here is, but I'm asking why this has become such a huge issue. Why has this issue become...?

Interjections.

The Chair: Order, hon. members. I know it's late; a little patience is required. Hon. member, you have the floor.

G. Farrell-Collins: The one little bit of respect that all members in this House are owed is the opportunity to speak and not to be told to sit down. I've never done that to another member, and I would think that that's the minimum respect we can offer each other. I'd just like to continue with my thoughts.

The Premier says it's against the law to change a pension plan retroactively, and that it's not only against the law but unfair. He uses that in a very indignant way. His government introduced this and he, along with every one of their backbench MLAs and every member of cabinet, stood up and voted to do just that retroactive termination of a pension plan that the government of British Columbia had signed with the doctors of this province. I distinctly remember that the current Minister for Employment and Investment, who at the time was the one who actually introduced the bill to cancel the doctors' pension plan, said we were cancelling it because it was immoral; that it was an unjust agreement that had been signed. It was immoral and it was not defensible.

All of those adjectives apply to the current MLA pension plan. The government isn't dealing with it in any meaningful way; they're fidgeting with it. With all due respect, the Leader of the Third Party is fidgeting with it. To go from 55 to 65, or from 60 to 65.... He's getting about a tenth of the message that the public is trying to get across. He's only going a very small way along the road to making those changes.

The member for Powell River-Sunshine Coast raised the issue of the LAMC committee, which this government brought in to replace the Board of Internal Economy. It has been more dysfunctional than the Workers' Compensation Board. Quite frankly, I think that all the members -- myself included, for that matter -- on LAMC should be fired, because it's not working. It's not working, because the Speaker never calls it; it's not working, because the government members can't get enough members for a quorum; and 

[ Page 16976 ]

we can't do the business of this House, because the government doesn't want to do the business of this House in that forum.

I find the member for Peace River South a little difficult to take when he talks about the public's demand for changes to gold-plated packages. He was part of the government that negotiated behind closed doors with those people who are now in government to institute a six-month severance package for MLAs. And now he wants to get rid of it. At least, he hasn't mentioned it this time, but certainly members of his party want to get rid of it. They've talked about it and have said that they're going to be tough and end it. But they brought it in in the first place, before the last election, behind closed doors.

It's just that type of behaviour over the last ten, 15 or 30 years in this Legislature and other legislatures around the country that has so debased public confidence in our ability to deal with these things. That means we have to terminate it -- not fidget with it, not play with it, but eliminate it and start over. We have to say to MLAs that if you're here, you're here for public service; you're not here for a career. You shouldn't be here for 20 or 25 years; you should come in here and provide public service, and when the time comes up you should move on. Quite frankly, I think a low salary and no pension is a darned good incentive to get people to cycle through this place instead of coming in here, atrophying in their seat and taking up a position forever and ever. I think it's time that people get moved through this place.

Interjection.

The Chair: Order, hon. member.

G. Farrell-Collins: The member calls me a hypocrite for spending four years here. Well, my understanding is that that's about the minimum term you can serve in this House.

Interjection.

G. Farrell-Collins: I can tell you that I think the people in my constituency have got their money's worth more than those in the member's have, because I never see the member in this House. I never hear him say anything, anyway.

I think it's the fact that we don't have any credibility on these issues. It's the fact of the record that has gone on for a period of time; MLAs don't have a lot of credibility when it comes to dealing with their own pensions and benefits. That's why I think it should be eliminated. It should be eliminated; let's put that to rest. I don't want it, quite frankly. If it's going to cause as much grief between me and constituents as it has in the past, then let's just get rid of it. I'm not here for the money, and I'm not here for the pension. I'm here to do a public service, and I think if other members were here to do a public service, too, they wouldn't be squawking as loudly as they are now.

I suggest that there's a bit of dissension within the New Democrat caucus on how this is going to go, because they're sitting -- alternating -- beside members.... Some of them will get $1 million, some will get $2 million and some of them will get diddly. I know there's probably some dissension over there, because I've seen the notes passed back and forth, and I know what they're thinking. Maybe that's why they're squawking; maybe that's why they're upset.

But I think the problem here is that we don't have the credibility to deal with giving ourselves pensions anymore. Let's get rid of it, and let's get rid of the issue. It will become a non-issue; we'll give it up and we'll do what we're supposed to do, which is provide a public service, and at the end of the day you move on and you do other things with your life. You don't stay here and take up seats.

J. Weisgerber: I think a lot of debate in this House tonight has been quite sincere, but when I hear a member stand up and say that they ran for office and they didn't know whether there was a pension plan and didn't know what the pay was, and you're looking at a relatively young person, you've got to assume that either they were born with a silver spoon in their mouth or they don't care about their family, or the sincerity of the comment has to be questioned.

For viewers, I would wonder whether anyone would want to elect someone to a position of responsibility in government who is willing to get into a profession and didn't know whether there was a pension plan and didn't know how much it paid. You'd want to say: "What other kinds of deals will these folks make for us if they don't even bother to check out the pay?" You'd have to wonder if they would be as candid with us about other issues as they are being candid with us on this issue. I think it stretches credibility to believe that.

[12:00]

I do believe that members of this assembly deserve a pension -- not a gold-plated pension, but a pension -- and an opportunity to earn a pension. I agree with the members for Powell River-Sunshine Coast and Delta South, because I believe they made the arguments outlined in the amendment that I put forward. Whether they were voting on the amendment for some other reason, I don't think particularly matters.

The member for Powell River-Sunshine Coast also raised the issue of LAMC and the fact that it hasn't been meeting. I'm not going to read it into the record in its entirety, but I would like to table a letter that I wrote to the Premier in February 1995, in which I acknowledged that MPs in Ottawa were dealing with the issues of MPs' pensions. I suggested to him that there was a great opportunity, through LAMC, to call a meeting and to push for LAMC to involve itself in striking a committee to look at MLAs' pensions and benefits. I encouraged the Premier to set guidelines that would require the committee to examine benefits and the age of eligibility. I suggested that there should be an age of at least 60, and that that committee should be chaired by an independent person such as a judge.

I'm sure there's no way that the member for Powell River-Sunshine Coast could know about the letter that I had written to the Premier, but I want to get into the record that we have been talking about these issues. We have been pushing for changes to the pension plan -- not the elimination of the pension plan, because I don't think that's the way we should deal with it.

The members of the Liberal caucus say they'd do away with the pension plan, but I would refer members back to the words of the member for West Vancouver-Capilano when he introduced the original amendment. He said that we would 

[ Page 16977 ]

strike a committee after the election to look at introducing a new pension plan, and we would allow for a rollover from our members into that plan. Members can shake their head if they like, but the Blues will be out tomorrow and we'll have an opportunity to examine them.

The fact of the matter is that we should be working to strike a plan that's fair to taxpayers and that also provides a level of compensation for MLAs appropriate for the function, and a pension plan that is no better or no worse than those in the private sector. I suggest again that although the amendment I put forward was defeated, it in fact met all of those tests.

Having said that, I would table my letter to the Premier.

The Chair: Hon. member, there is no provision for tabling it in committee. If you want to table it after we have risen and reported out, you can do so at that time.

D. Mitchell: I would like to say a few words on this section. There are moments in the life of the Legislature and in the life of this parliament, when we have served in this House, that I'm sure have made members feel quite proud. There are other moments that have made us all feel ashamed. I'm sad to say that tonight is the latter for me as a member of this House. If you take a step back from what is going on here this evening in terms of the debate and the discussion about self-interest and about who is willing to be tougher and willing to be more macho and willing to flagellate themselves with more force, it's not a moment that I think any of us can be proud of.

The member for Powell River-Sunshine Coast said that he felt that we were in a conflict tonight. I can tell you that I sought an opinion on this very matter from our conflict-of-interest commissioner to determine whether or not we could actually debate and discuss and vote on an item relating to our own pecuniary interests. The conflict-of-interest commissioner actually said that there was no legal impediment to do so. But I agree with my colleague and seatmate the member for Powell River-Sunshine Coast that there is a conflict.

Perhaps it's only a moral conflict, but there's something seriously wrong going on here this evening. I'm uncomfortable with it, and I know that there are other members in this assembly and in this committee this evening who are also uncomfortable with the discussion that's taking place and the manner in which it's taking place. I know that there are members on the government side who are uncomfortable with what is going on and with what has been proposed and the kind of debate that's taking place here.

It's not a question of who's more macho. It's not a question of who is willing to be tougher or who is willing to penalize themselves the most to try to impress the voters about how little we're willing to be paid as MLAs, how cost-effective we're willing to be, how hard we're willing to flex our muscles and whip ourselves and deny ourselves and become practising ascetics. That's not the issue here at all.

Statistics tell us that the majority of British Columbians do not participate in large corporate or government pension plans. The majority of British Columbians work for small enterprises or are self-employed. They contribute to RRSPs; they look after themselves. The question as to whether or not we are entitled to a pension is not an issue that we should be debating or discussing. I don't think any fair-minded member of this assembly or any of our constituents would doubt for a moment that we as elected representatives should be and are entitled to a good wage. We're here to be provincial representatives; we should be compensated well for that.

Earlier in this session I tabled a petition signed by 15,000 British Columbians who said that they wanted to eliminate or reform all MLA perks: to get rid of tax-free allowances, under-the-table deals and hidden compensation, and that included the gold-plated pension plans. The way we do that is not by dealing with any component of our compensation package alone; it has to be dealt with as a package. For the government to bring in legislation saying that they'll take one component of the package and eliminate it and then send the rest to an independent review, and for the opposition to then say that they'll be tougher and go retroactive, is not achieving the end that our constituents want to see achieved. It's not a question of who is more macho. We are in a conflict, but we're quibbling this evening over details that we should not be dealing with; they should be dealt with on an arm's-length basis.

Tonight is not a proud moment in this House. If the government has any sense of dignity left, they will withdraw this amendment and refer it properly to an outside, independent commissioner, where it and all aspects of MLA remuneration should be. I'm ashamed of the debate that's taking place in this House tonight.

C. Evans: Members will know that I haven't had a lot to say this session. I spent the last three weeks preparing some comments for tonight, and in light of the hour, I'm going to be really brief and hope that what I have left hangs together.

I intend to vote for this bill because I believe that collective wisdom is the only reasoned form of government, and it happens that the collective wisdom of my government is to introduce this legislation. More than that, I'll vote for it because I think it's the right thing to do.

A lot of this debate misses the point, and I want to elaborate on a few other items that go along with our work. The truth is that to work here, you trade quite literally everything that there is to trade: your youth, your health, your family, your outside career and literally all of your privacy. You pretty much trade the works. Every time you make one of those trades, you say to yourself: "I'll just put that off until later. I'll get my health back later. I'll fix my marriage later. I'll get to know my kids better later. I'll go on vacation later. I'll quit smoking or drinking or eating too much or whatever I do to deal with the stress later." Pretty soon the fact of living at all gets to be a function delayed, because the wages are so low and the expenses are so high. Even if you arrive here, as I did, willing to do this job for nothing, sooner or later it occurs to you that the only rational explanation to give your family for wanting to sign up for a second hitch has something to do with that "later" maybe being pensionable.

So let's talk a bit about the pension plan. If we remove the pension plan from this line of work, how would anybody but a rich person ever justify to their families the years it takes to get the job -- never mind the stuff you have to do after you have the job?

If you create a job that is so underfunded in terms of the tools we have to work with and the staffing allowance as to almost ensure that the worker is unable to achieve what they dream about when they get here, and then you take away whatever financial reward they might earn while they are here, what kind of people will we attract to want to work here 

[ Page 16978 ]

at all? Are they people who are already rich and then lust after this job in order to achieve power? Will they be people who mouth words of piousness to convince people that they should get to work here and who then cut deals with their friends?

There's a wonderful diversity in this room. Look at these people. There are men and there are women, and that's better than it used to be. There are very young people and people who were pensionable before they even ran for office, who are doing this literally for free in terms of this debate and working here. There are single parents and people with very young children working here. There are people who took a pay cut of $100,000 a year to get this job, and there are people like me, for whom it's the best wages I ever had. We come from all walks of life.

But if we strip away the expectation of fair remuneration, imagine who is going to want to work here ten years from now. Are we heading towards a time where the rich, who already run the banks and businesses and own all the stocks, will then inherit the government, simply because none of the rest of us can afford to apply for the job? Are we heading towards a time when even those people who walk through the doors with the greatest sense of integrity will find themselves, over the years, having to cut deals to survive?

Everyone wants pensions for MLAs to be fair and to be seen to be fair. But the argument against pension benefits for elected people runs a whole lot deeper than that. It is based, at least in part, on the lie presently abroad in the culture that British Columbia is broke. That lie is being fed to the people in every nook and cranny and village and big city in this province. But the investor community, the people who actually know money, know that it's a lie. They know that the worth of any institution is established by its debt-to-equity ratio.

By this standard, British Columbians are the richest people on Earth. This is because we have developed and maintained our assets -- our forests, hydro, ferry systems, hospitals, schools, universities -- in public ownership. We own enough forest land alone, for example, that if we decided to put it all on the market tomorrow to deal with this debate, we could pension off not only everybody here but every living British Columbian for life. So the citizenry are hardly broke.

In fact, the efforts to convince the people that they're broke are precisely intended to smash the people's faith in themselves and convince them to sell off their assets to the rich. Those who desire to gain control of the people's birthright need to convince the people that their wisdom in choosing managers -- us -- is false. They need the people to despise the politicians and, finally, to decide that you can't trust anything but greed and that you might as well sell your assets to the rich to be managed for profit. The people are not broke precisely because the people who came in here to work in decades past historically tried to do their job for the collective good.

We built this society and made our citizens relatively secure in it because of the principles of stewardship that come from our concept of Crown -- Crown land, Crown corporations, Crown forests. The deal in British Columbia historically has been -- and those who've worked here for a long time know it -- that hon. members come to work here and don't steal from the Crown -- in part because they're considered to be honourable members, which generates an ethic that generates behaviour deserving of the job and the title of hon. member. That deal has left British Columbia with the best debt-equity ratio in the world, the lowest debt per capita in Canada, the highest credit rating in the country, and enough Crown assets left that we actually have a shot at stabilizing both our environmental balance sheet and our relationship with the first nations, from whom we expropriated all the wealth in the first place.

All of that is put at risk by the predilection to demonize politicians and devalue the notion of all hon. members. Rather than phrasing this debate in terms of fixing something that's busted, as some would have us do, I think we should consider casting the discussion in terms of making more fair something that has historically worked well.

[12:15]

Our system of paying MLAs almost nothing, and then providing them with almost no tools, has resulted in the lowest cost per capita for governments in Canada, according to Robert Fleming's Canadian Legislatures 1992, which you can get from the Clerk if you'd like to read it. British Columbia delivers government cheaper per capita than any province, territory or, indeed, the federal government. I'm not talking here about the cost of services, like health care or forestry. I'm talking about the cost of doing what we're doing here tonight: making decisions of stewardship, of politics and politicians. I'm talking about the cost of this building and all the wonderful people who work here -- the gardeners outside, the Clerks, the Speaker, Hansard staff -- and all the wages, constituency allowances, travel and all that stuff for Members of the Legislative Assembly, including our pensions and the pensions of the people who have gone before us.

All of it added up together comes to $7.76 per person per year. Fleming includes a graph that shows all the rest of the provinces. I'll try to rush through it. P.E.I. comes in at $19.57 for governance. That might lead you to the notion that small is expensive. But great big Ontario comes in at $13.12. Even the federal government, which has 30 million people to charge those costs against, comes in above us at $8.49. If you want an American example -- if you're enamoured of that system -- Washington to the south of us comes in at $9.09, and that's American money. I think we actually owe a great debt to those people we've pensioned off. I think we owe a great debt to W.A.C. Bennett, Dave Barrett and all the rest of them for establishing a system that maintains integrity literally on a shoestring.

Returning to Fleming's book, I'd like to read from his conclusion on the chapter about our pension scheme. He says:

"It appears certain that given the overall conditions confronting Canadians in 1992, when politicians are often labelled as lacking in integrity and credibility, they would be wise to no longer place themselves in a position to justify their own pension arrangements. The wide range of issues surrounding retirement allowances for elected members should be examined outside the House of Commons or the Legislature, and therefore a members' pension commission should be struck in each jurisdiction with the purpose of examining existing legislation governing members' retirement allowances and recommending whatever changes may be required to provide a plan that is fair and equitable to members and also to the community at large."

My party considered this question of pensions at our last convention, and the convention decided against changes to the plan in the absence of overall reform. But we who work here, and perhaps rightly so, will pretty soon pass this legisla-

[ Page 16979 ]

tion anyway, in the interest of assuring everyone else that we do this job for love and not for money. I'm going to vote for it because, quiet as it's kept, that's a fact. You will probably never read that in a newspaper, but it was true the day I got this job, and the days of reflection and preparation for making these comments reminded me, or made me newly aware, that it remains true today.

I want to talk, though, for just a second to those citizens out there who might someday aspire to do this job in the future. Don't come to work here, as I did, imagining that you will not put your family's well-being at risk. That was a dumb, stupid and naive assumption on my part. I'm embarrassed by it, and other people shouldn't follow suit. Do not come thinking that you will return all your phone calls, answer all your mail or fix even the most justified of your constituents' complaints. Because the funny thing is that the better you are at the job, the bigger it gets.

Do not in fact set your sights on this job with any illusions at all, because as in the rest of life, it's not, after all, experience that hurts so much as busted expectations. But do, anyway, set your sights on this job with your eyes open and your dreams intact, because nothing proves the need for a future full of defenders of democratic principles more than precisely the attack on this institution and the people who work here that's going on in British Columbia today. Aspire to office and work to achieve your dream, and then come to work here before you begin to believe the cynicism that is the disease extant in these precincts.

I want to close with a quote by a wise man, in the time of the ending of the Soviet satellite nation of Czechoslovakia. A neat guy, playwright Vaclav Havel, was in prison. As the empire crumbled, the people let him out of prison and had the good sense to make him their president. For a short time we had a thoughtful and articulate man addressing us from the world stage. In his New Year's address in 1990, President Havel challenged the politicians of his country with the following:

"Let us teach ourselves and others that politics should be an expression of a desire to contribute to the happiness of the community rather than to cheat or to rape the community. Let us teach ourselves and others that politics cannot only be the art of the possible, especially if this means an art of speculations and intrigues, secret deals and pragmatic manoeuvring, and that it can even be an art of the impossible, namely the art to improve ourselves in the world."

By the way, it's a neat thing: that's the introduction to Fleming's book that says we work for almost nothing, and we should reform our pension plan. President Havel provides us in that quote with a short test, I think, to apply to hard questions. Are we tonight, in this measure, teaching ourselves and others that in our desire for fairness we can "contribute to the happiness of the community"? Or are we engaging in the art of pragmatic manoeuvring, which serves only to devalue what we do or hide from the question of who really governs whom in the province of British Columbia?

I would submit that the test Mr. Havel challenges us to meet is not going to be answered here tonight -- lots of people have said so -- but will reveal itself over the course of the next year, as we discover the extent and nature and final outcome of the review that will follow. Keep in mind, my colleagues -- and I think that's the first time I ever used that word -- of all persuasions, that even as he spoke of his dream with complex understanding, the pragmatists around him, with their simpler answers -- more appealing to people -- eliminated not only Mr. Havel's job but also his democracy and his nation.

Section 21 of Bill 55 approved on the following division:

Hon. J. MacPhail: I move the committee rise, report progress and ask leave to sit again.

[12:30]

Motion approved.

The House resumed; the Speaker in the chair.

The committee, having reported progress, was granted leave to sit again.

Hon. J. MacPhail: I call committee on Bill 54.

The Speaker: Before we move to committee, the hon. Leader of the Third Party.

J. Weisgerber: I request leave to table a letter.

Leave granted.

D. Mitchell: Just a point of order. I was listening carefully to the Government House Leader when the question was asked: "When shall the committee sit again?" I thought I heard her say: "Next sitting." If that is the case, I'm not sure that we can go back into the committee right now. The Government House Leader directed next sitting of the House.

The Speaker: Hon. members, the point of order raised by the hon. member is not, I think, a difficulty for the Chair, in that we are now into the next day, and the next sitting will be at 10 a.m. I don't see a difficulty there.

J. Tyabji: If I understand you, hon. Speaker, you're saying that we are able to sit in committee again because we are on the next sitting. But the next sitting sits at 10 a.m. today, unless there is unanimous consent of the House to change it to earlier than 10 a.m. Isn't that correct?

[ Page 16980 ]

The Speaker: Hon. members, I think there is general agreement that we proceed with business. We will be dealing with another bill. I don't think there is a difficulty with the process at this point.

AN ACT TO PROTECT MEDICARE

The House in committee on Bill 54; M. Lord in the chair.

On section 1.

D. Mitchell: Just before we proceed on the bill, just a question on the order of the bill. Section 1 of the bill not only includes the change of name of this statute but also includes the preamble. Normally when bills have preambles, we deal with the preambles last. But because section 1 in this case also deals with the substantive issue of a change of name, are we going to be proceeding on section 1 as you called?

The Chair: Yes, hon. member.

D. Mitchell: In that case, I will just ask one brief question to the minister. Why are we changing the name of the Medical and Health Care Services Act to An Act to Protect Medicare? This was discussed widely in second reading stage. This was an item that was described as of symbolic value. Is it purely of symbolic value? Of course, we have to understand the political context in which this act was introduced in the House, as well. But is the name change a public relations gesture? Is it a political issue? Is it a symbolic gesture? It doesn't really have any effect on the delivery of health care services to British Columbians, so what's the purpose here?

Hon. P. Ramsey: The purpose is to state very clearly that we wish to have medicare protected in this province. We are enshrining in the preamble to this act the principles of medicare that have been established in this country in the Canada Health Act and for the first time making them part of a preamble and stating what this act is intended to do in the province of British Columbia. I think it is entirely appropriate that the services delivered under the provisions of this act be so named and preceded by this preamble.

L. Reid: I intend to proceed through this bill seeking clarification of a number of sections, and certainly I welcome the staff to the chamber this evening. Thank you so much for joining us.

Interjection.

L. Reid: Well, I'm always pleased when the minister has support.

On the preamble section, which talks about portability, comprehensiveness, accessibility and the like, I do believe that this bill is lacking in definition around those terms. I would ask this minister to define each of those five terms, as this is the section of the bill the minister seems to be most proud of. In fact, he has entrenched these basic tenets within the act. As a result, I do believe that anyone looking at this bill must understand what is meant by each of those terms.

Hon. P. Ramsey: I too welcome my staff to the chamber to debate this bill at this hour. They've been most patient this evening as we dealt with other matters. They are Janet McGregor from the Medical Services Commission, Lillian Bayne, a strategic adviser with the minister, and Alan Moyes.

We can debate these at as much length or with as much specificity as you wish. Universality simply means that the provisions of this act are available to all British Columbians. Regardless of who they are, they are entitled to the benefits under this act and to the provisions of this act. Comprehensiveness has been a feature of Canadian medicare since its inception, and it was defined and refined further in the provisions of the Canada Health Act. It simply means that all medically necessary services that are encompassed by the provisions of the Medical Services Commission are available to all British Columbians. Accessibility is defined in the Canada Health Act. It refers to reasonable access to these in a timely fashion that meets medical need and that meets the geographical dispersion of our population.

Portability is self-evident. We're looking at portability with other jurisdictions in Canada that have also committed themselves to these principles under the Canada Health Act, and that receive funding in partnership with the federal government for delivery of these services. Finally, there is public administration. There are clear choices in front of us. There are those who say that we ought to go to a system where some services are administered publicly and others are planned and administered without reference to the public set of health services in the public health system. This act says very clearly that public administration must be a guiding principle. That's been carried through, obviously, in the way we fund and manage our health facilities, and in the way we are restructuring health care in this province through the provisions of the Health Authorities Act.

L. Reid: I thank the minister for the clarification. I have a couple of questions around comprehensiveness. Certainly this administration and previous administrations have looked favourably upon supplementary medical services, and concern has been raised by chiropractors and physiotherapists in this province as to whether or not this act speaks to their care delivery. If the minister could kindly comment.

Hon. P. Ramsey: There are no changes to the provision under which private-practice physiotherapists, chiropractors, massage therapists or other supplemental practitioners deliver services to the people of B.C.

L. Reid: My thanks to the minister for that clarification. When he was defining comprehensiveness, he was talking about reasonable access. If he recalls second reading debate on this bill, we actually compared reasonable access in this province to actual wait-list access, if you will -- tremendous variation. So, indeed, how is this minister defining "reasonable"? What we have in our hands today -- and not just from the source I cited the other evening, but also from a number of different wait-list sources -- shows tremendous variance between what is a reasonable wait-list and what is actually the wait-list today in British Columbia. So if this bill is indeed intended to entrench comprehensiveness as defined by this minister, and he's defining that to be reasonable access, could the minister give us some guidance as to what "reasonable" would be, in his mind?

Hon. P. Ramsey: Accessibility goes to a number of factors: timeliness, geographical accessibility and financial or 

[ Page 16981 ]

other barriers. I think all those factors are important. Recently in the chamber we debated a bill on access to abortion services in the province, which said that intimidation of service providers and patients was presenting a barrier to access that we ought to seek to remove. All those things are factors in making health services or medical services accessible. I simply think that the member opposite ought to examine very carefully the assertion that wait-lists are unreasonable and growing in this province. The facts are contrary to that. The Premier and I announced a wait-list reduction strategy earlier this year which is having a significant impact on wait-lists for some surgical and diagnostic procedures, which advice from the ministry and medical practitioners said was getting too long.

I would also invite the member opposite to compare very closely waiting times under the Canadian health system and the British Columbia health system with access to such services under other public health systems elsewhere in the world. If that is done, I believe she will indeed find that our access to services is excellent in terms of timeliness, geographical accessibility and lack of financial or other barriers.

L. Reid: I thank the minister for his suggestion to compare other jurisdictions, because that is exactly how I proceeded in second reading debate, and certainly orthopedic surgery was one of the examples I used. An actual wait in British Columbia today is 15.7 weeks. What is considered reasonable is 7.9 weeks. It's this minister who chose to use the words "reasonable access" when defining accessibility in terms of his necessity to entrench these tenets within the Canada Health Act in his Medicare Protection Act. So I think the comment is valid. I don't support the minister's contention that we are doing the best we possibly can. I do not support that. If you compare with Alberta, Saskatchewan, Manitoba and Ontario, even before you flip to the other provinces in Canada, then no, we're not doing the best in terms of wait-list.

The minister talked about geography as another way to define access. Certainly the minister has heard me say many times that there are tiers in health care in this province. One of them is the geographic tier. The level of service I can receive in the lower mainland is dramatically different than for British Columbians living in Fort St. John and Fort Nelson -- dramatically different. The minister and I have had this conversation as well. For me to receive service at St. Paul's and travel home is a $20 cab ride. For an individual from Fort St. John to travel home from St. Paul's is a $500 plane ticket. Those are different levels of access. The symbolic need for this minister to entrench these basic tenets in legislation is only interesting if the definition does not deliver. The definition as the minister has provided is very, very broad-ranging.

In terms of where we're headed with comprehensiveness, certainly I'm aware that this government and the British Columbia Medical Association are involved in ongoing negotiation around core service. What will the comprehensive health care program in this province look like? Again I submit to this minister that it has not been defined. We simply do not have agreement on what core medical service is.

We have a lot of discussion and we have ongoing discussion. I take nothing away from that exercise. That's fundamentally important. Every new service that comes along needs to be evaluated and structured into an existing program. I take nothing away from the evolution of health care. We simply have things today that we will not have five years from now. Then we'll probably have a whole bunch of new services that we simply don't have access to today.

In terms of the public administration, it has always been defined as something that's a single-payer system. Certainly I believe the minister alluded to that -- that it will continue. I take nothing away from that. Indeed, that is where we need to go in terms of some kind of cost saving generally in the system.

[12:45]

In the third "whereas" clause, "WHEREAS the people and government of British Columbia recognize a responsibility for the judicious use of medical services in order to maintain a fiscally sustainable health care system for future generations," I simply ask the minister to define "fiscally sustainable." Again, the sentiment is evident in his need to entrench these principles. But unless you define "fiscally sustainable," it simply is symbolic.

Hon. P. Ramsey: I don't wish to prolong the debate on the principles of medicare that we are entrenching here. It is important that we state publicly that these are the guiding principles under which we should be providing medicare services to the people of British Columbia. Obviously, we can argue about what appropriate accessibility is. That is really something for a government of the day to debate with the public and with those who provide medical services.

But let me say very clearly, on the wait-list issue, that quite frankly, I think the study from the Fraser Institute that the member has quoted does a disservice to the complexity of measuring access to services, both in quantifying them and in comparison. I've seen those figures. I find them rather shaky in many, many cases.

The other thing we need to recognize is that.... We talk about accessibility to services. One of the things we are working on -- and this goes to the third point in the preamble that the member was pointing to, which is "judicious use of medical service" -- is that we are increasingly seeking with medical practitioners and other health care providers how to make sure that access to them is appropriate, through such things as clinical practice guidelines and making sure, in the example of orthopedic surgery, that we have a list of those who need elective surgery that truly reflects their need, not the particular....

The Chair: Excuse me, minister.

The member for Okanagan East rises on a point of order.

J. Tyabji: Recognizing the importance of this debate and the fact that we had to have it at this time of night, I note there isn't a quorum. Considering the importance of this debate, I would call for a quorum.

The bells were ordered to be rung.

Hon. P. Ramsey: I have just a few more brief comments on the definitions contained in the preamble. As I was saying, one of the real challenges in dealing with wait-lists is to make sure that people are placed on the list according to their actual need for access to elective medical services, not because of the practitioner who is delivering the service or the facility at which the service is being delivered.

Finally, I want to comment on the concern about fiscally sustainable health care. British Columbians and those of us 

[ Page 16982 ]

charged with overseeing the health system have the responsibility of making sure that we have a fiscally sustainable system. That means allocating adequate funding for delivery of services, but also and perhaps even more importantly, taking measures to make sure we are delivering services as efficiently as possible and involving the public in discussion about the judicious use of medical services.

That's why the Medical Services Commission established under this act jointly launched a campaign with the medical practitioners in the province. The campaign, called Taking Care of Health Care, broadly seeks to inform British Columbians of some of the pressures facing medicare and to work with them, as individual practitioners working with individual patients, on how their services can be used when needed and perhaps not used when not needed. To say it again, that's why we've entered into a prolonged effort with medical practitioners on clinical practice guidelines -- so we don't end up with vast disparities from one region of this province to another on what medical services are delivered when.

To take just one small example, the rate of Caesarean sections for women in this province varies some 400 percent from one health region to another, and there is no easily recognizable health need as to why there should be that variation. In conjunction with physicians in the province, we are seeking clinical practice guidelines that will make more judicious use of health services and therefore move toward a fiscally sustainable health care system.

L. Reid: The minister takes great issue with the source of these wait-list documents. I can tell you that with every single province that has been reflected here, the information was sought from the individual Health ministries. Perhaps he needs to revisit his figures, because I believe that this information is valid. I have done checking in terms of Alberta and Saskatchewan. This institute performs a collating function; it does not generate this information. I think that's a valid comment.

Hon. P. Ramsey: I would differ greatly with the member opposite. What this institute seeks to do is promote an agenda, and that agenda is the development of two-tier health care in this province and in this country.

G. Wilson: As I stand to speak to Bill 54 in this committee stage, it is interesting to note that there is a change of title in section 1, from the Medical and Health Care Services Act, which describes an act that provides for health care services to the public, to the title Medicare Protection Act. I can't help but think how important it is, if this is indeed a medicare protection act -- An Act to Protect Medicare -- that this debate and the nuances in this particular bill be heard, considered and read by British Columbians.

The sincerity of the government in the introduction of this bill is greatly diminished by the fact that it brings it in at 12:45 a.m. on perhaps the last, if not the second-to-last, day of a session of the Legislative Assembly. It seeks to advance this debate at this time of night, after some of us have been debating in this chamber for over ten hours. I don't say that to suggest that we can't stand the rigours of debate. We certainly can, but I do say that to call it into question. This government is going to try to use this bill, as vacuous as it is, in the protection of medicare. It in no way protects medicare. It stops doctors from extra billing, and that isn't going to protect medicare. The title is a complete misnomer in section 1. It tends to detract from the government's strategy in the introduction of this bill. If it was really serious about the protection of medicare, if it was really serious in having this bill reviewed in this committee stage and understood, debated and discussed by the people of British Columbia, it wouldn't be doing it at 12:55 a.m. in this parliamentary session in its last and dying hours.

I have to call into question the sincerity of what the government is proposing with these grandiose whereases: "WHEREAS the people and government of British Columbia believe that medicare is one of the defining features of Canadian nationhood and are committed to its preservation for future generations." That's a very important statement to be talking about at 12:55 in the morning. "WHEREAS the people and government of British Columbia wish to confirm and entrench universality, comprehensiveness, accessibility, portability and public administration as the guiding principles of the health care system...." Those are extremely important issues.

Hon. D. Miller: Whose side are you on?

G. Wilson: I'm being heckled by the Minister of Skills, Training and Labour, who knows what side we're on. We have said unequivocally what side we're on. We do not believe in a two-tier system. We do not believe that we should have extra billing. We do not believe that we should undermine our comprehensive system, and neither do we believe that we should abuse the privileges of this parliament and debate these very important, pressing issues at almost 12:58 in the morning.

The reason I rise now is that the members of the Alliance Party that are represented in this Legislative Assembly have been on record in second reading. They know, this government knows and the people know where we stand with respect to this. Let me say that I think the introduction of this as a medicare protection act in section 1 is clearly a misnomer. By itself, this bill is not going to protect medicare. There is absolutely nothing in this bill that is going to protect against the privatization of a system that is, by its very nature, going to start to introduce a two-tier medical system. The fact that we talk about extra billing and the general limits on direct and extra billing is not going to prevent a future government from moving in and dismantling the health care and medical systems, and the minister knows that.

If we want to debate the privatization of health care, we should. If we want to talk about these whereases, which are critically important, we should. And we must do so before the next election. In second reading I made it very clear that we found major discrepancies between the positions of the official opposition -- from the member for Richmond East -- and what we were hearing from nominated candidates in Kamloops who talked about it. Today we witnessed it when the Transportation critic stood up and supported an amendment, only to find that when the leader came into the House the Transportation critic left the House, didn't vote on it, and the leader voted with the caucus in opposition to the very amendment he had supported a few minutes before. So the critics clearly don't speak for the party -- at least not in these instances.

These whereases are really important. They speak to the very basic health care system that we have enshrined in our 

[ Page 16983 ]

system of governance and our social contract in British Columbia, and we support it 100 percent. That's why I wish the government had chosen a more sensible hour in which we could start to look at the day-to-day administrative issues around the extra-billing component.

From our perspective, we are on record on Bill 54. Given the hour of this debate, if other members of this Legislative Assembly wish to carry on with what I think is going to become almost a vacuous bill, they are free to do so. From our point of view, we've made our position clear. It's unfortunate that the government has detracted from what we believed was a genuine interest in getting this public debate going by carrying this forward at such a ridiculous hour in the morning.

[1:00]

Hon. P. Ramsey: I agree with part of what the member opposite says. The principles contained in this bill are, indeed, important. I might add that if the members of this chamber wish to have this bill debated at a more reasonable hour, they might have considered curtailing some of the repetitious debate that has taken place in this chamber over the last ten hours, including the comments of the member for Powell River-Sunshine Coast. We could have very easily gotten to this bill at an hour where we might have had a larger television audience, and people would have been able to watch this debate a little more clearly rather than simply read about it in Hansard. But that was not the will of this chamber.

Let's talk very clearly, though, about what the principles here are....

An Hon. Member: Were they on our side?

Hon. P. Ramsey: Or on that side?

The Chair: Order, please, hon. members.

Hon. P. Ramsey: On the other hand, do they wish to speak in opposition to this bill and then vote in favour of it? That's an interesting policy of some members of opposition parties.

Let's say clearly that one cannot define this bill as vacuous and then say, as some have said, that it goes too far in trampling on particular sorts of rights for private medicine to develop. I believe that the protections for medicare contained in this act are significant and important. They protect medicare against one of the major threats which is arising in this province and in other provinces across Canada, and those pressures are clear. They are pressures from those who would change Canadian medicare radically.

There are two visions here. One is a vision in which medicare is a service which governments and people of a province have a right to under a sustainable health care system. It's a set of medicare services, some 3,000 of which are delivered through the Medical Services Commission in this province. Others would see health care as a commodity and like other commodities, it would be more accessible to those with more financial means to get it. We reject that vision. This preamble in this bill rejects that vision. Obviously most members in this chamber reject that vision, because they voted in favour of the principle of this act, and now they wish to say that the implementation of those principles is not something they wish to support.

L. Fox: First, let me say that I really believe the response from the minister a few moments ago does this whole process that we've gone through a total injustice. For the minister to suggest that the debate that took place over the last ten hours was meaningless and did nothing more than consume time, I think is really unfair to the House and even, in fact, to the ministers who took part in the debate as much as the opposition members did. I want to put that on the record.

Second, the minister made reference to the fact that all opposition members voted at second reading in favour of the bill. Certainly I voted in favour of the bill. When we're voting on principle, how could one not support a principle all Canadians believe in of protecting medicare? Where we have a problem is that we have different views of how we might do that. That's what the debate is around; it's not around the principle of protecting medicare.

The problem with section 1 is that it assumes we understand that the definitions of the five principles are something that will relate to the year 2000. But in fact, under the Canada Health Act, those definitions were defined in 1984, a time when technology was different, when the problems in the delivery of health care were significantly different and when the vision of health care was significantly different. The problem with this bill is that it should have had a definitions section which outlined what those five principles mean in the view of this Legislature. There is no question that the delivery of medicare is going to be an issue in the next election, specifically for this member. In Prince George right now you could wave this "whereas" in front of the residents and they would laugh at it, because we don't have universality or accessibility in Prince George Regional Hospital.

That is really the important issue that will be facing this government and this minister. Let me say that if we're going to redesign New Directions -- a principle, I think, that most people in this Legislature support -- it's important that we define what our objectives are. Had we defined what the five principles were, this legislation could have been a tool utilized in the New Directions process. Without that, we see well-meaning volunteers, who are putting significant effort in all around the province, in their own view trying to define what the intent of the five principles are. That is very unfortunate.

So my first criticism of this section is that it doesn't have a definitions section. I think the debate would have been centred around what we all envision universality to be and how we might achieve it, and how we envision comprehensiveness to be, accessibility to be, and so on.

I'm very concerned that the preamble here.... If the minister and this government are looking for a silver bullet to take him out of the problem that they presently have with respect to their image with British Columbians that this government has done damage to health care over the course of the last three and a half years, then it's inexcusable. It's unfortunate that we didn't do it right and that we chose to play politics rather than addressing the issues at hand.

Hon. P. Ramsey: I'll just respond very briefly. This is committee stage, and not second reading. We've had some very good reprises of second reading speeches again. Let's just say that I and, I think, all members of the Legislature believe that medicare is one of our defining features as a nation. It is widely recognized that access to medicare without financial barriers is one of the hallmarks of our system, and I think that 

[ Page 16984 ]

it is broadly acknowledged that there are growing threats to that access without financial barriers. The provisions of this act lower and remove those financial barriers. I think the preamble reflects the intent of the act.

L. Fox: Let me ask the minister a question. If an individual from Fort St. James who had to spend $590 in order to come to Vancouver to have some tests that historically could have been done at PGRH, is that "accessible" in the view of this principle "accessibility"? When they didn't have the $500 to buy the airfare, nor was it available to them in any program in government, either through Social Services or through the so-called air transport assistance, is that equal accessibility?

Hon. P. Ramsey: I had understood that the member opposite was quoted in the press in Prince George as welcoming the ban on extra billing contained in this act. We are removing financial barriers to access to 3,000 medicare services. I believe this is a significant step toward protecting medicare, as the title reflects.

L. Fox: Well, it could be a long evening. I asked a specific question around accessibility. The minister chooses to come back and deal with another section of the bill. I'm asking the minister very clearly about an individual from Fort St. James who could not have tests done in Prince George which historically were available at PGRH, and did not have the funds to travel to Vancouver -- in fact, was on UI. Funds to assist that individual were neither available from Social Services nor through the travel assistance program, and that individual didn't have the $500 to go to Prince George. Is that the minister's vision of accessibility, pure and simple?

Hon. P. Ramsey: I will resist the temptation to respond with the heat that this member seems to wish to engage in in this debate. He and I both know that Prince George Regional Hospital has a number of vacancies on staff that it is seeking to fill.

L. Fox: Let me ask one more question around that issue. The union board of health has not been able to offer homemaker janitorial services to new clients since July 1994. I got a letter today that they're going to have to reduce their services because money is not available through the union board of health. Demand on services is becoming greater and greater because reduced stays in hospital are expanding. More demand is being placed on community services, and they're not able to meet them. Now, this is different from what is received elsewhere in the province. Is that equal accessibility?

Hon. P. Ramsey: We are indeed back in estimates debate. The member and I discussed the homemaker service at length. We have said very clearly that, while we've increased funding for homemaker services by about one-third during our term in office, we expect all providers of health services to make judicious use of the moneys that we have been able to provide. Homemaker services are not provided under this act; it is a health service provided through other budgets in the Ministry of Health.

L. Fox: I recognize where their funding comes from. But we're talking about universality of services; we're talking about accessibility of services. The minister is trying to portray the image that indeed all of British Columbia has the same accessibility and the same universality, which is totally wrong. It's incorrect. If the minister is not prepared to debate this legislation at this hour of the night, I can understand that. I would have much preferred to see this come forward tomorrow morning at 10 o'clock, and we could have had a rational discussion at a reasonable hour. Perhaps the minister would have been more relaxed and more prepared to deal with the issues.

But, once again, let me get back to the point of the whereases. I'm trying to identify what this piece of legislation means in reality. I mean, it's nice; it's got apple pie and motherhood statements in it. It's very, very nice. But what does it mean in reality in terms of the five principles? Would the minister not agree that it would have been a worthwhile exercise to have a definitions section define what the five principles mean in 1995?

Hon. P. Ramsey: I think we've had a good back-and-forth on what the principles mean. I have spoken on them; they've been read into Hansard. I guess the question is simply that the member would define these as pie in the sky. I would define them as the fundamental principles under which we wish to see the 3,000 services that are defined as medicare services in this province delivered. If that's not the vision of the member opposite, I regret that. But it's definitely the vision of this government; it's the definition reflected in this act.

[1:15]

L. Fox: We hear a lot about the word "vision" from this government these days. Obviously Karl Struble has told this government that they should use the word "vision." It worked very well for Martin Luther King, and perhaps there's some magic that could be attached to these people.

But the real fact is that all I'm asking is for the minister to come clean and give us his vision of whether or not there was a need to define the five principles in terms of what British Columbia means when it puts it in legislation, other than accepting the definitions from 1984. Let's look at it in today's world.

Hon. P. Ramsey: We've talked about what universality means: access to the subservices and the same conditions for all. We've talked about what accessibility means. We've had debates on whether potential geographical barriers are real or not and about what we should do around financial barriers. We've talked about portability and public administration. I guess I could provide this member with a fee guide that lists all 3,000 medicare services which constitute comprehensive services under this act.

Section 1 approved.

On section 2.

L. Reid: Paragraph (a) reads: "...in the case of a practitioner's personal supervision authorized by the commission in the circumstances...." I would be interested in a definition of "personal supervision."

Hon. P. Ramsey: In this act, personal supervision is defined by (a) and (b). In some cases personal supervision is that which is authorized by the commission. There are some 

[ Page 16985 ]

circumstances when a practitioner can supervise rather than deliver service. Or, as (b) says, in the case of a medical practitioner who is not operating within medicare, then it's personal supervision acceptable to the disciplinary body.

Clearly, medical practitioners and health care practitioners deliver services both directly and sometimes through supervising others. The circumstances under which a service can be rendered under supervision, rather than by direct provision, are defined either by the Medical Services Commission or by an appropriate disciplinary body.

[G. Brewin in the chair.]

L. Reid: Let's take the example of acupuncture. The announcement has come out that that is going to be a regulated profession under the Health Professions Council, but it currently is not. So are we going to look at personal supervision applying to that kind of care delivery?

Hon. P. Ramsey: Not at present. Acupuncture does not fall within the health care practitioners that are captured under this act. Their supervision will be done under the regulatory body of their college.

L. Reid: In the first question, what I was attempting to get at with the minister is what personal supervision looks like. I did want to come back to that. Certainly it's not defined. Again, I will say that's one of the difficulties around this particular piece of legislation, because there's not a great deal of definition in it. I would like to understand what the minister means by personal supervision.

Hon. P. Ramsey: There are any number, among the 3,000 medicare services, which are allowed to be delivered under supervision by a practitioner who is enrolled under the act or by a medical practitioner or health care practitioner who is not enrolled and delivers them under the supervision of their college. It could range from... everything from the drawing of blood by a nurse acting under the supervision of a doctor to the taking of an ultrasound by a medical technologist under the supervision of a physician who then reads and interprets it. There are a wide variety of medicare services that are delivered under personal supervision of a practitioner who is enrolled under the act but not delivered directly by him or her.

L. Reid: Paragraph (b) discusses a care practitioner who is not enrolled and "personal supervision acceptable to the appropriate disciplinary body for the medical practitioner or health care practitioner." I would simply ask the minister to provide us with an example of a care provider who is currently not enrolled.

Hon. P. Ramsey: It could be a doctor who is not enrolled under the plan, in which case any of the examples I have just given would be an example of a service that's rendered under personal supervision but is not delivered directly.

Sections 2 and 3 approved.

On section 4.

L. Reid: Section 12(9) says: "A medical practitioner whose enrollment is cancelled under subsection (8) may not apply for enrollment under subsection (1) within 12 months of the date of the cancellation...." I would simply like to understand the rationale for 12 months. Is it an arbitrary discussion that resulted in the 12-month figure being chosen? I trust not; I trust there is some rationale for it, and I'll await the minister's comment.

Hon. P. Ramsey: The intent of this section is simply to say, as we said at second reading, that if medical practitioners believe there is an appetite for wholly privately-paid-for medicine, they're welcome to de-enrol and test those waters. What we will not allow is flipping back and forth between the wholly private practice of medicine and medicine practised under the auspices of this act. The length of the provision is somewhat arbitrary. A year seemed like a reasonable time.

L. Reid: As an example, if all the psychiatrists in the province were to de-enrol.... Section 12(9) continues: "...because it considers this to be in the public interest, allows the application." If they were all to de-enrol, could they re-enrol the very next day based on public need and on serving the public interest?

Hon. P. Ramsey: If that were the determination of the commission, yes.

L. Reid: Was there some discussion around six months perhaps being more likely in terms of the dramatic necessity in this province today for general surgeons, obstetricians and gynecologists? It seems to me that if these people are going to be serving the public, we don't want some arbitrary comment suggesting that they are not able to come back into the system and actually serve the public. It seems to me that the minister did nod when I said it was truly arbitrary, and certainly his comments have only confirmed that. Perhaps he could suggest if there is indeed going to be some latitude. I would await his comment.

Hon. P. Ramsey: No medical practitioner, as far as we have been able to ascertain, is practising on a wholly de-enrolled basis in this province right now. Such practitioners are not there. If such a situation arose, this section provides for a clear hiatus in that practitioner's ability to practise under the auspices of this act; on the other hand, it allows the commission, where a clear public interest is identified, to allow the practitioner to return and become enrolled after a shorter period of time.

Sections 4 to 7 inclusive approved.

On section 8.

The Chair: I understand the minister has an amendment.

Hon. P. Ramsey: I would seek the sense of the opposition at this point. The amendment is to section 17.4 under section 8. I can move it now or it can wait until we get to section 17.4. I'd prefer to wait. It will probably help the thing flow, so let's begin now, and I'll propose the amendment when we get to section 17.4.

On section 8, section 17.1.

[ Page 16986 ]

L. Reid: Section 8, "General limits on direct or extra billing," says: "17.1(1) Except as specified in this Act or the regulations or by the commission under this Act, a person must not charge a beneficiary...." It's my understanding that that closes the loophole in previous legislation. Is that also the minister's understanding?

Hon. P. Ramsey: I'd be interested in hearing what the hon. member opposite perceives as the loophole.

L. Reid: Let me continue, and perhaps it will become clearer to this minister. Section 17.1(b) says: "...for materials, consultations, procedures, use of an office, clinic or other place or for any other matters that relate to the rendering of a benefit." My question relates specifically to who would now be responsible for medical-legal reports, medical-legal redress -- i.e., individuals who have been in accidents and need medical coverage to assist them with a legal process. It seems to me that that is not covered. Could the minister kindly confirm or deny?

Hon. P. Ramsey: Those charges are allowed now, and they would continue to be allowed. This seeks to specify what charges are not allowed. I think the member refers to a loophole. I would refer to the previous act as having a fair bit of generality. The section previously read: "...for any...matter that relates to the rendering of a benefit except as provided for in the regulations...." It was on the rendering of a benefit that there was a fair bit of ambiguity. We have sought to remove that ambiguity by specifying precisely what charges are prohibited.

Section 8, subsection 17.1 approved.

On section 8, subsection 17.2.

L. Reid: Subsection 17.2(2)(c) says: "...other circumstances specified by regulation by the Lieutenant Governor in Council." Certainly the minister heard me speak strongly of the powers that would be found around the cabinet table under this particular section and under this legislation. We have some serious concerns about housing all that power, if you will, in the regulation. Because this bill is truly symbolic in a number of ways, the meat of it will be in regulation. Perhaps the minister could give some examples on other circumstances specified by regulation.... How far do these parameters actually extend?

Hon. P. Ramsey: Other circumstances could arise were we have a substantial number of de-enrolled physicians seeking to practise a wholly private tier of medicine in this province. In that circumstance we would be looking at regulations to prohibit the extra billing. We do not have such a circumstanc now. In a time when there is such flux in how services are delivered, where there clearly is an appetite among a small number of practitioners to establish such services -- an atmosphere that has been welcomed across the Rocky Mountains in Alberta -- we thought it was important to provide for regulation of those, should such circumstances arise. The member opposite spoke of the potential for all psychiatrists choosing to de-enrol and then in the public interest to let them back in to enrol if they so wished. I guess there are circumstances where every physician in a community might choose to de-enrol and perhaps hold the community hostage in a private-pay system. We would seek to regulate in such circumstances. So a number of potentials are around out there; we don't see any right now. We thought it was important to provide for regulation of those, should they arise.

[1:30]

L. Reid: Section 17.2(3) says: "If a medical practitioner described in section 17.1 (2) (c) renders a benefit to a beneficiary, the medical practitioner must not charge the beneficiary for, or in relation to, the service an amount that, in total, is greater than..." -- etc., etc. Is the intention under the term "in relation to" to restrict services that have not been previously covered? How is this minister defining the term "or in relation to"?

Hon. P. Ramsey: "In relation to" is intended to capture precisely the same set of circumstances as are captured in section 17.1 around matters that relate to the rendering of a benefit -- "materials, consultations, procedures, use of an office, clinic or other place or for any other matters...." Those are the circumstances related to. Section 17.2(3) applies to physicians practising within medicare in that they're enrolled in the plan but have chosen to bill their patients directly, rather than collect from the Medical Services Commission.

Section 8, section 17.2 approved.

On section 8, section 17.3.

L. Reid: Section 17.3(1) says: "Before a beneficiary is rendered a service that would be a benefit...." What is the definition around "would be a benefit"? Are those the 3,000 services the minister listed earlier that are currently part of the listed package?

Hon. P. Ramsey: Yes.

Section 8, section 17.3 approved.

On section 8, section 17.4.

Hon. P. Ramsey: At this point I wish to move the amendment to section 17.4 standing in my name on the order paper.

[SECTION 8, in the proposed section 17.4 of the Medical and Health Care Services Act, S.B.C. 1992, c. 76, by deleting the proposed subsection (3).]

I actually briefly explained the purpose of this to the member opposite in the corridor. I'd like to explain it for the record. We discovered that, really, this is a repetition of a power granted earlier and therefore is unnecessary. The powers that would have been granted under section 17.4(3) are available under section 17.2(2)(c), and therefore the section is not required.

Amendment approved.

Section 8, section 17.4 as amended approved.

On section 8, section 17.5.

[ Page 16987 ]

L. Reid: Under "Civil action," it says: "An amount that is to be refunded under this Part is a debt due to the person who paid the amount, recoverable by action in any court of competent jurisdiction." I simply require a definition of "any court of competent jurisdiction." There seems to be a difference of accessibility, if you will, to different courts in the land, depending on where you currently reside. There has certainly been some discussion with practitioners, whether we're talking small claims court or different levels of jurisdiction.

Hon. P. Ramsey: That would depend on the amount owed. Small claims court would do for many of them.

Section 8, section 17.5 approved.

On section 8, section 17.6.

L. Reid: Section 17.6 says: "The minister, or a person designated by the minister for the purpose, may enter into an agreement to pay an amount to offset all or part of the cost for materials, consultations...." It seems to me that this discussion takes a look at private clinics in British Columbia, and it certainly recognizes that the ministry currently purchases a number of services from private care providers. What I'm wondering is whether that is going to change the relationship in any way with the services that are currently purchased from and delivered by private providers in the system to the Ministry of Health. If the minister could comment.

Hon. P. Ramsey: The intent of this section is for some of the fees that are clearly not currently allowed under the provisions of the act we debated later to enter into formal negotiations both with the BCMA and with the owners or operators of clinics that are now charging facility fees, which are going to be prohibited when this act comes into force on September 30.

We've said very clearly and very publicly that we recognize that the delivery of medicare services in situations other than a hospital setting is both appropriate in giving advanced medical technology and cost-efficient, and we do not wish to discourage that. Currently we have a situation in doctors' offices, for instance, where some charge tray fees for consumables and some don't, for the same procedure. It's not fair to patients or to physicians. This will allow us to negotiate variations in fee schedules with physicians.

It will also enable us to enter into contracts with facilities that we wish to contract with and to pay facilities the equivalent of the overhead that is now paid by facility fees in order to enable them to offer medicare services where that is appropriate and where their sets of services are needed within our publicly administered health system.

L. Reid: I appreciate the minister's comments, and I'm simply inquiring as to what the next step might be in terms of what we currently reimburse. What is the actual fee schedule item -- item X, whatever it happens to be? That delivery system, I understand from the minister's comments, is still in place. It's whether or not there's an additional charge. If there's an exchange going on between a private clinic and the patient, and if that private clinic is offering the service at the same cost as contained within the fee guide....

There is no discussion with this minister and this government that the status quo is maintained. If in the past that individual had been charged a facility fee of some sort -- a tray fee as an example, in the minister's view -- that would now be picked up by the government as well. There would be no direct cost to the patient, from the minister's remarks. Perhaps the minister could confirm that.

Hon. P. Ramsey: Yes, that is the intent. Let me distinguish here, though. Tray fees are one set that we will be negotiating with the BCMA. For facility fees, there are some private clinic operators that will be discussing whether or not they wish to be a subcontractor within the health care system and have the Ministry of Health assume part of their overhead. We obviously have to negotiate very seriously with them what that assumption of overhead, now collected through facility fees, would look like.

L. Reid: I appreciate the minister's comments. I have just one further clarification. If we had a private provider operating out of a private clinic, who was charging a fee in excess of what is currently listed in the fee schedule, the case has always been made in the past that that additional cost covered off medical insurance and professional development, as two examples.

My understanding from the minister's comment is that the status quo will be maintained around that as well, if this person is de-enrolled and is currently not providing a service under the Medical Services Plan. Perhaps the minister could confirm.

Hon. P. Ramsey: We are not talking about de-enrolled practitioners or services offered through de-enrolled practitioners under this section. We're talking about enrolled practitioners, whether they're direct-billing or collecting from MSC, who are participating in medicare but delivering services other than in a hospital setting.

L. Reid: I appreciate the minister's clarification. The question was specific to de-enrolled physicians, so there is no intention under this section to curtail their activity in any way. Perhaps the minister could confirm.

Hon. P. Ramsey: No, there is not. The power to do such regulation, if required, rests in the earlier section that we debated.

K. Jones: Does this legislation have any way of controlling the situation where a doctor may charge a fee, but that fee is required to be paid as a donation to the hospital foundation as a means of being able to have a particular operation? For instance, for a hernia operation you have a choice between a laparoscopic and a regular one. The laparoscopic one, which gets you done with much less injury and less time off work, requires an extra $600 for the extra materials related to it. Would this piece of legislation require that this practice cease? Or would it still be allowed under those circumstances?

Hon. P. Ramsey: I can't think of a clearer example of extra billing, nor a stranger one. Yes, that would be prohibited.

Section 8, section 17.6 approved.

Section 8 as amended approved.

[ Page 16988 ]

Sections 9 and 10 approved.

On section 11.

L. Reid: Certainly we touched on this in earlier debate, but I simply ask the minister to perhaps synthesize the impact of the name change.

Hon. P. Ramsey: Synthesize. We've synthesized quite enough as we debated the preamble and title of this act. As to the impact of it, it says that for now and until some other government seeks to change the principles under which medicare services are delivered, those stated in the preamble and in section 1.1, the purpose of the act, apply. We will have a publicly managed, fiscally sustainable health system in which access to necessary medical care is based on need and not on ability to pay.

Sections 11 and 12 approved.

On section 13.

G. Farrell-Collins: I've got to ask this question, because after so much being made about the name change to this bill, all the hoopla around it and the way it was brought forward.... It's even done in a larger font. It's right front and centre that this bill's name has been changed. The first section, from the "Medical and Health" -- or whatever you want to call it -- says: "The Medical and Health Care Services Act...is amended (a) by repealing the title and substituting the following...." And in really big letters it says: "Medicare Protection Act." It's front and centre. It's the largest print in the whole bill.

It's mentioned throughout the bill. We had a big debate about the significance of the title. Then you come to section 13, and you have this short title. It says, "This Act may be cited as the Medical and Health Care Services Amendment Act..." which is exactly what it was before. In fact, the short title is longer than the new title. So perhaps the minister can explain what the heck is going on here, other than just cheap politics.

Hon. P. Ramsey: Let me analyze and then synthesize the debate here. Section 13 refers to the title of Bill 54, An Act to Protect Medicare. Legislative counsel has said this is an older style of doing it, where you always amend an act by saying this is an act to amend a particular act beforehand. When the consolidated act, now called the Medical and Health Care Services Act, is printed, it will have the title "Medicare Protection Act."

Section 13 approved.

On section 14.

L. Reid: This is my final question to this minister. I simply ask if it is this minister's intention to have this act proclaimed by September 30, which has been the discussion, to indeed respond to the directive from the federal Minister of Health, the Hon. Diane Marleau.

Hon. P. Ramsey: Yes, the provisions of this act will become law in British Columbia by September 30, 1995.

[1:45]

Section 14 approved.

Title approved.

Hon. P. Ramsey: I move the committee rise and report the bill complete with amendment.

Motion approved.

The House resumed; the Speaker in the chair.

Bill 54, An Act to Protect Medicare, reported complete with amendment.

The Speaker: When shall the bill be considered as reported?

Hon. P. Ramsey: With leave of the House now, hon. Speaker.

Leave granted.

Bill 54, An Act to Protect Medicare, read a third time and passed.

Hon. P. Ramsey moved adjournment of the House.

Motion approved.

The House adjourned at 1:47 a.m.

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