Prayers.

Hon. M. Sihota: I call Committee of Supply in Committee A to debate the estimates of the Ministry of Employment and Investment, and the Ministry of Small Business and Tourism; and in this chamber, Committee B is to debate the estimates of the Ministry of Education, Skills and Training.

The House in Committee of Supply B; G. Brewin in the chair.

On vote 20: minister's office, $460,000 (continued).

D. Jarvis: I want to say that, unfortunately -- I hope I'm not repeating anything that has been said before -- with the present system we have here, where we're running from House to House, I wasn't able to attend the previous one yesterday. I would like, first of all, to say to the minister that I understand that he is going to meet in the near future with the three North Shore MPs with regard to school district 44.

Hon. M. Sihota: MLAs.

D. Jarvis: Did I say MPs? Pardon me. The last thing I'd want to be would be an MP. He's going to meet with us MLAs. That's appreciated. We'll look forward to it.

I want to mention something about the fact that North Vancouver school district 44 has probably been an unusual school district over these past five years, more so than any other district in British Columbia. That is the fact that this government did fire our school trustees. It's hard to believe, but they actually fired the trustees. It takes us back to the old Social Credit government. Who would have thought that the NDP government would have copied the past performance of the Social Credit government? But sure enough, they did fire them.

This situation leading up to the firing of the trustees goes back quite a time to, I guess, early '91, approximately four Ministers of Education ago. It involved the collective agreements and the technical distribution group. I've written letters to the present minister. He may have read them; I'm not sure. It created a very difficult situation on the North Shore. We have had, up to this time, a very superior education system on the North Shore, an innovator of quite a few unusual and new methods and support groups for the education system, such as the outdoor schools. And I understand that the North Shore was the first school district to even experiment with community schools. If we weren't one of the most superior education districts in B.C., we were probably close to number one, anyway.

In any event, they ran into financial difficulties. The reason is very complicated and probably.... One of my questions will lead up to why it occurred. No one really knows. Philosophy has gotten into the problem, put itself forward, and people are fighting and discussing and arguing amongst themselves as to who really caused the problem of letting North Vancouver school district have such a large deficit, to the point where it was necessary for the government, through the previous MLA for North Vancouver-Lonsdale, David Schreck, to ask for the firing of the school trustees.

From what I can see, and I've gone over some of the books from the superintendent, they've cut and cut and cut North Shore down to the bones: they've cut the administration staff, vice-principals and assistant superintendents; they've cut special ed; they've cut, as I said, outdoor schools, bands and strings, and all these things that parents have had to come up with extra money for on the side to make it a two-tier education system on the North Shore. Also, they threatened cuts to community schools, which created unbelievable anxiety for parents, and hundreds of children were affected with the thought that their education would be interrupted.

Two ministers ago, the superintendent, Bob Smith, was appointed to look after North Vancouver school district. On his volition, he said he was going to do an audit of the school district. My suggestion at the time was that in view of the heavy conflict.... There was a conflict between the parents and the superintendent of the district; there was a conflict between the teachers and the superintendents; there was a conflict between the superintendents and the trustees, and between the trustees and the board of education. No one could specifically say what caused the unusual deficit in school district 44, until it got up into the millions of dollars, and it didn't seem like there was any possible way out.

My first question to the minister is on this. I believe that if they had called for a forensic audit of the district at that time, they probably would have settled the problem at that point, and we would have found out who was wrong: was it the board of education here in Victoria? Was it the minister? Was it Mr. Schreck? Was it the trustees' fault, or was it the superintendent's and the assistant superintendent's? Just who was at fault? I honestly believe that if the board of education in Victoria had been right, they probably would have saved the seat in North Vancouver-Lonsdale, because that was one of the major causes of them losing that seat in that area, believe it or not.

I was wondering if the minister could give us any thought as to whether he's prepared to look into the situation even deeper than it has been. The audit that he used was by the same people that had audited the books before, Peat Marwick. Would he venture out to another outfit and get a deep forensic audit to find out exactly what occurred in North Vancouver's district 44?

Hon. M. Sihota: As the member noted, I made a commitment to meet with the North Shore MLAs to discuss this issue. I think this is a rather tangled and complicated matter, and it's best dealt with at that kind of venue, rather than this one.

D. Jarvis: I'd just like to ask a couple more questions. Has the minister made any decision, or is he prepared to discuss the settlements with the teachers in their arbitration discussions for the new collective agreement in the province -- the pupil and classroom-size ratios?

Hon. M. Sihota: I've already answered that question. It's on record in Hansard.

D. Jarvis: I really appreciate the minister's succinct reply. I'll have to read up on those.

[ Page 1516 ]

Could the minister tell me how many of his staff on the board of education in Victoria have experience in education?

[10:15]

Hon. M. Sihota: Many of them do have experience in education. I guess in some sense all of them do, because they are now within the Education ministry. I've already indicated my concern that there has to be a better and a more positive relationship between the ministry and teachers. I acknowledge that we need to do a better job of in-field work in this ministry.

I know that our system here is such that not all hon. members can be in the House in the same time. It is unfortunate, and it does get us into repeating issues.

As I said earlier, I have respect for the rules here, as I'm sure all hon. members do, and the rules do not allow me to get into repetition, except to say to the hon. member that that specific question has not been asked, and I have tried to answer it the best that I can. We have people who have experience in education. But it is my own feeling that we're not as well connected to the field as we should be, and I have already said on the record that I intend to make that an issue that I'm going to attend to.

J. Dalton: I think it's appropriate that I have the opportunity to follow my colleague for North Vancouver-Seymour, because we are two of the three -- in full or in part -- North Vancouver-based MLAs that the minister has offered to meet with to discuss the implications of the situation in North Vancouver, both as we built up to the Bob Smith report, which I have with me, and also the aftermath of that report.

There are just a few items that I want to put on record. Certainly we look forward to the opportunity to sit down with this minister, because I can tell this committee that his predecessor -- neglectfully or otherwise -- failed to get around to even acknowledging receipt of Bob Smith's final report until, I believe, a month after it was sent to Victoria.

My colleague and I have met with Bob Smith several times before and after the report was finalized in March, and I can tell you that Mr. Smith was in a quandary over what his terms of reference were, as to whether he was to carry on in his capacity as official trustee, which, of course, he has now been appointed to do. It was a very unhappy situation, needless to say, and I know the ministry officials over there -- many of whom have been involved directly or indirectly in this issue -- are quite conversant with it.

I want the committee to be aware of two or three things, and then we will look forward to the opportunity at some point to sit down with the minister and his staff and discuss what we have learned from North Vancouver. I don't know why North Vancouver seems to be almost picked upon in some of these major issues. Hopefully, we have learned something from the Second Narrows Bridge fiasco which we've just come through, and I hope that we will learn something from the North Vancouver school district issue that we've gone through and are continuing to go through.

There is one thing I want to make reference to for the committee's information. The minister will be aware of the 1993 technical distribution report that examined in detail the financing formula and the financing structure for public education in this province. There are two things that the committee was instructed to do, and they certainly are reflected in its final report: firstly, ensure that available resources should be distributed equitably; and secondly, ensure that the distribution system should be more easily understood.

If I'm not mistaken -- and perhaps the minister can confirm this for me -- I believe that when he was first appointed as Education minister, he did make a public statement and acknowledged that the funding formula needs to be revisited. Certainly the technical distribution report of '93 has made that point, and Bob Smith, whom I'll refer to in a moment, has made reference to that.

But could the minister assist me as to if he has indeed publicly acknowledged the confusion and the difficulties of trying to understand and comply with some of these comments about equitable distribution and a more easily understood system? Is that the minister's feeling? If so, we can proceed from that basis.

Hon. M. Sihota: We have already implemented some of the provisions of the technical report, particularly with regard to operation and maintenance funding. But I want to reiterate that these issues, as they relate to the North Shore.... I just think that there seems to be a whole set of issues here, a whole set of concerns and views about this matter being sort of politically driven or driven by other matters, or the size of the deficit, how it was created, the role of the government, the provisions of the collective agreement....

My view is that if we just sort of walk through the facts here and have a common understanding of the facts, then I will seek the counsel of the North Shore MLAs as to what plan of action they recommend ought to be taken in light of events that have happened. I don't have much appetite to revisit the reasons for why things happened, because I think we've all inherited a situation. I would just like to try to focus on where we go from here.

I'm quite obviously happy to offer some explanation, to the degree that I'm aware of it, but I'd really just like to say okay, fine, let's take a look at the report that you refer to, let's take a look at the situation as it relates to North Vancouver, and let's assess what the situation is now, knowing that November is coming upon us. How can we craft a resolution that brings an end to this file that's on your desk and mine?

J. Dalton: I certainly do appreciate the circumstance whereby the ministry now is in possession of Bob Smith's final report, the one that was tabled on March 31 of this year. Presumably, we can all extract information from Mr. Smith's report that will assist the people of North Vancouver. I am, among other things, a parent of two children in high school in North Vancouver, so I know firsthand some of the unsettling effects of the dismissal of the board. Perhaps even more important is not just the dismissal but what led up to it: the uncertainty, the continual requests from the trustees for assistance -- auditing assistance, for example -- from Victoria, which apparently fell on deaf ears to some extent. I agree with the minister. I don't want to be casting blame or seeking back as to what happened and why. I think we have to learn from the experience.

I just want to make two or three observations from Mr. Smith's report, to get these on the record. Then when we have our follow-up meeting with the minister once the session is finished, we can sit down collectively and examine what's come out of this and what we've hopefully all learned from the exercise. I'm sure all members of this House would agree that it's a very unusual thing for a school board to be fired, whatever may have contributed to or led to that circumstance.

Mr. Smith, in his conclusions and recommendations, makes two observations. Number one, "...the financial challenges faced by school district 44 exist due to a Ministry of 

[ Page 1517 ]

Education funding distribution formula which has inherent inequities in its structure..." And that's why I made reference previously to the technical distribution report. We recognize, and the minister will certainly recognize, that that's something we're all going to have to sit down and discuss within the context of what happened in North Vancouver in particular, and of what may be happening in other districts.

Yesterday, the minister will recall, my colleague the member for Okanagan-Vernon asked about what other districts were in a deficit position. I believe that she listed seven, and the minister acknowledged that that was the case. Now, I'm not suggesting that we have seven other school districts that are going to get into the mess that the North Vancouver situation created -- hopefully not. Again, I remind all of us that we can learn from the exercise, even though it wasn't the most pleasant way of learning. That's the first thing Mr. Smith pointed out: the formula itself has inherent inequities in the structure, and we must recognize that that is so. He then goes on to say that the district should be funded in a fair and reasonable manner. Well, that comes back to the 1993 guideline set by the technical distribution report, which is that the system should be more easily understood.

Other than that, the Smith report is quite detailed. I'm hoping that the minister.... Perhaps in his response he can indicate to the committee whether he's had the opportunity to read the report. I wouldn't necessarily expect he's been able to read it cover to cover, but I do know that he is certainly conversant with the issues. If that is the case, then when he calls the three affected North Shore MLAs together for this meeting, we can sit down and collectively discuss what's contained in the Smith report and what the overall implications are. Perhaps I'll allow the minister to respond to that, and then I'll make one other point.

Hon. M. Sihota: No, as I said yesterday, I have not had the opportunity yet in the short time I've been in the portfolio to read the report. But I will be fully briefed on it when we have our meeting.

J. Dalton: Good. I'm sure that's the case.

One thing that Mr. Smith does comment on in his report.... I'm not using this example in any way to pass judgment as to whether it's a good or a bad suggestion, but Mr. Smith has done a very thorough inventory of the assets of North Vancouver school district. He suggests in part of his report that the way to get out of the financial bind.... Of course, at the moment, North Vancouver school district is in a $4.9 million deficit from the last two years. He also pointed out that if this were allowed to proceed unchallenged we'd probably have another $4 million or $5 million deficit on top of that. Naturally, something has to be done. He's suggesting in part of his report that the sale of surplus assets might be considered.

I have a little bit of difficulty with that. For example, my riding contains parts of two school districts, the other being West Vancouver. I think of the public furore that was created when the sale of the Hillside site came up in late '91 and into '92. Of course, at this very moment, that site is now being chopped up into about 30 building lots so they can pay for the new Rockridge school in West Vancouver. It caused a lot of concern. I think school districts have to be very cautious about getting into the position of maybe having to sell assets that may not be needed today but may very well be needed down the line. I'm not quarrelling with Mr. Smith's observation, because he has done a very thorough study of all the inventory of North Vancouver. That's something that I would like the minister to be aware of and that we will certainly have to discuss when we sit down for our meeting.

Hon. M. Sihota: I don't think the member is looking for a response, but no, I understand all those issues. We will, when we meet, discuss the issue of surplus. As the hon. member may be aware, I have to approve any sale of surplus properties, and I will seek their guidance on those issues when we meet.

J. Dalton: We all look forward to this meeting.

I thought, while I had the floor, that I would divert into something that is not specifically district-related. I just want to put this on the record. When we sit down with the minister, I would like the opportunity -- if not at that meeting then in some ongoing dialogue -- to consider an issue that other members of the committee have raised. I know my colleague the member for Delta North, for example, has talked about governance in some of his questions and comments. I'm wondering if the minister is aware of the governance change, a very significant change, that has gone on in New Brunswick as of February of this year.

[10:30]

One thing in particular that interests me -- and I've made some public comments, in writing and verbally -- is school-based management and a more parent-focused approach to public education governance. That's the philosophy and the guideline that New Brunswick is going through at this time. It's a parent-focused structure designed to better support learning and ensure local parental input. I just wish the committee to be aware of something that's going on in public education, not outside the boundaries of this country but within the boundaries of this country. I guess it's not dissimilar, in a way, to what New Zealand has gone through for many years now. I'm not suggesting, again, that this may be the new approach that we should take -- if indeed we need to take a new approach -- but I do truly believe that we need to revisit the entire governance of public education. It isn't perfect now by any means.

I guess the other thing I would add to that comment is that given that we are heading into the November civic elections, we've got some very important issues on the public school agenda. Number one will be the amalgamated districts and who is going to surface and run for trustee. Secondly, coming back to my community in North Vancouver, the question will be: who's going to dare, if that's the way to refer to it, to put their name forward to run for trustee in a school district that has gone through the unfortunate circumstances that we've all witnessed?

I believe the minister acknowledged by a nod of his head that he's aware, and I'm sure he is, of the New Brunswick exercise. That's something that we can all profit from from the point of view of observation and a learning experience.

Hon. M. Sihota: I am well aware of the New Brunswick situation. It has caught my eye. I have read in detail -- unlike the Smith report -- the reports from New Brunswick, because I too recognize that there are some governance issues that we're going to have to grapple with as to the trustees. The PERC report made reference to the fact that we need to establish a process to look at governance. It is my own view -- and I have not taken this issue yet corporately to cabinet, so I want to emphasize that this is my own personal view -- that we are going to have to go through an examination of these issues.

[ Page 1518 ]

What has happened in New Brunswick is intriguing. I agree that it may not be appropriate to transplant that system here, but one could learn from experiences in New Brunswick and other jurisdictions to have us develop a system here where parents have a greater say in the decisions that are made, because I think that is lacking, to some degree, within our system now.

A. Sanders: Good morning. I would like to just go over a little bit of protocol for the minister and the staff. What we would like to do this morning is continue with K to 12 and offer individuals from the districts opportunities to ask specific questions about their districts. We'll then follow with Skills and Training and go back to K to 12 this afternoon, after awaiting the information from the deputy ministers concerning questions from yesterday's session.

My first question to the minister is one of quite significant importance to me, relating to the funding that we looked at yesterday in Education. There are two things that we need to go over a bit more carefully. The first is that within the Ministry of Education, we're going to be looking at a figure. The minister has given me $454 million for federal off-loading combined with $23 million that has got to come from somewhere -- I assume it's within the Ministry of Education -- for the teachers' settlement, the two-year collective bargaining agreement. This will also be followed by the additional $23 million or so for the estimates for the year forthcoming.

This is a considerable amount of money. We're looking at $477 million. When we were saying that surely we can find some money out of a $3.7 billion budget, we're now talking about quite a considerable amount of money. I'd like some reassurance from the minister as to.... I'm sure this has been looked at. What are we going to cut? Where are we going to take that money from? What schools won't be built? What projects will be stopped? What people won't be hired? What staff will be let go? What are we going to do within the internal structure of this ministry to accommodate what is really quite a considerable amount of money?

Hon. M. Sihota: Let me deal with three issues. The first is the process. There's certainly no difficulty with that agenda. Let me also say, however....

I just want to make this clear, because it occurred to me yesterday that perhaps I didn't make it clear enough. We will not be able to give answers to all of the questions she asked yesterday within the time that I think these estimates will take. We're going to try to give you many of the answers to the questions that I said we would get back to you on during the course of these estimates. I asked staff yesterday to start to get that information together, but some of it will take a week or ten days to get. I suspect we'll be completed by then. I just don't want the member to have a false expectation here. We'll get as much of the information that the member requested, but we won't be able to get the totality of the information -- just so she doesn't have a higher expectation than that which we can deliver on.

The other point I want to make is that we're really talking about two chunks of money here. We're talking about the federal off-load, which, as I said yesterday, is a revenue item in terms of less money coming in from the federal government. It is treated as less money that would come in from any other source, whether it be sales tax, forest revenue or whatever. Government then has to make up that revenue. The full measure of that doesn't fall on the Ministry of Education. Quite frankly, the decision that this government has made, unlike any other government in the country, is that we're going to keep Health and Education budgets full. And if we're going to do that, then the brunt of those impacts -- the loss of that revenue -- will have to be made up through other adjustments in the budget. That would include reductions in expenditures in other ministries, which clearly is going to happen. So there will be -- if I can put this way -- a far greater impact on other ministries than ours as a result of the federal off-load, and just through revenue enhancement that the government will have to incur through the decisions of the Minister of Finance within the broad political objectives government sets for itself.

Obviously there will be some offsets because of growth in the economy and the like, which will offset that $454 million. At least our economy is growing, so there's a greater absorption ability than there would be in other jurisdictions. Other jurisdictions have not taken that view, and hence they've passed on those cuts directly, which really means that from a qualitative point of view, theirs will be a two-tiered system of education. I think the quality of the education system in British Columbia will be superior to that which is offered over time in other jurisdictions, which is unfortunate.

I just want to emphasize that it's not for us in this ministry to find the full measure of those federal cuts. We've chosen not to go that route. There will be some impact on the ministry, but it will not be as great as it will be on other ministries, which will have to come up with their contribution to that $454 million.

The real challenge, then -- which gets me to my third point and the real purview of the debate here in estimates -- is to try to find that $22 million cost of the collective agreement for this year. You're right; there are costs in subsequent years as well, whether the $3.7 billion.... That's there. I believe we can do that. We have to do that, and we'll do that. I'm sure that through looking at efficiency measures -- again, just working on administrative costs -- and yes, through deferring some decisions that we would otherwise have made, we'll manage that issue.

As I've said to staff, I don't intend to.... One of my options is to go back to Treasury Board and say that I'd like the full measure of that to be taken out of contingencies. I don't expect to do that, because I don't think I should do that. As the minister, I think my responsibility is to try to find as much of that money in-house as I can. Therefore I have some options. I can do things I just alluded to: administrative efficiencies, reduction of administrative costs, deferring some decisions. I may come to the conclusion that I can do $15 million of that $22 million with very little pain, but for the other $7 million I need, I'd go back to Treasury Board and ask for a reach into contingencies to deal with that issue. I've got a lot of options. I'm satisfied in my own mind that I've got some flexibility here. I've had the good fortune to serve in a number of portfolios. After a while you have a sense of what you can do. My sense on this one is that we should be able to make the appropriate adjustments.

Now, I should have said four points. The fourth point is that deferment of capital projects is a different issue than dealing with these $22 million worth of challenges in the ministry, because the capital budget is different. So we will not be deferring capital projects in order to save enough money to generate that $22 million. There will obviously be some debt-servicing costs that could be built into a saving, but that's not really the strategy. I look at those as two separate envelopes. I will deal with Debt separately, and I don't merge the two on those operating cost provisions. So we have to find that within the budget. I am confident I'll do it, and I'll go back to Treasury Board if I don't think I can.

[ Page 1519 ]

A. Sanders: My interest would be: has the department done some rough copy on what this new....? Here we have the estimates that we're debating, yet we're $23 million short. We know it's got to come from somewhere. Do we have a rough draft of what that's going to look like? For example, does that mean that ministry operations will be adjusted in September? I think it's perfectly reasonable to say: "Leave it to me and I'll take care of it." But when we're talking about $23 million and I see a number of people living on $500 a month, they want to know how that's going to be done. I think it's reasonable, rather than the broad brushstroke of: "Leave it to me. We'll just take care of it. Don't worry." Twenty-three million is $23 million. These are the estimates for the year. We're halfway through the year before we've even passed the estimates, and we're on special warrant. How are we going to do it, and what kind of picture does that show to a person in North Vancouver or Quesnel? What are they looking at, in terms of their school system?

Hon. M. Sihota: We just started that review last week, so I haven't seen the paperwork. Every branch of the ministry is now doing its own internal reviews to find out where we can find that money. So at this point I don't have a definitive plan in place. What normally happens is that they go through a process and give me a set of options. I will tell them that this is not acceptable and I want them to go back or that this is acceptable and I think we can swallow that or defer that. The best that I can do for the hon. member at this point is say that after I've made those determinations, I would be happy to brief her on the decisions that we've made.

A. Sanders: I appreciate the difficulty of being the minister, especially wearing two hats and trying to make decisions that make sense within a very large area in terms of budget and responsibility. However, I think one of the things that many taxpayers feel is that government is very inefficient in terms of when it finally gets to the actual decision. I speak in terms of people at the Queen Elizabeth school packing up their school in the month before, not knowing whether they're going to unpack it, whether they're going to have portables or what's going to happen, having not heard from the ministry and sitting in a limbo situation 30 working days before school will start again. That's not good planning.

[10:45]

We have $23 million that we know we're going to take out of the cookie jar -- out of this project or out of that. With the minister's experience, I don't think there is any question that he has some pretty good ideas about where that money is going to come from. Although I'm not looking for the dollars and cents, I am looking for the generalized area rather than: "Don't worry about it, we'll take care of it." What is the generalized area where that big wad of $23 million is going to be sucked from in order to stabilize the system?

Hon. M. Sihota: Maybe I can help by doing it this way. There will be some areas that I won't want to touch. One would be services in the classroom. So let's just take that and put it aside. There will be other areas that I will touch: administrative areas and some of the grants and contributions we make that I believe we can make some changes on. There may be some ways in which I think we can get more commercial in the application of decisions and in products that we produce as a ministry, ways we can generate a stream of income.

Let me just give you an example. This is a post-secondary education example, but it's the same problem, because you have some costs associated with those agreements. I think there's a great capacity for the province to do a better job of marketing some of its Knowledge Network programming to other jurisdictions. There is a huge market potential in that regard, which would offset some expenses we have and will generate more revenue within government. So that's an option. Certainly within all the administrative components of the ministry and the school boards, I can see areas where we should try to recapture the $22 million out of $3.7 billion.

Those are some examples of areas that are not touchable and other areas that are touchable. I haven't been in the portfolio long enough to be able to tell you that I have a game plan at this point, but I'll hear what staff have to say, and then we'll take it from there. Any advice the hon. member has in terms of where she thinks there is a surplus, I'd be happy to hear as well. Right now we're in the process of developing that game plan, but my own sense of it, doing the walk around the ministry, is that we're quite capable of finding that money.

A. Sanders: I would anticipate deputy staff, being the continuity within the ministry and the minister coming and going as ministers do, would have some definitive plans. For example, you mentioned marketing for post-secondary schools. Do we have any copies, drafts or examples of a précis of this program and what kinds of funds it could generate in terms of revenue? Or are these more ideas that are not concrete, just ideas of how money could be generated?

Hon. M. Sihota: I've asked that agency to prepare a business plan. I met with them, I guess, ten days ago. I told them that I would like the business plan this month. I'm sure I will receive it this month, and then I'll take a look at it. They came forward with the idea themselves -- it wasn't an idea that I went to them with -- and that's the kind of creativity you want within the bureaucracy. So I said: "Look, I appreciate that. Go ahead and work on a business plan and come back to me with it." They know full well what the challenge is.

It's not a surprise to our bureaucracy that there was a collective agreement concluded. Remember, it wasn't finalized until May. Then there was an election, which puts us behind what would normally be the case. Then there was a time period while we waited for the writs to be returned and for ministers to be appointed. So this year it is odd that we're into August and the plan isn't there, but it's an unusual year, which creates that oddity. We have some catch-up to do, but there are options there for me, if I can't find it within the ministry, to keep the system whole. That's why I know this is something we can manage.

A. Sanders: I would appreciate the minister sharing some of those ideas if they are on paper over the next month or so, so that I can keep abreast of what kind of realignment we're going to be seeing in the ministry and in what areas we should anticipate that there will not be services, programs, special grants or funding -- whether it will be ESL programs.... Really, when we have no idea on this side of the House how that $23 million within a budget is going to be made up, it leaves a lot of room for speculation, and speculation can lead to concern, especially in areas that are already tenuous in their funding or are feeling overstretched.

One of the things I am hearing very definitely from people who are working in the school system is that we are in some significant trouble. We've got people amalgamating who are feeling very much in disagreement with the ministry. We've got seven school boards running on deficit budgets. We're going to elect new trustees for those boards, and we're 

[ Page 1520 ]

wondering who is going to come forward to put their aye on the line, in terms of taking on the job of trustee in an area that has a $2 million or more deficit. We've got schools that aren't being built. We've got people living in boxes, because portables can't be bought and schools can't be built because of freezes. They've got less than a month to go, and they haven't heard from this minister in terms of which way it is. The minister will say it's because we haven't passed the interim supply. My reaction would be that we should have done this before the election, which would have been the appropriate and responsible thing to do in this House, so that these people could get on with their lives, plan their schools, and so on and so forth.

I'll change the topic slightly, to ask -- from yesterday's discussion -- about capital freezes. When we discussed yesterday what the capital freezes would amount to in the areas, the total was $17.5 million, I believe. The minister has kindly provided me with a list of those projects that will be frozen. I'm interested in what kind of process we will go through. Have we set up a process to review those projects, so that six months down the road we will be having some committee structure to see which projects go forward, if any do? What is the minister's intent for six months from now, when we're relooking at and revisiting the projects that have been frozen at this time?

Hon. M. Sihota: There's a committee of cabinet co-chaired by the Minister of Finance and the Minister of Employment and Investment. They will hear representations from ministers on issues to be dealt with at that level. Obviously, in my preparations I will listen to what MLAs, school boards, trustees, parents and the ministry staff have to say about various priorities. Then, based upon my assessment of those representations, I will give advice to the ministers on the committee as to what I think should happen. They will then take their report to cabinet, at which point there will be further debate around the issues. Then we will make public the determinations that we are going to make.

I should say that I believe this is a very useful process, for the reason that you can have one kind of dialogue about debt in the emotion of an election campaign and a different kind of dialogue about debt subsequently. It's now coming home to the opposition and the public just what the implications are of deferring this debt, and there are some real implications. But at the same time, you know, we have an obligation to reduce the debt level in the province, and we will do that. That means there will be some projects that will go unfunded. Those are realities that one has to accept. As I said earlier, I got the message during the campaign that we had to deal with debt, so we will.

A. Sanders: It concerns me that the minister would bring a question of debt into the circumstance, having sat on the side of the House that campaigned on a balanced budget, and now we find we're in a deficit of $235 million because of the weather or other circumstances. It is a situation where I think all of us are very concerned about the debt. I don't feel that I need to be patronized or lectured about the aspect of what side of the House is more concerned about debt.

This is one of the reasons, from my point of view, that I've actually become involved in public service, in that I have been concerned since 1991 about this government and the increase in debt that I have seen, which my children will pay back. So your point is well taken. My interest is very acute and very there, in exactly that way. That's why I'm so concerned about the $23 million and about the minister's feeling that I should not worry about it, that he'll take care of it and find the money -- because that's part of how I perceive we got into the problem.

In terms of the capital freeze board or committee that you've mentioned, which is co-chaired by the Minister of Finance, could you give me an idea of how many people are on that board and what kind of composition it has in terms of numbers and who exactly will be on that board to review the projects in six months to decide whether the freeze can be changed?

Hon. M. Sihota: If memory serves me right, I think it is just the two of them. Then we as cabinet ministers will go and make representations to them. There might be a third member, but it wouldn't be more than that.

A. Sanders: Say a district has had several capital freezes -- some are actually in that position, some are fortunate to have none, others have several. How do they make application to the minister in order to be heard in terms of their individual situation?

Hon. M. Sihota: They correspond with me or they talk to the ministry, which are the more traditional venues. Quite frankly, I think the best way for them to make their case is to go to their local MLA and have their local MLA make the representation on their behalf.

As I said yesterday, I am going to be listening to what local MLAs have to say about their priorities for their constituency. That will have an impact on my thinking. I would recommend that that's the way they handle it. They know that, they've been around the political business long enough to know that's the way to approach issues.

A. Sanders: My concern on behalf of parents is in fact that the traditional routes don't seem to work. I have more than 30 letters from parents in districts, and many of them run the same theme. A letter from July 24 says: "Parents in the Surrey area have been writing and phoning your office" -- referring to the hon. minister -- "but to date, nobody has received any responses. It is critical that the ministry address the impacts of government freezes on the school district of Surrey." I have a similar letter for Williams Lake, and I have similar letters for many of the other projects, which I would be happy to share with the minister.

I am interested in the filtration process in the ministry. If I'm a parent and I have a problem in my school district and I write to the ministry, where does that letter go? I think they obviously get lost somewhere. I am looking, especially for the public record, for the conduit for someone to actually get their letters read and responded to.

Hon. M. Sihota: Sometimes letters are read faster than they are responded to. The best conduit I would suggest is the local MLA. MLAs contact me all the time to express their views, and I would encourage them to do this.

Let's also put this in some kind of perspective. There are 90 projects under construction in this province, which will create about 22,000 new spaces. There are 19 projects out of 109 that are affected by the freeze, so the vast majority of these projects are proceeding.

A. Sanders: Would it be fair to say that the 19 affected projects are the large projects?

[11:00]

[ Page 1521 ]

Hon. M. Sihota: These are major projects of the 109. As I said yesterday, there are some that we would call minor capital projects which are also impacted. Quite frankly, that is where the large level of concern is. It is one thing to look at 19 major capital projects being frozen. I think most people say that 19 out of 109 kind of makes sense. When you are dealing with hundreds of minor capital projects, they spread across the system in a far greater way. I think that is generating much of the correspondence you are referring to. Having to deal with those minor capital projects is something that needs to be done with dispatch. That then reduces the level of concern materially, because you have shrunk the size of the pool of concern. That is why I said to you yesterday that within seven days of passing these estimates, I will complete that list so people will have a very, very accurate idea -- in fact, a black-and-white idea -- of what is approved and what is not.

A. Sanders: In six months, when the freeze comes up, what is the next step that will occur at that point?

Hon. M. Sihota: I just checked with staff. We're talking about 1,000 minor capital projects. I think that's where the bulk of the problem is, and so I have to shrink that pool. I just wanted to double-check the number when I said a hundred. It's about 1,000 projects. The process after that is: after six months.... Remember, there is a difference. I've made a commitment to you that within seven days I'll let the public know where they stand on the minor capital. Okay? So they're not going to have to wait for six months to get an answer to that; they'll get that answer within seven days of these estimates. After six months we will, on the major capital, through the Ministry of Finance, issue a note to the school boards as to the outcome of our review. That will then become public, and there will be public commentary, I'm sure, on that issue. Let's say that seven days from the conclusion of these estimates, we indicate that we will not go forward on some minor capital projects. They can also be reviewed during that six-month period, at which point we will tell them what the conclusion of our further review is.

A. Sanders: In terms of the 19 that were held up, with 1,000 small projects being funded and moving forward, what was the rationale for choosing the 19? Was it that this is where the big areas of money are, and therefore it would be the easiest way to get the money we need? Or was there some rationale that could be brought forward by the minister to designate why those choices were made?

Hon. M. Sihota: The decision was based upon projects which were or were not contractually committed, so those 19 fell into the pool of projects that weren't contractually committed.

A. Sanders: Would it be fair to say that if you were in a district where people were on the ball and had got their projects contracted, those went forward; or that people who perhaps knew something ahead of time could have got their projects in under the wire, whereas other areas did not have that opportunity?

Hon. M. Sihota: I would be very surprised if anybody knew in advance that those would be the criteria. I don't think it was being on the ball or not being on the ball; things were just frozen at a point in time. I don't think the world had an inkling that the freeze, the way it came down, would come down at the time it did. I'd be surprised if people had advance knowledge of it.

A. Sanders: If the minister could look at the projects that were frozen again, would that have been the right way to do it in terms of using the...? What I'm hearing is that tendering was the only important part of the freeze project. It wasn't based on need; it wasn't based on immediacy; it was based on who had tendered their projects. That was the criterion. If it could have been done another way...? The minister is looking at the numerous school districts and at schools that are not going to be constructed; they will be put back not six months but, in many cases, a year because of the tendering itself. Would there have been another way to look at this a bit more realistically?

Hon. M. Sihota: I understand the line of questioning here. Maybe I should just not make it as simple as it sounded. Okay? The capital projects were frozen pending the review unless they fell under one of the following conditions. Legal commitment. We've commented on that. Let me also say parenthetically to the question you asked that I would assume that if projects within a district were of a pressing and urgent need, those were the ones that they would have proceeded with quickly in any event in order to deal with the pressure points within their districts. I would assume that when a superintendent or a treasurer of a district looks at the capital envelope and receives it, that person is going to make the decisions based on highest need. I assume that will be plugged into the system generally.

In any event, it was on the following conditions. Legal commitment is a factor, and health and safety are a factor. For example, let's say that asbestos removal is the reason they want to proceed with a project. Well, we will then allow that project to proceed. With capital asset maintenance, for example, if they needed to replace a roof because it was leaking, it would be counterintuitive to freeze that and have the kids sit under a leaking roof. On that basis, they would be allowed to proceed. To avoid increased land costs, they could make the case to us: "Look, if we don't proceed now, the impact in terms of increased land cost is there, and the risk is both evident and quantifiable." Again, we'll say: "Okay, you fall into that category, so your project is not frozen." Let's say contracts have been let to build a school up to a particular stage. Nothing more has been done, and they are in the process of tendering the next phase. That may fall within the category of functional integrity. We developed the guideline of functional integrity, really, more in the context of roads, where you had built the road up to here and another connecting road up to here, but in between you hadn't started the work. Well, it doesn't make sense to leave it frozen at that level. Those were the other criteria that we looked at.

A. Sanders: I still have some concern about the fact that we are leaving the 19 major projects and doing the 1,000 minor projects. I understand the rationale, but to a physician that's counterintuitive. I never put on the band-aid first; I stop the major bleeding. And if there is a place where we find tremendous backlog and inability to house children in a school fashion.... Sometimes, it would seem that the minor projects are of a band-aid nature. The major projects are the ones where.... People are not going to be looking forward to having their kids in any kind of school system where they can count on being in a school, having computers, a gym, a music room and a place where they can put their clothes where there's not going to be twice the traffic outside, increasing the peril for those who come to and from classes. We're going to have students sharing lockers, with the potential for violence and aggressive behaviour, especially among junior high and high school students in general, at a time when the school is 

[ Page 1522 ]

overcrowded and we are now frozen for what could be, in some cases, 30 to 40 percent of that original school's volume. It was going to be off-loaded onto a project that is now going to be held for some more time yet.

It's a problem in that often the people who are sitting in the communities wonder what we're doing here and if we ever go outside this room, if we ever see the real world, if we actually ever go to these school districts. My question to the minister is: have you been to a district such as Surrey? Have you met with the parent groups there and seen the magnitude of the problem that they profess to have?

Hon. M. Sihota: I have, and as I said yesterday, I'll continue to do that. But you know, let me just put this in some kind of context again. We went through an election campaign, and the Liberal Party, during the course of that election campaign, made debt a major issue. I believe that we would have been remiss if we didn't deal with that issue after the election campaign. It's all fair and good to say: "Well, look, you know, this is now causing problems in the community." Anytime you don't proceed with debt.... You can't have it both ways. You can't complain about the level of the debt, and then complain about the impact when we try to reduce it. It doesn't cut both ways. Government has to walk a line. I think the implications of the political position that was taken are now being talked about in a way that it's difficult to talk about during the course of an election campaign. Having said that, I think there is a far more operative point here. I tried to make it yesterday, and I'm not going to repeat it in the same way I did yesterday.

I think that we can be more creative in dealing with debt. We had this discussion in the context of fair wages, and I think those other options I laid out are where the public would really prefer to see us go. It is to look at those kinds of options so you can have your cake and eat it too -- namely, to defer debt but make better utilization of your dollars to deal with some of the challenges you have.

Nobody wants to see a situation where facilities are inadequate for children -- and no matter where you draw the line, there will be people who will complain that you haven't done enough. Even if we were to proceed with these 19 projects, the hon. member would be armed with letters from other parents or school boards wanting to lobby for projects that didn't meet the criteria at the time. I've seen that over and over again in this chamber, but at some point, somewhere, government has to say that there's only so much we can fund. We have drawn a line here, and admittedly, we moved the line from here to there. Even if we had left it, there would be projects not being funded.

As I know the hon. member knows, we just don't have the fiscal capacity to fund each and every need, so we will continue to have these problems. We will continue to have them because, quite frankly, there was a political decision taken in this province in the mid-eighties not to proceed with an increase in debt to deal with this. Come 1991, there was quite a backlog here, which explains why it was that the debt level under this administration rose materially. There are no two ways about that. It also created political vulnerability in terms of criticism around it, and we took the heat for it. I think it's only appropriate that we respond to it.

A. Sanders: Again, we are still fighting the election in the House. I think it's important to recognize that the Liberal Party did hear that debt was important, and that's why we had the Liberal Party "Taxpayers' Plan," which we presented during the election campaign. It is a concise review of how we would have run the province so that it wasn't in a deficit circumstance, and I think that when you run on one message and then change it after you're elected, there's a lack of credibility. There's a perceptual shift by the public that perhaps there was some electioneering going on rather than dealing with the debt, dealing with where we were at and looking at where that money was going to come from. Again, to look at the $23 million, we don't know where it is going to come from, and this is why we're here. This is why constituents want to know what we're doing and where that money is going to come from. They are not hearing very clearly that we are concerned precisely about where their taxpayer dollars are being spent.

I want to just get off that topic for a second and ask the minister about a report I received during my time here in Victoria. It is called Inventing Crisis, and I wonder if the minister has read this report.

[11:15]

Hon. M. Sihota: I'm sorry, sometimes I won't get.... Sometimes I'll just get a summary of a report, and I may have read the summary. If the member were to table that report, I could flip through it and let her know if I've gone through some of it -- I just saw the cover, and the cover didn't ring a bell with me -- or she can perhaps explain what the report is about.

A. Sanders: I would be happy to table this for the minister. It has come to me from the B.C. Teachers Federation, dated February 1996, and it has come to all the members here in Victoria. I have some concern about one paragraph in the report, and I want comments from the minister, as information that comes to us in report form often seems to have a seal of approval from those of us who receive it and work in government.

At the end of this report, on page 30, there is a section called "Facing the Challenges," describing our education system as it is now in '96. The text reads:

"A diverse range of interests will continue to influence the future of public education. Many stakeholders will voice their opinions on what is wrong with education and how it needs to change. The claims are many and contradictory. We must eliminate the deficit, lower taxes, slash budgets and spend more on education. We must give children information to protect themselves from violence, drugs, abuse and AIDS, and leave moral teaching to the family. We must make room for children with disabilities, emotional problems or violent behaviour and expel those who disrupt others. We must build children's self-esteem, and test and stream them according to their socioeconomic potential.... We must teach children to critically analyze mass media and allow them to retain the innocence of childhood. We must graduate students who will be judged on their skills as workers and contributors to the economy, but prepare them not to expect jobs."

I'd just like the minister's comments on that paragraph, if he has any feeling about the content.

Hon. M. Sihota: First of all, I do recollect the report. It is a report that was written in advance of the program that the BCTF ran to talk about the value of public education. It was a report that in some ways summarizes the contradiction of expectations that are placed upon us as politicians and policy-makers: to try to give society everything and attend to every problem that's out there, but to do it by spending less. That's not always achievable, but those are the kinds of tensions that someone in my spot has to manage. When people don't feel they've been managed well enough, it's for me to defend and for the opposition to ensure that I follow through.

[ Page 1523 ]

A. Sanders: My concern with this paragraph in the text is that we would educate our students not to expect to have jobs. I really don't feel that this represents, in any way, shape or form, anything that I would particularly want to be part of. I would like to know that we're educating our children in British Columbia so that they would expect to be educated to have a job when they finish.

A question to the minister about what my colleague for North Vancouver asked about the North Vancouver school district. We were talking about getting together with MLAs who represent that area to discuss the deficit in that district and to ameliorate the situation. We're looking for input from MLAs as to what ideas they could see to eradicate some of the problems in that particular district. What I'm interested in is: has the minister had any time to think of how that would work in terms of format?

Hon. M. Sihota: First of all, I agree with your comments about jobs. That's what I had to say yesterday about the relevance gap and the skills gap, and parents' expectations that children have the skills necessary to meet the needs of our economy. I went on at some length yesterday on that point in response to what I thought was your best question, which was in relation to the goals that we had set.

Have I thought about the process with regard to North Vancouver? Yes, I have. I'm going to talk to the MLAs. In fact, I was thinking I might even do it tonight in our break between 6:00 and 6:40 -- or whenever it is that we come back -- and try to get a read on what they see as being the dominant issues at this point. I appreciate what the Labour critic for your party had to say in terms of moving on now with what we've inherited, and I'm going to be looking at their advice in terms of how they think I should move on. I suspect that after I've heard that -- I may even have staff at the meeting -- I certainly will want to assess the fiscal consequences of their advice. Then we'll probably make a decision, and I will always reserve the opportunity to go back and talk to them in advance of making a final decision.

A. Sanders: My understanding is that there is a time line on this.

Hon. M. Sihota: I think I said yesterday that I'll want to meet with them before the conclusion of this session.

A. Sanders: I thank the minister for that information. Would it be safe to say that before the election of the new trustees, some kind of format will be in place for reviewing that situation and providing some kind of framework for these new people to come into what will be a considerable deficit?

Hon. M. Sihota: I think I said a few minutes ago that I am actually thinking of meeting with him at 6 o'clock tonight, if my schedule allows.

R. Masi: My questions are essentially in the area of Skills and Training, and if you are prepared to go ahead on that, I'm prepared to go ahead. I'd like to first of all look at it from the perspective of organization and structure, with some general questions on programs, and finish up with more specific questions pertaining to the estimates.

Looking at the organization and structure, we note the change of positioning of Skills and Training from the Ministry of Labour to the Ministry of Education. I wonder if you could comment on the rationale behind the structural change there.

Hon. M. Sihota: Rationale for what?

R. Masi: For the change of positioning of Skills and Training from the Ministry of Labour to the Ministry of Education.

Hon. M. Sihota: If memory serves me right, it was previously under the Ministry of Skills, Training and Labour. So it may have appeared on an organizational chart to be within Labour, but the objective all along was to have it in Skills and Training. It may have been housed in Labour in diagrammatical form, but in practical terms it was always to be a part of Skills and Training. Because Labour was part of that portfolio, it may have been configured in a reporting relationship to a particular deputy while I was getting up and running. That would be the only explanation I could provide.

R. Masi: In the Ministry of Labour, is there a function there in terms of services that Skills and Training attempts to deliver? What I'm after is: is there still a connection there?

Hon. M. Sihota: There is a connection in terms of apprenticeship programs. So it may well have been that the division which had that kind of skill at that time, if I could put it that way, would have been notionally responsible for getting the program up and running.

R. Masi: In the opinion of the minister, then, would the only connection that remains be the apprenticeship programs?

Hon. M. Sihota: The only connection with the Ministry of Labour are 22 administrative staff that deal with apprenticeship-related issues; apart from that, it's a Skills and Training function.

R. Masi: Again we're talking about organization and structure, and I wonder if we could look at a clarification of the role of the Ministry of Social Services relative to the Ministry of Education, Skills and Training. We would probably look at Youth Works or something like that. How many other programs are involved there, and how much connection is there between the two ministries?

Hon. M. Sihota: They will do the assessment in terms of eligibility for income support programs; first you're assessed by them as to whether you meet the criteria to be eligible for the living allowance. They will work on the independent job search phase of the Youth Works program. Then the assisted job-search program, job readiness, basic education, workplace training, entrepreneurship and independent job-search programs would all be functions of our ministry.

R. Masi: In terms of the counsellors or professional staff who actually refer from the Ministry of Social Services, in terms of the Ministry of Social Services and Youth Works, what qualifications and training do these counsellors have?

Hon. M. Sihota: Well, there will be a variety of skills. Some of them will be social workers. Some of them will be people who've been involved in adult basic education and training programs for the province. Some of them will be people who have done training for the federal government. So we'd engage them to deliver these programs.

R. Masi: So, again in terms of the organizational structure, each ministry is complete in itself. In other words, there's 

[ Page 1524 ]

not an integration of staffing or movement of FTEs across from one ministry to the other?

Hon. M. Sihota: We are not sort of two universes on our own. Obviously, by the very nature of this program, we have to dovetail our activities, and that is what we do. In some cases, we dovetail to the point where the physical site is identical. Five of the 60 offices are ones where that occurs, because it makes sense to do that in some settings.

We also coordinate our activities between the two ministries. Staff at the ADM level work in conjunction, and at the ministerial level, the Minister of Social Services and I meet frequently to go over the programs. I think it's sort of joined at the hip, if I can put it that way, at the critical spots. Also, in terms of cabinet, the Minister of Social Services and I report jointly to cabinet on this issue every Wednesday.

[11:30]

R. Masi: In terms of direct services to clientele, I understand the ministers meet, and probably upper management meets. What about at the delivery level? Is there an integration there or a combined grouping of services to young people?

Hon. M. Sihota: At the staff level, for example, we will let Social Services staff know who it is that we've contracted with to provide services in the community so that they can do referrals.

R. Masi: So there's not a formal organization of youth involvement there between Social Services, Health and Education -- Skills and Training, rather. That doesn't happen? I wonder if we could establish that.

Hon. M. Sihota: We have committees at the staff level that meet formally to ensure that activities are complementary. It's not as if we meet every Wednesday, the whole system shuts down and everybody goes for coffee and chats with one another. I don't like that; I don't think that's required. At some level you need to have some symmetry, so we're trying to construct this so that at the appropriate levels and times the symmetry is there.

R. Masi: In terms of continuing education or adult education programs vis-�-vis the new structure, I have a certain amount of concern with the existing work-and-learn programs, adult basic education and English language training. Where does that sit? Again, I'm looking at structure here. Ministry of Education, Skills and Training, adult education -- where now does adult education fit?

Hon. M. Sihota: As I said yesterday, there are different access points for people to get access to these services, depending on who they are and where they are in terms of their station in life. We provide, as I'm sure the hon. member knows, some funding for these kinds of programs in the K-to-12 budget. There is some allocation, up to $2.4 million, made available at the post-secondary level. At Youth Works, after the first seven months, we provide opportunities for basic education, which includes literacy, with English language training courses of under 12 weeks in adult basic education. They can access that at different points. You can capture it to upgrade your skills, depending on where you are stationed in life.

R. Masi: My concern here is not so much one of access by referrals from Youth Works. In terms of the framework of adult education and funding for it, is that still an entity? I'm not sure whether this is a Ministry of Education question or a Ministry of Skills and Training question. In other words, is the funding secure for adult education programs?

Hon. M. Sihota: Yes, the funding is secure. The lead agency, if that's what you're trying to find out, would be the post-secondary education side of the ministry.

R. Masi: I'm not sure we're heading the same way here. I'll try it again. School districts run adult education or continuing education, whatever the terminology may be, and they operate programs such as English language training, work-and-learn programs and various programs along that line. These are not post-secondary, necessarily, but this is generally a component of the school district. What I'm referring to here is the funding for adult education as we know it, or knew it.

Hon. M. Sihota: Yes, that funding on the K to 12 is intact. If you're concerned that we've taken that funding and shifted it into post-secondary education and reduced the allotment for education, we haven't done that. We've kept this intact in post-secondary education and in Youth Works. To be frank about it, my concern is the degree to which there may be some duplication between the three pillars of the ministry with regard to the same programs. There may be some whittling of costs there so as to achieve some administrative efficiencies. However, the program and the funding that I think you are referring to is intact within the Education ministry to provide those kinds of programs. We haven't moved it out.

R. Masi: In terms of the adult education component of a school district, do any of the adult education services provide delivery services for Youth Works?

Hon. M. Sihota: Yes, they do.

R. Masi: Along the same line, in terms of post-secondary education, again relating to school districts, we're talking about the articulation of programs between post-secondary institutions -- generally, community colleges -- and school districts, primarily related to funding and programming in the skills and careers area. Previously, most of the agreements were informal, usually generated by the funding from the community colleges. I wonder if there are initiatives in that area, taking place or which will take place in terms of career education.

Hon. M. Sihota: I don't have any staff here from post-secondary ed. I've just asked staff to come up from the skills training side of things. Perhaps we can hold that question in abeyance until I have the post-secondary ed staff show up.

R. Masi: Now that Skills Now has come to the end of its term -- specifically, the four major components: linking schools to the workplace, post-secondary skills training, retraining workers in communities and welfare to workforce.... This whole program was a huge program with high expectations, and I think generally acceptable and delivered well. But I have some concerns about maintaining these programs in terms of expectations and services. So in general terms, what will replace Skills Now?

Hon. M. Sihota: The B.C. Benefits initiative will build on the foundations that we established under Skills Now, and 

[ Page 1525 ]

similarly, the Welfare to Work program that we are now beginning to deliver.

R. Masi: It seems as though the funding in terms of post-secondary skills training alone was $62.8 million, and for linking schools to the workplace it was $19.9 million. I guess my question is: have we seen the end of that funding?

Hon. M. Sihota: Yes, you are seeing the end of Skills Now, as it was designed. That is not to say that elements of Skills Now aren't being carried forward in some fashion within the ministry. They are, and those carryover programs have been added to our ministry. Let me just give you some examples of the kind of stuff that has been carried over: sectoral and small business programs, the Welfare to Work program, quick-response matters, some apprenticeship work, community skills centres, institution-based training, workplace-based training -- those kinds of programs are now being carried over. It's not as if Skills Now came to an end and nothing else happened. We as a government made a conscious decision to carry on some of the components of Skills Now to deal with their giving people the ability to make the transition from welfare to work or to upgrade their skills.

R. Masi: Are we saying that the movement of funding that took place during Skills Now through the educational institutes is...? I didn't seem to pick that up in that list of programs you gave us. Specifically to secondary schools and post-secondary institutions, was that a one-shot thing or a two-year program? It was excellent, but it may be finished.

Hon. M. Sihota: No, we're carrying over some of those programs that were delivered through those institutions -- not all of them, but some of them. I've tried to make that point throughout. Not every one of those will be carried over, but we are carrying that over -- that special amount of money that was added on in terms of Skills Now to increase the financial capacity of the ministry to deliver these programs. It's not as if the two years came to an end and all of that money vanished. What happened was that a good percentage of that money was built into our base as a ministry, so it became part of the base funding for the ministry. Programs that were institutionally driven are provided....

R. Masi: Just a couple of questions on skills training centres. Is it correct to say that the skills training centres are established under a community board, or are they directly functioning as an administrative arm?

Hon. M. Sihota: Those fall under post-secondary education. When I have the post-secondary education staff here, we'll deal with that. What I'll do over the lunch hour is make sure that they're here for the continuation of this debate after question period. I incorrectly assumed we were just going to do the B.C. Benefits side of things and not get into the overlap. But that's fine, we can go on with these questions, because we only have 15 minutes in any event.

R. Masi: So, do you not consider questions about skills training centres appropriate at this time?

Interjection.

R. Masi: Okay. How many functioning skills training centres are established in the province today?

[11:45]

Hon. M. Sihota: Twenty-one.

R. Masi: Are these regionally located? Could you give me some picture of the spread and location of skills training centres throughout the province?

Hon. M. Sihota: The locations are around the province. If you want the breakdown, we can give that to you after lunch. They are regionally spread out. They are not confined to one portion of the province.

R. Masi: Is there an ultimate target in terms of these centres? Are we looking at further expansion, or have we completed the regional dispersion of skills training centres?

Hon. M. Sihota: We had proposed 21, and we have funded for 21. They are managed or run by a board of volunteers who represent some of the interests in a community.

R. Masi: In terms of the staffing of these skills training centres, could you give me a description of the range of employee duties in terms of their functions, not every one obviously -- there's clerical, etc. -- but in terms of counsellors?

Hon. M. Sihota: Well, the skills of the individuals will vary. As community skills centres, they have a number of program activities. For example, we have programs now where they provide ESL training for garment workers, so they will require people who have got the ability to do ESL training. We have established various programs through Capilano College and other institutes to provide some skill-based training. We try to look at the institution or the agency within the community that can provide for the kinds of niche needs that we have, and then they have to have people in place who have those skills -- if that helps.

R. Masi: I guess it's my understanding, then, that those are the agencies to which the clients are referred. But in the skills training centre itself, I'd like to know a little more about the qualifications and the functions of the people working in the skills training centre, if I could.

Hon. M. Sihota: I can get that information for you after the lunch hour.

R. Masi: The minister described a bit about the replacement of the services formerly provided by Skills Now. In terms of the Welfare to Work program, could you be more specific in terms of what Welfare to Work is replacing and the funding level there?

Hon. M. Sihota: We have community employment training programs being funded. We're carrying over about $2.5 million worth of funding there. We forecast that we'll be dealing with about 29,600 clients: 8,600 adults, 21,000 youth. We will continue to carry over programs that engage in workplace training. We anticipate that we will deal with 3,571 clients, of which 2,143 are adults and 1,428 are youth. We will carry over about $1.8 million in funding for institution-based training. We will carry over about $6 million in funding for about 3,000 clients, people with disabilities. We will maintain a little over half a million dollars of funding for public service training to deal with 95 clients. That gives you an example of the kind of money that we're carrying over that's been built into our base to deal with Welfare to Work.

[ Page 1526 ]

R. Masi: In the replacement for More Doors to College, was there a component for child care?

Hon. M. Sihota: In terms of what?

R. Masi: In terms of the openings to college that was a component of Skills Now, is there still funding left in there for child care?

Hon. M. Sihota: We will be providing assistance through the provincial child care subsidy.

R. Masi: So the child care program is intact, then? I take it that is the answer?

Hon. M. Sihota: No, I wouldn't come to that conclusion. I'm sorry if I gave you the wrong conclusion there. One, there is a child care subsidy that is being attended to through the Ministry of Women's Equality. Two, there are some capital child care improvements that we are making to provide child care spaces at post-secondary institutes in the province. That's what's being provided. There might have been some additional elements of support -- nominal; let's say $500,000 or under -- that may no longer be provided, but the subsidy and the capital allocations will obviously attend heavily to the needs.

R. Masi: Maybe we could move to apprenticeship. In terms of both the secondary apprenticeship programs and beyond, it would seem to this member that grade 10 in the school system is the ideal decision-making time relative to course planning and career planning. The problem here is to convince the parents of value when we're talking about apprenticeships. Right now the situation is that, in general terms, the parents won't buy, and we know that student predisposition is based upon parental attitudes and expectations.

My question to the minister is: what steps have we taken, or will we be taking, within the confines of this budget coming up, to establish, first of all, early awareness in elementary schools relative to trades/apprentice training and parental involvement -- programs along that line that would in fact lend to an enrichment in these areas? I don't believe enrichment should be limited just to the academics and the arts. So I'm wondering where we are on that.

Hon. M. Sihota: That's an excellent question, and the point is well taken. We're not doing enough. I have told staff that I want to do more in promoting that beyond the sort of traditional things that we've done. I have asked for a meeting -- which I was supposed to have had, actually, but these estimates were called and so it was cancelled -- with the people on the apprenticeship side of the ministry to canvass that very issue.

I clearly accept what you're saying. There is a deficiency in terms of both attitude and promotion, and that's going to change. Now, I haven't quite got the plan down yet in the short time I've had the privilege of being in this portfolio, but I just want the hon. member to know that I have taken the same view as he has with regard to this matter.

R. Masi: Again, in terms of the high school and workplace programs and apprenticeships, I'm wondering how many students have been enrolled in the school year '95-96? Do we have a number for that?

Hon. M. Sihota: I don't have that number. We'll try to get that number and provide it to you.

R. Masi: If we don't have the number for that, then it's hard to establish the target for '96-97. Perhaps you can generate both numbers at the same time.

In terms of the apprenticeship programs in secondary school, what is the funding level at the present time?

Hon. M. Sihota: We've hired about 12 coordinators to do some coordination of these programs. We've put in the nominal amount of $150,000, pending this discussion and review that I've asked for.

R. Masi: Are these 12 coordinators regionally based, are they school district-based, or what is the...? We are referring to the high school and workplace programs, so there must be some connection with the school districts.

Hon. M. Sihota: They are based within school districts throughout regions in the province.

R. Masi: Is each of these coordinators a full FTE?

Hon. M. Sihota: No, they are not ministry FTEs; they are individuals hired by the district.

R. Masi: I would assume that it's based on the size of the school districts within the region.

Hon. M. Sihota: That would be a fair assumption.

R. Masi: Taking the number 12, then, we can assume that there are just 12 regions in British Columbia, but they're not fully serviced with a full FTE.

Hon. M. Sihota: Well, they're serviced. Whether they are fully serviced is another issue. Obviously, the process of the review that I've asked for will give me a better read on the degree of service, and perhaps then I'll be in a better position to tell you whether or not, in my opinion, the service has reached the depth that it has.... I infer from the member's question that he's concerned that the depth of service isn't what it should be, and if that's the case, then I take that point. In the dialogue that I have, I'll have that.

[12:00]

Hon. Chair, it being noon, I would move that the committee rise, report progress and seek leave to sit again.

Motion approved.

The House resumed; the Speaker in the chair.

Committee of Supply B, having reported progress, was granted leave to sit again.

Committee of Supply A, having reported progress, was granted leave to sit again.

[ Page 1527 ]

Hon. M. Sihota: With the progress made, I move that this House do stand adjourned until 2 o'clock.

Motion approved.

The House adjourned at 12:01 p.m.

The House in Committee of Supply A; W. Hartley in the chair.

The committee met at 10:28 a.m.

On vote 22: minister's office, $374,615 (continued).

F. Gingell: We now have the 1995-96 financial statements. I wonder if the minister could give us a quick rundown on the projections for 1996-97 -- just the little short P and L that is published in the financial statements.

[10:30]

Hon. D. Miller: I would ask Mr. Costello to respond, Mr. Chairman.

M. Costello: The projection for '96-97, if I understood the question, for B.C. Hydro would be a net income of $267 million.

F. Gingell: Can you give us the breakdown of the dozen items that arrive at that revenue by residential, industrial, transmission, other and the three or four categories of costs? If I may just add, they are differently described in this year's report from the normal.... I mean, they are the same numbers, but you've used different nomenclature. It was previously described as residential, general, transmission, other. It's now described as residential, light industrial and commercial, large industrial....

Hon. D. Miller: I'll ask Mr. Costello to respond.

M. Costello: For 1996-97, the major revenue items are residential revenue, which is projected to be $881 million, light industrial and commercial at $818 million and large industrial at $477 million. Those would be the major revenue items. Electricity trade is $87 million. Major expense items are energy costs at $499 million; operations, maintenance and administration at $387 million; taxes at $174 million; and depreciation and amortization at $318 million. Income before finance charges is $1.003 billion. Finance charges are at $736 million, to yield the number I indicated before: income projected for '96-97, $267 million.

F. Gingell: The residential revenues show an increase of some 7 or 8 percent. Can the minister explain to us how that is going to come about? Perhaps he can give us the growth in anticipated volume -- electricity delivered, as it were -- and the rates, because as we all know, residential rates have been frozen.

Hon. D. Miller: Mr. Chairman, Mr. Costello will respond.

M. Costello: Obviously, the forecast does incorporate the freeze on residential rates, and the assumptions behind that $881 million are based on projected load growth, as calculated for '96-97.

F. Gingell: Can the minister advise us what load growth percentage they have used?

Hon. D. Miller: We've just sent someone out to see if we can get some more details with respect to that question. I don't know if the member wants to move on to other questions.

F. Gingell: Would it be possible at the same time for us to get an understanding of the causes of the increase in residential revenues of $30 million for the previous year? The issue is that they were $792 million in '94-95; they grew by $30 million to $822 million in '95-96. Now we're going into '96-97 with a freeze on the rate, yet we anticipate an increase of $60 million in revenue, double the increase from the previous year. My logic doesn't make that equation stand up.

Hon. D. Miller: As indicated with respect to particular details on that question, we hope to get some information relatively soon.

Several factors have been cited to me in terms of advice. One is forecasting on the basis of climate, which I assume is extremely difficult, but last year was pretty warm. If you look at page 67 of the operating stats, which gives comparative years plus projections, there are three issues to note. In one, under "Customers, residential," the forecast growth from last year is 1.273 million to 1.3 million megawatts. Looking at the kind of growth that has taken place under "Electricity sold," the projection from last year is from 12.957 gigawatt-hours to 13.442 gigawatt-hours. Finally, under "Average revenue," use per customer has also increased from the '95 average of 10.309 kilowatt-hours to a projection of 10.409 kilowatt-hours. Those are four of the factors that resulted in the projection.

F. Gingell: It's difficult to do these things in your head, but the increase in the number of customers from '94-95 to '95-96 sounded somewhere between 2.5 percent and 3 percent. The increase in use from 10.309 to 10.409 kilowatt-hours is less than 1 percent; that's an easy one. I really do have problems understanding why one would project an increase in revenues of somewhere around 8 percent.

Hon. D. Miller: Mr. Costello will respond.

M. Costello: Hon. Chair, let me draw attention to the factor that the budgeting is assuming a normal year in terms of weather, which drives residential consumption. If it is a colder year, the number will be higher; if it's a warmer year, it will be lower. It is assuming that '96-97 will be an average year, which will result in an average amount of consumption in terms of how weather affects the consumption pattern. As I understand it, for '95-96 the number was lower than expected because of the weather.

F. Gingell: I'm wondering whether the Ministry of Environment has any opportunity to put some input into your 

[ Page 1528 ]

projects. I'd like to suggest to you that your turning up the Burrard Thermal plant is exactly the kind of thing that is putting greenhouse gases in the air, which is causing global warming. I don't know whether the Burrard Thermal unit operated last year -- but global warming is a fact of life. Whether the Burrard Thermal unit is operating or not, there are all these automobiles going around stuffing carbon oxides into the air. The world is getting warmer, and all the statistics tell us that is happening. I'd like to suggest to you that what happened in 1995-96, with less consumption than in '94-95, is the way the world's going. If we don't do something about it, it's going to get worse.

Having gotten that off my chest, is the fact that the consumption per household went up from 10.309 to 10.409 kilowatt-hours an indication of the failure of the Power Smart program?

Hon. D. Miller: No, I don't think so. To my understanding, the Power Smart program has been fairly successful. Perhaps it might reflect lifestyle issues. There's been a huge growth in the condo market -- electric heating, appliances, and those kinds of things. No, I don't think it is a negative reflection on the program.

F. Gingell: When the Power Smart program was first developed and planned, were there future outcomes, goals or targets set for the reduction in consumption per capita or per residential housing unit? We're all using lower-electricity-consuming refrigerators and those kinds of things. So I'm wondering what the original targets were, how we're meeting them and what plans you have for the future to ensure that a major factor in meeting electricity demand is reducing that demand.

Hon. D. Miller: I think there are a number of goals. Certainly that was one, and whether it was a particular target.... There were also employment goals.

Just a couple of facts: as well as energy, water is a bit of a problem -- surprisingly in a province with so much of it. In the life of the program, there have been more than 80,000 homes around the province that have installed energy- and water-saving devices, 300 direct jobs and some training for contractors. As a result of the program, 24 gigawatt-hours or $4 million in electricity, $1.4 million in natural gas and 4 billion litres of water have been saved. So it was beyond just the direct energy issues, moving into water.

F. Gingell: One seems to hear a little bit less about Power Smart these days. Does it have any less of a focus within Hydro?

[10:45]

Hon. D. Miller: No, Mr. Chairman.

F. Gingell: Special direction No. 8 deals with the rate of return that B.C. Hydro can earn and instructs the Utilities Commission, as I understand it, to allow them that particular rate. It changes annually, and the B.C. Utilities Commission doesn't know what it is for 1996-97. I'm wondering if B.C. Hydro does.

Hon. D. Miller: Mr. Costello will respond.

M. Costello: For '96-97 the allowed rate of return under the BCUC directive that we are working from is 14.81 percent.

F. Gingell: That's good news for B.C. Hydro -- it's up from 12.74 percent the year before -- and bad news for consumers, I guess. Do the projections that have been prepared for 1996-97 provide for this 14.81 percent rate of return?

Hon. D. Miller: Mr. Costello will respond.

M. Costello: Just to elaborate on my previous answer, the number that we have calculated as being based on the formula that would be allowed under the BCUC rules is 14.81 percent for '96-97. For the last year in which that number was actually, in a definitive way, put forward by the BCUC, it was 12.74 percent. For this year, based on the methodology -- we, of course, haven't applied for a rate increase -- we have calculated that would be the rate. The rate of return that we expect to achieve, based on our budget and the numbers that we have discussed here today, would yield an expected rate of return of 12.7 percent, somewhat less than what we calculate would be the allowed rate of return.

F. Gingell: Do the revenues in each of their categories -- residential, industrial, transmission and other -- assume any rate increases in any single category?

Hon. D. Miller: Mr. Costello will respond.

M. Costello: The assumption is that there are no new rate increases built into the assumptions.

F. Gingell: I assume that answer means in each revenue category.

Hon. D. Miller: Mr. Costello will respond.

M. Costello: The assumption is that there are no general rate increases for any of the classes.

F. Gingell: Perhaps they could advise the committee, so we can get this sorted out in our minds, when the last increases went through for both residential and industrial.

Hon. D. Miller: April 1, 1993.

F. Gingell: So there was an exercise where the rate increase was applied and got refunded, but that all finished up back where they had started.

Hon. D. Miller: I'm also advised that there was some rate redesign.

F. Gingell: But looking at 1995-96 versus 1996-97, we have the same rates and the same rate design. There is no change in the way electricity service is being billed.

Hon. D. Miller: The answer is yes, Mr. Chairman.

F. Gingell: One of the numbers that the minister through Mr. Costello didn't give us was the projected revenue for '96-97. In these statements that is called "Other energy sales" and "Miscellaneous," and in the public accounts it's just called "Other." By adding and subtracting, we calculate that to be $218 million. Is that number correct?

Hon. D. Miller: Mr. Costello will respond.

M. Costello: I apologize. I thought the member had asked me for the major items, but I can certainly give him 

[ Page 1529 ]

the rest of those items in that category: "Other energy sales," $77 million for '96-97, and a smaller category called "Miscellaneous," $41 million, for a total of $2,294 million.

F. Gingell: We had a $100 million adding error, which didn't help.

I notice in the electricity trade area a relatively high $142 million in '95, down to $51 million. You're anticipating it will come back to $87 million. Can the minister give us a small explanation of the factors that affect electricity trade revenue and explain why you think they are coming back?

Hon. D. Miller: I'm advised that '97 should be a return to what is more normal with respect to that market. Sales are expected to increase in response to water conditions -- again, the part that weather plays in hydroelectricity -- the projected flows versus the actual, the ability to generate excess power and the sale of energy at low margins in order to gain market penetration into new markets.

F. Gingell: So I take it that the major item that affects electricity trade revenue is precipitation. If we have a low previous year, we'll get low revenues the following year. Is that the major factor?

Hon. D. Miller: It's not just domestic weather conditions which affect our ability; it's factors in places where we export -- for example, in California. When it's extremely hot, people use their air conditioners more -- things of that nature.

F. Gingell: Special directive No. 2 requires B.C. Hydro to pay out 85 percent of its calculated earnings, which are adjusted by certain factors. I note that the anticipated dividend this year is in fact 85 percent of the projected income. Is there any difference between net income and the amount that is calculated under special directive No. 2? Can any of these distributable surpluses, etc., affect that calculation?

Hon. D. Miller: Mr. Costello will respond.

M. Costello: That's correct. There is no movement in or out of the rate stabilization account. The last time that took place was in '94-95. It is basically calculated according to the formula driven off the net income number of $267 million, to yield a projected distributable surplus of $214 million.

F. Gingell: If one goes back a few years, the originally budgeted dividend for the year '93-94 from Hydro was $290 million; you paid $245 million. In '94-95, the projected dividend was $235 million; you paid $198 million. Last year the projected dividend was $146 million, and the estimates show $125 million, but the financial statements that have just come out show $115 million. I presume the $115 million is correct. For three years in a row the actual dividend pay-out has been substantially less by roughly $40 million every year: $45 million the first year, $37 million the next year, and $31 million last year.

It therefore surprises me that you've taken such an optimistic view for 1996-97. You have projected revenues to be up 4 or 5 percent. You have estimated all your costs to come down even though you're delivering substantially more electricity. Your energy costs you're projecting to remain constant; you're projecting to bring your overhead costs down by $10 million. You have a history, clearly, of coming in under budgeted revenues. Do Hydro officials have any comment on that -- whether they feel comfortable with the projections for 1996-97 in view of the history of not doing as well as you think you're going to do?

Hon. D. Miller: Mr. Costello will respond.

M. Costello: At this point all I can say is that in terms of the projections that we put forward for '96-97, we do feel comfortable with those projections, and some of the early numbers for the beginning of the year confirm that we will be on budget. Of course, a very large part of our budget success will be driven by weather conditions over the rest of the year, but to date, we certainly appear to be on track for those projections.

F. Gingell: You can appreciate that we in the opposition -- myself as the Finance critic particularly -- are concerned about the validity and quality of the numbers that went into this year's budget. You can appreciate that when the projected dividend from B.C. Hydro is $100 million more than it was last year -- up from $115 million to $215 million -- and how important the issue of a balanced budget was and all the things that have gone on earlier this year....

[11:00]

I would like an assurance from the officers of B.C. Hydro that these projections were produced by their people without any suggestions about what the numbers should be, that nobody from government said: "Hey, we're looking for a bigger dividend this year; see what you can squeeze out of Hydro." Operating a Hydro grid that is as big and important as this one is a matter of good management practices, not necessarily trying to squeeze out an extra $100 million this year because you want the financial statements to look right. We must not be putting off and delaying maintenance costs because we want a bigger dividend to come into the consolidated revenue fund. I would really appreciate the assurance that there were no pressures or suggestions made by Treasury Board -- I wouldn't describe it as hanky-panky -- as to what they were looking for out of Hydro.

Hon. D. Miller: I think these are Hydro's projections. We talked about some of the factors that contributed to those projections overall -- the kinds of management issues, reduced operating costs, reduced interest costs, and efficiencies. These are Hydro projections, and the member has pointed out that there is a historical record with respect to those projections. Ultimately, I suppose, the problems rest with the Minister of Finance on the revenue side, but this is Hydro's work.

D. Jarvis: I want to ask the minister to tell us what the situation is today with regard to the capacity of Hydro in megawatts. I understand that about 9,900 megawatts are required for '96-97. Is that up or down from previous years in terms of what they expect it to pull?

Hon. D. Miller: Mr. Chairman, I would seek some clarification with respect to where we are going before I answer the question. I do have Mr. Smith here. I had anticipated that we would be back into areas where Mr. Smith was required for questioning, and I have not received any indication from the opposition of what their intentions are with respect to staff. We have tried to be quite accommodating, at some cost. I wouldn't mind getting a sense of what direction the opposition is pursuing with respect to these estimates.

C. Hansen: Our plan was to deal with the Raiwind project until those questions had been completed, to take 

[ Page 1530 ]

advantage of Mr. Smith's presence. We did not anticipate we would be sitting this morning. That certainly threw our agenda off, and in the meantime it provided us an opportunity to address some of the issues that we would have addressed following the discussions on the Pakistan project. Our schedules on our side were not flexible on such short notice, as we did not anticipate we'd be sitting this morning.

Hon. D. Miller: Again, if I could get some sense.... I mean, obviously the opposition has no obligation to provide me with anything, but in the interest of trying to be accommodating.... I have staff waiting on a number of issues at some considerable expense. I assume that if we're sitting now, we could deal with Raiwind. I don't know why we can't. We were dealing with it up until last night at 10 o'clock, and I assumed that we would just resume this morning. So I'm at a bit of a loss. Is it something that the opposition wants to pursue after lunch or this evening? Is there some general sense they could give me so I could try to give some direction to staff with respect to their attendance in this chamber?

C. Hansen: We're certainly more than willing to work with the minister and the minister's staff to make sure that officials' time is used most effectively. It's certainly not in anybody's interests to have people sitting around waiting for particular things in the estimates to come up. But as I mentioned, those who are involved specifically with the questioning on the Raiwind project had other commitments this morning, which we were not able to change on such short notice. As a result, we're trying to deal with some of these other issues that we had been putting aside, regarding B.C. Hydro. We will come back to the questions on the Raiwind project possibly later this morning. They are going to try to get here as soon as they can, but certainly it will be following question period this afternoon that we would be trying to address that issue.

Hon. D. Miller: I've asked Mr. Smith to come back after question period. Is that appropriate?

The question was asked about our capacity. I refer the member to page 68, the last page of the report, where it is printed as 10,851 megawatts.

D. Jarvis: That's up approximately 1,000 megawatts over what was proposed back in their '95 plan. What was proposed was about 9,900 back in their '95 plan, and I was wondering where this increase has come from, or what the requirement is for this sudden load.

Hon. D. Miller: I don't have that comparative figure for '95, but the table on page 68 of the annual report is quite clear. It lists, in order, the sources of supply, and there is a comparison of gigawatt-hours to '94 and '95. It's very easy for the member to look at that table and see what the sources of supply are that contribute to the 10,851 megawatts.

D. Jarvis: It's up considerably from the previous year, am I not correct?

Hon. D. Miller: I'm informed by staff that it's been over 10,000 for over a decade.

D. Jarvis: I go back to the '95 integrated electricity plan of B.C. Hydro. There the existing and committed supply of the hydroelectric system was 9,300 megawatts.

Hon. D. Miller: That 10,000-plus figure includes the non-integrated diesel capacity at various spots around the province.

Interjection.

Hon. D. Miller: About 1,000 megawatts.

D. Jarvis: So that change was over this last year, because back in '95....

Interjection.

D. Jarvis: I've got it here -- your '95 integrated electricity plan. I've just got a photostat here of the page with everything on it.

Hon. D. Miller: Have you got a page number on there?

D. Jarvis: I don't know if there's a page number. No, there's no page number on it.

The Chair: Member, if you could ask the question through the Chair, please....

D. Jarvis: In any event, Mr. Chairman, I wanted to go further and ask if they feel there are any proposed or required increases for their capacity over the next five or ten years.

Hon. D. Miller: The corporation will continue to look at demand and at opportunities for power generation. We've discussed IPPs at length in these estimates. That is really somewhat contingent on forecast demand. Our responsibility is to meet the demand requirements of the province and to engage in entrepreneurial activities in terms of revenue generation. A variety of options are being looked at around the province. I talked about the IPPs, Seven Mile and a variety of other....

I'm not quite sure where we're going here, Mr. Chairman, with respect to the line of questioning.

D. Jarvis: Well, when they put out their integrated electricity plan -- a year ago, I guess it would be, in '95 -- in it they had included their Seven Mile, Burrard, etc. I'm wondering if they could tell us if there is any specific increase required for dependable electricity.

Let's go back to a specific situation. We'll talk about their request for proposals that suggested they would only require....

Interjection.

D. Jarvis: Go ahead.

Well, I'll have to read it all again, Mr. Chairman. I go back to their '95 integrated electricity plan. They put out a plan saying that for the year '96-97 they would require -- including all additional resources they were going to get, like Seven Mile, Revelstoke, Mica -- approximately 9,200 megawatts. I appreciate that there's been a higher demand, so they're now up to a little over 10,000. I'm simply asking if there's anything in the future, which they know and which we don't know, that is going to make a further demand on the electricity capacity for this province.

Hon. D. Miller: Growth, Mr. Chairman. Again turning to the plan, there's an obligation to meet requirements, as I said, and that's forecast at a certain level. Our capacity does exceed current requirements.

[ Page 1531 ]

D. Jarvis: Is that capacity that they have produced in British Columbia, or is it imported?

Hon. D. Miller: There really are so many variables with respect to power generation. I mean, on the one side you have a figure of what you anticipate demand to be, and on the other you have an integrated hydro system -- and a non-integrated system in places like the Queen Charlotte Islands, where there's diesel generation, and other areas of the province. Really, that is subject to a variety of factors that we talked about: the weather, reservoir levels and those kinds of questions. It's very difficult to try to get a sense of what the member is pursuing, to try to answer his question. There are so many different factors that account for the ability to generate power. Clearly, B.C. Hydro is able to generate low-cost power, and, to the extent that it's practical, we use the power that we generate for domestic purposes. It may be, with respect to unknowns in terms of reservoir levels, ability to generate and those kinds of questions, that we may have to consider importation. Really, you try to balance an operating system and maintain the lowest-cost power that you possibly can, considering the factors that you have to deal with at the time. I don't think I can be more precise in terms of trying to respond to the member's question.

[11:15]

D. Jarvis: My question wasn't on the philosophy of B.C. Hydro -- whether or not they can produce cheap power. I was simply trying to find out if we are presently.... Hydro would have to have, I would hope, some kind of plan -- they have had in previous years -- of what the demands on their electrical power capacity will be over the coming years, up into the year 2000-plus. They have done it before. I assume they have it now. Seeing that their '95 figure has changed dramatically and their capacity is now 1,000 megawatts over what it was in their '95 plan....

The minister is shaking his head, saying he doesn't understand. I'm telling you that in your 1995 capacity plan, it showed you that you had about 9,300 megawatts. Is there any plan for the future? I'm simply asking what your demands are on the future. What is your plan for it? Are there plans set out? Do you say, as you go up the plan: "In '97 we will require another 1,000; in '98 we will require another 240 megawatts, etc., etc."? In that plan, how much of it is produced in British Columbia, and for how much of it are you depending on imports?

Hon. D. Miller: There is a public document, called the 1995 Integrated Electricity Plan, which really answers every one of those questions. With all due respect, Mr. Chairman, there are some rules governing this estimates process. With all due respect, there is detailed plan. I can read it, I suppose, but that would be an insult to the rules of this committee. The graphs are all there. It's charted, and it talks about 20-year forecasts. The 20-year outlook is in the front summary section. It's very comprehensive. I haven't read it, obviously, in the time I've been the minister, but....

Mr. Chairman, I seek your direction. How can I respond to these very general questions when there is a very comprehensive document available to the member, and indeed to all British Columbians who may want to look up any specific questions? Look at some of the charts here. I couldn't begin to try to explain these in this kind of process. I really would seek your direction, Mr. Chairman. We appear to be, I think, spinning our wheels a bit. I want to be cooperative if there are questions, but it's quite difficult.

D. Jarvis: I appreciate what the minister is trying to get at, but he's trying to be awfully cute. I didn't ask him to explain all these charts. I asked him specific questions. I asked him if the capacity projected in the future.... Is B.C. able to produce that amount of power, or are they going to have to import it from, for example, Alberta?

Hon. D. Miller: Yes, British Columbia has the ability to produce all the power requirements for the future.

D. Jarvis: The other day, I was discussing with the minister the request for proposals that they put out about two years ago. About this time last year, around September 1995, a letter went out to the people who put in proposals stating that they had now got to the stage where there was a shortlist of only ten. Of that shortlist of ten proposals.... They mentioned the fact that, in view of the deregulation of power in Alberta, there was a surplus of power available in Alberta and that it may not necessary for B.C. to seek...it may not be necessary or probable that the request for proposals will be acted on, because of the fact that they can get power equal to or cheaper than B.C.'s from the province of Alberta. I would like to ask the minister if that situation has changed.

Hon. D. Miller: We dealt at some length with the issue of IPPs and the RFP. Again, with all due respect, I have been cooperative in terms of trying to answer those questions and I don't know if this is a one-way street I am on or not. Is it just in terms of time-filling while they are getting prepared for the Raiwind issues that they want to fill a vacuum here and we're dealing in this? I've dealt with it, Mr. Chair, and I really would request a ruling from you with respect to flitting in and out of these subjects at will without the process.

The Chair: Perhaps the member could consider his line of questioning. It is true that we did cover this, and you were the member that was asking the questions in previous estimates.

D. Jarvis: That is correct, Mr. Chairman. I asked those questions, but I didn't get full answers for them, so I am now trying to clarify that situation.

The Chair: Would you take your seat, please, member.

The Chair would like to advise members that we are dealing with the administrative actions of the minister's portfolio, the estimates. We have been dealing with a great deal of repetition in regard to those estimates. I would like members to come to order and pursue a line of questioning that is not repetitive.

D. Jarvis: It's a matter of interpretation if it's repetitive, whether it's the minister's opinion or my opinion.

I would like to ask....

The Chair: Please take your seat, member.

The Chair's rulings are not up for debate. I have been clear that you have been repetitive. It is not a matter of interpretation; it is the Chair's ruling.

D. Jarvis: I was just trying to clarify the point, Mr. Chair, that you hadn't brought the subject up. It was brought up by the minister first.

I'd like to ask the minister, in regard to the business process improvement plan of B.C. Hydro, the requirements of that and why they are hiring consultants.

[ Page 1532 ]

Hon. D. Miller: Again, with all due respect to the estimates process, is this a one-way street? Does the opposition feel any obligation to try to go through in some kind of sequence? It's clear they are filling time, and to ask an inane question like that is not appropriate for this estimates process. I would ask the member to move on.

D. Jarvis: The minister seems to have a feeling that people are sitting around here stalling for time. What he's trying to do, I don't know. We're certainly not here to stall for time. We would like to be through with these and out of here as fast as we can.

With the process that his government has set up, there are two Houses calling estimates. Now, if that subject has been brought up before, then I apologize for it, but I was unable to be here. However, I do not think that that subject has been brought up before, and it's part of the business management process of B.C. Hydro. It's their process-for-improvement plan, and I'd like to ask them specifics about that business process improvement plan, the BPI as they call it. I wonder if he could reply to that, because I do not think that I was spinning wheels.

Hon. D. Miller: I understand that the opposition parties were the ones that referred these estimates to this committee, and have been diligent in pursuing a line of questioning with respect to B.C. Hydro. We've been at it for three days. This is the fourth day, I believe. I've been trying to take it seriously. It's not been an easy process; it's been a very tough process. We have made arrangements to have people here to answer legitimate questions, Mr. Chairman, and the inability of the opposition to ask those questions because of some other issues is not relevant to this committee at all.

I really think that this is not an appropriate estimates debate. To ask any question that pops into your mind to fill time seems to me not.... I have highly paid staff here, who are here to try to.... We've just finished a fairly good discussion with respect to the business plan and projections. I thought it was very good. But, really, do you want me to be the only one playing the game here?

C. Hansen: To say that these estimates were referred to this committee by action of the opposition is unfounded. We have made it very clear that we feel that these kinds of discussions should be taking place in the Crown Corporations Committee, as opposed to estimates. That would be a much better vehicle. Given that we are here.... I think that we may not be asking the questions that the minister would like us to ask; and he may not see the particular relevance of our questioning, but we do. I guess that's our prerogative, and that's why we're here.

D. Jarvis: The Chair ruled that we are here to discuss business developments and plans of B.C. Hydro, so I have changed my questioning from asking about the capacity of B.C. Hydro to its business process improvement plan. Would the Chair please rule one way or another whether that is a proper line of questioning, in view of the Chair's previous statement?

The Chair: To reiterate, and possibly for members' understanding, I would refer you to standing order 40(3): "No member shall be irrelevant in debate." Speaking beside the question.... The basic point is that parliament's dignity is impaired by time wasted in idle debate. Therefore it is the duty of every member to confine his remarks to the subject matter under debate. Relevance may not be immediately visible, but may emerge later in the member's speech. While the debate may not be idle, it is repetitive, and all members should please adjust their continuing remarks with that in mind.

D. Jarvis: I ask whether, to his memory -- and he's been in here for some time -- and that of the officials on the other side of the table, any questions have been asked by any member in this House in regard to the business process improvement plan of B.C. Hydro. I have some specific questions I would like to ask about it.

An Hon. Member: Aye.

Hon. D. Miller: Was the question: do we engage in business improvement initiatives? The answer is yes.

D. Jarvis: Could the minister tell me: do they do that with inside staff or do they hire outside consultants?

Hon. D. Miller: Both.

D. Jarvis: Could the minister describe to us what the process improvement plan means?

Hon. D. Miller: We challenge the corporation and all of its business units to be efficient.

D. Jarvis: I ask the minister if he could tell us what types of consultants they hire.

Hon. D. Miller: Those with the knowledge we require.

D. Jarvis: Could he tell me how many consultants they have hired?

Hon. D. Miller: I don't have that figure.

D. Jarvis: Mr. Chair, do you think the minister would be prepared to find out that information and let me know within a reasonable period of time?

An Hon. Member: Aye.

The Chair: Shall the vote pass?

Some Hon. Members: Aye.

D. Jarvis: It's obvious that the minister is being very uncooperative. I would like to....

Hon. D. Miller: Point of order, Mr. Chairman. Nothing could be further from the truth. It is patently clear, Mr. Chairman....

D. Jarvis: Answer some of the questions, then. They're very simple.

Hon. D. Miller: Mr. Chairman, I'm speaking on a point of order. It is patently clear, and the member questioning me has admitted, that they have no questions. He is filling time. Mr. Chairman, it is really a bit too much. We have been at this now.... This is the fourth day. We arrive here in the morning, 

[ Page 1533 ]

and there are no questions. It is a bit too much, with respect to the legitimacy of estimates debate, to be faced with this. We are here to answer questions. The opposition indicated that Raiwind was the issue. Yet they're not here this morning to ask those questions.

[11:30]

Interjection.

The Chair: Take your seat, please, member. The Chair cannot compel members to ask or answer questions, but debate will only proceed in an orderly and productive manner if all members obey the rules of the House. I have cautioned members on numerous occasions with regard to relevance and repetition.

I recognize the member for North Vancouver-Seymour.

D. Jarvis: Yesterday evening the minister mentioned that he was concerned with the Laxton-Raiwind-Caymans situation, and that there was a morale problem involved in the management of B.C. Hydro. At that time, I was concerned that there was more than a morale problem, from what I've been informed, not only in the management end but also probably in the staff end of it, ostensibly due to a lot of largesse that's been going on in B.C. Hydro over the years. As I mentioned to the minister before, the special deals for pensions in the inner circle.... I want to clarify a point about that.

For example, Bob Wyman, a previous chairman of B.C. Hydro, was in his job for about two years, and he was paid $200,000 per year. He was able to buy up to five years at the time for his pension plan, which resulted in him having approximately seven qualifying years. Times 2 percent per year, that equals about 14 percent of the $200,000. So that resulted in the gentleman having worked for B.C. Hydro for not quite two years and receiving a $28,000 pension per year for as long as he remains around. I wonder if the minister could tell me if this is applicable to all employees of B.C. Hydro.

Hon. D. Miller: I'm advised that there has been a policy in place since the early 1980s, when Larry Bell was the chairman of Hydro.

D. Jarvis: I wasn't quite clear on that. Mr. Bell's policies have been in.... Is the same type of plan applicable to all employees?

Hon. D. Miller: It's for vice-presidents and above.

D. Jarvis: I assume that the minister....

Interjection.

D. Jarvis: It still wasn't clear when he bent over and didn't address the mike properly, as far as I was concerned; I couldn't hear, for the second time, whether it was applicable to vice-presidents and above.

I was trying to say that a lot of largesse has gone in, and that that's why there's a morale problem among vice-presidents and down in B.C. Hydro -- as well as among the vice-presidents and up, probably, in view of the situation.

The minister signals "So?" He doesn't seem to be concerned. I wonder if Mr. Laxton will have the same privileges in the pension plan that has been given to him as a result of his being fired from the presidency.

Hon. D. Miller: I think I have given an answer with respect to the policy in terms of pensions designed by Mr. Larry Bell, who, I understand, was a prominent adviser to the Liberal caucus. Perhaps if the member has some difficulty understanding it, he might give Mr. Bell a call. It surprises me that they haven't talked about that. Mr. Laxton was serving as an unpaid chair of Hydro.

D. Jarvis: Is this applicable to the present chairman of B.C. Hydro, Mr. Smith?

Hon. D. Miller: The question was in reference to Mr. Laxton.... He was a per-diem-paid chair of the corporation. None of the pension issues apply.

D. Jarvis: That wasn't my question. It was with regard to whether the present chairman, Mr. Smith, was....

Hon. D. Miller: It's the same answer.

D. Jarvis: When we previously discussed how pensions were measured, I asked the minister how they measured the pension situation. In view of this year's profits being down from last year, I wonder if that's still applicable in his mind. But at the same time, I want to know if bonuses are applied to the pension criteria.

Hon. D. Miller: Bonuses are included in pensionable income.

C. Hansen: I have one minor thing that I've been anxious to get some questioning in on over these last few days. I think it may be quite brief. I'm trying to get a sense of the various student summer job programs as they apply to various organizations and Crown corporations. I know there is a specific program that has been developed for Crown corporations regarding youth employment. I wonder if the minister could advise us as to what B.C. Hydro's targets were with regard to that or to any other student summer employment programs for this summer, 1996.

Hon. D. Miller: The target is about 400-plus, and I don't have information as to whether they've reached that or not.

C. Hansen: Could the minister advise us if there have been any revisions to those targets during the last two months, during the course of the summer?

Hon. D. Miller: I'm advised that it has been revised upwards.

C. Hansen: I have a copy of some internal E-mail from within Hydro that indicates that the target number for B.C. Hydro was originally 87, that it has been increased to 475 and that this was done in the middle of July, approximately. Could the minister confirm if these numbers are accurate?

Hon. D. Miller: I did indicate that they had been revised upwards through the Crown corporations secretariat. We've challenged the corporations to do better than what they originally thought they could do.

C. Hansen: Could the minister confirm that this is a directive that has gone out to all Crown corporations from the Crown corporations secretariat, to increase their targets?

[ Page 1534 ]

Hon. D. Miller: Yes, we have obviously issued challenges to the private sector, and our feeling was that those same challenges should be issued to the public sector, the Crowns.

R. Neufeld: I don't have too many questions in regard to B.C. Hydro. I will try to stay with B.C. Hydro, but most of them concern my constituency. Could the minister confirm for me whether -- and I've had the information that the two dams on the Peace are both generating hydro at full capacity -- the Columbia system is also at full capacity at the present time?

Hon. D. Miller: We don't have a ready answer to that question. We did have Mr. Swoboda here last week to deal with those issues, but we don't have him here now. As of today, I can't give you an answer to that question.

R. Neufeld: I appreciate that I wasn't here when the gentleman was. With the snowpack in the Columbia system, I would assume that they are dumping water and that they are generating electricity at maximum, the same as is happening in the W.A.C. Bennett and Peace Canyon dams. I would also like to know: is Burrard, the gas turbine plant, generating hydro right now?

Hon. D. Miller: Not at the present time.

R. Neufeld: As recently as a week or ten days ago, there were indications that Burrard was going to start generating. It seems strange to me that with the Peace and the Columbia at maximum, we would have to start the Burrard plant for any reason, especially at this time of year. I was wondering why there would even be a contemplation of getting Burrard up to maximum. Can the minister maybe explain to me a bit of the rationale behind that?

The Chair: Just before I recognize the minister, noting the hour, the Chair is prepared to entertain a motion to rise, report progress and ask leave to sit again.

Hon. D. Miller: I'd have difficulty making that motion, Mr. Chairman.

Because of the systemwide impact of the W.A.C. Bennett Dam -- in other words, we had to draw down.... It's complex in terms of interrelations between the systems, but I gather that the sense is that prior to winter, we need to build those systems back up, and build the Columbia back up. One of the options that B.C. Hydro has announced is the restart of Burrard Thermal. In that regard, I believe there was a press release a number of weeks ago, and there was subsequent information indicating that B.C. Hydro would only start the one unit that had the environmental control technology in place. The second unit, which is in the process of having that technology fitted, would not be started until that job had been completed. That would leave a gap or a hiatus, if you like, in time. During that time, because of concerns expressed by the Port Moody council, Hydro has agreed to find that power from other sources. There will be a cost to that; there always is a cost. Burrard Thermal may indeed need to be restarted; in fact, Hydro has said that they will have to start up Burrard Thermal. But it really relates to the system on the hydro side -- the system and the impacts of the work currently underway on the W.A.C. Bennett Dam, and the need to fill those reservoirs again.

The member indicated that he had a few brief questions. We may be able to conclude them here.

R. Neufeld: No, I have a number. So I'll go after.

Hon. D. Miller: Okay.

The indication was that people wanted to revisit the Raiwind issue. I have had Hydro staff, general staff, available now for a number of days. Is it possible that I could get some indication of progress so that we could start to manage the staff issues? In other words, are we finished with Hydro generally? Is there some sense that we may conclude on the Raiwind issue? Quite frankly, in terms of my own time, I don't care. But in terms of the very difficult issue of staff, who have been on hold for a number of days, at significant cost, I would be pleased to get some general indication. Are we finished with this? Can we concentrate on one...?

[11:45]

C. Hansen: As a new member to this House, one of the things that surprised me in the estimates process is the lack of cooperation between the government and the opposition when it comes to the scheduling of officials. I think that cooperation is obviously something that has to be a two-way street. Certainly we are anxious to move this process forward as fast as possible, because we want to complete it and fulfil our responsibilities as opposition. It's certainly not in anybody's interest to drag this out any longer than is necessary. Speaking from my own point of view, I am not aware of any other of my colleagues in the official opposition who wish to address any other general Hydro issues at this time. That's not to say that there aren't any, but I would be very surprised if there were. My understanding is that the Raiwind project is the only issue that we would want to pursue this afternoon. My colleague from Peace River South, I understand...

R. Neufeld: Okay.

C. Hansen: ...may have some other questions.

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

Motion approved.

The committee rose at 11:47 a.m.

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