(Hansard)
WEDNESDAY, AUGUST 7, 1996
Afternoon
Volume 2, Number 15, Part 1
[ Page 1535 ]
The House met at 2:06 p.m.
J. van Dongen: I'm very pleased today to introduce two constituents from Abbotsford, who are good friends of mine: Paula McAleese and Ivy Ganske. They were a little shy about being introduced, so I'd like the House to make them feel very welcome.
M. de Jong: I'm pleased to advise members that a former colleague of many members, a former member of cabinet, Mr. Peter Dueck, and his wife, Helen, are here. I inherited a couple of things from Mr. Dueck: his constituency a few years ago and his dining room number, and I use the latter with pride. The bill is waiting for you, Peter, downstairs.
With Peter and Helen today are their grandchildren, Alissa and David Kandal. I hope all members will make their family feel welcome here today.
L. Reid: I'm pleased to welcome today Mr. Ron Woodward, who is the president of the Saskatchewan Research Council. Ron has gone to Saskatchewan after having a very distinguished career here in British Columbia, and I trust he will be back to join us shortly. I ask the House to please make him welcome.
M. Coell: I'd like to introduce to the House today three very good friends of mine: Craig and Susan Girard, and their daughter Lauren. Would the House please make them welcome.
Hon. M. Sihota: I notice that in the gallery today is an individual who has an uncanny knack for scoring goals, while playing floor hockey, from behind the net. I've never seen anybody else who could do it with the proficiency that he has. He's also a very proficient principal at Sooke Elementary and Port Renfrew Elementary, and that's Mr. Aj Sundher.
B. Barisoff: I'd like to introduce John Webster, born and raised in the Okanagan, who is now teaching in Bella Coola. Will the House please welcome him.
Hon. D. Miller: I haven't had time to have a proper visit, but I see in the gallery an old friend and the president of my old trade union, Garry Worth, the president of the Pulp, Paper and Woodworkers of Canada. I ask the House to make him welcome.
F. Randall: In the gallery this afternoon is Samern Jeet Grewal, who is from India, and she is accompanied by Amirt Mann and Man Geet Mann. Would the House please make them welcome.
G. Plant: I'm delighted today to be able to introduce three very important people in my life, who've come to watch the festivities -- that is, the proceedings here -- and I'm sure they will be interested to follow them: my aunt Sandra Gilmor, from Long Island, New York; my aunt Elva Reid, from Crescent Beach; and my cousin Katie Reid, also from Crescent Beach. I ask the House to make them welcome.
B.C. HYDRO'S PARTNERS IN
PAKISTANI POWER PROJECT
G. Campbell: Hon. Speaker, in carrying out our due diligence with regard to the Raiwind project and B.C. Hydro, we have come across some observations which cause us grave concern. They're observations that are made by Pakistan's ombudsman about the Water and Power Development Authority of Pakistan, WAPDA, which is the arm of the Pakistani government that B.C. Hydro has been dealing with. According to the Dawn Wire Service, Pakistan's largest English-language newspaper, the ombudsman said that WAPDA "tops the list in inefficiency and corruption." The ombudsman is a retired judge. He goes on to say: "There is no dearth of favouritism, discrimination, departure from law, rules and regulations, unjust and irrational decisions."
My question is to the minister responsible. Does WAPDA meet the ethical standards contained in your policy framework for Crown corporation entrepreneurial activities as someone we would want to be dealing with in British Columbia?
Hon. D. Miller: Mr. Chairman, I certainly don't dispute the information that has been read by the Leader of the Opposition. I simply have no knowledge of it. I would suggest that in view of Mr. Smith's ongoing review of these matters, that would be appropriate information to give to Mr. Smith for follow-up.
G. Campbell: This is not a question for Mr. Smith; it's a question for the government. Mr. Smith is, after all, a servant of this government, so the question is: does WAPDA meet this government's ethical standards?
Another story from Islamabad points out that WAPDA is undergoing some changes "before the authority breaks down under the weight of massive corruption and wastage it has been suffering from for decades."
Again, my question is to the minister responsible. Do the ethical standards that this government set out have any force whatsoever, or did the government simply decide to ignore them as part of their activities in Pakistan?
Hon. D. Miller: I really do think, faced with the information in an oral form in this fashion, that my response is quite appropriate. This issue is under investigation by Mr. Smith, and if the members of the opposition -- indeed, anybody in British Columbia -- have information that is germane to the matter, then I think it
Interjections.
Hon. D. Miller: Mr. Speaker, I wonder if we could get some silence so I can finish my response.
The Speaker: It's not my practice to interrupt the flow of question period on points of order, but I would ask all members to please allow those asking questions and those answering questions an opportunity to do so.
Minister, if you wish to, finish the answer; then I'll go back to the opposition.
Hon. D. Miller: As I indicated, if anybody, including the Liberals, has information that's germane, then I think it's
[ Page 1536 ]
important -- in fact, I think it's an obligation -- that they provide that information to Mr. Smith so that it can be followed up. We clearly have given Mr. Smith a mandate to get to the bottom of all aspects with respect to this issue. He is working on that, and I'm sure this information will be useful to him.
G. Campbell: You know, when you're a minister responsible for a Crown corporation, you are the one that is accountable. You're the one that's supposed to be making sure that ethical standards are being met. This minister and the previous minister have failed abysmally to protect British Columbians' public interest. It was not the opposition that risked millions and millions of British Columbians' dollars in Pakistan. It was this minister and this government, and they evidently did it without doing one bit of research themselves.
Throughout this situation, throughout this mess, two names have come up consistently: John Laxton and Ali Mahmood. Mr. Laxton and Mr. Mahmood are clearly good friends, or else I can't imagine why Mr. Laxton would be visiting Mr. Mahmood in his bedroom.
[2:15]
The Speaker: Question.
G. Campbell: Mr. Mahmood received 300,000 free shares for "risks taken" during the early stages of development. My question is to the minister responsible, to the minister accountable, to the minister who's supposed to be taking care of the public interests of the province of British Columbia. Can the minister tell us exactly what risks Mr. Mahmood took for his 300,000 free shares -- and who is Ali Mahmood, anyway?
Hon. D. Miller: I am somewhat perplexed. This issue was thoroughly canvassed yesterday. At 7:30 last night in committee, Mr. Smith said that he is in fact investigating this issue. He said: "The first report touches on this, and the final report will deal with it." The report deals with it on page 99. Mr. Smith, in Hansard from committee last night, said: "I would think those are legitimate matters for the final review."
Mr. Speaker, perhaps I seek your advice. This was thoroughly canvassed last night. The
Interjections.
Hon. D. Miller: I'm sure, Mr. Speaker, with the way we've been spinning our wheels, that we'll go back at it again this afternoon in committee.
M. de Jong: I wonder if I can ask the Premier, now that he has arrived, to advise the House whether he is aware of the fact that the present chair of B.C. Hydro, Mr. Smith, was appointed to the board of directors of ATS Canada on January 19, 1996 -- ATS Canada being the company that was and is engaged in contractual negotiations around the photo radar situation.
Hon. G. Clark: I read in the newspaper that he was associated in some fashion. I'm not familiar with the details, but I believe it's all a matter of public record. If you are the chair of a board or are appointed to a government corporation, it's not a full-time job, so you quite appropriately have other interests and other activities that you would pursue, and I would encourage that.
M. de Jong: To the Minister of Transportation and Highways, perhaps she can advise whether she was aware of Mr. Smith's status with respect to that company. Will she confirm that officials with ATS Canada, including Mr. Smith himself, would have been engaged in making representations to the government surrounding the negotiations of the supply of photo radar equipment?
Hon. L. Boone: There have been no representations from Mr. Smith to myself, and no representations to anybody that I know of in government with regard to ATS. I'm not sure when Mr. Smith went on the board. This is a private company. As supporters of the free enterprise world, I'm sure you fully support people getting involved in the free enterprise world and taking on positions and being involved in promoting business in British Columbia. I'm certainly not going to tell private citizens what company they can be involved with.
M. de Jong: Mr. Speaker, to say that I am troubled is something of an understatement. Here's what we're
Interjections.
The Speaker: Order, members!
M. de Jong: Mr. Speaker, at the same time that Mr. Smith has been engaged to carry out an investigation and prepare a report that could be very critical not just of the government but of the Premier himself, he is a director and owes a duty to a company that is engaged in sensitive negotiations with the same government. My question to the Premier
Interjections.
The Speaker: Order, please.
M. de Jong: Can he tell the House whether he thinks it was appropriate to put Mr. Smith in a position where he was negotiating with the government on a million-dollar contract and investigating the government at the same time?
Hon. G. Clark: It's easy, I guess, to make unsubstantiated charges, but these are really outrageous questions.
Interjections.
Hon. G. Clark: Look, relax! No wonder the business community didn't support the Liberals. Just relax.
You're allowed to take an appointment on a hospital board, a college board or a Crown corporation board and not give up your life in the private sector. Clearly we have asked people to take on these responsibilities. We don't ask them to live a life where they're not involved in any other
Interjections.
The Speaker: Order, members!
Hon. G. Clark: If the members have any allegations they want to make, I suggest they make them in here -- I suggest
[ Page 1537 ]
they make them out in the corridor, hon. Speaker -- and then we'll deal with them.
C. Hansen: This morning we learned that two escaped convicts from Ontario were picked up by the Osoyoos RCMP but were later released. They apparently walked out of the police station laughing at the police officers, because no one was prepared to pay the cost of their return to face Ontario justice. My question is to the Attorney General. How can we tolerate B.C. becoming a resort destination for escaped convicts from other parts of this country?
Hon. U. Dosanjh: That's exactly the reason that my ministry has put forward amendments to the Criminal Code. They were discussed at the last meeting of the Attorneys General of this country. They were also discussed at the meeting of the Deputy Attorneys General from all across the country. We are attempting to negotiate an agreement with the province of Alberta, and we've successfully done so. We've asked all the provinces to engage in such reciprocal agreements so that we can ship all the criminals from each others' jurisdictions back to where they belong, to face justice in the provinces where they've committed offences.
So far, we've been unsuccessful. We're working on it, and as I said before the election -- and I'm saying this after the election -- if we have serious offenders in this
Interjections.
Hon. U. Dosanjh: Once you've finished clapping, maybe I'll conclude my answer.
I have said that if we have serious offenders who are within our jurisdiction, we would be prepared to ship them to the receiving province at the expense of British Columbia.
C. Hansen: While this issue is being discussed by the Attorneys General across the country, the taxpayers in this province are becoming disgusted on this whole issue of non-returnable warrants.
The problem is much worse. Recently a constituent of mine was the victim of several break-ins. On one occasion, the alleged thief apparently dropped his B.C. welfare cheque-cashing card. What better identification do the police need? It turns out that this alleged thief was on a non-returnable warrant from Ontario and is collecting welfare in this province. How can the Attorney General justify not returning the two criminals from Osoyoos and not returning this individual? The cost of returning would have been less than one month's welfare -- for a plane ticket back to Ontario.
Hon. U. Dosanjh: I am proud of the fact that we are leading the country in this fight against fugitives from other jurisdictions. We raised the issue first. I said before the election that if we had a busload of criminals that belong in other jurisdictions, we'd be prepared to pay the way for them to receive justice at the other end of the country, and we are prepared to do that. I don't think rhetoric helps anyone. You should look at the record, and you would be pleased.
C. Hansen: It's great to hear that the Attorney General is prepared to foot some of these costs that will save the taxpayers' money in British Columbia. On the one hand we have talk -- you can call it rhetoric; you can call it whatever you want -- but we don't have action.
The lower mainland director of Social Services apparently indicates that they don't even bother trying to identify escaped felons and other individuals who are wanted on Canada-wide warrants. They don't even make any attempt to identify those who are collecting welfare. Can the Attorney General tell us if efforts will be made to cross-reference individuals wanted across Canada with people who are currently collecting welfare in this province?
Hon. U. Dosanjh: We have a member of the opposition being sanctimonious, and his party opposed the three-month residency requirements that we imposed in British Columbia. I think it's important for the people of British Columbia to know that this government is the leader in dealing with the question of returning fugitives to face justice across the country. Whether or not we can cross-check our information with social assistance recipients is a question of confidentiality, and I'll look into it.
The Speaker: The bell terminates question period.
Hon. D. Miller: Point of order, Mr. Speaker. It has come to my attention that Mr. Smith is not a director of the company mentioned by the member for Matsqui. We know that the Liberals have called for Mr. Smith's resignation. They have played fast and loose with the issue of conflict.
The Speaker: Excuse me, minister.
Hon. D. Miller: Mr. Speaker, I think an apology is due -- right here, right now -- to Mr. Smith for those spurious allegations made in this House.
Interjections.
The Speaker: Members, I recognize that the summer is rapidly disappearing, and there is a certain level of anxiety that is understandable. But we seem to be losing some common courtesy, one to another.
Interjections.
The Speaker: Order! We seem to be losing some courtesy, without which this place cannot function. I would ask all members to please assist me in doing what I am charged with doing -- namely, maintaining your rules. Having said that and having now achieved some silence, the hon. member for Matsqui on the point of order.
M. de Jong: If the minister will review the comments made earlier in question period, he will know that there were no allegations made with
The Speaker: Having heard those two submissions, I think that concludes the necessary debate on the point of order.
[ Page 1538 ]
Hon. A. Petter: I am pleased to submit the annual report of the Ministry of Finance and Corporate Relations for the year ended March 31, 1996; the annual report for the British Columbia Securities Commission for the year ended March 31, 1996; and a report concerning the Vancouver Stock Exchange pursuant to section 10.01 of the Vancouver Stock Exchange Act, outlining exchange contributions to the provincial economy. Finally, as my contribution to the decorum of the House this afternoon, I am also pleased to table the Lottery Corporation's annual report for the year ended March 31, 1995.
Hon. J. MacPhail: In Committee A, I call Committee of Supply. For the information of the House, we will be debating the estimates of the Ministry of Employment and Investment, Municipal Affairs; and the Ministry of Small Business, Tourism and Culture. In this House, I call Committee of Supply. For the information of the House, we will be debating the estimates of the Ministry of Education, Skills and Training and Ministry of Labour.
The Speaker: Given the tenor of the House, I'm pleased to know that is not debatable.
The House in Committee of Supply B; G. Brewin in the chair.
[2:30]
On vote 20: minister's office, $460,000 (continued).
R. Masi: I believe that at our last meeting we were discussing the high school and workplace programs in terms of apprenticeships. At that time, we were looking for the number of students enrolled in the 1995-96 apprenticeships program in high schools. I believe that number will be forthcoming. Is that correct?
Hon. M. Sihota: We don't have that information yet. We'll try to get you that information as quickly as we can.
I do have other information for you with regard to community skills centres. Twenty-one have been announced, and 16 are operational. Three have received approval for their business plans and are moving to operational status. They are located in Clearwater, Princeton and Masset. Two are developing business plans; they are located in Surrey and Trail. The other 16 are located in Burnaby, Prince George, New Westminster, Kitimat, Quesnel, Dawson Creek, Williams Lake, Prince Rupert, Houston, Revelstoke, Mission, Port Alberni, North Island, Vancouver East, Kimberley and Sparwood. For staffing those, they generically have a manager of the community skills centre, an educational facilitator and clerical support. Total cost would be about $145,000, including benefits. The staff thereafter is the responsibility of the board.
The selection criteria for the communities that are impacted by the community skills centre -- in other words, the reason we locate them there -- are the unemployment rate in the area, single-sector dependency if that's an issue, the current level of training and retraining opportunities that exist in the community, evidence of community readiness and other factors such as the number of income assistance recipients.
R. Masi: Thank you for that information, hon. minister.
In terms of the apprentice scholarship programs -- and I understand that's in place -- I wonder if you could describe the criteria for the scholarship program.
Hon. M. Sihota: I'm sorry, maybe I'm getting confused here. I thought we were doing Skills Now in post-secondary education and that by agreement with your Labour critic, we were going to be doing Labour later. Labour covers the apprenticeship program, so that's another part of the ministry. I thought we were going to do all of the Education materials first and then, once Education is complete, go to Labour. I'm sorry, maybe I thought it and didn't say it at the beginning, but apprenticeship falls under the Ministry of Labour. We have about 22 FTEs that are responsible for the apprenticeship programs. So if we could do Educations, Skills and Training, we'll do apprenticeship later.
R. Masi: I guess I made the incorrect assumption that these scholarships were connected with the preapprenticeship programs in the high schools, and I take it they're not. That's fine; that's the answer, then.
B. McKinnon: I'd like to ask the Minister of Education a question. I would like to change the focus and ask about my school district, which is basically the city of Surrey.
Right now the city of Surrey is in a crisis situation when it comes to education. We have each year at least 2,000 new students coming into the city. We are probably the fastest-growing community in B.C., if not in Canada. I know it has been brought to the attention of the minister many times that Surrey is seventy-fifth out of 75 when it comes to school funding. I also realize that some questions have been asked on school funding, but my questions are mainly for my understanding of the funding. I wonder if you could explain to me why Surrey is in this position -- last -- in the way you figure out funding and what it is about Surrey that rates this amount.
Hon. M. Sihota: Let me make two points. One is that we have made enormous progress in Surrey -- and I think the hon. member would have to concur with that -- over the last four years. Second, given the growth in Surrey, which is phenomenal, the pressures in Surrey continue to be there, and we'll have to continue to deal with them.
Third, the funding formula is constantly under review. Based on representations made by MLAs from Surrey, we have refined that formula to put Surrey in a stronger position than it was before. It really is a function of growth more than anything else. I am the first to admit that there are challenges in Surrey, as I've said, and we will continue to deal with those challenges.
B. McKinnon: Well, maybe I'll ask this question on who is first in funding as far as the amount of money they get is concerned. Who gets the highest amount of funding in British Columbia? I've been trying to compare it to what Surrey actually gets in funding per student.
Hon. M. Sihota: I will get that information for you. The average in the province, I think, is $5,827 per student. I'll get an indication for you of exactly where Surrey sits on the scale.
[ Page 1539 ]
On the upper end, it will probably be an interior -- probably northern -- constituency because of some of the allotments that occur there. That would be my guess, but we'll get you that information in a few minutes.
B. McKinnon: The government has put this freeze on our schools that are so desperately needed, particularly in my riding. I will refer to Clayton Elementary and Lord Tweedsmuir Secondary, which has gone from 550 students to over 2,200 students now, and they're continually growing with the planning and the building in Surrey. About 2,000 new homes are going in that area, and we don't have any places to put portables in. With the freeze on, could the minister please explain to me what we are going to tell the people of Surrey is going to be a solution to our dilemma? People want their children educated, and they deserve an education. How are we going to educate these students when there is no place to go, no place to be?
Hon. M. Sihota: You should tell the people in Surrey that overall funding in Surrey, as a result of the changes we are bringing in this year, has increased by $7.7 million. You should tell the people in Surrey that core funding has increased for educational services in that community by $5.8 million. You should tell people in Surrey that $3.9 million has been provided in that constituency to cover enrolment costs. You should tell people in Surrey that $1.9 million has been provided by this government to recognize teacher salary increases in the agreement. You should tell people in Surrey that there has been a transfer of $1.4 million from teacher salary adjustments to the core, which recognizes a more even level of service in the core programs throughout the province. You should tell people in Surrey that there has been an increase for special education programs of $900,000 to reflect increased enrolment. You should tell people in Surrey that operations and maintenance have increased by $1.3 million. You should tell people in Surrey that administration has increased by $400,000. You should tell people in Surrey that service level changes, which were introduced in 1996-97, have given Surrey an additional $1.4 million. You should tell people in Surrey that per-pupil funding in that district is $5,359.
You should also tell people in Surrey that during the course of the last election campaign, your political party made the argument that we should reduce the amount of debt. Throughout the campaign, I heard from one end of the province to the other the concern that debt should be dealt with. As a result, we are in the process of reviewing capital expenditures. You should also tell people in your constituency that of the 109 major projects that were to go to capital funding this year, 19 have been impacted by the freeze. In other words, 90 projects will be proceeding. So, generally speaking, projects are proceeding in this province with regard to the incursion of debt.
[2:45]
B. McKinnon: It's all very well to tell the people in Surrey that we've spent all this money on education in Surrey, but I think the argument is that a number of students are not going to get a proper education if they don't have a school to go to, a portable to go to, the equipment or whatever.
I would also like to remind the minister of the NDP's promises before the election. The hon. members Priddy, Hammell and Smallwood -- all of them incumbents -- talked endlessly about the $103 million technical university that the NDP could build in Cloverdale. The Minister of Women's Equality promised: "The technical university at Cloverdale will be opening its doors in 1999 if the NDP is re-elected. Liberal candidates have said they will not build this university." The three MLAs also promised relief for Surrey's public school system, which suffers from serious overcrowding -- 300 portable classrooms -- and underfunding. It is last in B.C. in per-pupil funding, though, oddly, the NDP failed to deal with these problems in its first term in government.
The hon. minister from Surrey-Newton said:
"Unlike the Liberals, the NDP is committed to ensuring the needs of our growing community are met. Not only will the NDP protect medicare and education funding, but we will keep it public, accessible and affordable for everyone in Surrey."
Well, what's happened to those promises? So far your government is not keeping its promises; we are not getting the schools that we need. You're just breaking your promises. We can go on and on about the number of dollars spent, but as the Liberal Party always said, we would put students first. We would find the money to put into education by looking at other areas in government. What is the NDP doing to find more money to educate our children?
Hon. M. Sihota: I'm telling the hon. member that she can't have it both ways. During the election campaign, she went and told people that the sky was going to fall in, because of the level of debt in this province; she made that argument during the campaign. Now, she can't betray those people who voted for her by standing up here and saying that the government should increase the level of debt by building facilities that she campaigned against inferentially as a member of the Liberal Party. It's as simple as that: you can't have it both ways.
Of the 109 projects that were scheduled to be built, all but 19 are being built this year, and overall funding in your district has increased significantly. And I haven't heard anybody stand up in this House and say that this university is not going forward; in fact, that would be a misinterpretation of the evidence. In addition, we have significantly increased the post-secondary education facilities funding for that community. You can't come in here and have it both ways: ask for an increase in debt, ask for an increase in expenditures on the operating side and then come in here and say: "Well, the government is increasing the debt too much and is running a deficit." It just doesn't cut both ways.
Having said all of that, let me make the same offer to the hon. member that I have encouraged others during the course of these estimates to make. Namely, write me a letter saying to me that you want the debt increased for particular projects in your riding, and I will give it consideration. When I receive a letter from an MLA saying, "I want the debt increased in order to see this project built," then that will begin to have an influence on me.
B. McKinnon: The minister may very well say that the Liberal opposition wants to increase the debt. That is not true by any means. The hon. minister can find ways to put education first and find the money. We have seen over the past five years that this government has spent, spent, spent and put the province into this position of a large deficit. Now they're trying to put it over onto us, that it's our fault if we ask for something. It's because of this debt that we cannot have the schools and the classrooms to educate our children. I put the blame fully and squarely back in the hon. minister's lap. I will not accept the blame or your saying that I want to increase the deficit. I do feel that it's every student's right in this province to get a proper education, and it is this government's mandate to see that these children get properly educated. It's their spending habits that have created this problem, so don't try to put it into my lap, because I will not accept that.
[ Page 1540 ]
I would like to ask the minister if the funding for each school is per student. Does each student get a certain amount of money, or is it a lump sum given to each school district?
Hon. M. Sihota: Hon. Speaker, that question was answered yesterday. The answer is in Hansard.
B. McKinnon: I will pass this on right now and come back.
B. Penner: I have a question to the minister, and I believe the question would pertain to his portfolio of Skills and Training. I presume that now is an appropriate time to ask such a question. In late June, shortly after the Legislature reconvened, we were in this House debating Bill 5, the bill that dealt with interim supply, and I had an opportunity to ask the minister then a question pertaining to a program that occurs in the Fraser Valley approximately once every year. Unfortunately, it is not occurring this year. It last occurred in 1995 and was known as Job Fair '95. It's now planned to next take place in the spring of '97, so presumably it will be called Job Fair '97. I'm told that it's scheduled for March of 1997, but before further plans can go ahead there needs to be some assurance from the government, and particularly from this minister, that adequate funding will be forthcoming.
Just by way of background, hon. Chair, Job Fair '95, which I had the privilege of attending, was visited by more than 1,000 students from across the Fraser Valley. It's a fairly unique concept. Rather than simply bringing people into the schools and telling students what they may or may not be interested in, the Job Fair concept involves inviting people from across the community and throughout the Fraser Valley who are involved in various businesses or other endeavours to come and put up a booth under a common roof and present information to students who are interested in their particular endeavours. More than 90 different individuals and businesses participated in Job Fair '95 by setting up booths and presenting information to students. They weren't forced to learn about things they were not interested in; rather, they could attend those booths and speak to those people who were of interest to them. I can indicate to the minister that I participated as a representative of the legal profession and certainly advised students to reconsider their thoughts if they were seriously considering going to law school.
However, my question to the minister -- and I'll get to the point -- is: can the people trying to plan Job Fair '97 count on his ministry, Skills and Training, for funding for this upcoming year?
Hon. M. Sihota: The Job Fair funding was provided to this organization in your constituency, in July of 1995, by my predecessor. The amount provided at that time was $20,000. At the time, it was communicated to the school district, the chamber of commerce and community employers who were involved with putting together the fair that that would be a one-time grant. There is no provision in this year's budget for that purpose.
R. Masi: I'd like to get back to the topic of partnerships: business, labour and schools -- educational institutes. Partnerships for placement of apprenticeships are being developed. We understand that, and we understand that there's a high level of cooperation in terms of the educational institutes and business and industry. However, there are some reservations regarding the level of cooperation with labour unions. In some cases -- it's my information, and it's anecdotal -- there is actual blocking going on in terms of generating these partnerships from the labour side of the coin. I just wonder, in terms of the effectiveness and the future development of this program, whether the minister could comment on the position of labour.
I hope we're not getting over to a Ministry of Labour thing. I don't think we are.
Hon. M. Sihota: Let me explain. I've been going through Hansard trying to find a reference. For the member from Surrey who was asking me questions about debt, and some options, on pages 43, 44 and 45 of yesterday's Blues, we discussed these issues, including comments as they relate to Surrey. I would draw those to the hon. member's attention. On page 46 we dealt with some of the schools in Surrey, as well. I just want to make that point, because the issue was already dealt with in Hansard, and I think that if she familiarized herself with the debate that occurred then, she would have a better appreciation of the options available to government. I would encourage her to comment in writing to me with regard to those other options I raised as to how we can provide more facilities without increasing the size of the debt.
The second point I want to cover off is that this morning the hon. member for Delta North asked me about apprenticeship students in '96-97 in the K-to-12 system. It is anticipated that there will be an allocation of $1,118 for each student in the system, totalling $214,820 -- to answer his question in terms of budget allocation for that purpose.
Thirdly, with regard to the question as it relates to labour unions, if there are impediments along those lines, I have little patience for that. The first objective here is to provide apprenticeship opportunities for young people. Therefore, if they are showing resistance, I will take appropriate steps to push that aside.
R. Masi: Going on on the same topic, relative to skills and training, and possibly apprenticeships -- I'm not sure -- has the minister given any consideration to the unskilled new immigrants to British Columbia? We often hear a lot about importing skilled people, tradespeople, professional people. We often hear about the difficulties of highly skilled and highly qualified people receiving approvals and certification. But I would like to point out to the minister, through the Chair, that there is a large group of non-qualified immigrants -- some new Canadians; some will be new Canadians -- often with a farming background and, comparatively speaking, a fairly limited education. It is a concern to me that these people are not in a good position to move up the social continuum. It's very difficult to bootstrap your way up if you do not have access to skills training and educational programs. I would like to ask the minister if, in fact, there are specific programs for new Canadians. If there are programs like that, what sort of financial support is there? Could we have a description of those programs?
Hon. M. Sihota: A number of points. First, the federal government provides funding for those individuals the member alluded to. In my view, they have a responsibility here. We have an expectation that they will pick that up, and they do. Second, through the Skills Now component of the ministry, we do provide ESL training and skills upgrading generally. I don't know if I can break that out in terms of how many people who are new immigrants would apply for that, because I'm not sure if we keep the statistics that way, but they are eligible under those programs. We have about $2 million in the Skills Now portion of the ministry to do that. That is a
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combined amount under Skills Now, ESL and vocational training.
R. Masi: In terms of effectiveness, have we any idea at all of how many are successfully moving into the trades?
[3:00]
Hon. M. Sihota: There is follow-up. They do the ESL. They then go on and get their trade certificate. I'm advised that the employment levels for those people are very high. We could ultimately break down that information for that group for you if you want it. We can source it, but it will take us a while. We wouldn't be able to do it during the course of these estimates, but we can get you that information. If you'd like that, we'll make a note to make sure the hon. member for Delta North gets that.
R. Masi: My reasoning there -- and I may be getting out of this ministry -- is that often these people are maligned and accused of accessing social welfare programs, while I tend to think that maybe that's not the case, and training programs are more appropriate.
Anyway, to get on with it, in terms of career education and secondary schools, I believe that at the present time the funding is based on $1,118 per grade 11 and 12 student registered in any career program. Is that the correct number?
Hon. M. Sihota: That is the correct number. There are 192 students who would benefit from that.
R. Masi: I'm sorry; I missed that. There are
Hon. M. Sihota: There are 192 students in the K-to-12 system who are enrolled in apprenticeship programs.
R. Masi: That's apprenticeship programs. Right. Well, in terms of career education, though, there are co-op education, career prep programs and preapprenticeship under the general heading of career education. My concern here is obvious: will the funding for career education in total be continued at that level?
Hon. M. Sihota: This year's budget makes an allocation of $40 million for 36,372 students to take career prep, co-op and apprenticeship programs. That is more than we put in last year.
R. Masi: I'm glad to see the progress in that area. Is this funding directed or protected in any way?
Hon. M. Sihota: No.
R. Masi: Could I have the minister offer an opinion on whether it should be protected in any way?
Hon. M. Sihota: Boards do make provision for this in their budgets, and that's how we arrive at the number that we do. So I guess in some ways provision is made for it. Should we protect it or target it? To be honest with you, I haven't thought about it, so I'm not in a position to say. My general rule of thumb is that if it's not broken, then it really doesn't need fixing. If we came to the conclusion that people were sort of raiding this fund to provide for other programs, then that would concern me, at which point districts would get notification of it. You know, I tend to take very assertive action if people sort of move off of the direction that they said they were going to go in. At that point I would look at that. To date, we don't see that as a problem.
R. Masi: I guess my concern is that there would be different applications in the 75 school districts as to whether or not raiding is taking place on career education funds.
I'm also concerned about some districts that, in fact, do not avail themselves of career education programs. I'm wondering if there are any initiatives that would be taken in terms of motivating these districts that are not as enthusiastic about career education to move ahead.
Hon. M. Sihota: Of the 75 districts that existed at the time we did this, only two in the province -- and they're both remote districts -- did not provide funding. Other than that, they all did. Interestingly -- and I hope members note this -- the two that provided the most amount of money for these programs were Vancouver and Surrey.
R. Masi: It was my expectation that Surrey would be near the top of that. I've had a fair amount of experience with those particular programs.
In terms of CAPP, career and personal planning, I believe -- and correct me if I'm wrong here -- that the allocation was $95 per student under Skills Now.
Hon. M. Sihota: The funding in the K-to-12 system is $85.
R. Masi: Because Skills Now has terminated, where will the future funding come from? Is there any amount allocated per student for the future?
Hon. M. Sihota: As I said this morning, we are taking that Skills Now funding and putting it into base funding -- not all of it, but some of it. Some of it shows up here in the career prep, co-op and apprenticeship programs.
R. Masi: So I'm to assume, then, that the CAPP funding will come out of the $1,118 per student, and forget about the additional $85, as you say, per student. So there will a reduction in that program.
Interjection.
R. Masi: No? I have misunderstood, then.
Hon. M. Sihota: No, the $1,118 and the $85 are both funded. As we said, we're committed to protecting education.
R. Masi: At the present time, CAPP consists of career education and planning, and personal development. Are there any planned revisions to the personal development component specifically? It's my understanding, in speaking to field personnel, that of the three areas, this one is probably the one they find the most difficulty with in terms of teaching, acceptance and parental concerns. It's closely related, as I'm sure the minister knows, to the old guidance, health and personal development, which brings about a number of contentious issues relative to morality, values, etc.
Hon. M. Sihota: You're right; more specifically, the sex education component of that program generates a lot of comments from parents, students, teachers and trustees. I certainly
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get my share of comments on that. I am in the process of reviewing CAPP because of a number of other concerns about it. I guess that in the course of that review we will look into this. I've asked staff to look at some reconfiguration of CAPP and to have that review completed by the first week of September. I plan on being public in my conclusions about it some time in October.
R. Masi: In terms of the other considerations relative to CAPP, are we discussing the 30-hour components, the summer job components and all that in terms of requirements for education?
Hon. M. Sihota: We're discussing it all, but if I were you I wouldn't read as much into it as one could.
R. Masi: It leads me to look at the graduation requirements of the secondary schools. I've referred to this before in other speeches I've made in the House. If 58 percent of income assistance recipients have not completed school for whatever reason, it would seem apparent to me that the school system would have to widen the scope for graduation possibilities. My concern here is that in the sixties and seventies, the education system offered a fairly wide variety of courses and scope for graduation. In the early eighties there was a distinct turn to the right, a conservative turn, in terms of toughening the standards at any cost. Now, of course, the school system, because it's compliant, efficient and fairly effective, can adapt to almost anything that the ministry directs. At the time, the ministry narrowed the requirements for graduation to the point where a large component of students were unable to fulfil graduation requirements and were forced into a fairly narrow mode of graduation.
I would ask the minister again -- and I know we talked about this: are there any initiatives within the budget that would indicate any sort of move toward the stand-alone trades- and technology-based schools?
Hon. M. Sihota: Not for a stand-alone facility. As the hon. member knows, we are doing much work in terms of applied academics. Certainly I'm keenly interested in increasing apprentice and vocational opportunities and working more on the career prep materials that we already discussed a few minutes ago.
As I said earlier, during the course of this debate, one of my purposes here is to make sure that students and parents believe and see that the experience they have in the education system, K to 12, is one where they have confidence that what they're learning is preparing them for the economy that they're going to enter, whenever they enter it. That is a discernable shift, if I can put it that way, that was started by my predecessors and which I will continue. So that course would happen. I want to make sure that the skills gap between what you get when you graduate and what's required out there, and the relevancy gap between what you're taught and what you need to be taught, is as narrow as possible, so that there is a better linkage between education and requirements for our economy. We're moving in that direction as a province by virtue of the changes we started to bring in about two years ago. We'll continue to move in that direction. We'll also do that at the post-secondary education level.
[3:15]
I think I said this yesterday, that I also want to make sure that students very early on, around grade 8, begin to realize that they have opportunities and options that are available to them at that age. Too often, too many young people either tune out or give up hope that they will be able to get the type of post-secondary education training that they would like to pursue.
I'm struck by the number of students that I talk to who say to me, "If only I had known in grade 8 that I could pursue this option," or: "If only I had known that I could get scholarships, I would have attended to matters differently." I just think that our ability to penetrate the mind in terms of them recognizing the options that are available to them has to happen at a far earlier stage. They have to have a far greater range of options available to them.
These changes that we are discussing now -- the career programs, the apprenticeship programs, vocational opportunities, 30 hours a week in the working world, if I can put it that way -- are all types of changes that we're going to continue to accentuate so as to reduce these skills and relevancy gaps.
R. Masi: As I pointed out before, Skills Now was a dramatic and largely successful initiative, especially at the college level. It was very well received. The problem here, of course, is that it was a finite program of two years' duration. At the risk of being again redundant -- and perhaps this is more of a statement than a question, I don't know -- how will career education in schools be institutionalized? I think this is the important thing. Programs that rely on soft
I would like to be more specific here in terms of which ministry funds the careers program in the secondary schools. I have some concern here
Hon. M. Sihota: It's the Education ministry, so it's the education pillar of the three pillars: skills, post-secondary and education. So nothing has changed in that regard.
The second point is that I agree with your comments with regard to soft money. I have no time for one-off, one-year, one-month programs. The federal government has been remarkable in the way it has funded those kinds of programs with very little benefit. We're going to consolidate into hard money and hard options, including the opportunity to negotiate a conclusion with the federal government with regard to training funds under what was known as manpower training. I believe they want to devolve those funds to the provincial government; they want to devolve those programs, certainly, to the provincial government. If the funds are to be devolved, then we can have a serious talk about converting the array of programs, providing better focus and having training that's commensurate with the market niches that we see developing for British Columbia in the future.
R. Masi: In terms of the apprenticeship programs in secondary schools, just a quick question -- and again it may be the same answer. Which ministry funds the apprenticeship programs?
Hon. M. Sihota: Education, not Labour.
R. Masi: In terms of the partnerships programs generally -- business institutions and agencies -- how many of these
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programs are in place at the present time, how many businesses are involved, and could you give me an example of any companies that may be involved in this?
Hon. M. Sihota: In the initial phase we have a target phase of 200 placements, 1,000 placements in our second phase, and a number of proposals that were under negotiation which will result in 4,000 placements. They include food industry training, which is a program that we have been involved in on a pilot basis, and the Victoria Chamber of Commerce program of $250,000. The B.C. Manufacturers Association, the Open Learning Agency, Hunter-Palmer and the Vancouver City Savings Credit Union are all examples of the kinds of companies we have been working with. There are additional programs that we're targeting, which will be Community at Work, and the Open Learning Agency horizon and destination programs. That would give us a total of 1,200 placements.
R. Masi: I wonder if any certification takes place following participation in these programs.
Hon. M. Sihota: There are. For example, in tourism we have a program which is certifying 1,000 workers.
R. Masi: Are formative and summative evaluations going on?
Hon. M. Sihota: Yes.
R. Masi: It may be soon to do this, but is there, if not tracking already, any provision for tracking?
Hon. M. Sihota: Yes, we do track.
R. Masi: Are there any results?
Hon. M. Sihota: Yes, under the workplace education program, for example, we know that the food industry training pilot program that I referred to had, after 15 months -- a considerable amount of time -- 18 of the 22 still employed and earning approximately $10 an hour. We know that under some of the bridging
R. Masi: I have a few specific questions based on the estimates books, and we can move through these fairly quickly. I see where the Ministry of Education, Skills and Training has increased FTEs from 1,019 to 1,083, an increase of 64. Could you explain that increase and what it entails?
Hon. M. Sihota: I've already done that. It's all in Hansard, on the record. I think it was the first or second question I had.
R. Masi: In terms of total asset acquisitions -- this is on page 93 of the estimates book -- the dollar figure has more than doubled, to over $5 million from over $2 million. This is a significant increase. I just wonder if I could have a breakdown of these increases.
Hon. M. Sihota: We'll get you an explanation. I'll put that in writing to you. Right now we just can't seem to locate the exact answer.
R. Masi: In terms of grants and contributions, there is a significant increase in expenditures from $94 million to over $134 million. Could I have a breakdown on these?
Hon. M. Sihota: I answered that yesterday.
R. Masi: Under contributions -- I believe it's in the supplement to the estimates on page 46, section 82 -- could we have specific examples of the public bodies, agencies or any organizations that receive payments?
Hon. M. Sihota: I think I answered this one yesterday. We'll go back and check.
An Hon. Member: Don't take a chance on it.
Hon. M. Sihota: You don't think I did, eh? Then in that case, we'll get you an answer. At this point, I don't want to be repetitious. I have too much respect for the rules to be repetitious.
R. Masi: Did we have the answer or not? I'm not sure.
Hon. M. Sihota: It's not here. We'll get that answer. If I can explain, I thought we had moved out of the Education side of it, so the staff who would have had that information aren't here right now to provide it. That's why I can't give you that specific answer, but I will get you that before the conclusion of estimates.
R. Masi: I'm still somewhat confused. Perhaps I need some sort of in-service training on this, but I was of the understanding that the skills development line was Skills and Training. I know it's under the umbrella of Education, Skills and Training, and that's the line I'm looking at here. Am I wrong?
Hon. M. Sihota: Okay. Sorry, there's some confusion on this side of the House as to what you were asking. I think we've got it, then. Yes. On the skills development side of it, there is a total allocation of somewhere in the neighbourhood of $176 million. That includes $3 million for phase 1 and then it works its way up. There are a number of organizations that are contracted. I can give them to you by community if you want. So if you want something in Delta, we'll find that for you. But I just have Abbotsford here, because it's the first one that comes out. Through Abbotsford-Matsqui Community Services, they'll provide training and job search services through an integrated curriculum, combining career planning, life skills, personal management skills, employment skills -- 150 participants -- for an allocation of $159,000.
School district 33 in Chilliwack will get something in the neighbourhood of $73,000 to deal with a program called Starting Points -- 138 participants. The West Coast Training Institute in that community will train up to 576 applicants on issues relating to barriers to employment.
In your constituency there will be funding for the Surrey-Delta Immigrant Services Society job club for new immigrants:; 84 clients; $225,000. Buxton Consulting will engage in an assisted job-search program that will provide assistance for 324 clients, totalling $392,694. Surrey Rehabilitation Workshop will provide a program for 600 clients, where clients are actively involved in the identification of their employment skills and of barriers to employment, and develop career action plans; that will be $345,693. Options Unlimited in New-
[ Page 1544 ]
ton -- I don't know if that's in your area or not; it's in your area but not in your riding, perhaps -- will also receive a grant of $327,000 to work much like the Surrey Rehabilitation Society on that kind of program. You can phone them up, let them know that you just argued for that in the Legislature, and thanks to your hard work, they got all this money.
[3:30]
R. Masi: I believe I'm still a director of the Surrey Rehabilitation Society, and I'll go with gift in hand. In terms of section 81 there, that's under grants. I'm not sure if this has been answered or not: are grants and contributions separate, or are they virtually the same thing?
Hon. M. Sihota: Grants are grants; contributions carry conditions. That's essentially the difference.
I do have an answer to your earlier question, which I said I'd get before estimates are complete. The reason for the increase in asset contributions is that we are expanding to 60 offices -- additional outlay for office equipment, computer training and vehicles.
R. Masi: Having visited an office, I'm very impressed. This is a move in the right direction. In terms of advertising and publications, again in the supplement to the estimates, is the $326,000 an increase or a decrease from the previous year?
Hon. M. Sihota: We don't know whether that's an increase or a decrease, but it strikes me as a rather nominal amount.
R. Masi: It's strikes me as a nominal amount also, and I guess that's my concern here. In terms of the impact required to implement these programs -- and I think they're vital programs -- is this dollar figure adequate in terms of the $3 million-plus designated to advertising in publications in the total Education, Skills and Training budget?
Hon. M. Sihota: I thank the hon. member for bringing that concern to my attention. I'll look into it; I'm surprised at the amount as well. Obviously we need to promote this program, so that's a valid point.
R. Masi: I'd just like to thank the minister for his forthright answers to my questions today, and I'll turn it over to a colleague.
V. Anderson: I'd like to ask about Magee Secondary School in the Vancouver-Langara riding. Is it one of the 19 that are on hold at the moment? Perhaps he could advise me of that at this point.
Hon. M. Sihota: I know I answered that question yesterday.
V. Anderson: I believe he was asked yesterday about that. He was taking it on notice and would provide the answer at a later time. It was raised yesterday, but I don't think the answer was provided.
Hon. M. Sihota: It's one of the 19.
V. Anderson: What is the time frame, then, for those folks? This program has been ten years in the making. They have come forth three different times now with results and are just in the process of completing the performance evaluation review. They are curious about the time frame which is coming up now as a result of this.
Hon. M. Sihota: The time frame is six months for the review.
V. Anderson: Is the minister saying that after they've done the third set of architectural drawings, and after they've just completed a performance review on the third set, it's another six months beyond that?
Hon. M. Sihota: No, I'm saying that the review of capital projects will be concluded in six months from the date of announcement -- so about four months from now.
V. Anderson: When you're looking at those capital reviews then, I trust that the criteria the minister was talking about earlier will take into account the condition of the school at the present time. It's over 67 years old. It has not been maintained recently because of the promise that new construction would be taking place, and so the labs and the equipment there are in very dire and unsafe conditions at this point. Will these things be taken into consideration in doing that review?
Hon. M. Sihota: They will. And as I've said repeatedly, I will also encourage every MLA in this House to write to me saying that they would like to see an increase in the debt in order to fund that kind of project.
V. Anderson: I cannot resist responding to the minister in that regard, because I think all of us in this House -- on all sides of the House -- said that education was a priority. It wasn't a question of increasing debt to provide education; it was a question of reducing debt in other areas so that education would have a priority. Am I to understand that the minister is now saying that for this government, education is no longer a priority -- as we indicated as well in the election -- that other items are taking priority and that it is only debt if it is education and that it's not debt if it is any other project that the government is undertaking?
Hon. M. Sihota: No, I am only saying what I said yesterday in Hansard, and I will find the hon. member the reference in a minute. He knows full well that education is a priority with our government. I don't think even your critic has argued with that point.
I want to make it clear that if hon. members in this House want to see an increase in the debt, then they should write to me explicitly stating that they want to see an increase in the debt. If they believe that there are other options in terms of deferring other projects in their constituency -- for example, if they think that Magee Secondary is a higher priority than other debt-related expenses in their constituency -- they should rank them in order when they correspond with me. That will guide me in terms of having a clear understanding of those projects in your constituency, hon. member, which you feel government should incur debt for.
V. Anderson: Is the minister saying that he will provide us with a list of every expenditure that the government is going to consider in each constituency in the province? Is he going to give us the full list of all government expenditures from every department of government so that we can choose our priorities? Is he recommending, then, that we should have
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full, open-house meetings with all our constituents so that the constituents, not ourselves, can put in their priority?
This particular school has been the priority of our school board for over ten years. Now the minister is saying that he wants the council, the city hall, the health department and every aspect of government to come together and give a priority for each government-funded project within the province. Is this what I am hearing within my constituency? Is this what I am hearing the minister say?
Hon. M. Sihota: I'm saying a number of things. Let me be very explicit and very clear. Any MLA who does their job -- and I know the hon. member well enough to know that he falls into this category -- knows full well what capital projects are under consideration in their constituency, because they are in and about their ridings. They have a good idea as to what is under consideration and what is required. All I am saying to you, hon. member, is give me your list of priorities in your constituency, because I know that as an effective MLA, you know what is under consideration in your riding.
The second point I want to make is that you can't have your cake and eat it too. You can't campaign saying that we have to lower the debt and then, on the other hand, turn around and say: "Increase the debt for projects in my constituency." You can't have your cake and eat it too. Everybody in this province, because they know that we have to deal with the debt issue, will have to swallow some projects that are under consideration in their constituency. So I want to know which ones you would place in that category out of the projects you know are under consideration in your riding.
The Liberal Party -- and with respect, I don't want to be repetitious; as there are a lot of members in this House, perhaps they are hearing it now -- made an issue of debt in the last election campaign. The public made it clear to us that we had to deal with debt, and we are going to deal with debt. That doesn't mean we are going to vacate our commitment to education. The budget speaks for itself. We are the only government in Canada that has increased the level of funding for education year in and year out. As the earlier debate noted, we are the only government in Canada that has taken steps to protect education in light of the determinations made by the federal government in terms of their off-loading and the revenue impact that this has on the Minister of Finance.
We are going to protect education, and we are going to deal with debt. So far, 19 out of 109 projects have been deferred, and Magee Secondary is one of them in the education field. So just give me your list, hon. member, and ask explicitly that the debt be increased. I've made that point repeatedly during the course of this debate. I've said that it applies to all MLAs. I've gone as far as telling MLAs that if they heckle me during this session on my side of the House, they would not be considered for any debt allocations for their riding. They've been remarkably well behaved, and all I can ask is for you to show the same type of courtesy. Don't heckle. Just give me your list, and we'll make those decisions.
V. Anderson: Is the minister speaking on behalf of all the ministers of the government at this point, indicating that each ministry of the government is taking the same stand as this minister, that only the MLAs will be able to comment and speak to the minister now -- not the constituents, not the school boards, not the councils, not the constituent groups; they are no longer the people who speak to the minister? Is he saying that on behalf of every minister of this government?
Hon. M. Sihota: I will listen to school boards, colleges, universities, municipal leaders, parents, students and MLAs. I will hear from you. Then I will make a determination. Now, I may not be able to meet with every group in every corner of this riding that wants us to incur more debt. In fact, I won't be able to do that, because physically I can't do that. I've already made that point. But I will be most interested in hearing what members of the Legislature have to say about this matter, including the venerable member for Vancouver-Langara.
[3:45]
A. Sanders: I've taken the bait. I must rise to remind the hon. minister, our representative for education in British Columbia, that following the last election he has been appointed, not anointed. I would appreciate seeing that his comments represent that.
Hon. M. Sihota: What's the difference?
L. Stephens: That is a telling remark.
I have a number of questions today, and I'd like to start off with the distribution of gender equity funds and the grants that flow through this ministry to schools for a number of areas. There are funding areas under the distribution of gender equity funds. I have in my hand the ministry's '93-94 statistical supplement to the annual report that speaks of these funds. Perhaps we could start by asking the minister what total amount in your '96-97 budget is for the gender equity funds.
Hon. M. Sihota: I dealt with those issues yesterday. In the past we have made allocations of $5,000 to $10,000 for gender equity -- related projects. The hon. member for Okanagan-Vernon, in my view, made an appropriate point with regard to what kind of impact these funds were really having. I don't think that the kind of follow-up that would really give us a good read is there. On reflection, based upon her comments, it would be my view to not to make those expenditures this year until such time as I have what I would consider an appropriate mechanism for monitoring and evaluation in place.
L. Stephens: Just going through the different categories that these funds are allocated under, they've been falling every year -- the percentage of funds that have been going to these particular areas. Curriculum development is one; girls and women in math, science and technology is another; learning resources; policy development, staff and professional development; sexual harassment and violence prevention; and women in leadership -- that one has fallen quite significantly. I heard the minister say that he is going to review these programs to determine whether or not they are results-oriented and if there is some benefit to having these kinds of grants available. If that is so, I wonder if the minister would care to put a time line on when he would have those results in hand.
Hon. M. Sihota: I will have discussions with the Minister of Women's Equality, and then we will make some determinations. I doubt if I'll have those discussions until the early fall, simply because of scheduling. It may be that at the end of the day, based on the representations your colleague made, we will not make any allocations out of this ministry but perhaps consolidate the way in which we deal with these appropriate issues through the Ministry of Women's Equality.
L. Stephens: I wonder if the minister would comment on curriculum around women's issues, particularly at the high
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school level, and specifically on whether or not he thinks it might be appropriate to have a women's studies course as an elective at the high school level. I also wonder whether or not the minister feels that in the English course, for example, the study of women authors writing about women would be an appropriate addition to the curriculum. I'm thinking of Jane Austen, the Bront�s and Margaret Atwood perhaps. I wonder whether or not these particular individuals and those kinds of studies would be an addition to the curriculum at the grade 11 or grade 12 level.
Hon. M. Sihota: I have no difficulty whatsoever with considering that. However, I don't have the staff from that portion of the ministry here, so I don't know to what degree we've already started to make those changes. I do think that that's the kind of cross-ministry issue that should be dealt with by my ministry and by Women's Equality. But I don't have difficulty doing what the hon. member is suggesting. I don't know at this point whether we can do it or the degree to which we can do it, regarding curriculum and so on, but those are all appropriate concerns, in my mind.
L. Stephens: As an extension of that, I wonder if the minister would comment on counsellors. At the high school level, as the minister knows, there are counsellors who advise students on appropriate career paths. The minister spoke earlier about the opportunities that students have -- and wish they had been more aware of in grade 8, for example. I wonder if the minister would comment on whether or not he is contemplating requiring further or different training around counselling skills at the high school level, in order to look at those increased opportunities for students -- not specifically for women, but including them -- in non-traditional roles and perhaps to make sure they are aware of the opportunities that are out there for them.
Hon. M. Sihota: Yes, I've already advised staff that I wish to see an accentuation of that work in the system. They tell me that we actually do some training and in-service work already, but I've indicated to them that commensurate with the values of this government, it's important that we accentuate that work.
L. Stephens: I'd like to ask the minister about the facilities review and whether or not there is a facilities review in progress other than the capital planning that is frozen. It was my understanding that there would be a review of the physical properties of the Ministry of Education to determine the state of the physical plant and whether or not there needs to be some environmental upgrading and earthquake preparedness, as well.
Hon. M. Sihota: My understanding is that that is occurring.
L. Stephens: Is there a desired date of reporting to the minister?
Hon. M. Sihota: I don't know if staff have a desired date on which they want to report to me. I haven't given them a date.
L. Stephens: Would the minister perhaps elaborate on what he would like to see as a result of this facilities review?
Hon. M. Sihota: I'm only giving you what was in my briefing material when I read it. I haven't followed up on it much more than that.
L. Stephens: Perhaps that would be one thing the minister would care to commit to provide to the opposition when he does have it available.
Interjection.
L. Stephens: Thank you. The minister just indicated that he will.
I have a couple of questions about the capital projects. I am not going to ask specifically about the capital projects freeze, but I'd like to talk a little bit about how those capital projects are facilitated. I'd like to know if the minister has decided that a four- or five-design structure would be desirable, that school districts would have a choice of four, five or six -- pick a number -- designs for an elementary or a senior secondary school, and whether or not the minister feels that may help with the kinds of costly structures that we see in some districts.
Hon. M. Sihota: We have encouraged districts to take advantage of stock plans that we have. In order to give them incentive, we have said that 50 percent of the savings will flow back to the district if they do take stock plans.
L. Stephens: I wonder if the minister has also considered the lowest-bid policy. Our particular district has had many difficulties around this lowest-bid policy. The contractor bids can't deliver. There are all kinds of problems, cost overruns and the whole ball of wax. I wonder if the minister is contemplating looking at this particular policy, if he is aware that this problem is there and if he has any appetite to do something about it.
Our particular district is not the only one that suffers from this. There are many others around the province. It does make it very, very difficult to plan a school year or to plan for the movement of children into these facilities. It generally makes it a very difficult process for everyone involved. Perhaps the minister could comment on lowest bids and what he thinks should be done.
Hon. M. Sihota: I will only say that we will accept and consider bids for projects that fit the considerations that I outlined in response to the member from Okanagan North, which were in Hansard yesterday. I'm sorry, I don't have the reference here that I can draw to the hon. member's attention. I'm just trying to find it quickly. If they meet the criteria that I outlined on pages 43 and 44 -- particularly with regard to benefits to society -- in yesterday afternoon's sitting, part 1 of the
L. Stephens: I apologize to the minister for not having seen this.
I have another question around the capital projects, and that is about using project managers. If the minister could indicate whether or not that has been covered, I will look that up in Hansard as well.
Interjection.
L. Stephens: Project managers? Thank you.
That's another area our district has been advocating that the ministry give its approval to in order to facilitate these projects in a timely and cost-effective way. I wonder if the minister would comment on whether or not he is considering
[ Page 1547 ]
making it an option up front for the school boards to put these project managers in charge of making sure that the project goes along smoothly.
Hon. M. Sihota: I will have to defer an answer on that until after the dinner hour. I will talk to my staff and give you an informed view on that. There's no point in me giving you a general answer. The appropriate staff person isn't here right now, but I'll definitely do that after the dinner break. I think we might be doing second reading on a bill, but after that finishes, we'll be back to this.
[4:00]
L. Stephens: On the 30 new school-based child care spaces, some of the 789 spaces are caught up in the capital freeze. I just want to say that I think that's important. Having those child care spaces in schools is important, so I would encourage the minister to look at those projects favourably and expeditiously.
The ombudsman's report highlighted some interministry and intergovernmental issues around child care and was looking at the education system as one of those critical components. If the minister was listening, or if he has seen some of the Hansard, it has been a particular concern of mine that we need to have more integration around the education system of services to children and families. I wonder if the minister could perhaps comment on anything that is included in his estimates for this coming year that would help facilitate those kinds of services to children in communities.
Hon. M. Sihota: Yes, we are participating in the work and the dialogue with Ms. Morton on that very issue to bring about some of the commonsense efficiencies which we all agree need to be applied.
L. Stephens: Is the ministry in consultation with the PAC organization, the parents' organization in the province? I know they have a number of issues and views around participating in the school system as well. Many of those individuals and groups in not all but some of the districts around the province feel that they are not able to participate in the manner that they would like to. I wonder if the minister is continuing the dialogue with the DPACs around the province in reaching some resolution on perhaps having parents' rooms in the schools, which is another issue that deserves some merit.
Hon. M. Sihota: I haven't had the opportunity to meet with the parents' advisory councils, other than individual ones in different constituencies, so I don't know the degree to which the ministry is having those discussions. I know that my ADM of Education does engage in dialogue with that organization, so I would suspect the issue has come to the ministry's attention.
That's quite a wish list that the hon. member is building up here. I know the hon. member was campaigning on it during the election campaign and was expressing concern about, generically, government's ability to fund and to raise revenue to develop its programs. I'm also mindful of that backdrop as I answer these questions.
L. Stephens: I am mindful of that background, as well, and I think that if the minister would care to take a look at what has been said, he would find that the support of education is something that this member and this side of the House take very seriously. That has been demonstrated time and again, which is why those of us here are having this conversation.
On that point, I have one last question for the minister, and that is whether or not the ministry is undergoing the program review of the ministry for policies, practices and procedures with a view to efficiency and effectiveness of the ministry. And is there an appetite to downsize the ministry or decentralize the ministry from Victoria?
Hon. M. Sihota: Yesterday I answered the questions about the review process, which commenced a week ago.
L. Reid: I would like to touch on one or two issues around home schooling and around special education. I know my hon. colleague from Okanagan-Vernon has asked the basic questions in terms of the number of students and the number of FTEs. My interest centres solely on accountability frameworks in both of those areas and in terms of accountability for home schoolers. Certainly I know that there are a number of issues that this ministry has been aware of over the last two years, because much of that correspondence flowed through my office when I was the critic for Skills and Training.
One of these issues is parents who choose to home-school their children when there is an issue around the quality of that home schooling. I need the minister to respond in terms of any kind of appeal process or accountability framework. It seems to be there in writing, but there seems to be zero accountability for any kind of appeal process. If indeed other family members or other community members find fault with that level of schooling, there seems to be nowhere that they can receive some kind of response to their concerns. Could the minister kindly comment?
Hon. M. Sihota: Do you mean in a situation where parent A engages in home schooling and parent B is concerned about the quality of that educational experience, but has nowhere to go to complain about the condition or the quality of the experience of parent A's child. Have I got it right? Is that the point you're making?
L. Reid: That was not the example; that one bears a response as well. I will cite two examples specifically for the minister: (1) a grandparent having issues around the quality of schooling and having no appeal process; and (2) members of the community who believe that the child is receiving no home schooling, and they have nowhere to turn. So if there's a process in place for any of those scenarios, I would welcome the minister's response.
Hon. M. Sihota: I'm sorry, I don't have a response at this point. I understand the concern now, but I don't have a response that I can give to you.
L. Reid: I might just flesh it out for the minister, because I do trust that he will get back to me at a future point. What the act says is that the superintendent can be contacted, and he or she can make the determination on whether or not there's a program in place. When the superintendent makes the determination that there is no program in place, the process comes to a grinding halt. So that is specifically the area of interest for my constituents and for a number of constituents around the province. Perhaps I can ask the ministry officials to wrap their minds around that for a future response, perhaps future legislation or at least regulation that would suggest that there is a necessity for accountability when you're delivering a home school program. For me, speaking as a teacher, it's not enough
[ Page 1548 ]
to say that somebody's in a home school program, if there's no way to evaluate its effectiveness in any way, shape or form.
The same line of questioning would reflect on special education. I've stood in this chamber for many years and heard the government response that the dollars for special ed go to the school districts, and then they choose how best to allocate those funding dollars. The issue for parents is that if the district doesn't choose to make those allocations, what is the appeal process, what is the accountability framework where they can
Let me give the minister an example. One of the best examples is that child X moves from district X. The child was receiving decent services, let's say, in Richmond -- as an example. They move to a different district in the province, and there are no services for that particular special need. It seems to me that we've been lacking in that regard. Those dollars need to follow that student, and there needs to be some recognition that the student's needs do not change based on geography. That hasn't been the case with this government's particular term of office or its preceding term of office. The dollars come to a grinding halt, and the government takes the position that it's hands off, because they have invested the dollars in the school district. I would ask the minister for a response on how best to measure accountability of those funding dollars for specific students, whether they move around the province or not. Could the minister kindly comment?
Hon. M. Sihota: A student who moves from district A to district B will be eligible for special needs funding, and will be funded for special needs funding in that new district. There is no assurance that the quality of the special educational attention that that student is getting will be identical to that which they were getting in the district they left. It could be better; it could be inferior. It is known to me that parents do move to particular districts because some districts have a better reputation for providing special needs funding than others do, resulting in the fact that there isn't uniformity in the quality of the special needs assistance that a student gets. I have told staff that I am going to be taking a look at the special needs area -- in particular, the training provided to the people who provide the service to the students -- and taking a look at the kind of in-service work that we can do to have a higher quality of experience for the student.
But it is true that different districts offer different levels of programming, and it is true that to date we have left it to districts to make determinations as to the level of services they will provide. It is also true that provisions in collective agreements may impact upon training, and that is another variable in the equation that we have to deal with.
L. Reid: I appreciate the minister's remarks in terms of there perhaps not being uniformity across the system; however, that is absolutely the expectation for regular education, if you will. So it seems to me that when those gaps occur in the special education system there needs to be some kind of process in place. Again I come back to the question of whether or not there is any accountability framework.
I've had constituents, and this minister probably has as well, who have gone the school board route in different areas of the province and have met with their MLA. They need some assurance that the minister is at least looking to close some of those gaps in the system, and I'm not making any reference to the training issues around qualified personnel. The issue for a lot of parents in this province is that they arrive at school X and are told: "I'm sorry, the dollars are back in the other school district." It seems to me that we all understand that this is a provincially funded system and there is one pot of dollars, so perhaps I'm looking for some flexibility, some fluidity, around moving those dollars. We do know the dollars are there; they just don't end up being attached to the right student and the right place. It seems to me that's not a tough request. Again, I would ask the minister to wrap that into his thinking in the next number of days.
In terms of special needs students who are of an age where they leave the public school system -- they are either 18 or 19 years of
Hon. M. Sihota: We do allow students who are past the age of 18 to receive funding for special needs purposes if they are still in the system.
L. Reid: How long might that length of time be? It seems that for regular education students, it could be upwards of two years. Would the same parameters exist for special needs students?
Hon. M. Sihota: It's my understanding that we fund for what is laid out as to what they need for school completion.
L. Reid: In terms of the bridge to the workplace, there certainly has been a lot of discussion on the Skills and Training ministry, both with yourself and your predecessor when I was critic for that area, about how important it is to bridge to the workplace for regular education students. It seems to me we haven't put as much effort into bridging to the workplace for special needs students. This is a population that truly needs that assistance -- that fostering, if you will, of the process. Is there any plan in place on behalf of this minister or ministry to look at some of those programs?
[4:15]
Hon. M. Sihota: Through the ministry, we do provide funding for job training for special needs students to deal with the concern that the hon. member has. We also, if they are able and wanting, allow them to participate in the career programs that are offered in different districts.
L. Reid: I'm picking up on the minister's comment on programs that are offered in particular districts around the province. The difficulty is that these programs are not universal. Could the minister comment on how best to access those dollars? Would that be a situation where the person must go through their school, or is it something they can do through a post-secondary? Is it a high school allotment of dollars or a post-secondary allotment?
Hon. M. Sihota: It's a K-to-12 allotment.
W. Hurd: Can the minister tell us whether any allocation has been made in this set of estimates for a thorough review of the School Act?
[ Page 1549 ]
Hon. M. Sihota: I don't know. I hadn't planned on it. Well, I wouldn't say I hadn't planned on it; there's always the opportunity to review the provisions of the School Act. Perhaps the hon. member could be a little more specific, and I can tell him whether or not.
For example, we're just making some changes as a result of amalgamation which will mean that there are changes to some provisions of the School Act. In fact, I think we introduced that legislation in the Miscellaneous Statutes Amendment Act. In that context the answer to the question would be yes, but in another context the answer could be no. Perhaps the hon. member could be a little more clear in what he's asking.
W. Hurd: Perhaps I can be a little more specific. Given the fact that the province has now returned the collective bargaining agreement with the province's teachers to a centralized bargaining process, is an effort going to be made to review the contract language in the
Hon. M. Sihota: If it's being violated, I'm sure staff will let me know.
W. Hurd: That's just about the quality of the answers we've been getting out of the minister so far. I'm sure if he has talked to a number of interest groups in the system, they will advise him. The B.C. Principals and Vice-Principals Association certainly advised me when I was critic. They are very concerned about the erosion of provisions of the School Act in terms of the collective bargaining process that has occurred during the previous four years with some of the school districts in the province. I guess what I'm looking for is some commitment from the minister that he acknowledges that there could be a problem there and that some effort will be made to review the collective agreements, with the aim towards instructing the province's bargaining committee to come to grips with some of those discrepancies if they exist. I can return to my first question. Is he, as minister, aware of any problems that have occurred with existing collective agreements? Is there going to be a commitment by this government to uphold the current provisions of the School Act in British Columbia?
Hon. M. Sihota: I have a request to meet with the Principals and Vice-Principals Association. So far we haven't been able to wrap up a date. I'll hear what they have to say about that issue before I make any determinations.
W. Hurd: Can the minister tell us, then, whether he knows if the provisions of the School Act with respect to days of instruction are being met under the current collective agreements that govern the teaching profession in British Columbia? First of all, I'll ask him whether the days of instruction are being met.
I guess my second question would revolve around the issue of year-round schooling. I don't know if that has been addressed in previous discussion. If it hasn't, I wonder if the minister could tell us where we are in terms of the number of districts and the number of schools that might have availed themselves of the opportunity to pursue year-round funding in order to improve their position in the capital projects that may be awarded to that district and perhaps to their individual school.
[J. Pullinger in the chair.]
Hon. M. Sihota: On your first question, my information is that they are in compliance with the instructional days. With regard to your second question, the answer is yes.
W. Hurd: Just one other brief question in terms of the instructional days. On the professional days that are allocated throughout the province each year, can the minister just clarify: are those a matter of across-the-board negotiation? Are they subject to collective agreements? I wonder if you could just advise the committee of how the non-instructional days are determined within the school system in British Columbia.
Hon. M. Sihota: We set the school calendar that indicates the number of professional days that are available.
W. Hurd: I wonder if the minister can tell us, in light of the fact that, I guess, we are competing with other provinces in Canada, whether the ministry makes an effort to verify or cross-reference the number of instructional days and the number of non-instructional days in this province and perhaps compare them to what's happening in other jurisdictions in the country -- where B.C. might rank in terms of the number of days that students actually spend in the classroom.
Hon. M. Sihota: Yes, we do look at that, and we are comparable. I think it's about 186 days.
W. Hurd: I wonder if the minister could tell us where that ranks, then, in terms of other Canadian provinces. Is 186 days the average, or is it on the low side? I think parents in British Columbia would be interested to know where their province stands in terms of the number of days their kids are in the classroom.
Hon. M. Sihota: It's our information that it's close to average. We will get you the rankings.
W. Hurd: I have been trying my best to follow this set of estimates carefully, and certainly I think the questions that have been asked have been excellent ones. I wonder if I can ask the minister a very general question, though, because during the time I spent as critic for the Ministry of Education, I certainly was advised of areas in the system where parents and trustees, principals and vice-principals, felt that a lot of money could be saved. They often talked about site-based management provisions, in which some schools were given an opportunity to manage more dollars on the operating side, particularly with respect to dealing with in-service issues related to janitorial work or whatever. It was more of an opportunity to participate in the budget planning for their district, but it would also save money.
In the global context of this huge ministry -- I don't have the figure in front of me, but I assume it's around $3.8 billion -- I wonder whether the minister has any ideas, from what he has heard during his time as minister, where the system can save money. Given the fact that looking down the road, we will be seeing shortfalls in revenue projections for forestry and other taxable revenues, within the global budget there is going to be the need to identify efficiencies. I wonder if the minister
[ Page 1550 ]
could take a moment to advise the committee where he feels a system that spends so many capital dollars each year can perhaps realize some real efficiencies and put that money back into the classroom where it can do the most good.
Hon. M. Sihota: We're doing that regularly. I hear a lot of ideas, and we follow up on those.
W. Hurd: Perhaps I can ask the minister whether the ministry has given any consideration in its funding formula to encouraging kids to stay in school. I am aware that one of the initiatives underway in other provinces is to fund based on the number of kids in the system at the end of the year, as opposed to those who might be in at the start. The reason for that initiative in other provinces -- I think this is being done in some districts in Alberta -- is that once the funding allocation is made in September, the ministry doesn't know or care how many kids might leave the system by the end of the year.
As the minister well knows, there are some districts in the province where the dropout rate is higher than others. The concern expressed from those districts is that there appears to be very little direction or initiative from the ministry in encouraging those kids to stay in school, because the funding allocation has already been made. Perhaps I can ask the minister whether he or his staff have reviewed what is being done in other provinces, and whether any consideration is being made to provide some financial incentives for districts to be accountable for what happens to their students during the course of the entire school calendar year.
Hon. M. Sihota: The hon. member will be pleased to know that this year there will be a very high-profile and effective program built around staying in school to the point that -- if my crystal ball is right -- by next year he'll be criticizing me for the degree to which that is a high-profile program. But I can tell him that we are soon going to launch a very high-profile program along those lines.
W. Hurd: I have no desire to break the rules of the House by engaging the minister in a debate on future policy, but the initiatives in other provinces have been devoted to recognizing some sort of incentive system in the funding formula for districts that do make an effort to keep kids in school. In some districts it is an onerous challenge, where individual time has to be made by the school, the principal and the staff to deal with dropout problems in specific schools.
In this grand initiative that he sort of announced today, I wonder if the minister can give us some idea whether or not he believes there should be some financial incentives for districts that do launch a major initiative to track their enrolment, to ensure that the dropout rate achieves certain targets of accountability and success, and whether that will form, could form or should form the basis of such an initiative.
The Chair: Before recognizing the minister, if he is going to respond, I would warn the member that that is future policy and therefore not in order.
Hon. M. Sihota: Because of my respect for the rules, the only comment I would make is that we are working on an initiative, and he will see that in due course.
W. Hurd: Fortunately, the dropout rate in the province is past policy as well. It's been a concern to parents and to people who fund education and pay for it with their tax dollars. I believe 18 percent of it comes out of the tax levy on property in the province.
I want to ask the minister again about the entire accountability issue, and I know it's been raised by other members in some detail. I am certainly aware that the ministry makes a determined effort to catalogue statistics on test performance, on enrolment and dropout rates, and on schools that might be in trouble. I guess the concern that parents and students might have is that there appears to be no accountability at the end of the day. The ministry collects these statistics, and nothing changes.
I wonder if the minister is aware of the drive in other parts of North America towards achieving greater accountability for results and the lack of results in the system, and whether he sees the need to change the way in which the ministry deals with those statistics and holds individual school districts, and perhaps even individual schools, accountable for the successes as well as the failures.
Hon. M. Sihota: That's an intriguing comment. Let me ask the hon. member this question: given the fact that I'm looking at everything these days, does he have any suggestions to make to this government in terms of what kind of mechanism he would recommend be put into place? I'm always interested in what the opposition has to say. What mechanisms would he encourage us, as a government, to put in place to hold individual schools responsible for those outcomes?
[4:30]
W. Hurd: I don't often get a chance to answer questions on this side of the House, and I welcome the opportunity. But certainly the minister is aware of the perceived advantages of more site-based management in the system, where dollars are allocated to a local site, sort of bottom-up instead of top-down. Certainly I think we're dealing with the possibility of some financial incentives for schools that do achieve better results in terms of enrolment and accountability. I guess the minister will hear during the course of his tenure as minister, about that lack of accountability in our system; about the fact that schools
Interjection.
W. Hurd: Well, the minister is looking for suggestions and I've given him one: the possibility that schools can be given more opportunity to manage their budgets directly, which is happening in other jurisdictions. I know there are some experiments going on in Alberta, for example, and in other provinces where schools are given the right to opt in or opt out in terms of how they manage their budgets.
I guess the reason I'm asking the questions is that other jurisdictions in the world are striving, as the minister knows, to try and hold their education system to account for results. I guess what I'm looking for is a commitment from the minister that yes, things need to change and that all this statistical information the ministry
I guess what I'm asking about is the follow-up. When the ministry does identify a district or a school that is having problems, what steps could be taken? I don't have all the answers, obviously. I'm just posing the questions, but I guess maybe I'm looking for even some future policy and for the minister to acknowledge that there's a problem that needs to
[ Page 1551 ]
be addressed and that the ministry collects statistics without having any way of effecting change in the system. What steps does he feel could be taken, in a hypothetical way, perhaps, to bring about those kinds of changes?
Hon. M. Sihota: I don't think we can devise a system where we say to principals and teachers: "Well, if X number of your students don't graduate, you're fired." I don't think that works. I'm not necessarily sold on the fact that it works to say: "Well, if X number of students graduate, you'll get computers. If they don't, you don't." That's a financial incentive, but I don't think the world works that way.
I know from my own experiences that there are some schools that, due to a whole array of factors that impact on the student even before they arrive there, have lower participation rates and lower graduation rates. Other schools, because of the communities in which they are situated, have higher graduation rates and higher participation rates. And these are as a result of a compilation of socioeconomic variables, not all of which, in terms of outcomes, can be laid at the feet of a principal or of a teacher.
The work that principals and teachers do within the school is very commendable and seldom acknowledged, in terms of the skill that they bring to a classroom, the way in which they deal with the intellectual and social development of a child and prepare that child for entering into the workplace. It seems to me that sometimes we do not accord due praise to the remarkable talent of educators, and I think that should change. I think they should be recognized for the high quality of the work that they do.
I think it also should be recognized
So our objective has to be to be able to deal with all of those socioeconomic factors. There has to be an acknowledgment of parental responsibility, and of the responsibility of teachers and of all the other agencies that may interact with a particular child.
That's not to say that we can't develop a better model of accountability and governance. I think that we can, and earlier on in the estimates I said that we're going to take a look at issues of governance and that we're going to deal with one of my concerns, which is the sense that parents have that they don't have enough say in the system. That has to be attended to, and that's on the agenda that I've laid out.
I thank the hon. member for his suggestions, as unspecific as they were. I want to give him some assurance that we are going to be looking at these kinds of issues in a thoughtful fashion, so as to allow teachers to teach, students to learn, parents to involve themselves and taxpayers to get the most efficient allocation of dollars within the system.
W. Hurd: I guess my last comment on this topic would be to recommend the minister review some of the initiatives that are happening elsewhere with respect to site-based management. There are schools in some districts elsewhere in Canada and North America where a portion of the budget is managed on site, and the school can carry forward a surplus in order to address some emergent educational issues at the site.
We have a situation now in schools where, as the minister is well aware, parent involvement involves going to car washes, doing fundraising events to provide those educational extras that they feel the public school needs to provide. I think the minister has quite correctly identified that in some schools, where there might be social problems and lack of economic opportunity, you don't have that level of parent involvement, and those schools do experience a greater degree of difficulty.
One of the things that's happening elsewhere is that those schools are identified by the ministry and are targeted for certain operational funds to help them deal with those problems where you don't have strong on-site management. I think that all I can do is recommend the minister review those experiments that are going on elsewhere, and perhaps identify it as a way to look at the schools that are in trouble, that are falling behind. And some will, in a site-based system, but there can be an allocation of resources by the minister to help those schools rise to the top instead of race to the bottom. The minister and his colleagues have always talked about racing to the bottom.
Hon. M. Sihota: You just woke me up.
W. Hurd: I've been accused, hon. chair, of waking the minister up, and I hope I haven't done that. But we might get an improvement in the quality of debate.
I want to recommend that the minister review the experiments that are going on elsewhere and perhaps consider more site-based management models, allow schools to carry surpluses forward, reward them for thrift
Interjection.
W. Hurd: Hon. Chair, the minister is engaging in debate not through the Chair,
I have one other question that I want to raise, and then he can go back to sleep. It relates to the learning resources branch within the ministry and the ability of the branch to evaluate course materials, particularly computer software and new computer technology. From my brief time as critic, I am certainly aware that there is a tremendous amount of interest in getting software into schools. I am aware that there are several emerging companies in British Columbia that successfully sell educational software across the North American continent, yet have not been able, for whatever reason, to deal with the learning resources branch in getting those excellent programs into the public schools.
So I am asking the minister whether there is any change underway in the learning resources branch to try to deal with the explosion in information technology and the need to dramatically upgrade software programs in order to provide our children with the same kind of opportunities that are happening in other jurisdictions. I'm aware, for example, that in the province of Ontario and other provinces, some software manufacturers are actually licensed and pay a fee to sell programs within the school system. I wonder if the minister could take a moment to elaborate whether any changes are underway in the learning resources branch to better deal with the entire evaluation of learning resources materials, particularly in the computer area.
Hon. M. Sihota: In the short time that I have been the minister, I have done more on that than what the member
[ Page 1552 ]
opposite achieved in the short time he was critic. It wasn't that short; I can't remember. Certainly it was short enough for him not to know that you can
Interjections.
Hon. M. Sihota: Let me answer the question, although I thought about not answering, because the hon. member did say that the previous question was his last question, and just on a matter of principle I thought I'd wait.
Yes, we have set up a system with the technology development division of the learning resources component of the ministry so as to bring about some of those synergies. I do believe that there is value in us as a province, first of all, generating revenue out of better commercial application of the material that we have produced to generate revenue for the state, so to speak. Also, I think there is a place for entrepreneurs to come forward with technological curriculum material that we can use -- that they've developed at their expense -- in some kind of commercial arrangement.
W. Hurd: I want to ask one last question, and it will indeed be my last question. It relates to the ability of the school districts to acquire the learning resources that a company -- a course curriculum or a curriculum that's initiated by the
I wonder if the ministry has given any consideration to working more closely with districts to reduce the amount of course materials to a core group of materials and perhaps limit the amount of widespread options that the districts have. When it comes to supporting the curriculums by the ministry, I'm certainly aware that because of the latitude that's provided and because of the amount of materials that are out there to be purchased, the curriculum that the ministry initiates -- such as career and personal planning, for example -- ends up being broadly interpreted and broadly applied without any consistent standards in terms of the learning resources that are applied in the classroom. I wonder if the minister could comment on that. I could ask him whether or not there's any intention to identify the problem, deal with it and perhaps tighten up that support for the new curriculums like CAPP and others.
Hon. M. Sihota: Well, I just don't know what to say. I just heard the member for Langley a few minutes ago say that she wanted more additions to curriculum, particularly as they relate to women's studies programs, and now I've got the member for Surrey-White Rock saying that he wants to reduce the number of options because there are too many out there. I'll listen to both of them, and try to figure out what I should do.
[4:45]
W. Hurd: I am sure the minister will correct me if I'm wrong; he always does. My understanding of the issue is that the ministry presents each district with a new curriculum and a wide list from which to support the curriculum in the classroom. The sheer breadth of the list of materials that is provided is a problem because districts are left to interpret which items from the list they want to buy. The result
Hon. M. Sihota: I'll resist the temptation. Let me say this: a number of districts want the broad choices, and they want them kept because they've already made choices within the umbrella of broad choices. And if the umbrella was shortened, so to speak, and their choices fell off the edge of the table, then they would have to incur costs to acquire new material, albeit their old material was at one point deemed to be relevant. So that's a consideration in a system.
The second point I want to make ties in with the earlier point that the hon. member made with regard to technologies. We are, however, establishing a resource committee that will, from a technological point of view, be able to get some utilities throughout the entire system with regard to curriculum. The economies that will be realized by the province will then be made available to the school districts, so that they can have that technological development at a lower price through the broader umbrella. That may also achieve at least the fiscal concern that the hon. member has.
B. Barisoff: Carrying on from my colleague there, I think that sometimes what takes place is that the curriculum is put out and the material actually isn't ready to come to the school districts. Is any consideration given to having those two timed together a lot better?
Hon. M. Sihota: My understanding is that the new integrated resource packages are now tied together so as to solve what would have been a problem.
B. Barisoff: I hope it's getting better. One of the ways of improving the educational results might be merit pay. Has the minister ever considered that merit pay would be a consideration amongst administration and teachers?
Hon. M. Sihota: Could you repeat the question?
B. Barisoff: Has the minister ever considered that merit pay might be a way of increasing the results in schools?
Hon. M. Sihota: No, I can't say that I have.
B. Barisoff: I hope that the minister would consider it, because it probably would make a difference. Another would be increasing the amount of instructional time given to students in the province. I think if we were to look at where we stand on the overall scale, we're probably lacking. Would the minister consider increasing the amount of instructional time that students have?
Hon. M. Sihota: Well, we just added back one more day this year as a result of a decision we made. I've already answered the question in terms of comparability with other jurisdictions. I've already said that I would give the information in terms of where we rank with other provinces in Can-
[ Page 1553 ]
ada. My belief is that with regard to other nations, a number of nations will indeed exceed the number of instructional days that we provide.
B. Barisoff: I was more concerned with the instructional hours, not instructional days. If the hon. minister will look back, it was this government that took away two instructional days to institute the community interaction days. Taking two away and returning one doesn't, to me, amount to an increase in instructional time. I think the minister did indicate yesterday that he was considering that that other day might be returned. I hope he goes along with that.
Carrying on with some of the things that happened yesterday, the hon. minister indicated to the House that no special ed funding would be taken away from any district in the province. I indicated to him that I thought this was a problem in some areas, particularly in small areas. In the detailed funding calculations for a special purpose grant in special education here, it has: "Stepping has been removed in dependent handicap, moderate handicap, severe handicap and gifted programs." This certainly impacts a lot of districts in the funding. Is the minister about to tell us that he will reinstate this kind of funding that goes back to the small districts?
Hon. M. Sihota: We provide a special purposes grant to cover that.
B. Barisoff: I think that yesterday the hon. minister indicated there would be no cut in special education funding to any district. What I'm looking for now is a commitment, after reading
Hon. M. Sihota: The stepping changes and the reduction in funds as a result of that were then offset by the special purposes grants that were given to the districts.
B. Barisoff: I don't want to keep going back over this, but the concern I have is, as long as the funding hasn't
Hon. M. Sihota: I just want to make sure that the hon. member understands one of the assumptions in my answer. Presumably, if you have fewer special needs students, then you'll see a decrease, and presumably, if you have more, then you'll see an increase. With that assumption in mind, the answer is yes, you would not see a decrease in funding; it will be the same.
B. Barisoff: Moving on to a couple of other things, I just wonder what the status is of the storefront schools throughout the province and what kind of funding levels they'll be maintained at.
Hon. M. Sihota: They can seek funding as an alternative school.
B. Barisoff: I know they can seek funding as an alternative school, and I know it does exist. My question to the hon. minister is: is that funding going to be maintained in its present form as long as it's there? I'm more concerned about whether the funding is going to stay there.
Hon. M. Sihota: There are no current plans to change it.
B. Barisoff: Another point that I'd like to question the hon. minister on is the combination of using schools for community use. Are there any programs or anything in place with tying in community use of schools in the evenings, and whatever else? Is there any kind of funding for that?
Hon. M. Sihota: We provide funding of about $75,000 for community schools. I would, however, refer the hon. member to comments I made yesterday in Hansard with regard to my views as to the role and application of community schools. I believe that those are also contained, funnily enough, around
B. Barisoff: What I was getting at, hon. minister, was just tying community use in with extracurricular activities and things like that. It wasn't community schools; it was tying the usage of the schools in the evenings and whenever else, allowing the funding for uses that would tie the community with municipalities and whatever else. That's the line of questioning that I was looking at.
Hon. M. Sihota: I'm a big advocate of community schools in both those contexts. I will certainly be working with the ministry to make my views as easily implemented as possible.
B. Barisoff: My colleague from Okanagan-Penticton has had to leave. I'm sure I probably know what the answer is going to be to the question he's asked me to ask. He's very concerned with the middle school that's been promised for ten years in Summerland. It was announced just prior to the election, and he would like to know the status. Short of being one of the ones that is on the frozen list, is there anything else the minister can comment on?
Hon. M. Sihota: If he wants to see the school, he should send me a letter saying that he wants the debt increased to fund the school. If he has views as to other debt-related projects that he would like to see deferred in his constituency to ensure that that goes to a higher priority, he should let me know. I will be in Summerland later on this month, and I may even be nice enough to take him out for a round of golf so we can talk further. There's a nice golf course there in Summerland.
B. Barisoff: I think if the hon. minister wants to see some really nice golf courses, he should come to the South Okanagan, not Penticton.
Carrying on with some of the lines of questioning, something I'm just a little concerned about is that the government's fiscal year ended March 31. We've gone through three months. I just wonder if the hon. minister knows what the status of the Education budget is at this point in time.
Hon. M. Sihota: I didn't realize that the Penticton Golf and Country Club was in your constituency. If it is, it's also a very good golf course. If it's not, you'll have to show me some golf courses in your riding.
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As to the issue of the budget, that information is made available by the Ministry of Finance. However, I am advised that we are on track.
B. Barisoff: We do have a great golf course, it's called Fairview Mountain -- just a little bit of advertising.
The minister is always indicating to this side of the House that if they want something done in their particular riding, they've got to figure out ways to increase the debt. I don't believe that that's necessarily the way we've got to do everything -- increase the debt.
[5:00]
A great concern of mine is that I think the Premier of the province interfered with the negotiations with BCPSEA. What took place there was a settlement with the teachers for labour peace for this short period of time, which the minister indicated yesterday cost $22 million. I think it's probably closer to $23 million. That would probably build four elementary schools in the province every year. Is the minister prepared to relook at any of these things and the fact that it is costing an awful lot of money? We could spend that money building schools. In fact, I know for sure that we could build four elementary schools in the province.
Hon. M. Sihota: Come to think of it, it may not be the golf courses, but I think Haynes Point Park is in your constituency. It is certainly one of the best parks we have in our system -- a highlight park, I think. If anyone is travelling, it's one they should take in. It's great for kids.
As for the other question, I have no intention whatsoever of rolling back the wage agreements we have signed.
B. Barisoff: I guess it's always been the case that this side of the House is usually more concerned with the students, rather than with what pay increases are taking place in the province. That's probably the direction we were going in when we were looking at what's best for education in the province.
Another area of concern I have is the fair-wage policy that takes place in the province. I know that some of the comments the minister made yesterday indicated that he wasn't interested in that. In the last project that was built in the South Okanagan, we canvassed contractors there. They didn't change; they were the same contractors that bid on every other job. They indicated to us that it was an average increase that would probably cost an extra 20 percent. Is the minister prepared to look at this area, where it would be a substantial saving for particular areas, if the particular MLA would write a letter stating to the minister that we were prepared to build a school that wasn't under the guidance of the fair-wage act?
Hon. M. Sihota: I would refer the hon. member to the comments I made. It is important, if one is going to have a debate on the fair-wage act, that they look at the totality of the economic benefits and savings that accrue to the taxpayer over the life of the project. And they should take into account the benefits that accrue to society as a result of that money remaining within British Columbia. Those benefits also have to be calculated in. As I said yesterday, I'm more interested in a
The Chair: Before I recognize the member, I would just caution him that under the standing rules discussion of legislation is not allowed during the estimates debate.
B. Barisoff: I'm sorry, hon. Chair, that I was breaking the rules. It was a concern of mine, with the way the hon. minister was indicating areas where we could save money. I was just trying to find areas where we could save money and build more schools and provide a better service for the students of British Columbia. With that, I'll turn it over to one of my other colleagues.
A. Sanders: I'd like to change the topic slightly, and talk about independent schools. For the record, perhaps we could start by giving the minister some very straightforward questions, such as: can he give me the number of students enrolled in independent schools in British Columbia in the 1996-97 estimates?
Hon. M. Sihota: There are 57,000.
A. Sanders: In how many schools do those 57,000 students study?
Hon. M. Sihota: Over 300.
A. Sanders: Will the boards of independent schools be guaranteed the same funding level in the 1996-97 estimates? I believe that the funding percentages are as follows: grant 1 is 50 percent of the local public school district per-student cost, and a group 2 grant is 35 percent of the local public school district per-student cost. Will that remain the same in the estimates for this year?
Hon. M. Sihota: I think the Premier has made the commitment that those amounts will remain as they are.
A. Sanders: I was aware that the Premier made that commitment, but again, that was before the election. Now that the election's over, we were wondering whether this promise would go the way of the Premier's other promises which were made prior to the election and during the following month.
I'd like to ask the minister to spend some time now on issues concerning French language education in this province. My concern, specifically, is with accountability in relation to the expenditure of federal moneys that are designated for Programme Cadre, a French education program for children of French-speaking parents. How much money comes to us from the federal government for this program?
Hon. M. Sihota: It's in the neighbourhood of $9 million.
A. Sanders: Earlier we talked about federal off-loading. Is it anticipated that any component of that $9 million will be affected by cuts to federal transfer payments?
Hon. M. Sihota: By the way, the $9 million is for all French education. I may not have answered your question there, and if I haven't, just ask it again.
Given that the federal government has this horrendous deficit problem of about $25 billion -- unlike our government, which is balancing its budgets -- the federal government will inevitably be reducing its contributions. They've given us some notice of this.
A. Sanders: I must be sitting in the wrong House. In this House, we have a $235 million deficit this year. The hon.
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minister is referring to some House that has a balanced budget; I'm not exactly sure where it is, but I know it's not here.
Because he has identified the fact that I haven't asked the question as precisely as is required, could the minister outline the allocation from within that $9 million for French immersion, as opposed to Programme Cadre, which is a program for students from French families?
Hon. M. Sihota: Our best guess is that about 80 percent of it is for French language instruction, and 20 percent is for the Cadre program.
A. Sanders: How is that money allocated within those two areas?
Hon. M. Sihota: We fund districts on the basis of advice they give as to the number of students enrolled in those programs.
A. Sanders: My understanding is that not the French immersion but the other French program has a French board that was set up at a cost, I believe, of $4 million. Do we have that board in place now in British Columbia?
Hon. M. Sihota: My understanding is that it is in place and is to become operational in September.
A. Sanders: Could the hon. minister give us the composition of the board and how many boards that entails?
Hon. M. Sihota: One board with five members.
A. Sanders: From my interpretation of five members, does that mean there are five schools?
Hon. M. Sihota: No.
A. Sanders: Would the minister be so kind as to differentiate how many students are in French immersion, compared to the Programme Cadre?
Hon. M. Sihota: In the Programme Cadre, 1,100; and 30,000 in French immersion.
A. Sanders: In those two separate programs, $9 million is allocated federally to us. What is the accountability mechanism to ensure that the moneys are used for the specific intended purpose?
Hon. M. Sihota: We asked for certified statements from school districts testifying to the fact that they are providing those programs.
A. Sanders: It is part of the Canadian constitution that we have a French school board in place, as per the wording of the constitution. Could the minister spend some time updating the House on how this board is going to work in September?
Hon. M. Sihota: It will be providing programs in those 18 school districts where a significant population of French students is situated. There is an issue as to the degree to which this is constitutionally required, and I believe there is some litigation around that issue to give further guidance as to what may be required by government.
A. Sanders: Does the Ministry of Education have any flexibility in interpreting where those funds go -- whether they go to the totally French program or to French immersion -- or is that set at the federal level?
Hon. M. Sihota: The responsibilities of the francophone education authority are with the Programme Cadre.
A. Sanders: How many students are in the 18 districts that provide the totally French program?
Hon. M. Sihota: It is 1,500 of the 2,700.
A. Sanders: Could the minister tell me the per-student funding in block funding that would go to the francophone school, compared to the funding that goes to the regular student?
Hon. M. Sihota: They have submitted a budget to us. We haven't yet finalized the amount that will be available.
A. Sanders: I would appreciate the minister sharing that information with me when it does become available.
French immersion programs are a concept that has become more and more popular throughout British Columbia, I feel, to the betterment of British Columbia. It's set up for children whose mother tongue is something other than French. Could you just remind me of the amount of money that is allocated per student for French immersion programs in British Columbia, compared to the amount allocated to a student in a non-French immersion program?
Hon. M. Sihota: It is $113 for a primary student and $450 for a secondary student over and above the basic grant that's provided.
[5:15]
A. Sanders: In terms of the francophone schools, there are a number of options that we could enter into for funding those schools -- for example, the model on how we fund independent schools, or otherwise. Has the minister taken time to ascertain which model we will be using to fund the francophone schools?
Hon. M. Sihota: I haven't, no.
A. Sanders: Has anybody thought about how we're going to fund the francophone schools? I understand, if they are having a board in September, that we should anticipate them being on line very soon. Again, they would be in our estimates. It's another thing that hasn't been considered, so I'm trying to get some feel for how much leeway we have there.
Hon. M. Sihota: We're in the process of having discussions with them about these very issues. It would be premature for me to speculate on what the outcome would be, but everyone knows what the time lines are and the amount of money that's there. You know, there's always dialogue around some of these issues; there's some happening here.
A. Sanders: I enjoy the minister's sense of humour.
With respect to the collective agreements -- what I call the interim; what the minister calls the agreement -- between
[ Page 1556 ]
the teachers and BCPSEA, when will the public be made aware of the contract as a whole?
Hon. M. Sihota: They're aware of the contracts as they are now, and those are contracted as a whole. But they're splintered in the sense that there are different contracts for different districts. Again, the public is aware of those. At this point, I don't know if one uniform contract will be developed to cover the entire province over the next two years. If there is, they'll be notified of that; if not, obviously we'll notify the public of that. I'm sure that along the way it will be apparent to both educators and trustees what the status is. Obviously if I have to involve myself in it at some point, that will happen as well, so as to begin to deal with these issues. But, as I said yesterday, this is a major administrative agenda item for me that will probably need to be attended to.
[G. Brewin in the chair.]
A. Sanders: Could the minister apprise me of what areas in the contract have been signed off and are finalized at this point?
Hon. M. Sihota: A number of issues have been resolved, and a number of issues remain outstanding. I don't have the full list of the demands and what's been agreed to. It may well be that what has been agreed to publicly may be less than what's been agreed to tentatively as they work their way through the process.
I think the best way that I can assist the hon. member with regard to this matter -- and she can have her option -- would be to meet with her two or three months from now and give her a status report on negotiations, or, alternatively, for her to meet with staff after the estimates are complete so they can advise her of the full range of outstanding issues versus issues that have been resolved and the status of those. Either one of those would be fine, or I could arrange for her to meet with the provincial negotiating body to get a better overview or with the deputy minister as to how he intends to move the outstanding issues along under the provisions of the agreement. It is tough to say what has or has not been agreed to in some ways, because in some cases it has been agreed that they will have a process, but they haven't agreed to the outcome. So I give you those four options. Just pick the one you want, hon. member, and we'll make those arrangements.
A. Sanders: I would appreciate meeting with the deputy minister and becoming familiar with the status of the contract in terms of what has been signed off now and, in addition, in several months seeing where we are at with further issues that need to be designated as terminated.
In terms of the issues that have been signed off -- not specifically the list of what those are -- one of the things I am interested in is: are local areas aware of the parts of the contract that have been signed off?
Hon. M. Sihota: Yes.
A. Sanders: In another, totally different area, I'm trying to tie up some loose ends on K to 12. The Stay in School program which you discussed with the member for Surrey-White
Hon. M. Sihota: We don't have that information here. I can ask staff here to see if we can get that. If we get into it, there may be some difficulty to get that information. But I just want to reinforce what I said earlier. There will be a significant and, I think, very creative approach to Stay in School, and it will involve the private sector as much as the public sector. I think that what we're working on has enormous potential in terms of conveying, in a very powerful way, a message to young people. I must confess that I'm quite inspired by the degree to which the private sector has come forward with a desire to involve themselves in this messaging. And it's only because of the participation of the private sector, as you'll see when the program emerges, that I think it will have resonance.
A. Sanders: The importance that I see with the different Stay in School programs is not, in fact, the number of young people enrolled in the programs but the number of young people actually at school in the program. From my experience, those two things are different.
One thing I feel we're not doing very well in education is an objective evaluation of what we're doing, and this goes back to the gender equity programs and the Stay in School programs. We're flying a lot of things that are either nouveau or sound like they fit in some little niche. Yet how are we objectively quantifying their outcomes? Are 30 children registered in a Stay in School program actually there Monday to Friday? From my experience, albeit very limited, I think there may be a fair bit of transience. In other words, we're funding young people who are in a program but are not actually there. Is that what we want? Would we rather have something more accountable to make sure that the program is of benefit to them? And if they aren't actually there, why are we funding the district? Those are things I'd like to see incorporated more into the fabric of the ministry, so that there is accountability for the things we put in place, especially if they are special projects of some kind.
Inner-city schools. This is another very interesting program that I really had not been apprised of prior to taking on the role of critic. I wish to have clarification about inner-city schools indicators. My understanding of the inner-city school program is that you're looking at students who are living at the poverty level. As with the delineation of poverty, is that from Statistics Canada census data on family income? For those students, a number of things are looked at to determine a number called their critical mass number. Based on the critical mass number and the poverty level indicator, these two key indicators are used to ascertain and identify areas where there is high social dysfunction and poverty. Money is infused into that district to try to lift the socioeconomic area and give the children some equity in terms of having a full belly when they go to school and try to learn.
The one issue I wish the minister or his staff would clarify more for me is the number which has been identified as critical mass. The definition in the ministry's report says: "Social dysfunction, student behaviour and language concerns which reflect the complexity of the urban neighbourhood and the school, and the severe impacts of mixed constituent groups on the school staff and administration." This critical mass is a weighed number that indicates the social dysfunction and lack of environment that a student in this inner-city school must have. The critical mass is out of a total
[ Page 1557 ]
of 700, so if a school has 100 as a critical mass, then it doesn't have that many people at the poverty level or below.
I'm interested in how the ministry calculates the sum of the indicators of poverty, absenteeism and mobility, when the factors used to calculate that number, which is actually a number between zero and 700, are based on student behaviour, language concerns and social dysfunction. I think those things are very difficult to quantify, and I wonder how the ministry arrived at a critical mass number.
Hon. M. Sihota: We used to look at these issues through a formula. For example, we'd look at language and the number of ESL students there. In dysfunction, we might look at the number of single-parent families, and in other issues like student behaviour, we sort of gauge that. There was some sort of proxy system.
Districts came to us and said: "At the end of the day your formula sometimes hits the target and hits the right school, and at other times it doesn't." They made the argument that we should give them the funding. Because they are closer to the scene, they have a better ability to know what schools are involved, and they made the case that they should go in that direction. As a result, that's exactly what the ministry did. Now that the formula is gone, they get the same amount of money based on identified needs in the school district, but the school district makes the allocations.
[5:30]
A. Sanders: I'm pleased to hear that, as I was going to suggest that as an option rather than this silly formula which I can't imagine could hit a target ten metres wide.
Another question I have for the minister relates to the computers. Originally there was a move to have central purchasing and distribution of computers, either hardware or software, for school districts. What is the status of that at this point?
Hon. M. Sihota: Right now districts make their own determinations. With regard to the discussion we were having earlier about finding the magical $22 million, one of the concepts we are looking at is more joint purchasing to pick up some efficiencies, and we identified some opportunities there.
A. Sanders: At this point I am awaiting the information from the deputy ministers, and I appreciate their effort. There will be some more questions on K to 12, which will be specifically in follow-up to the information we receive, and I do appreciate the cooperation of the deputy ministers and assistant deputy ministers in providing information on what I consider to be the most important reason that we are here -- and that is education.
J. van Dongen: I have a few questions to the minister, dealing with special needs issues, and I did correspond with the minister recently. I'm sure that in most school districts there's an ongoing debate about this, but I just want to clarify.
In terms of severe learning disabilities and the funding formula that's used for the particular school district, is my understanding correct that it is based on an assessment of each student that is considered severely learning-disabled, and a rating is based on that actual assessment? Is that how the funding formula is developed?
Hon. M. Sihota: Could the member repeat his question?
J. van Dongen: I just want to get some clarification on how the funding is calculated for severely learning-disabled students. Is it based on an individual assessment of each student and the level of disability, and is the funding based on actual assessments in the school district? Or is it based on some sort of provincial average?
Hon. M. Sihota: It's on the basis of an individual assessment.
J. van Dongen: Once the sum total of those assessments is done -- I assume they are carried over from year to year -- then that envelope of money is provided to the school district for that year, and they are free as to how they spend that money.
Hon. M. Sihota: They're free to do it as they choose as long as they spend it on special needs.
J. van Dongen: In the correspondence, there was some discussion of a cap, and I wonder if the minister could explain the impact of the cap.
Hon. M. Sihota: For those students falling within the moderate handicap category, there is a cap of 4 percent.
J. van Dongen: I'm not sure what that means. Is the minister saying that there is a moderate category within the severe learning disability group, or is that another group?
Hon. M. Sihota: If a severe handicap is considered a moderate handicap, that is capped to a maximum of 4 percent of the district's total enrolment.
J. van Dongen: If I understand correctly, I think there was an issue in my school district about the use of some of those funds inside the cap for mild or moderate support in the form of learning assistance. My understanding was -- and I just got this letter from the minister -- that the school district does not have the flexibility to transfer some of those funds to provide support for mild and moderate disabilities. Is that correct? Are there two envelopes -- one strictly for severe learning disabilities? The minister included a figure of $2.3 million for Abbotsford. I wonder if the minister could clarify that.
Hon. M. Sihota: Some children may have greater disabilities than others. There is an ability on the part of the district to move money around within that envelope for special needs, capped at that 4 percent.
J. van Dongen: I appreciate the answers from the minister. I am not going to try to understand all the intricacies of these programs today. When I listen to the representations I get from parents -- and to the degree that I have been able to understand and discuss these issues with the school board -- my biggest concern, which I just want to register with the minister and the ministry, is with the mild and moderate learning-disabled kids. I say that because my sense is that we acknowledge that severe disabilities are readily obvious, but moderate or mild disabilities are not so obvious. When I look at what's actually happening in the field, if you will, or in the schools, my sense is that because of budget constraints, we're putting some children with mild disabilities into a regular classroom, sometimes without any sort of learning assistance. It seems to me that with a relatively small investment in
[ Page 1558 ]
support, we could probably make significant gains with a fairly high rate of payback in terms of assisting those students who have mild disabilities. That's really the sum total of my concern.
I hope the ministry, in designing these programs and formulas, will consider the high degree of payback for mildly disabled kids. We don't want to put ourselves in a position where, for the sake of maintaining appearances, we rob the mildly disabled kids of their necessary support.
Hon. M. Sihota: I thank the hon. member for his comments. Listening to them is very interesting. You know, that's why we do these estimates. I don't always get up on all the issues, but that's food for thought. I thank the hon. member for his points.
J. Weisbeck: I have the privilege to ask you a number of questions on colleges and institutes. I've had a chance to talk to a lot of personnel at the colleges, and I guess they feel a bit abandoned. Their major concern is funding, something so many other schools are concerned with. I see an alarming trend happening over the last few years, in that the funding seems to be less and less. I see it's no different this year. We've got a very, very small increase to $565 million from $563 million, which is only a 0.002 percent increase. There's a $1.2 million increase. I'd like to know where that $1.2 million is going.
Hon. M. Sihota: It's going to open the new campus at Douglas College.
J. Weisbeck: Over the last number of years, since 1991, the FTE funding has also been decreasing at an alarming rate. What will the FTE funding be for 1996-97?
Hon. M. Sihota: My apologies for that delay; I was somewhat confused as to the FTEs, thinking that you were talking about employees as opposed to students. Now I understand that you're talking about students. I'm sorry; I guess my head space is still back in the earlier discussions.
With regard to students, here's what we have done in a global way. You're right, we have given colleges and institutes the same budget they have received in previous years. There has been no decrease in funding for education.
To pick up on an earlier conversation, we have not passed on the reduction in revenue from the federal government. As you know, the federal Liberals have reduced social transfer payments to the provinces. At one point, consideration was given to massive cuts in college budgets -- to use your example -- just to pass that reduction through. As a matter of policy, our government, unlike any other government in Canada, chose to keep the system whole. We didn't increase the funding; we didn't decrease it, either. It stayed the same.
At the same time there are more students coming into the system as a result of the initiatives -- again, unprecedented in this country -- that we as a government are taking to increase accessibility to post-secondary education. So there's an increase in the number of students coming in and the same amount in the budget. There's a 4 percent differential; that's perhaps the best way to put it.
The colleges and the institutes are going to have to find the efficiencies within their system to make up that gap. It's as simple as that. There's no new money. You know, they're up to the challenge. I've met with them. They're quite capable of meeting the challenge.
J. Weisbeck: What has happened in B.C. is that we spend 16 percent less on education per capita than the Canadian average, so I find that alarming. Actually, post-secondary institutions have been tightening their belts. Over the past number of years they have seen a decrease in cost per student from $8,500 to $7,500, so I think we are placing a great number of demands on them. Currently, B.C. colleges receive about 15 percent of their funding from tuition fees. Do you feel the ministry should establish some sort of appropriate maximum percentage for public post-secondary tuition fees? If you do, what should that percentage be?
Hon. M. Sihota: We have frozen tuition fees, and in my mind, even at the frozen rate they still represent a barrier for accessibility to post-secondary education. I do not concur with the view that we need to increase those fees as a percentage of the overall funding to make up some of the fiscal demands. I have told colleges that very clearly, and they understand that.
With regard to your earlier point about the 16 percent, I think you may have been talking about the system generally as opposed to specifically in this area. I'm not saying that you haven't, but if you ask them this question, I am quite confident that administrators and presidents in the college system will tell you that we have the best system in the country.
[5:45]
J. Weisbeck: The government has frozen tuition fees for two years. I'd like to know what sort of thought went into that. It's a wonderful election ploy, but how realistic is it? What are your projections on the amount of shortfall that will be incurred over the next two years, and what will happen in two years' time?
Hon. M. Sihota: Let me just walk through the points you make. Yes, we have frozen it; and yes, a lot of thought went into it. Tuition fees are a barrier to post-secondary education. Every time I go to a school and ask kids why they are not pursuing post-secondary opportunities -- for example, going to college -- they say that they believe it's too expensive. When you ask them what's expensive, they say: "I don't have the money to pay the tuition." Tuition is a percentage of the overall cost of attending post-secondary education, but it is the biggest psychological barrier. The government consciously -- and I have to tell you that I strongly support the initiative -- came to the conclusion that we should freeze tuition fees to begin to deal with that barrier to post-secondary education. Yes, that means that there is less money for the colleges and universities to deal with the financial pressures that are on them. They have to find those efficiencies within the system; there is no more money. And I believe they can find those efficiencies. I've talked to them. They can find those efficiencies; they are going to have to find them. You know, it's a tough world sometimes. You don't always get what you want -- I think the Rolling Stones said something to that effect once.
With regard to the other points you made, yes, the freeze is there for two years. There is no intention on our part to then have a sizeable increase. In fact, I believe the direction society should be taking is commensurate with the views I outlined earlier on: to reduce both the perception and the reality of that barrier.
J. Weisbeck: You didn't get my last question. I appreciate that I asked a lot of questions. But what is the projection of the shortfall that's going to be occurring this year, and how is it going to be made up?
Hon. M. Sihota: The reason I didn't answer the question is that it's hard to answer. You have to make an assumption as
[ Page 1559 ]
to what it would have gone up to in order to know what would have been lost to the system. We can use other jurisdictions as a measurement. They have had increases of 10, 15, 20, 25 percent. In our terms, if this helps, 1 percent is about $2.5 million into that system. So you can extrapolate from that whatever way you want to put it. But 1 percent equals $2.5 million.
J. Weisbeck: The Premier made a statement that there will be 7,000 seats for the youth of this province. How are these guaranteed?
Hon. M. Sihota: They are going to have to provide those seats through productivity within the system. That is a challenge to a system that requires those kinds of challenges. Like you say, there is no more money, so they are going to have to find that within the system. They tell me they can do it when I talk to the college presidents, so I know they've got the ability, even at the university level, to do that. It will be achieved through efficiencies and productivity gains within the system. That doesn't mean you're going to get every course that you want; we're not guaranteeing you that. We'll guarantee the seats, but it may be that in some cases you won't get the course that you want.
J. Weisbeck: By my calculation, by the increase of 4 percent, you get 3,100 seats. Where are you going to get the other ones?
Hon. M. Sihota: You've calculated only for the college system.
J. Weisbeck: So the 7,000 seats are for universities and colleges? Is that what you're saying?
Hon. M. Sihota: Yes.
J. Weisbeck: Okay.
The NDP made a commitment to education, and I have some concern with this commitment. You've frozen tuition; you have a decrease in federal transfer payments; you've demanded a 4 percent increase in the FTEs; B.C. post-secondary institutions have lost 10 percent of their buying power due to inflation, etc.; and you have given virtually no increase to funding. I would like to know what this commitment really means to education. You've placed some huge demands on institutions to come up with money to maintain the same level of education that we've become accustomed to.
Hon. M. Sihota: Yes, we have, hon. member. This is a challenge for the system. They've been given certain parameters to work within, and those are the instructions from government. There's no limit to the human mind when it's applied to deal with these challenges.
Surely, hon. member, you're not suggesting that we should increase fees, fund for inflation and provide increased funding as a way to meet these challenges. Surely you would expect government to be tough and say: "Look, this is all you get. Now get on with the job that you've got to do and meet these objectives that government set."
J. Weisbeck: Well, we did -- during the election, of course -- make a commitment to education that we would find the savings elsewhere. We actually promised we would raise the number of fees. You made a commitment as well that you would be dedicated to preserving education, but it doesn't seem to be happening. It's not happening. You've put too much of the onus on post-secondary institutions. I don't know how they're going to do this. They'll have to be magicians to come up with this money without eroding the system.
Hon. M. Sihota: Well, you'll find out just how magical they can be. It is going to happen, and it's going to happen because we've told them that it has to happen. You know, that's what governments are all about. That may be, at the end of the day, the kernel of truth as to why you're there and we're here. You gotta be tough. You gotta lay it out to them: "This is your budget; this is the number of students that you've got to get in. Now find a way to do it." The kind of acumen that is found on this side of the House, that kind of tough fiscal reality and entrepreneurial drive that we possess, is absent on the other side of the House.
J. Weisbeck: I really feel as though I should have worn my rubber boots tonight. That's not being tough: that's just making promises and not keeping them.
Could the minister please give a brief outline of the two types of funding: formula and non-formula?
Hon. M. Sihota: First of all, hon. member, you'll be eating your rubber boots next year, because you'll find that we did it and that you were wrong and we were right. I look forward to that -- in your constituency, of course.
Now, there is a matrix that we've developed which provides formula and non-formula. It is a complicated system. I have no difficulty, during the break which should be coming shortly, in having staff made available so that they can walk you through that. It will probably be a lot easier than for me to translate that to the hon. member.
J. Weisbeck: I'd like to know how it is determined who receives which type of funding. Can we include that in the same answer?
Hon. M. Sihota: Yes.
J. Weisbeck: Has the government looked into private sector funding, and if so, what conclusions has it come to?
Hon. M. Sihota: We do look at a number of private sector relationships, and we develop those all the time. Universities in particular, and colleges as well, have developed private sector relationships that work well, that fund institutions and that fund programs and capital opportunities within the system.
Hon. Speaker, with those bells having rung, I assume that the hon. members opposite have a meeting of sorts. Perhaps at this point, I will move that the committee rise, report progress and ask 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 1560 ]
Hon. M. Sihota: I move that the House do now recess until 6:35 p.m. and sit thereafter until adjournment.
Motion approved.
The House recessed at 5:57 p.m.
The House in Committee of Supply A; W. Hartley in the chair.
The committee met at 2:39 p.m.
On vote 22: minister's office, $374,615 (continued).
R. Neufeld: I know everyone wants to get on to the other project. I just want to finish off the line of questioning that I started just before lunch, dealing with the Peace system and the Columbia River system.
The minister stated that the reason for contemplation of firing up Burrard Thermal was the need to fill the reservoirs. To my knowledge, in reports and discussions I've had with B.C. Hydro, it was contemplated that the Peace system was going to be almost to the point where it was going to spill water this year, regardless of any problems in the dam. It was getting very close to full. The snowpack in the Kootenays was much the same as it was in the Peace; there's no doubt about that. I'm sure that B.C. Hydro had contemplated that those reservoirs would be full or near to full.
With that in mind -- knowing that we're going to have to spill water, anyhow -- I still don't know or can't understand why we would think about firing up Burrard Thermal in the middle of the summer, when electrical use is probably at its lowest compared to the winter and when we know we're going to have to spill water out of the Peace dam. Could the minister explain to me a little further the reasoning for firing up Burrard Thermal?
Hon. D. Miller: I don't think, really, what I tried to outline before lunch was that because of the situation at the Williston reservoir, which has
R. Neufeld: I understand that, but the snowmelt on the Columbia
Hon. D. Miller: Domestic consumption is the answer. It does pump back. I talked earlier about the fact that Williston has to be drawn down. They want to maintain the other systems as full as possible. All of that creates the situation of meeting demand -- and therefore the contemplation of the startup of Burrard.
R. Neufeld: Could the minister confirm for me how much of its capacity the Columbia system is it putting out now?
Hon. D. Miller: I don't have the absolute specifics on that. I did indicate that Mr. Swoboda had been in attendance to try to deal with those kinds of questions, and he's not here now. But it's less than capacity; how much less, I'm not certain.
[2:45]
R. Neufeld: As I understand, it's very high. It's putting out a lot of electricity. Unless I've been given the incorrect information -- I don't know the exact percentage, either -- the Columbia system is putting out almost peak power.
The minister responded before that we're using all this electricity domestically. I can't quite understand that, because I don't think we use it all domestically. I think what I want to find out from the minister is how much is being exported. I know it's at maximum out of the Peace Canyon. I understand Peace Canyon and the W.A.C. Bennett Dam are at 100 percent, and have been for the past month. And prior to that, it only had one generator down out of ten. So there's obviously an awful lot of electricity being generated, and I want to know whether it's being exported to the United States. The second question is: for what rate?
Hon. D. Miller: I said
But I go back to the primary question, which
R. Neufeld: To my knowledge, the Columbia system is now dumping water because of a high snowmelt. I'm sure that if they're dumping water, they would be doing it much the same as they do in the Peace system. They'd be generating electricity; rather than just dumping it, they'd generate as much as they could. I understand, and maybe the minister can
[ Page 1561 ]
confirm for me, that we are selling hydro south of the border. Because of what has happened at the W.A.C. Bennett Dam and because we are now spilling water in the Columbia system, we are selling it very cheaply. Could the minister confirm whether we are exporting hydroelectricity at a very cheap rate into the U.S.?
Hon. D. Miller: I can confirm that because of the need to lower the reservoir, Hydro is indeed looking at the opportunity for spot sales -- and I can't confirm whether they made any -- because that water has to be reduced, to drain down.
R. Neufeld: I hope they are looking, because we've been running it over the dam in the Peace River for the last five weeks at a fairly phenomenal rate, and both dams have been generating at 100 percent capacity. I would assume that we have been looking at it before.
What I want to know is: are we selling that hydro that we are obviously generating in British Columbia -- a massive amount of it, because we are not using it all domestically -- at a much cheaper rate in the U.S. right now than we are to our own industrial and residential customers here in British Columbia?
Hon. D. Miller: Yes, it is a spot market. Of course, given the physical event, or the problem with the dam, and the capacity to generate now because of the need to draw the reservoir down, we really don't have any control on either the timing or the price. The answer is yes.
R. Neufeld: Is there some way that B.C. Hydro could find it within its heart to sell hydro to our industry at a lesser rate because of the circumstances that have taken place at the Bennett Dam, over a shorter period of time, and to help our own industry instead of shipping hydro south of the border at a very cheap rate. Could we try to compete with them? Is there some way we can do that?
Hon. D. Miller: We do have permission now from the B.C. Utilities Commission to sell excess power to domestic industries, obviously on the spot market, at lower prices than the average domestic price.
R. Neufeld: Then the minister can confirm that that is happening right now in British Columbia? There are industrial users that are receiving hydro at a lesser rate than what they paid before because of what has taken place? Is that correct?
Hon. D. Miller: Possibly. I can't confirm with any details.
R. Neufeld: I understand that the minister doesn't have all his staff here, but maybe he could confirm to me the percentage amount that's being generated out of the Columbia system. I know the Peace system. If there are industrial users that are receiving hydro at a lesser rate in British Columbia at the present time because of the circumstances of what's happened at the W.A.C. Bennett Dam, could the minister provide that to me at a later date?
Hon. D. Miller: Yes, absolutely. I'll get Mr. Swoboda on this question as soon as possible, to get the information to the member.
R. Neufeld: Is the minister aware -- and I'm sure he is -- of what's taking place at Dinosaur Lake, with the potential for a huge landslide? Could you bring me up to date on what's taken place there, or provide information at a later time from some of your staff members as to
Hon. D. Miller: Again, I don't have a detailed report on that situation. It was reported briefly in the media, but I will get the latest update to you.
G. Farrell-Collins: I have a series of questions, continuing on the vein we did yesterday. The Leader of the Opposition has some questions also, which he would like to ask. He'll be back into this committee meeting room shortly, and at that time he will be pursuing a line of questioning, also.
With regard to the report, on page 19 of the interim report, the first paragraph talks about a $25 million omnibus fund for these types of investments. Can the minister tell us what the status is of that fund -- if any other money has been let out of it, or if it's still there? Is it held in reserve? What's the current status of it?
Hon. D. Miller: There have been no expenditures out of the fund other than for the Raiwind project.
G. Farrell-Collins: Can the minister confirm that the first line of defence, so to speak, in the event of cost overruns or other charges against our interest in the SEPCOL deal, would come out of this fund first, before it went to the ratepayers of the province to pay?
Hon. D. Miller: We did canvass that issue with respect to exposure fairly well in two separate sessions. It would not come from the ratepayers, but would be an obligation of BCHI Power. Again, I think we dealt with that fairly extensively yesterday.
G. Farrell-Collins: We did indeed deal with it. There was never any reference as to where the money would come from. If it comes from BCHI Power, then part of it, supposedly -- 60 percent -- would come from IPC, but it certainly hasn't been the past case that 60 percent of the cost of this deal is coming from IPC. Rather, it seems to be the reverse. There was no mention in the discussion the other day about where that money would ultimately have to come from. Obviously, the portion that BCHIL was responsible for would flow back in responsibility to B.C. Hydro, seeing as BCHIL has no real asset base of its own. Therefore my question is: where would that money come from? I'm asking whether or not the money would come from this fund. Has the fund been set aside just for seed money, or is it also accessible in the event of overruns or other charges as opposed to having those charges directed around to the ratepayers?
Hon. D. Miller: I can confirm that this fund would not be used for that purpose. The obligation would be BCHI Power's, and there would be no adverse impact on the ratepayers. Apart from that, around 9:30 last night there was a fairly extensive discussion of liabilities. Mr. Costello reported some confidence with respect to the project being on time and on budget, so I hope that answers the question.
G. Farrell-Collins: It doesn't answer the question, because a liability or a charge can't accrue to BCHIL -- or BCHI Power, if you want to call it that, 40 percent of which belongs to BCHIL, which indirectly flows to B.C. Hydro. BCHIL has no asset base of its own; it has its only asset base in the money that is granted through B.C. Hydro. To say that
[ Page 1562 ]
BCHIL would pay for any overruns out of its own bank account or out of its own pocket doesn't make any sense, because it doesn't have any cash of its own. It doesn't have a base of money out there. The only base it has is the money that I can see here -- this $25 million omnibus fund that has been made available for international activities. My question is: would a potential cost overrun come out of this $25 million fund, or would a potential cost overrun be diverted around that fund and eventually default to B.C. Hydro, because BCHIL doesn't have any money of its own, and then the ratepayers would have to pick it up? It has to be one or the other.
Hon. D. Miller: I have given a response with respect to the fund and the ratepayers. On top of that, I think the discussion last night dealt with the
M. Costello: Should there be any cost overruns, which we don't now anticipate, the first call would be against BCHI Power. BCHI Power has its own resources -- it has money in its bank account -- and should BCHI Power be unable to finance any cost overruns, it would look back to its owners, BCHIL and IPC. So it is possible that BCHIL could be called upon to contribute to some cost overruns that would be up to the cap of $5.95 million that we discussed last night.
As a subsidiary of Hydro, BCHIL has its own sources of income from consulting fees and otherwise, so BCHIL would be responsible for that. Should they require some cash to live up to that obligation they would be in a position to take an interest-bearing loan out from Hydro. But in no case would this form part of our rate base or in any way contribute to B.C. Hydro asking for a rate increase to finance it.
G. Farrell-Collins: Thank you for the answer to the question; I appreciate it. It wasn't that hard, and I'm glad we did finally get to it.
Page 31 of the Smith report refers to Adrian Dix being present at each and every one of the B.C. Hydro board meetings during the period covered by this review. Did he at any time attend any of the BCHIL board meetings? Did he have any role whatsoever in any of those meetings?
Hon. D. Miller: Mr. Chairman, there are documents that have not been made public, and will not be made public, because of the request of the special prosecutor, and I guess if we started down the road of dealing with questions pertaining to those documents, there would be no end to it. So I'll respectfully decline to respond to that. But it's reasonably clear to me that those are issues that Mr. Smith has canvassed and will continue to canvass. Presumably there may be some other interests -- I don't know, really -- with respect to the RCMP, but I think it's prudent not to get into that.
[3:00]
G. Farrell-Collins: I'm a little surprised by the answer, given that in the report it actually makes reference to Mr. Dix being present at each and every one of the B.C. Hydro board meetings during the period. It would seem to me that if that was of such a sensitive nature, it wouldn't have been included in the report. I've asked whether or not he also attended the BCHIL board meetings, and all of a sudden that becomes a sensitive issue.
I don't know why the minister doesn't feel comfortable answering that question, but I will take the minister's word for it that if there is some other reason than the reasons he's given for why that information can't be forthcoming -- because of the ongoing investigation, because of the potential for an RCMP investigation, information and documents are not being made
My next question is with regard to page 39 of the report. It says here that there are nine directors of SEPCOL. The prospectus showed eight. Maybe that's just a timing thing. I assume that that would be because Mr. Sheehan left the board of SEPCOL, and it was then reduced to eight. It also says that that includes four officers and senior executives from B.C. Hydro and BCHIL. The prospectus showed two: it showed Mr. Ridley and Mr. Laxton. And if I am to make the assumption -- and perhaps I shouldn't -- that Mr. Sheehan was the ninth director, and that he, at the time this report was
I'm getting a little confused, because we heard last night that Mr. Sheehan had in fact left SEPCOL almost two months before this report was issued -- about seven weeks before this report was issued. So who was the ninth director of SEPCOL, and which four members of the board of SEPCOL were officers and/or senior executives of B.C. Hydro and BCHIL at the time this report was issued?
Hon. D. Miller: Just going back to the first question in my response, I don't think I said it was sensitive; I don't think I used that term. What I did say was that none of the documents used by Mr. Smith in constructing this interim report have been released. We are under request that no documents be released, and I have tried to make the simple assertion that if we started to get into a line of questioning relative to documents, where would it end? I didn't deal with the issue of sensitivity. I know it's in the report, but we clearly received a request subsequent to the tabling of the report that no documents, even documents used by Mr. Smith and his team, be released. That's really the only point I tried to make.
In terms of the directorship, on page 38, we did cover that, I believe, last Wednesday. The current director is Mr. Ridley. There are three vacancies. I believe I indicated that we have an obligation to fill those. There is an agreement with respect to how that is done. We've not made any decisions about who that might be, but will in due course.
G. Farrell-Collins: With regard to my first question, at no point, in anything I said, did I ever refer to any documents, nor did I request any documents, nor did I request the contents of documents. I merely asked if Mr. Dix had been present at any of the BCHIL board meetings. I don't know why that's such a difficult question to answer, and maybe the minister didn't hear it. It was a simple question.
Hon. D. Miller: I heard the question.
G. Farrell-Collins: I don't know how, then, the minister possibly interpreted a request about whether or not Mr. Dix attended these board meetings into a request for documents that he has been directed by the special prosecutor not to release. I don't know how he made that leap. Maybe he can explain the connection there, because I don't get it. It seems to me it's a pretty straightforward question and therefore has a straightforward answer.
I guess it's a question of semantics with regard to numbers of directors and the people who sit on the board of
[ Page 1563 ]
SEPCOL. This says nine; the prospectus said eight. It didn't say there were any vacancies on the board. It said that the number was eight -- not less than seven is what the wording was in the prospectus regarding the long term. But there was no reference to that.
So what I'm wondering about, if I think back to the prospectus, is that there were eight people on that board at the time the offering was made in Pakistan. At the time the offering was made in Pakistan -- at the time the prospectus was issued -- there were eight board members listed, and we went through that last night. This says nine. Let us say there were eight. We're entitled, the minister tells us, to four seats on the board of SEPCOL. Where do those four seats fit in with the total of eight or the total of nine? Either way, there are obviously still some people missing. I'm just trying to get the facts here. I'm just trying to determine how many seats we actually get on the board of SEPCOL and why the discrepancy between what we're hearing, what the minister tells me, what's in the report and what's on the prospectus.
Hon. D. Miller: We do have an obligation to appoint further directors -- BCHI Power does -- in discussions. As far as the discrepancy between the eight and the nine, I'm informed the bankers requested an additional spot on the board, which is referred to, I think, in some previous part of this discussion, as the nominee of the development bank of Pakistan. That spot, I believe, is occupied by a representative of the chairman of the Pakistani development bank.
G. Farrell-Collins: The minister is telling me that there is another person on the board as a representative or nominee of the Pakistani development bank. I'm getting my copy of the prospectus brought to me as we speak, trying to determine who that is or if that person, in fact, exists and was on the list at the time the prospectus was issued. We're getting into subtracting and adding one or two at a time here. It's starting to get a little confusing with regard to how many there actually are or will be. We had this report saying that there were nine; in the prospectus there were eight. The minister is telling me that the reason it went from eight to nine was that the Pakistani development bank wanted an additional person on the board. But the prospectus came after the report. The report was issued on April 23; the prospectus came out after that. Instead of going up from nine to ten, we went from nine down to eight. I don't understand that rationale -- that is to say, that we went from eight to nine when in fact we went from nine down to eight, and we supposedly added somebody from the Pakistani development bank at the same time.
Hon. D. Miller: The prospectus lists Mr. Mohammad Munawar, chairman of the NDFC, which is the National Development Finance Corporation of Pakistan. There's a further listing on page 95 of the interim report: the details, the sources of capital to the project.
G. Farrell-Collins: That still doesn't explain how we started out with nine on April 23, we added the person from the Pakistani development bank, and we ended up with eight. That means that we must have lost two other people in the intervening period. Can the minister tell me why?
The reason I'm asking this is that there has been massive confusion around who has been on the SEPCOL board and when, and what our representatives have been doing on that board. I'm trying to determine who has been on the board, who has been off it and how much change has taken place in the intervening period, given that there is supposed to be some law in Pakistan that you are not supposed to move these people around in the time that an offering is being made. It seems to me there's an awful lot of movement up and down there. I'm just trying to determine what the course of action was, who has been on or off the board and why.
Hon. D. Miller: Again, I can only deal with the information that I'm given with respect to this issue. My information is that there are nine. There were eight, and there's nine because of the addition of the banking representative.
G. Farrell-Collins: The prospectus was out on May 12. On April 23 -- previous to May 12 because that comes before May 12 -- there were nine. The minister says the difference between eight and nine is that we added someone. But we can't have added someone from nine and got down to eight. It doesn't make any sense. I mean, it's basic grade 1 math. How did we start out with nine on April 23, add somebody and end up with eight on May 12 unless two other people went missing in the intervening three-week period?
Hon. D. Miller: Again, I appreciate the question. I have to say that I don't have the answer. That may not be satisfactory, but Mr. Smith is here. He's the author of the report. I have Hydro people here. With respect to the difference between eight and nine, I don't have the answer. If I did, I'd give it readily to be able to move on.
G. Farrell-Collins: I'm sure the minister would if he had the information available. At this stage, it's not a big issue. It's for the sake of up or down one or two or three or four. It does raise questions in my mind. How many are there? Who are these people? How many have moved on, and how many have moved off? Obviously, at the time this report was written, there had to have been nine; otherwise, they wouldn't have picked the number nine. It was a conscious choice to choose nine; it wasn't just a matter of let's pick a number. So there's obviously been one individual added between then and May 12, because that's what the record shows and that's what we've heard. We have lost two people in the intervening period. We're supposed to have four positions. If you look at the prospectus, we've got two out of eight: Mr. Laxton and Mr. Ridley. We are supposed to have four; I don't know where those four are, unless we had eight and added one to end up with nine, then somebody else left and we had two vacancies, and you mix it all up and sort of come up at the end with some number. But it doesn't seem clear to me that we have a very good grip on who the board members of SEPCOL are.
It's a pretty basic question, I would think: who is on the board, who has been on the board, who left the board, why did they leave the board and who's been added? To me, that's a pretty straightforward issue. I understand that the minister says he doesn't have the answer to that; that's fine. I hope he can maybe commit to get that information. Maybe it will take a bit of looking back and finding out. But given the surprises we've found regarding SEPCOL's membership, the minister will perhaps grant me a bit of curiosity as to the inability to clear up that discrepancy and confusion.
So if the minister can assure me that there will be some accounting of that coming our way in the next little while, in the next few days or so, once the staff has had a chance to look at it, we can move on.
Hon. D. Miller: Again, in talking to officials here, we will certainly commit to get that in writing. As I say, I don't know; I know we have an obligation to move forward with respect to
[ Page 1564 ]
replacement of directors, and we should obviously do that as quickly as possible.
[3:15]
G. Campbell: One of the things I know everyone is concerned about is the ethical standards that have been set throughout this activity, not just in Pakistan but also here in British Columbia. I'd like to look at some of those standards and see what action, if any, has been taken to date regarding some of the activities of some of the people who have been involved in this. On page 87 of the interim report it is quite clear that Mr. Laxton certainly did not disclose, as he should have, the shareholdings he had. At the top of page 88, it's clear that he did not. He signed a certificate, in fact, which suggested that he hadn't done that. My question to the minister, and perhaps through the minister to the chair, is: have any actions been taken by B.C. Hydro to launch a complaint with the Law Society with regard to Mr. Laxton's professional conduct?
Hon. D. Miller: No action has been taken by Hydro with respect to these matters. There is an ongoing investigation as well an RCMP investigation, so no initiative has been taken by Hydro with respect to that.
G. Campbell: I must say that that concerns me. This is not a question of whether you need an RCMP investigation or an ongoing investigation. It is clear from the report and from the documentation that Mr. Laxton did not disclose. The question is not whether or not he purposely did not disclose. In terms of the Law Society, the question they will ask is whether or not that was a breach of his trust, and whether, as a professional practising lawyer called to the bar in British Columbia, he should have been responsible for disclosing his holdings.
There is no equivocation in the report with regard to that. It is clear in the report that indeed Mr. Laxton did not disclose, and I can't understand why we wouldn't send out a very clear signal to everyone who was either working for or working with B.C. Hydro that unprofessional conduct was not going to be countenanced. We are now sitting here six months after this was disclosed, six months after Mr. Laxton said first that he had no shares, and then that he had lots of shares. It's three months after the interim report, which, I think, is satisfactory to everyone in terms of the fact that Mr. Laxton's shareholdings were not done.
I would like to know, in view of the problems that this project has had from the outset in terms of ethical behaviour, why we wouldn't act in terms of lodging a complaint with the Law Society with regard to Mr. Laxton's activities.
Hon. D. Miller: Again, I'm not familiar with the process whereby complaints are lodged, but the report is a matter of public record. Both the Law Society and the Securities Commission, and other professional bodies, presumably have the report and are capable of conducting their own reviews of the information contained in it. I'm not aware of any investigation by them.
G. Campbell: With respect, the chair of B.C. Hydro is a lawyer and has been called to the bar himself. He understands how it works. A complaint should be lodged, and it should be lodged by the person who was directly affected. It wasn't the opposition. Indirectly, it was the people of British Columbia. Mr. Laxton was working on behalf of B.C. Hydro and on behalf of the government, and it was to those people he breached his first trust.
I recognize that maybe the government is nervous about moving forward to the Law Society and launching a complaint, but this isn't about the New Democratic Party or about Mr. Smith. It's about B.C. Hydro, a long-established Crown corporation. It's about an individual who did not carry out his public trust and did not act in a professional manner with the Law Society, and it really should be up to B.C. Hydro to launch that complaint. I can't understand why they wouldn't launch the complaint with regard to Mr. Laxton.
That's why I would like some response from the chair of B.C. Hydro as to why they would not launch a complaint as soon as they discovered that Mr. Laxton had purposely covered up his shareholdings and that he had purposely not carried through not just on his provincial obligations but on his obligations with regard to other statutory provisions as well.
Hon. D. Miller: I'll ask Mr. Smith to respond, Mr. Chairman.
B. Smith: Mr. Chair, the review team has cooperated with a number of professional bodies who have sought copies of the reports and information. Certainly, I think Hydro's position was that, until there was a final report or some resolution or cessation or whatever of the RCMP investigation, it wasn't appropriate for B.C. Hydro to be going and laying complaints. The report was in the hands of professional bodies and the Securities Commission, and as I understand it, those bodies and that commission are already following this matter and have proceedings that are underway or contemplated. B.C. Hydro hasn't got involved in that, but the review team has cooperated in those regards.
G. Campbell: Am I to understand that the Law Society has received a copy of the interim report and has started disciplinary action with regard to Mr. Laxton?
Hon. D. Miller: I think Mr. Smith indicated that those professional bodies have the reports and presumably can form their own judgment about whether or not they want to initiate proceedings.
G. Campbell: Is it Mr. Smith's understanding that the Law Society would just initiate the proceeding itself? Or doesn't he believe that it would be better for B.C. Hydro to launch a complaint about someone who was acting on behalf of Hydro and the people of British Columbia, someone who practises law in the province and who clearly breached his professional ethics and responsibilities?
Hon. D. Miller: I do believe, Mr. Chairman, that Mr. Smith answered that question.
G. Campbell: I heard from Mr. Smith that it had been before professional bodies. One of the professional bodies in the province is the Law Society of British Columbia, which has a disciplinary committee and a disciplinary code. There is a way you launch a complaint. It sometimes takes time and resources to carry those complaints through, hon. Chair. My question is: does B.C. Hydro intend to lay a complaint and to commit those resources so that it is very clear to anyone who works on behalf of the government with B.C. Hydro that a breach of professional conduct is not going to be tolerated, will not be accepted and will be punished?
[ Page 1565 ]
Hon. D. Miller: Mr. Chairman, people lost their jobs because of these events, and I think Mr. Smith answered the question.
G. Campbell: Without being too glib about it, as I understood it, Mr. Laxton was paid nothing for this job. I don't think he lost too much with regard to that, but I can tell you that the people of British Columbia are at risk of losing something. I can tell you B.C. Hydro has lost something, and this government has lost something, because of that kind of answer from that minister and from the previous minister. They simply don't care.
Ethical standards set by the Law Society are set to protect the public. B.C. Hydro works for the public, and it is not unreasonable to say, when someone breaches their ethical standards, that B.C. Hydro should be the initiator of an investigation and a disciplinary hearing on behalf of the Law Society. It will take some time; it will take some resources. It seems to me that B.C. Hydro should do that.
We'll pass on Mr. Laxton for a second here. Let me go to Mr. Coglon. Mr. Coglon was appointed by Mr. Laxton, as I understand it. My first question to the minister is: do we have any policies with Crown corporations or within the government that prohibit the kind of nepotism we saw with regard to Mr. Laxton and Mr. Coglon?
Hon. D. Miller: There are no similar arrangements in other Crowns, and they've been notified that that's not acceptable.
G. Campbell: Is there an established policy that prohibits that from taking place? I'm not saying that there is any other that's taking place today; I'm sure there isn't. But do we have a clearly written policy that all boards, whether it's B.C. Hydro, B.C. Transit, B.C. Rail or B.C. Ferries -- any of the Crown
Hon. D. Miller: I'm not certain with respect to explicitly written-down policy, but the Crowns have been canvassed as a result of this. None of them have any of those kinds of arrangements, and we've let it be known that it's unacceptable.
G. Campbell: Is there any intention by the government to establish that kind of a policy so
Hon. D. Miller: I have indicated at various stages in these estimates that there is work to do with respect to the Crowns, in my view. The reporting relationship, the role of CCS -- all of those kinds of questions are now my responsibility to deal with. We're in a very preliminary stage in dealing with that, given the time and issues we've got to deal with. Certainly that suggestion is useful as we move forward.
G. Campbell: My next question is with regard to Mr. Coglon, and I would put the same question to the minister. Again, by his own admission, Mr. Coglon -- someone who was actually hired for his legal expertise -- did not in fact provide that expertise, or did not act in a way that was satisfactory in terms of the Law Society. Again I would ask: is anything being done to hold Mr. Coglon to account with the Law Society of British Columbia that has been initiated by B.C. Hydro?
Hon. D. Miller: It's really the same answer as with respect to the questions about Mr. Laxton. There may be another issue; I'm not certain of this. We obviously are under restriction in terms of releasing documents. I don't know if that would have an impact on those societies doing anything or not; I don't know the answer to that. I'm just throwing that out. But no, it's the same answer.
G. Campbell: Again, I'll just state that that causes me some concern, and I think it will cause British Columbians some concern. One of the things we had all hoped when Mr. Smith was appointed was that we would be aggressive and we would be very clear that this kind of activity was not going to be acceptable. Frankly, to date, it seems to me that we have been relatively passive, that B.C. Hydro has been relatively passive with regard to a number of breaches which are clear from this document -- which don't require an RCMP investigation and which don't require us to have a royal commission to find out about them. We should have acted promptly on that. We have not, and that raises some concerns, I think, with a number of people.
I would like to go back to one last issue with regard to this report, at least for the time being, hon. Chair. That goes back to the very outset of the report. One of the concerns I have is that we are dealing with some individuals, at least, who have played extremely fast and extremely loose with the truth. That's the best characterization you can put on it. Others have actually lied to us and have clearly gone out of their way to hide what is taking place.
One of the opportunities the inquiry had was to use the Inquiry Act of British Columbia, which would have required everyone to testify under oath. I would also suggest some form of cross-examination. To be fair to the report, it points out that no cross-examination has been done, so this is not the situation we're in. However, we also know that this testimony was not taken under oath; at least three people did not give sworn testimony. It seems to me that the three people who did not give sworn testimony are the three people whose sworn testimony is imperative for us to get to the bottom of this. I would like to know from the minister: why wouldn't we ask someone who has unquestionably lied to provide sworn testimony both to the review commission and prior to the final report?
Hon. D. Miller: I'll ask Mr. Smith to respond.
B. Smith: This was not a judicial proceeding, and it was not an inquiry under the Inquiry Act. It was a review. We had the opportunity to convert it into an inquiry and to get those powers if we needed to, to compel witnesses. We did not do that. One of the reasons we didn't do it was that, on the advice of the counsel we had, converting it into an inquiry and forcing people to come and testify brought another dimension to it. It could have been impugned or held up or attacked in the courts, later, as being an inquiry that could offend somebody's rights under the criminal law. A number of inquiries in this country have been stopped by that process, including the Patti Starr inquiry in Ontario and a whole lot of them. There
[ Page 1566 ]
has been a myriad of cases that have gone to the Supreme Court of Canada on that and we didn't want to get into that.
[3:30]
We were trying to do something speedily and efficaciously, and to get people to come before us. We weren't trying to run a thumbscrew operation. So I make absolutely no apologies for not interrogating everybody under oath. People had the opportunity to be sworn and all did, except for the few that the Leader of the Opposition has mentioned. Their statements stand for what they are. If you think that statements under oath are of stronger credibility, as I think many people do, then their statements won't have that same kind of credibility. But we decided not to convert it into a compulsory, everybody-gets-sworn operation. If we had had a long period of time, or if it had been a judicial inquiry or a royal commission or something like that to go on for a long period of time, we probably would have done so. And if people hadn't cooperated, we probably would have done so. But people generally did cooperate, and statements people make against their interest, whether they're under oath or not, are usable against them in the very sort of proceedings that have been contemplated or referred to here.
G. Campbell: In terms of that, the question I would come back to the chair with is: in view of some of the holes that are clearly in the interim report that has been put together and, frankly, in view of the number of the questions that have raised their head over the last week at least, would the chair think that the way to get to the bottom of this would be to do that? I mean, we're talking about an RCMP investigation that was initiated by someone other than B.C. Hydro. We're talking about a number of other opportunities perhaps to get to the bottom of this.
The problem with a lot of the testimony is that it's by people whom you can't trust. The interim report is building its case around their comments and their concerns. We've seen that time and again. We've seen it with regard to Mr. Mahmood. We've seen the report that all insider shareholdings are
Those things are clearly holes in the report in terms of us being able to structure two things: a response from the Crown corporation's point of view so that it never happens again, and an understanding of why on earth these decisions were made to begin with. Why was one person allowed to run amok with the major Crown corporation in the province? So wouldn't it be preferable for us -- perhaps after the RCMP investigation, if that's what is holding us up -- to take all testimony under oath and cross-examination?
Hon. D. Miller: Again, Mr. Chairman, I ask Mr. Smith to respond to the question.
B. Smith: We've always contemplated that that may be necessary; that we may have to compel some people to come, and we may have to take some testimony under oath. If that becomes necessary we will do it. It still may not get to the level of scrutiny that you and the public would like, because some of this information is in Pakistan, and I don't know who I could
I hear what you say, and one of the things the review team has to consider is whether we are going to, for the remaining witnesses that we have, and a few of them that might shed light on those very questions, exercise those powers that the government indicated they would give us -- those inquiry powers -- and try and call the few witnesses here that have any chance of shedding any light on that, and ask them to come forward. We will certainly consider that.
G. Farrell-Collins: I know we canvassed fairly extensively the Cayman Islands and the tax implications yesterday, and I don't want to revisit all that. I want to reassure the minister before I ask my question that I am not trying to get into a long, protracted debate. When I was reviewing the comments from last night and the notes, etc., something jumped out at me. I am sure it is just straightforward and simple, but it's been nagging at me, and if the minister or the CEO of B.C. Hydro could give me a really quick explanation of how it works, I'd be interested.
On page 47 of the report -- it's section 5.3, page 47, right smack in the middle of the page, at the bottom of that first big paragraph -- it says: "The summary indicated that the use of an offshore structure would be 'preferable to maximize net distributed income to the investor,' and it discussed some of the potential tax consequences to any shareholder who would own, indirectly, less than 10 percent of SEPCOL." Maybe I'm just not reading that properly, but to me that sounds like there was some effort there to increase the amount of money that the shareholders got, and to do it through some tax structure.
Perhaps the minister, or one of the two key individuals who are here, can explain that sentence to me, because it gives me a feeling that, contrary to what we were talking about last night -- that there was no tax implication -- there was in fact a tax implication. Maybe I'm just reading it wrong, but I'd be glad to have an explanation of that sentence.
Hon. D. Miller: Mr. Chairman, I could probably say that there are various things here that are nagging -- in fact, probably headache material. Again, if Mr. Smith feels he has a response, I'm quite happy to have him do it. And I appreciate that the member says that we are not going to get back into the topic, and I would hope that is the case. I think we ended last night by agreeing that with all the experts in the world on both sides we would never come to a final conclusion on this question. Bearing that in mind, if Mr. Smith feels he would like to respond, he's free to do so.
B. Smith: I am really not a tax lawyer or a tax expert. I make the offer to you that I made last night, and that is if you or any of your members would like to meet with the two members of my review team that are tax experts, Mr. de Gelder and Mr. Harder, and have at them on the explanation or on some of the opinions you have, we'd be open to those because I don't say that tax opinions are black-and-white. I can only tell you that the advice we got again and again, no matter how many times we went at it -- and we went at it many times; we were very skeptical about the initial notion that there was no benefit to Canadian investors in setting up Cayman Islands companies -- was that under these circumstances the benefits were only to the Pakistan investors. The
[ Page 1567 ]
Pakistan investors would, by doing that, have an advantage with their capital gains tax, and they would, of course, avoid having their funds commingled into some entity that would pay Canadian tax.
There was another advantage to the Pakistan investors, and that was that they would be beyond the reach of a change of government -- and changes of government in Pakistan seem to have somewhat extreme consequences, more extreme than under our system.
F. Gingell: Here they would have beneficial consequences.
B. Smith: Let's say, without making a moral judgment as to extreme and non-extreme, that marked changes occur, and they were very much concerned about their assets being nationalized. So those were the things that the tax lawyers told us again and again -- these were neutral tax lawyers. We went at it many, many times and they kept telling us the same thing. But we have a final report to do, and if you can shed some other light on
Hon. D. Miller: Just to add, in hopefully trying to be
G. Farrell-Collins: I have gone ahead and read that, and I guess that was the only reason I had the question, because that paragraph seems to be in conflict with subsequent paragraphs. I'll be glad to get our legal brief on the tax structure to the review team if that
An Hon. Member: Have your lawyers talk to his lawyers.
G. Farrell-Collins: Yeah, right. I know how that
On the other side of that page 47, on page 48, the second-last paragraph, it talks about the Cayman Islands issue being raised:
"There is also no evidence that the involvement of Cayman Islands companies in the structure was ever again raised as a contentious issue or as a matter requiring specific government confirmation at any time subsequent to the October 18, 1994, board meeting, although the BCHIL board was reminded of that structure subsequently in briefing notes, which included texts and organizational charts disclosing the involvement of the Cayman Islands companies."
Who was it who prepared those briefing notes, and who would they have been sent to other than just the directors on the board of BCHIL?
Hon. D. Miller: The notes were prepared by BCHIL staff and sent only to BCHIL board members.
G. Farrell-Collins: I'm taking it, then, that those board minutes for B.C. Hydro International, or the briefing notes which would have been attached to the board minutes, were never included with the package that would have been kicked up the chain to the B.C. Hydro board, so that the Hydro board only got minutes and never got any briefing notes or any involvement. Has that policy been changed in light of this? Or is that policy of only forwarding minutes continuing to the present?
Hon. D. Miller: I'll ask Mr. Smith to respond.
B. Smith: That very problem was a matter of great concern to the members of the Hydro board when this broke, because most of them had never seen these briefing notes. What the Hydro board did soon thereafter was decide that the BCHIL board would only meet with the Hydro board.
We've had a BCHIL board meeting. I think we had it in June. It was, in effect, the BCHIL board with the entire Hydro board sitting there. That's where our procedures now sit. The BCHIL board only meets with the Hydro board. I'm sure we'll change that situation and have a reconstructed BCHIL board. We'll probably have policies -- I'm sure we will -- which will ensure that certain briefing materials actually do get passed on to the Hydro board, because that was quite a sticky matter with members of the Hydro board who weren't on BCHIL.
[3:45]
G. Farrell-Collins: In the interim, as a temporary measure, the boards meet at the same time. There will never be a BCHIL board meeting when the rest of the Hydro board isn't also there. I would agree that there does need to be a reconstruction of that board and a different set of procedures, because in the end, if that were to go on indefinitely, it would almost defeat the purpose of spinning off a subsidiary. There are all sorts of other reasons, but certainly if your boards had to meet concurrently, it would be pretty oppressive. I'm glad to hear that those policies are being developed. It will probably head off this type of thing from happening in the future.
I did ask a question about this the other night. I think the minister gave me an answer, but I'm not sure that it was a complete answer. I didn't ask the question very well because I didn't have this section in front of me at the time -- I was referring from memory. It's on the bottom of page 51, in section 5.4: "Role of Government in Approving the Investment Structure." This has to do with the relationship between CCS and BCHIL, that of Mr. Duncan and Mr. Ridley.
At the time, I said that there had been some reference in the report to a heated exchange between the two that resulted in a breakdown of fluid communication. The minister advised me that that was due to the section 7 discussion -- the amendment of section 7 of the Hydro act -- which would have allowed the directors to purchase shares. When I went back and read that
"It is apparent to the review team that BCHIL only provided whatever information and answers were specifically requested by CCS, and information that might otherwise be helpful or of interest to it would not otherwise be produced. This working relationship was typified by the fact that after a somewhat heated exchange of mutual complaints between Mr. Duncan and Mr. Ridley, the information-sharing process between CCS and BCHIL was reduced to the submission of[ Page 1568 ]
written questions by CCS, to which BCHIL would then respond in writing."
It appears that later in the report it says that even that wasn't forthcoming very quickly.
It appears that that one instance typified it but wasn't exclusive. In fact, there was an ongoing reluctance by BCHIL to share any information at all with Hydro, or with the Crown corporations secretariat in this case. Is that a common occurrence with Crowns reporting to the Crown corporations secretariat, or is that something that only existed with regard to BCHIL? Was it something that existed with regard to Hydro? Does the same difficulty exist between Hydro and CCS? Does the same difficulty exist between ICBC and CCS? Is this a systemic problem, or is this an isolated incident, or incidents, between CCS and the spinoff of B.C. Hydro, BCHIL?
Hon. D. Miller: I think the record from last night shows that we did discuss that. I responded with one specific, and that was the issue that was raised by some directors with respect to wanting the government to change the legislation to allow directors to purchase shares.
I would say, in going to the broader question in terms of relationships, that, no, I don't think it
G. Farrell-Collins: I guess this is a perfect example of why CCS is required, and the minister talked about getting that second opinion, that independent set of eyes and ears for the minister -- sort of a safety valve to make sure that the minister is being informed and is being briefed.
I'm curious if at any time Mr. Duncan ever raised the issue of the difficulty he was having getting information, from this one spinoff of one Crown corporation in particular, with anybody up the chain. Or was this something he dealt with on his own in his dealings with Mr. Ridley and BCHIL?
Hon. D. Miller: Again, I obviously want to talk and be frank, and try to give answers, even though that's been characterized as not the case. But we're dealing almost in two things here. We're dealing with the report -- an interim report, that is, I suppose, a public document; but it's not completed yet and there are other issues yet to canvass. We're also dealing with questions that arise out of the report as they relate to current operations and past operations.
So all I know, really, as the minister responsible now, is that as minister responsible for this and other Crowns I have to work with CCS and those Crowns, and they have to work with each other and me, to resolve issues of public policy and issues of importance, and we'll do that in a way that makes sense and where people feel their opinions are valued, even if they sometimes aren't accepted.
G. Farrell-Collins: I agree with the minister that we are doing two things here: we're trying to determine what happened and also -- and really the most important part of what we're trying to do here -- to find out what actions have been taken so far to correct some of the things that have already come up in the interim report.
So my reason for asking if Mr. Duncan had rung that bell with somebody higher up, to say, "I've got a problem here," is whether or not -- if confronted with a similar situation in the future -- the staff at CCS has been advised that there is an open door; that they are encouraged to ring the alarm bells when they have a problem. I'm curious to find out if that was done in the past. And if it wasn't done, has direction been given to make sure that in the future, if necessary, the minister's door is open?
If somebody's got a problem that they can't
Hon. D. Miller: Not only is my door open, I think it revolves. I really can't speak for my staff, but I'm going to make an attempt to. I've had a number of ministries now, and I can assure you that people understand what I want. I think we have a good kind of management style in my office, and people know that they're free to come and talk to me. I'm quite confident, given the very capable staff -- including Mr. Duncan, who has done outstanding work, in my view -- that we will meet the challenges of the Crowns together with the Crowns.
Will we make mistakes? Yes, we will. Don't let anybody who has never run a ministry tell you that you can set up a perfect system and that somehow things will flow smoothly forever and you'll never make mistakes. Of course you make mistakes; that's the nature of the business in some respects. It's even tougher in politics, because you're under the microscope and the scrutiny of the opposition -- as it should be -- whereas in the private sector you're not.
I'm quite comfortable with the quality and capability of the management people in the Crowns, in the CCS and in my office, and I think they'd say the same about me if they were standing. We will work well together in terms of trying to solve problems.
G. Farrell-Collins: The member for Delta South said that if they can't get through to the minister, they can always come to the opposition. I'll extend that invitation to anyone who
Hon. D. Miller: They might not trust you.
G. Farrell-Collins: They may not trust us, but they obviously were able to get through on this issue and stop it,
[ Page 1569 ]
ultimately. Whether it was early enough in the process or not is questionable, but somebody did get through and ring the alarm bell with the opposition. Despite it being raised by the minister, it wasn't dealt with, and eventually it was dealt with by the opposition, after we managed to get our information together. That is another safety valve. It's a far more difficult one, probably, for the government, but it's one that is there.
If we move on to page 53 of the report, which is information, again, with regard to the Cayman
"The question that the review team has carefully considered is whether the absence of information in the hands of CCS concerning the Cayman Islands aspect of the investment structure was the result of a deliberate withholding of that information. The review team's conclusion is that it was not, at least not in the sense that BCHIL was, for some improper reason, attempting to hide the investment structure from CCS in either the hope or expectation that the whole project could be completed without the structure ever being known by CCS or government."
I guess that's an interim finding of the review team. Certainly, my reading of the
Maybe it's not even a question. Maybe it's just a comment that from my reading of the report, it seems that Mr. Laxton was far less than forthright on many occasions. Certainly, Mr. Coglon's comments about Mr. Laxton -- his comment saying that when he had to fund the $500,000 that had been taken up by an individual, he had to keep it quiet or there would be a major political kerfuffle about it -- lead me to believe that there really wasn't an attempt by B.C. Hydro International to pass on information in a meaningful way either to CCS or up the chain, if we were to agree with the Premier's, the minister's and the board members' explanation of what happened.
I wonder why it is that there was no exchange of information. If it wasn't a deliberate attempt, what was it that was wrong with the structure? What was wrong with the system that created the roadblocks for the sharing of information in this case that didn't happen in all the other Crown corporations? If it wasn't an intentional attempt to keep the stuff away from accountable higher-ups, then what was it that created the need for that? The report is silent on this; it says what it wasn't, but it doesn't say what it was. Something obviously had to cause that breakdown and stifling of communications -- from BCHIL to CCS, in particular.
Hon. D. Miller: I'm mindful of the fact that this is an interim report and that it has more to come, although Mr. Smith has dealt substantively with issues in the report. I guess that an oversimplistic but perhaps simple one-word answer is Mr. Laxton, and I think that goes to
I don't know. For all the discussions I've ever had, I still come away with the distinct sense -- and this is a sense, hon. Chair, so I don't want to say that this is based on all the facts or on anything else but a sense -- that we had a Crown that was moving into a territory that they had not been in before, and there was an eagerness about that. There were time pressures imposed because of pressures from the project itself, and for all those reasons -- this is my sense -- people just wanted to bull ahead and get on with this.
[4:00]
Governments move and operate a little differently than the private sector -- there is absolutely no question about it. Whenever I talk to business people, they tell me that they couldn't operate in a government environment. When I look, as I have in the past, at trying to find people to run some of the
I just get that sense through all of this that there was this desire to boom this thing through. It was our first international venture -- "So let's go" -- and if we had to ignore some of the niceties, well, that's the price you pay in that sort of high-powered world. That's the sense I have. You can find fault, and because of this
I said at the outset of these estimates, and I repeated it a short while ago, that I had confidence in the people around me to do the job they're assigned. In doing that, I know they make decisions sometimes and don't inform me on a daily basis. I think that's as it should be if you're going to have confidence in your managers. Yet I also run the risk, and I understand the peril, of being accused -- as I have been over this last week -- of not being informed enough. You're never right on an even keel, because you can at any time be accused of that.
The main thing is that you develop a policy-based mandate for these organizations with good process and rules about what's acceptable and what's not acceptable. You put in place people who are competent, and you have some faith in their judgment to follow the mandate. That's how we intend to do it. It's a long answer to the question, but there's only a subjective type of answer.
G. Farrell-Collins: At the end of the day, maybe the final report will have some comment on why there was such obstruction to getting this information out -- not just "We'll get around to it," but outright hostility in a couple cases when asked for information by CCS. I suspect that's an area that may well end up in the final report -- I don't know -- but certainly it is one of the more intriguing unanswered questions as to why there was such an abnormal reporting structure, such a difficult, painful and antagonistic reporting structure, between BCHIL and CCS. Perhaps there will be some comment on that.
I want to move on to section 6 -- section 6.3 in particular -- of the report, which deals with the B.C. Hydro investment. The investment in this project ended up exceeding what was approved by cabinet by a significant amount -- $2.35 million (U.S.) -- with regard to the framework and the guidelines that cabinet had given. How was it that it ended up being such a big difference? That is a pretty large cost overrun.
It wasn't until October -- correct me if I'm wrong -- of '95 that it really got to the deputy minister level or to the level
[ Page 1570 ]
within the ministry that somebody actually realized what was going on. Why did it take that long? How is it that it ended up being over by that much? I know the technical reasons such as how much was allotted here and there in the loans, etc. How did that actually end up happening? Why did we end up there?
Hon. D. Miller: The simple answer is that they simply exceeded their authority. In terms of a detailed answer, explicitly trying to find the one thing that was exceeded or the rule that was
G. Farrell-Collins: I don't recall reading it in the report -- maybe it's there -- and I did go through it again this morning. Was cabinet made aware of that cost overrun? And if so, when were they made aware of it?
Hon. D. Miller: I think it would be technically improper to call it a cost overrun. The authority exceeded their limit with respect to investment; it wasn't an overrun in the classic sense, as that term is used.
With respect to cabinet's awareness, casting my mind back to the sequence of events, I can't recall if that information was made available to cabinet or whether this was the first knowledge that members of government had explicitly about that.
G. Farrell-Collins: I wouldn't mind giving the minister a minute to confer and find out when it was, because I think it is an important question. It would seem to me that if the limit had been exceeded and their authority had been exceeded, you would have had to then go back to cabinet to have the thing approved. Obviously somebody had to be told that we made a mistake here or that the project got out of hand and that the guys running it got out of hand: "They've committed themselves to more then they are allowed to, and we need to fix this in some way or another."
I ask the question again and give the minister whatever time he needs to make a further determination. It would seem to me that there had to have been some approval from cabinet to boost that limit for those people to authorize this project to go ahead.
Hon. D. Miller: The consensus seems to be that cabinet was not made aware of that.
G. Farrell-Collins: That's very interesting, actually, that cabinet would set a limit; that limit is broken -- not by an insignificant amount, I might add, but by a fairly good chunk percentagewise -- and that is reported to the ministry; and the senior people, such as the deputy minister, never went into the minister's office and said: "We've got a problem here. These guys have exceeded their authority to invest in this project by a significant sum. We obviously need to correct that by either raising their limit on their credit card, so to speak, or telling them, 'No, you can't do this, and you'd better find a way to get yourself out of this.' " It seems to me that that would be the type of decision that would in fact go to the minister rather that just sort of be dealt with at the level of Hydro and the staff.
Hon. D. Miller: Again, given the sort of sequence of events and the
The broader issue went directly to cabinet when it was raised as a public issue. So that may be the explanation in terms of
G. Farrell-Collins: The minister just said -- and I'm paraphrasing, and I'll have to check Hansard to recall the exact words -- that normally this sort of thing would have come to cabinet on the basis of a quarterly report at the very least, if not as an individual public policy issue, and that it never went to cabinet, because cabinet was involved in a leadership campaign and the lead-up to an election.
Hon. D. Miller: No. Well, okay, go ahead.
G. Farrell-Collins: I said I'm paraphrasing. I would have to go back and check the Hansard, because I didn't hear all of what the minister said. So if I have stated it incorrectly, I hope he'll correct me -- that this wasn't dealt with by cabinet, because there were changes going on, there was a leadership campaign, and that had this been a normal year it would have been caught. Given what was going on with the changes, it was not caught, but probably would have been caught at a subsequent quarterly report. Is that correct?
Hon. D. Miller: I want to get back first of all to the paraphrasing, because I was trying to deal in a sort of general way with a kind of reporting question. I'd raised the issue of the timing relative to a couple of events -- the leadership campaign, etc.; a new cabinet -- and indicated that in terms of that normal reporting requirement, it would have been a different atmosphere than would normally have prevailed. Really, what I was trying to say was: are there financial controls so that this would have eventually shown up? Let's assume it hadn't been revealed as a public issue by the Liberals, etc. In the normal course of events, are there adequate public controls or controls on spending so that this would have come to the attention of either the appropriate minister, Treasury Board or the like? I'm satisfied, having discussed it with staff, that in fact that is the case.
In terms of the specifics, pages 67 and 68 of the report deal very substantively with the events around this particular issue. I draw the member's attention to that. It's from the previous year, from October '95, and involves Mr. Duncan and Mr. Allen, then deputy. The Premier, then minister, was away in Asia, and I believe that Mr. Allen as the deputy handled the issue. It is outlined on pages 67 and 68 in the report.
[4:15]
G. Farrell-Collins: That's exactly where I'm heading next, in fact: page 68 of the report, the second full paragraph just above the last paragraph of 6.6, which is just above 6.7. It says:
"Subsequent to November 1995, Mr. Duncan and Mr. Allen prepared various memoranda and briefing materials for cabinet to address the excess investment and non-compliance with cabinet's investment directive. As well, CCS monitored[ Page 1571 ]
BCHIL's activities closely to ensure that no new commitments for international projects were made until the approval process for BCHIL projects could be remedied."
The minister is telling me that in the lead-up to this, nobody at the cabinet level was made aware. We now know that the deputy minister was made aware. You know there's only one more step up from the deputy minister, and that's the minister himself. The deputy minister was aware.
In fact, he was aware in October, because he had to decide "not to stop the project from going ahead" -- I believe that's the quote used in the report. I suspect that the reason for not stopping the project from going ahead was that the feeling by Doug Allen, deputy minister, was that despite the fact that the IPC offering had not been filled to its maximum, it was sufficiently subscribed to express the confidence of the general public -- that test that the minister spoke of at the time -- to allow it to go ahead. So certainly in October, I think it was October 25, there was a decision to not stop the project from going ahead.
Obviously, at that point there were at least two concerns that the deputy minister was made aware of: number one, that the individuals involved had overextended their limit in committing BCHIL to this deal, and number two, that IPC had undermet its limit as far as its contributions to the project were concerned. At that time, they were well aware that the split, rather than being 60-40, was about 45-55 -- a big change. Prior to that, there were also major concerns raised about various intervening periods and about the loss of control.
Indeed, further back in this chapter there's some pretty strong comment about us putting up a whole whack of the money -- in fact, 55 percent of the money -- and only having 40 percent of the ownership, what a lopsided deal that was and how we certainly were not bearing our portion of the risk. If the idea of involving the private sector in this was to get them to take on some of the risk, then obviously that goal wasn't met, either. Mr. Allen was made aware of that at this time. At least, on October 25 at the latest, we know that at that period of time Mr. Allen was aware of it. I suggest that he was probably aware earlier of certain portions of that, if not all of it; but certainly as of October 25 he was aware of all of those issues I have just itemized.
On November 5, some 11 days
Hon. D. Miller: Again, following through on the summary of the report, the member is correct in citing the top of page 68 with respect to the sequence of events, the decisions taken by Mr. Allen and the reasons cited. Given when this issue broke, the matter has not been formally reviewed by cabinet, and that remains so today.
G. Farrell-Collins: There were two answers there. One I expected and the other I didn't. One was that as of February 22 it had not been reviewed by cabinet, which I sort of expected. Although I'm not impressed by that, it was not unexpected. The other answer was that it hasn't been reviewed yet by cabinet. Cabinet still hasn't dealt with the exceeding of the limit by BCHIL. I hope I heard the minister correctly when he said that.
Getting back to the first part of the question, having not been in cabinet or on the government side, I'm obviously not as familiar as the minister is with how this works; but it would seem to
Hon. D. Miller: Again, the issue became a public issue and Mr. Smith was appointed to deal with it. That's really where we are in the sequence of trying to handle this issue. Certainly everybody is now well aware of the problems that took place, and we're awaiting advice in terms of how we can avoid that in the future.
G. Farrell-Collins: That was the answer to one part of my question. The other part was: what is the process for Mr. Allen, when he has these briefing notes and memoranda prepared for cabinet, to make sure that they got on the cabinet agenda? Would he take that to the cabinet planning secretariat? Does he take that to the Premier's office? Does it go to the ministerial assistant or does it go to the minister? As I said, having not been in that position, I don't know what the process is. I'm asking the minister what the process is within his ministry and his government for the deputy minister to get those items on the agenda.
Hon. D. Miller: I'm not aware of any explicit document that outlines every step that every individual, whether it's the deputy minister or others, might follow with respect to getting something on a cabinet agenda. Cabinet agendas are political documents. They're the business of government. There are various processes that are used to get items on the agenda of cabinet.
G. Farrell-Collins: I'm sure there are. I'm asking what process Mr. Doug Allen used in order to put those items forward to the agenda of cabinet.
Hon. D. Miller: I wish that Mr. Allen were here. He could probably give you the answer. But he's not. I'm not certain.
G. Farrell-Collins: I wish he were here, too. Maybe the remaining individual in the DO or in that process who prepares those documents and is available to the minister has some knowledge of what the process is. If not, then perhaps the minister can make that call to Ethiopia sometime, see how the weather is and find out what the process was. However, I somehow suspect that won't actually take place.
I just find it difficult to believe that information the Deputy Minister of Employment and Investment or the minister himself wanted to go to cabinet would not be addressed to the minister or at least to the minister's ministerial assistant or political aide for prioritization and recommendations as to what he as minister wanted to take to cabinet. It would seem to me that those alternatives are placed before him, and the minister would decide that X, Y and Z are on his agenda -- which he's taking to cabinet and needs approval or discussion on -- and these other items are things that he can deal with on his own, don't need to be taken to cabinet or can be put on the agenda at a later date. At this point in time, with the concerns
[ Page 1572 ]
that I've itemized having come to the attention of the deputy minister and then been contained in briefing notes and memoranda that were prepared to go to cabinet, I find it unbelievable that it never reached the minister or the minister's political staff. I find that impossible to believe. Certainly somebody there must have heard something. The deputy minister wouldn't have gone to all the work of preparing those items for cabinet if he had no intention of passing it up the chain.
Perhaps that's something that can be determined in the final report, because it seems to me that that's a key issue -- what the minister knew and when he knew it. Certainly that's some crucial information at an early stage. If the minister had seen this then, it probably would have rung some alarm bells for him, and he would have asked the subsequent questions about what was going on with this project. That would be one of many opportunities for that to occur, and I find it unbelievable that it didn't in fact occur and that the information did not pass to the political level, to the minister's assistant or to the minister himself. I hope there will be some comment on that in the future.
An Hon. Member: You don't want to make the same mistake four years from now.
The Chair: Order, members.
G. Farrell-Collins: I think that's good advice, by the way.
Page 77 of the report deals with an interesting comment with regard to Mr. Laxton and his relationship
Hon. D. Miller: Mr. Chairman, on a point of order, I think we're getting into a bit of a theme here
G. Farrell-Collins: We're almost done.
Hon. D. Miller: Okay, fair enough.
The Chair: Member, with that assurance.
G. Farrell-Collins: Well, the theme is that we've got an interim report, major investments in Pakistan, potential risks in those investments and ever-changing explanations of the story -- although, in the last two days, I think, we are making some significant progress in understanding, not just on our side but on the minister's part, exactly what went on.
A role of the opposition is to try and make sure that recommendations that are brought to the government's attention are actually acted upon -- certainly with regard to the Gove report, they were not. Here is another report that has come forward, an interim report, and I am just trying to decipher whether or not the minister is acting on some of the recommendations contained in this report. If nothing else, the only good thing that's going to come out of all this, hopefully, is some awareness on the part of the government and this minister that there needs to be a better structure in place for dealing with these types of projects. I think he's accepted that, but I want to go through and make sure that steps are in fact being taken. In some cases they have been, and in some cases they haven't yet been. And in some cases the minister is waiting for the final report. Perhaps a year from now we'll be able to determine whether those choices of the minister have been good ones and whether or not things have improved in the intervening period.
I do want to ask a series of questions. As I said to the minister, we're getting there. We're actually making some pretty good progress. On page 77 of the report, there is some comment about Mr. Laxton's relationship with the Premier. Whether or not it was real is one question, but certainly the appearance, if not the reality, of the relationship between the chair of B.C. Hydro and the minister responsible -- and indeed the Premier -- resulted in a breakdown in accountability, if you can imagine that. The closeness of the relationship broke down the accountability in that those other people -- the people manning the safety valves, the people manning the second opinions and the people standing by those alarm bells that I've talked about -- were afraid to ring them and were afraid to push the issue to the extreme. Or the people who they did push it with were afraid to push the issue to the extreme and to actually get results, because of that perception of a close personal relationship between the then minister and Mr. Laxton, and between the then Premier and Mr. Laxton.
There is a reference in here -- it's one quick question -- that says: "Mr. Laxton also enjoyed personal access to the minister
[4:30]
Hon. D. Miller: Well, the section deals with the relationship between Mr. Laxton and former Premier Harcourt. Was that the question? Was it pertaining to that?
G. Farrell-Collins: No, the question is about the nature of the reporting structure and the personal access that the former chair of B.C. Hydro had to the Premier. It sounded like there was not just an appearance that they were close or had access, but that in fact he did enjoy personal access to the minister. To have it commented on indicates to me that it was above and beyond what would normally be a relationship between the chair of a Crown corporation and the minister responsible. I'm wondering how often they met and how extensive that personal contact was.
Hon. D. Miller: Again, I have no personal knowledge. I assume there was periodic contact, but that's the best explanation I can give.
G. Farrell-Collins: If we move to page 105 of the report, "Standards of Conduct," section 9, I have a few questions in this area. There is some discussion in the report and some uncertainty, which I'll get to in a minute. It's certainly not definitive advice being given with regard to whether or not it was absolutely improper for these individuals to purchase shares, but there was a reference to the Company Act.
Let me just pop ahead for a minute to page 112 of the report. There's a recommendation, a memorandum, by Mr. Duncan. The second paragraph says: "I would still strongly recommend against share ownership in subsidiaries such as BCHIL by directors and senior management of B.C. Hydro." It appears to me that if that's the memo these people got, it's not saying that you can't do it; it's saying that this individual in the Crown corporations secretariat strongly recommends that it not happen.
When you've got somebody here saying, "I strongly recommend that you don't do it," and you've got Mr. Laxton
[ Page 1573 ]
saying, "I think you should; in fact, I'm insisting that you do it," that wasn't a very clear and decisive direction being given. It was not as harsh or as clear as one would have liked. I'm wondering why, at this stage, with all of
You know, this was on May 3, 1995. We know that this issue -- the discussion about section 7 of the Hydro act being amended -- has gone on for some time. There's been communication back and forth. It's gone to cabinet; it's come back from cabinet. It's been a big issue. Now we have an undersubscribed IPC. We also know how strongly Mr. Laxton wanted to be part of this deal, because further on in the report, on page 116, there's a discussion of Mr. Laxton that says:
"Mr. Laxton made it clear to some directors, to staff and to Mr. Harcourt and Mr. Clark that he wanted to be involved in international energy development for the foreseeable future. Indeed, he told Mr. Clark that he would like to carry on in this capacity even after his term as chair of B.C. Hydro had expired and that he was thinking about resigning before the expiration of his appointment."
That is pretty strong wording for the report; it's about as strong as it gets at points. Mr. Laxton was more concerned about being involved in the international deals than he was about being on the board and being the chair of B.C. Hydro. That's something that should have raised some concern. When you combine that with the lack of information flowing from BCHIL, the fights that took place with regard to discussions around section 7 of the act, the overextension of the limit of BCHIL's funding ability, the undersubscription of IPC shares and the fact that Mr. Laxton insisted on governing that and running it himself, one can see that this project was bound for trouble long before it ever got to the September date.
All the makings were there. Mr. Laxton, as an individual, had expressed the fact that he was there more for his own interest -- in the long term, anyway -- than for B.C. Hydro's. With all of those things I just mentioned, I find it amazing that when the bells were finally rung at the deputy minister level, that information didn't raise a whole series of other questions. It's almost an unbelievable breakdown in the chain of communication and accountability.
This should be a textbook case in governance, quite frankly, on how not to do it. Right from day one, all the signals were indicating that there was a problem here: the financial indications, the personal indications, the reporting indications and the accountability indications. Everything, absolutely everything, pointed to a problem and to a breakdown, and nobody paid attention. The city was completely torched already; everything had happened and nobody knew it was going on. I just find it incredibly difficult to believe that it never got passed up the chain to the minister.
The question arises of how, with all of this happening, we ended up with the tepid -- if I may -- recommendation. In light of the potential problems, we had the comment:
Hon. D. Miller: I think we could actually agree that perhaps this work could be titled, "The Opposite of an Anatomy of a Deal," or something like that.
The report is quite detailed in going through all of these sequences and discovering where control failures happened and trying to draw conclusions. It is a very useful document. I don't know if it is useful as a text or not; it may be. Our intention is to take the advice that the reports give us, both this and the final report, with respect to dealings of this nature. I think there was communication from Mr. Laxton to the then Premier at some point, if I am not mistaken. I think it is detailed in here, saying that they had dropped the demand, if you like. In other words, there had been a period of time when some directors -- I don't know if it was all of them -- wanted to change the act.
Actually, I tried to speak about this the other night. Again, it is very difficult, because you try to talk about abstract concepts when you are dealing with this kind of issue, and people, quite frankly, aren't interested. We did try to talk; we talked last night about what is commonplace in the private sector. The report does detail that in this section. It talks about arguments that some people were advancing to say that the board people should buy shares, that that was standard behaviour in the private sector and that in fact in the private sector it was behaviour that was expected. But the problem you run into is that when you try to transfer those to the public sector, it doesn't always work; you come up with issues of conflict, etc.
Those are the kinds of questions that
G. Farrell-Collins: There was a motion, I believe, that was approved at both the Hydro board and the BCHIL board. I'll just read the section I'm referring to on page 116. It's a quote from a letter from Mr. Laxton to the Premier and the then minister:
"I gather that equity funding from the private sector does not need separate approval because it meets all the entrepreneurial guidelines cabinet has already approved for Crown corporations."
I think we've already canvassed that question and indicated that perhaps it didn't.
"In this connection I can now also advise that notwithstanding, the board of B.C. Hydro, with only one dissenter, and the BCHIL board, with no dissenters, has requested that the act be amended to allow for directors' investment in power generation outside of Canada. I am deferring bringing this request to cabinet now so as to avoid causing any delay with respect to the three approvals that are needed immediately."
Can the minister tell me who was the one dissenter on the B.C. Hydro board who said: "No, we don't want directors to be able to purchase shares"?
Hon. D. Miller: I ask Mr. Smith to respond.
B. Smith: Marjorie Griffin Cohen.
G. Farrell-Collins: Page 118 of the report talks about -- and it comes back to what I asked just a few minutes ago -- the cabinet memorandum and briefing notes that were prepared by Mr. Allen and Mr. Duncan. It talked, in that case, about those notes being prepared but not really where they went. I want to ask this question in regard to those notes and that memorandum. In the third full paragraph down, right in the middle of page 118, it says:
"Mr. Clark, Mr. Harcourt and Mr. Allen have all made it clear to the review team that if the equity funding had not been available, the project would likely not have proceeded because it had not received private investor approval. They felt that this approval was important in order to add another check to the project and to share the risk. They were never told that there were significant shortfalls in the private sector subscriptions which Mr. Laxton subsequently funded."
[ Page 1574 ]
Was that issue contained in those briefing notes and memorandum that were prepared by Mr. Allen and Mr. Duncan for cabinet, but we
Hon. D. Miller: No, Mr. Chairman. The paragraph is quite accurate. Mr. Clark, Mr. Harcourt and Mr. Allen were not advised. The offering was last October, at about 80 percent -- and still open -- and based on that, there was confidence that the rest of it would be taken up. But there was no knowledge, as the paragraph indicates, that part of that 80 percent was in fact held by Laxton, Coglon and others.
G. Farrell-Collins: Regardless of whether they knew it was Laxton and Coglon -- I think that has been canvassed before -- let's accept the concept that they weren't aware that contained in that 80 percent was a significant investment by Laxton, Coglon and a few others. Even then, this report says that at the 80 percent mark, they were never told that there were significant shortfalls in the private sector subscriptions which Mr. Laxton subsequently funded. So what that's saying is that the project could go ahead even at 80 percent subscribed. I guess Mr. Allen had made that determination, but he wasn't about to recommend that it be stopped. Those are the words that I think were used.
So if he wasn't prepared to make the recommendation that it be stopped, did Mr. Allen mention at all in those briefing notes and the memorandum to cabinet -- we now know, according to the minister, that they never went beyond Mr. Allen -- that it was undersubscribed or that it was only 80 percent subscribed? Did he say: "As the deputy minister, I'm recommending that we allow the project to continue, not kill it. It is 80 percent subscribed, so it's pretty close. It's got a ways to go yet, but my opinion to you, the cabinet, is that we should allow it to go ahead"? Was that information contained in those briefing notes?
[4:45]
Hon. D. Miller: I understand the answer is yes, and I think the characterization is that 80 percent was sufficient, given the importance of the project, and without the knowledge that part of that 80 percent was held by Laxton and others, that was sufficient to proceed. Or looking at it another way, the fact that they had not reached 100 percent was not any reason to kill the project.
G. Farrell-Collins: On page 128 of the report, right at the very end of section 9, the last paragraph says:
"Clear and precise written directions from the B.C. Hydro board or government were called for given that this was the first private sector joint venture undertaken by BCHIL. Mr Laxton failed to recognize that private sector practices regarding investments by insiders could not necessarily be applied to a Crown corporation."
Have these clear guidelines been written or drafted now? Are they in place now? Or are we not worried about that, given that no other projects are currently underway or being contemplated? Has anything been done on that, or are we waiting for the review team?
Hon. D. Miller: No other projects are contemplated at this time. I would like at some point, perhaps, to get a debate; we had one briefly last Wednesday. I venture to say that anybody sitting on Hydro or any other board should be well aware of the issues that were raised in this problem. But, no, there's not been an absolute,
G. Farrell-Collins: Well, I think this goes beyond just the directors. This deals with senior executives, people on the board and senior executives in the subsidiary companies, too. There are no requirements or guidelines, in my understanding, with regard to BCHIL, as section 7 provides for in B.C. Hydro. Those clear directions are not given to the subsidiary; they are given at the Hydro level, but not at the BCHIL level. So I think it would be wise for the government to send some clear directives.
In setting up this process, this framework for entrepreneurial activity on behalf of Crowns, Mr. Rankin was asked to do a number of things. He was asked to put together some policy guidelines for ethical conduct and for environmental processes. I would suggest that he, or certainly someone -- if it can't be done in-house, and maybe it shouldn't even be done in-house -- should also be commissioned to draw up some guidelines for conflict of interest with regard to this entrepreneurial activity that's going to be taking place in the various Crowns. It's not just Hydro. This is available to any of the Crown corporations that exist right now, and that framework applies to all of them. It would seem to me that we could deal with this quite quickly and decisively by including in the framework a directive with regard to conflict-of-interest guidelines and the role of the private sector in these deals. Does the minister intend to amend the framework for entrepreneurial activity by Crowns to include some pretty clear and decisive directives with regard to conflict of interest?
Hon. D. Miller: Hydro, for example, has its own internal policies with respect to conflict. They are those that apply to Hydro and to the subsidiaries. When we come back to it, surely the issues that this report deals with lead us to one overwhelming conclusion: it wasn't necessarily a lack of guidelines; it was a lack of compliance. You can't always find it, but if you find it, you take action, and the Premier did take action.
G. Farrell-Collins: It was indeed not just a lack of guidelines but, more importantly, a lack of compliance. More important than that, it was a lack of supervision and of accountability that allowed this to happen. As I said, there's a whole string of events. In my former life, I used to do a lot of teaching on aircraft accidents and investigations, looking at what actually causes an airplane to crash. It's rarely just one thing. It's rarely as simple as a bomb being placed on the airplane, and it blew up. It's usually a whole series of things that happen -- not just one item, but a whole series. It may be partially mechanical; it may be partially error; it may be partially weather. All those things and the decisions that are made result in the accident occurring, and I think this is an example of just that.
If one goes back and looks at some of those accidents, if at any point somebody had raised the issue or had made a slightly different decision or taken a slightly different action, the scenario would have stopped at that point. One never knows how many potential accidents get pretty far down that range toward an accident; and then somebody does make the right choice and things are changed, and it progresses.
In this case at B.C. Hydro, we had a pretty major accident, and luckily it was caught before it got completely out of hand.
[ Page 1575 ]
But there is a whole series of steps along here. One can see it in the review report. There are a whole series of steps or incidents along the way where if somebody had insisted a little more, if somebody had made a slightly different decision or had approached a senior person with a little more adamancy, they would have actually stopped this thing. They would have dealt with it. If those notes had gone to cabinet, perhaps it would have been dealt with. If the minister had paid more attention, perhaps it would have been dealt with. There was a whole series of things that happened, and I really do think it may end up being a good candidate for some lessons to be taught in public administration as to how to do things and how not to do things. It is a very good case study.
I certainly await with eager anticipation the final report of the review team. Obviously there are still an awful lot of questions which remain to be answered. I appreciate the candid nature of the responses we have had, in the last two days anyway, which have allowed us to progress with some haste through this report and clarify a lot of the issues that were unclear before and, in fact, contradictory. There are still some contradictions that exist and a lot of questions that remain to be answered. I hope that the final review will deal with them in a more decisive and comprehensive manner and address some of those concerns.
I also know that the minister has offered throughout the debate to provide certain information. I'll have our staff go back through Hansard and pull those and make sure that they are forthcoming in the near future. I await them.
I have a couple more questions, not necessarily with regard to the Raiwind project, but word is out. Rumours are around, and they're not necessarily true, but sometimes they turn out to be. In much the same vein that we asked this question a little over a year ago -- about what was going on with the Caymans, etc. -- there's been talk
"Team Canada has been very successful in the trade mission to India. B.C. Hydro has several agreements and memoranda of understanding worth at least half a billion dollars. They include $300 million for a hydroelectric dam in India. Canasia Power Corp. of Vancouver nailed down a $300 million contract for a thermal electric plant."
Can the minister tell us if that's factual with regard to B.C. Hydro? Is B.C. Hydro involved in either of those projects? Or is that something that has been terminated since that came forward?
Hon. D. Miller: I'm not aware of that. I mean, I'm generally vaguely aware of the kind of press that came out of Team Canada, and I'm also aware of the critics who sometimes say that it's just a lot of padding. But, no, there are no specific commitments for B.C. Hydro to become involved in future power projects. That's an issue we need to address, but there are none.
G. Farrell-Collins: I just want to be clear. It says: "B.C. Hydro has several agreements and memoranda of understanding worth at least half a billion dollars." That's $500 million; that's a significant sum; that's almost five times what the entire Raiwind project is. Unless they were completely erroneous in that report, there was at least a memorandum of understanding in place. Were any memoranda of understanding signed? Were any letters of intent signed? Is there anything out there at all where we've been trying to set up some deal with B.C. Hydro in any of these projects in Asia? This is with India, in this case. I think it's important that we get a clear and decisive answer from the minister on this. We're going to move off this, obviously, and I would like to know what the facts are.
If the minister doesn't have those at his fingertips, I'd be more than glad to have him get them to me over the next few days, so we do know what exactly is the case. I don't want to get the minister to commit to something unless he's sure, so if he doesn't want to commit today to giving me a definitive answer, I'm happy to accept that, as long as he commits to getting that information in the next week or so.
Hon. D. Miller: I have no hesitation. I did give it, and I'll repeat it. B.C. Hydro, as I've talked about in these estimates, has been in the field for a dozen years, in terms of technical advice. There's no question that we are in the field and have been for some time, looking at the potential for participation in projects.
There are the issues the member refers to in the press release, but none of those memorandums of understanding commit the government; there is no decision. They are expressions of interest; none of them is final, binding. There is absolutely not one project out there that is not subject to approval by this government before we proceed.
G. Farrell-Collins: That's a slightly different answer from the first one. There are memoranda of understanding in place, but they're not things that have been committed to by the government. The projects in the news report are not necessarily incorrect. There were letters of intent or memoranda of understanding signed, but none of them are formal, firm commitments, because they haven't been approved by cabinet. There is an ongoing debate or there will be a debate -- with regard to whether or not we should actually be involved in any more of those types of projects. Is that a correct interpretation of what the minister said?
Hon. D. Miller: Mr. Chairman, I don't think that what I said required any interpretation whatsoever. It was a declarative statement; it stands on the record. If I'm wrong at some future point, then I guess my job's on the line. But I said it; it's clear; it doesn't need interpretation. It's not fancy; it's straightforward.
G. Farrell-Collins: Although the minister may not accept it, I'm trying to do him a favour. The last minister who sat in that chair and who had these types of questions asked of him also needed to have it followed up on, and it wasn't. He didn't follow up on it; the opposition followed up on it. It should have been that minister's job, but it wasn't. Instead, he got a promotion, and he's now the Premier of the province.
That's why I'm asking -- to make sure that my understanding of this is correct and clear on the record. That's why I'm stating it again. I'm not trying to cause the minister any harm here; I'm just trying to make sure that he and I understand what he's saying before we move off this topic. I'm not trying to give the minister a hard time; I'm just trying to find out what the facts are. That's my job. If he doesn't like it, then that's his problem. He'll have to deal with it. I'm doing my job; I'm happy with how I've done it. If he doesn't like being asked these questions or doesn't like it being put on the record, that's something he's going to have to deal with.
[5:00]
Hon. D. Miller: Fair enough. I'll back off from that. It seemed to me, in my interpretation of
[ Page 1576 ]
incorrect. I thought I made a very simple statement, a declarative statement. Where I come from, I like to try to live by what I say. I thought there was some questioning of that, and that's why I reacted.
The advice I have been given by Hydro is that there are no commitments. I have repeated that; it's on the record. That's not to say that there aren't opportunities out there that we need to look at. That's a debate that's yet to come.
G. Farrell-Collins: I think the minister was perhaps overreacting; I accept that. I was just trying to get the facts clear. They weren't clear in my mind; now they are.
The member for North Vancouver-Seymour asked -- this morning, I believe -- a series of questions with regard to Hydro pensions. I don't believe the minister answered them, although I haven't had a chance to review Hansard. I'm only going by word of mouth. Do we have a commitment from the minister that he will be answering those questions at some time in the future, or has he decided that he just doesn't want to deal with the Hydro pension issue -- or am I misinformed?
Hon. D. Miller: It's been my practice in the past as a minister to have Hansard thoroughly reviewed. If there are questions that have been asked, and if, for example, we don't have the information and we say we're going to get it, then we follow up on that. So I'm quite happy to give it.
G. Farrell-Collins: The member for North Vancouver-Seymour was going to ask some questions with regard to pensions today. It has been indicated to me that he did do that. If he didn't ask all of the
Hon. D. Miller: We'll respond.
G. Farrell-Collins: I just want to extend my thanks to the staff who have been here for the last number of days. This hasn't always been easy or pleasant. It's sort of like going to the dentist, I guess. I don't enjoy it, either, but it's something that has to be done. I appreciate your efforts. It's not always easy to have all those answers at your fingertips.
Thank you also to Mr. Smith, the chair of Hydro, for returning from his out-of-province journey to answer these questions. It was much appreciated and allowed us to move much more quickly than we would have otherwise.
Hon. D. Miller: Hon. Chair, I offer the same sentiments. I'll very briefly try to say that we do have issues yet to deal with, and they are difficult questions. They involve our international view, and I look forward to hopefully having some forum where those questions can be addressed in a way that is not necessarily confrontational but that allows all British Columbians to feel a sense of participation in the opportunities and in the fundamental question about whether we move forward and try to look at other projects around the world, including the issues that remain to be addressed in terms of this project here.
J. van Dongen: I have a few questions with regard to a natural gas supply line for Burrard Thermal. I want to acknowledge, first of all, that I think the opposition critic had assured the minister that we were through with this area of questioning, but this issue just came to my attention today. So I'll keep it brief. I just have a few questions.
This gas supply line is intended to run from Huntingdon to Burrard Thermal, at Ioco. I guess members out in the Fraser Valley are concerned about it because it has impacts for our area in a couple of different ways. I wonder if the minister could just update us on the status of that proposal. I know that there was some discussion of it in the local newspapers and that there were a number of different routes that this gas line could follow. I just wonder: have the decisions in terms of the routes been made? What's the status overall?
Hon. D. Miller: The issue has not gone to the board yet. The member is correct; this issue has been talked about. Hydro is continuing to work with others in the gas industry, looking at proposals from the private sector for potential joint development of the pipeline. Proposals have been received and are under review. Further public consultation is taking place and will take place.
J. van Dongen: Is the minister saying that a clear, confirmed decision has not yet been made on whether to install that kind of pipeline?
Hon. D. Miller: That's correct.
J. van Dongen: Have there been any environmental assessments done to date? If not, will there be any done?
Hon. D. Miller: In the context of my previous answer, there has been some preliminary work done with respect to potential environmental questions. But since there's not been a formal decision taken, the issue has not gone to a formal environmental review.
J. van Dongen: I understand that these types of projects normally have to go in front of the B.C. Utilities Commission, and that in this case B.C. Hydro went to court to try and get that requirement overturned. Could the minister confirm that? If that's true, on what basis was that overturned by the B.C. Supreme Court?
Hon. D. Miller: It was in the court, Mr. Chairman. Really, that part of the act was taken over by the Environmental Assessment Act, so that's the proper act for the consideration of this proposal.
J. van Dongen: Is the minister saying that the Environmental Assessment Act applies today and that it will be considering this project before it is actually put into effect?
Hon. D. Miller: If we want to proceed, it is a requirement.
J. van Dongen: Part of the concern for my constituents is, of course, the environmental impact of Burrard Thermal and what could be a long-term decision to continue to operate that. Given the decisions that I understand have been made with respect to Burrard Thermal, are alternative energy sources being considered that could actually completely displace the possibility of a gas line, as has been contemplated in recent times?
Hon. D. Miller: From Hydro's point of view, Burrard Thermal remains a very live option with respect to generation of power. That has not been discarded by any means.
J. van Dongen: I think there's a concern, too, about the net cost, including not just the hard costs but the costs in terms
[ Page 1577 ]
of social and environmental impacts. I think there's a concern about the alternative sources, such as independent power producers. Are these alternative sources still within the total scope of the consideration that is taking place -- for example, the independent power sources?
Hon. D. Miller: We are examining a number of other options. Again, that's an issue that's been canvassed in the past here -- for example, the independent power projects, two that were announced previous to the election and five that are currently going through a panel process, on which we will have to make some decision. So yes, we're not looking at simply one option. We're looking across the spectrum of power development or power generation. But from our point of view, Burrard, as I've said, remains a very live option.
J. van Dongen: I think one of the complaints, and a concern too, has been full disclosure of all of the costs for some of the alternatives that B.C. Hydro is considering. We're talking about the hard costs, such as the cost of the gas that they might be purchasing. Will there be, once a decision is made -- and in the process of a decision being made -- a more full disclosure of some of the costs that people have been seeking, in order to fully debate the various alternatives that might be available to us as British Columbians?
Hon. D. Miller: Yes. For example, the current review panel, the IPC review panel, is looking at the independent proposals in the context of the repowering options of Burrard. But one of the things I'm starting to learn about this energy business is that you can talk to different people on different days and you'll get different numbers with respect to costs. Perhaps this is the nature of the business; but nonetheless, it's true.
J. van Dongen: I can appreciate what the minister is saying in his last comment. I'll just close off this discussion by encouraging him to ensure that, as much as possible, there is full disclosure of various peoples' opinions of costs and how they arrive at those calculations. I'm pleased that there seems to be some opportunity for a revisit of this pipeline. I would hope that he would consider ensuring that there is a public dimension to the process which B.C. Hydro and the government are engaged in right now, and that there is a re-evaluation of these options. Would the minister commit to a public dimension to that process?
Hon. D. Miller: As I said in my response to an earlier question, there is actually a legislated requirement for an environmental assessment process and, of course, consultation with affected individuals, stakeholders -- you name it.
J. van Dongen: Our concern is over air quality, and Burrard Thermal is a major factor. But having had some recent experience with pipelines, I also believe that we cannot underestimate their impact on the lands which they pass through. The pipeline in itself creates a number of impacts, so I would encourage B.C. Hydro to first consider the issue very carefully. Then, if a decision is made -- and I'm not saying whether I support it or
D. Symons: A very brief question on Hydro just came to mind. When I was first elected, I met with some people up on the Sunshine Coast who had real concerns about a power line passing by a school. At that time, the issue of the danger of electromagnetic rays from power lines seemed to be in the press quite a bit. I wonder if you might give me an update on what Hydro is doing about that, or whether those were all needless concerns which proved to be false.
Hon. D. Miller: As I understand it, there's no conclusive evidence on that issue. It's being looked at, I think, across North America. There have been a number of studies, but there's nothing conclusive.
[5:15]
D. Symons: If you say there's nothing conclusive, that means there may be something to it. Has Hydro taken mitigating actions, then, just in case it is proved that there is a problem?
Hon. D. Miller: With all due respect, there has been speculation about that question. There is absolutely no scientific information that would suggest that proximity to power lines or transmission lines has a negative impact on health. Yet there are people -- I've seen the clips on television -- who claim that the contrary is true. The question is very, very important. It is not just in British Columbia; it is international, if you like. The consequences, if it is true, are huge with respect to the cost. They're staggering to even contemplate. So I really can't give the member much more. There's probably a body of information. Maybe there are some speculative journals, etc., that the member might want to pursue. We simply can't respond in any kind of definitive way to those hypothetical questions.
The Chair: The committee is going to move on to B.C. Ferries, so we'll just take a short break while the transfer occurs.
The committee recessed from 5:16 p.m. to 5:23 p.m.
[W. Hartley in the chair.]
D. Symons: I guess we pick up from where we left off a few days ago. I had asked a question just toward the end of that session, I guess, relating to a business plan for B.C. Ferries. I was surprised at the minister's answer that they were working on one. Then he responded again, and I'll read from Hansard: "There is a business plan, but really, we've been talking about the kinds of changes and challenges that the corporation is faced with and the period of change that we're in." So he indicated that they're still working on one, because of the changes that have taken place. But I'm wondering: there must be a business plan that was put in place prior to the actual commitment to going ahead with the fast-ferry project. It's that business plan that I'm wondering if the minister would share with us, so that we can see the material used by cabinet, by the B.C. Ferries board or whomever to make the decision that we are now going to go ahead with this fast-ferry project. So if the minister could share that business plan with us, I would appreciate it.
Also, perhaps the minister might enlarge a little bit upon the changes that have taken place that he alluded to as to why they're now reworking the business plan. Could he give us an idea? Can we have the original plan that the decisions were made upon? And maybe he could tell us about the changes that necessitated an upgrading of that business plan.
Hon. D. Miller: I did indicate that there was a business plan -- obviously, a strategic plan -- with respect to the fast
[ Page 1578 ]
ferries, etc. The business plan is constantly up for revision, and we're looking for new opportunities, whether they are revenue opportunities or operational issues. We did the work in-house and also used external consultants.
D. Symons: In the minister's answer, I don't think I heard a yes to my question of whether we could have the original business plan that was used to make the decision to go ahead with the fast-ferry project. Is the minister trying to avoid giving me an answer? Would I be allowed to have it or not?
Hon. D. Miller: I think the business plan is available.
D. Symons: I'll look forward to receiving it.
I wonder if we can move on to other topics of a general nature for a moment. I know that the minister has a problem with opposition members using the newspaper as a source of information, but apparently there was a news article a while back which talked about B.C. Ferries repairmen spending hours in their cars. Some of the employees stationed at the Deas dock go to Horseshoe Bay or Tsawwassen. The Deas dock isn't that far from Tsawwassen, but there is certainly a fair amount of travel time from Horseshoe Bay. Is there some way that you can reduce the travel time of Ferries repairmen? An awful lot of time seems to be spent going back and forth, and then there's the portal-to-portal pay that you are giving them for work not done. Here is one comment: "Once travel time is deducted, staff who serve at Horseshoe Bay are left with only about three or four hours per day of actual work." Is there some way that that can be worked on so you can get a day's work for a day's pay?
Hon. D. Miller: As part of their job, dock repairmen use their vehicles for a lot of their work, especially in terms of fabrication, etc. But, yes, we are constantly looking at ways in which staff can be deployed in the most efficient manner.
D. Symons: In the board minutes of April 28, 1992, I notice a provision concerning observers from the union who attend board meetings, and "that the union observer shall be compensated by the corporation on the following terms: a retainer of $3,000 per year paid monthly, plus $200 per day of corporation business." I am wondering if that is standard procedure with government -- and, indeed, in the private sector -- that when a union member comes as an observer, the employer picks up the tab for that observer. It would seem to me that the union, if they're sending an observer along to meetings, should be the one responsible for paying the person's salary for attending the meeting. Certainly there shouldn't be a per diem paid by B.C. Ferries for a union member to be an observer at a board meeting.
Hon. D. Miller: I'm advised that that minute is to give us the option to have that kind of attendance there as and when we need it, and no money has been paid out.
D. Symons: In other words, the minutes where this was passed unanimously are not being followed? Is that what you're saying?
Hon. D. Miller: No. I said that is "as and when"; it's an enabling motion.
D. Symons: I can see that when he attends the meetings, there's a $200-a-
[5:30]
Hon. D. Miller: None. No money has been paid out.
D. Symons: Let's see. This would have been just about two months ago. At the end of March, I believe, a 15-member crew of one of the ferries was suspended with pay on a Friday over a dispute with management in the Crown corporation. I think they were in a dispute with the captain of that vessel. I'm just wondering: when members basically go on an illegal strike, are they generally paid for that strike time when they're off duty?
Hon. D. Miller: It was not on a ship; it was not an illegal strike. That method was chosen to allow an allegation to be investigated. The allegation proved to be unfounded.
D. Symons: I'm wondering if the connotation of "with
Hon. D. Miller: We were doing an investigation that required the attendance of those people. So they were technically at work, if you like, but not in their normal duties -- conducting or taking part in that investigation.
D. Symons: Then, obviously, the newspaper article I was reading the account from was incorrect when they said these members were suspended with pay. There's quite a difference between coming in and being used for an investigation of some sort and, as the newspaper report has it, being suspended with pay. It had something to do with unhappiness over some change to work procedures.
The Chair: Does the member have another question?
D. Symons: We'll try and talk to some other people involved in that and come back to you on that one.
I'm looking at another report. The projections by B.C. Ferries suggest there will be an additional 725,000 passengers and 340,000 vehicles arriving in and departing from the Gulf Islands by the year 2004. That says "additional." I'm wondering what B.C. Ferries is doing to handle that additional number, because 2004 is not all that far away. The term "additional" there indicates that we must have a fair number planned for the Gulf Islands.
Hon. D. Miller: We are currently engaged in a stakeholder process with representatives of the various Gulf Islands communities, with respect to service requirements both now and in the future.
D. Symons: This would apply to other runs as well, but I'm asking, specifically on the Howe Sound and Sunshine Coast run, if you might tell me what percent of the revenue generated is from discount fares rather than regular fares. What percentage of the fares would come from discount fares?
[ Page 1579 ]
Hon. D. Miller: We would have to do some computer analysis to get that number.
D. Symons: I was after a ballpark figure, but if that's not known, then I await the other answer.
We had a study done by a Mr. Bill Waters at UBC. He was working on the subsidy and how the subsidy is allocated between minor routes. I'm wondering if the results have come through in Mr. Waters's study and what steps the corporation has taken on how you use the profit you make on the money-making routes to help subsidize the minor routes.
Hon. D. Miller: No decisions. That's a subject that we will continue to work on.
D. Symons: If we can get back to finances for a moment, I gather that last year B.C. Ferries lost somewhere in the neighbourhood of $30 million. I'm wondering, since the government has been cutting back on its subsidies to B.C. Ferries: does B.C. Ferries just run a continual debt when they suffer a loss, as they did last year, in ridership? Costs are going up and ridership is going down.
Hon. D. Miller: The operating loss was $3.4 million last year. That was put out in the release, and the report is available. I've said publicly -- the member should be aware -- that prior to looking at traditional opportunities for revenue generation, such as fare increases, I want a better look at the whole corporation to see what other options are available: efficiency gains, etc. That work is ongoing.
D. Symons: Does the $3.4 million you just referred to include the debt-servicing charges and the capital cost payments?
Hon. D. Miller: Yes, but it does not include depreciation of the assets. Again, that was contained in the report that was released publicly. I think the total combined operating and depreciation was just shy of $40 million.
D. Symons: Putting in depreciation makes a tenfold difference, so my figure of $30 million that I said initially was not that far off. So if you had a deficit of $40 million, which is basically what you've now told me, how is B.C. Ferries going to do away with that if that happens year after year and you're cutting back on your subsidy? I think you're putting B.C. Ferries in a rather difficult position.
Hon. D. Miller: I have talked generally about the challenge for Crown corporations, and B.C. Ferries is no exception. They've been performing, in my view, quite well. They've been asked to carry their debt retirement costs. They've got an ambitious capital plan to continue to serve British Columbians in a very positive way. These are questions that we are currently engaged in, but no decisions have been made.
D. Symons: I'm wondering if it might not be a little bit irresponsible on the part of the government to be pushing a capital program of $800 million when, before that capital program is very far along, you're already running a debt of $40 million a year. It seems that if you can't get that debt under control first, you should hardly be considering increasing the capital costs. You indicated that the big difference in there was paying your debt, paying your loans. So when you take all that into account, that's where the largest portion of that deficit is coming from in B.C. Ferries. And you're going to increase it terrifically.
Hon. D. Miller: Sometimes you have to spend money to make money. The ships, many of which are approaching 30-plus years, need to be replaced. We do have that strategic plan I talked about in continuing to provide the kind of service that British Columbians expect -- in fact, in new and enhanced ways. It's entirely appropriate to have a capital plan linked into your operational plan.
D. Symons: I wonder if we can jump around to a few other topics. I may come back to that issue a little later on.
I'm wondering about the Langdale improvements that took place a year ago. One of the projects was to pave the parking lot. I'm wondering if you might give an idea of how much the parking lot paving cost, what parking fee is charged for that, and if there is going to be projected revenue from the parking fee. I'm trying to determine whether the fee will eventually pay for the costs of paving the lot.
Hon. D. Miller: The parking lot cost $700,000. There are fees, both for commuter and daily use, and there are some initiatives -- some feelers from the private sector, who may wish to build amenities at the parking lot -- which would provide additional revenue opportunities.
D. Symons: Is it planned that these revenue opportunities, through parking fees and in other ways, will eventually pay the capital costs of doing that paving?
Hon. D. Miller: They will exceed the debt retirement costs.
D. Symons: I'm just looking for a moment at the capital freeze that's currently on -- under review, I guess, is the term the government is using. The Duke Point terminal site preparation has begun. Can you give us an idea -- so I can ask later on, further to the fast ferries -- which parts of that are under review and which parts are carrying on because they are committed?
Hon. D. Miller: None are under review.
D. Symons: The Duke Point ferry project is going ahead, then. There was a news release from B.C. Ferries not long ago that the Duke Point ferry terminal was on schedule and on budget. Are those figures accurate today?
Hon. D. Miller: It's on schedule. I am advised that it's under budget by several million dollars.
D. Symons: Would it be under budget because certain parts of it have been changed, or simply because you've managed to use good business management in conducting the program?
Hon. D. Miller: It was a competitive contract.
D. Symons: As you are working on the Duke Point project, the city of Nanaimo gets more and more involved. I am looking to see if there is somebody from that end of the Island here. I gather that the city of Nanaimo feels that B.C. Ferries, with its grants-in-lieu for that particular site, is paying probably about one-third of what it would be if they were paying full taxes. Would that be about the correct figure?
[ Page 1580 ]
Hon. D. Miller: I had occasion to speak to the mayor of Nanaimo, who I believe was a Liberal candidate. I know he parted with his colleagues in the Liberal caucus, saying that the $100 million we are spending in Nanaimo is absolutely vital to that community. So I am sure he is delighted that we are continuing with that project.
D. Symons: That's a very interesting bit of information. I'm not sure that the minister answered my question. If the corporation was paying full
Hon. D. Miller: We are paying about a little less than half of what the taxes would be.
D. Symons: I'm sure the mayor of Nanaimo is very happy with the project but maybe not so happy with the grants-in-lieu they are receiving from B.C. Ferries.
You made a comment a few minutes ago about our aging fleet and the need to carry on with the ferry program -- the $800 million capital cost. I notice that a while ago you had done a few refits. One was on the Queen of Saanich, and I believe it was $1.5 million. I'm wondering if the minister might give me an idea of when the Queen of Saanich was built -- he should be able to look that up very quickly; just roughly -- and how long this refit will last, until either the ship is retired or until another refit is required.
Hon. D. Miller: It was less than $2 million for passenger and safety improvements. The vessel was built in '62, I believe, and we'll keep it as long as it's operational.
[5:45]
D. Symons: The second answer, I guess, was the one I wanted a little more elaboration on, because I have read of a few other refits that were done. It might be further along in my notes where the minister responsible at that time indicated that this vessel would be good for another 20 or so years. So I thought if you were going to put $3.4 million into the refurbishing of the Queen of
Hon. D. Miller: Well, I won't change the answer given by the previous minister, Mr. Chair.
D. Symons: I gather a 20-year time frame would seem okay. That would shoot holes, I think, in the government's theory that we must get on with this $800 million capital project because all our ships are aging. Indeed, some of these aging ships, if enough money is spent on refitting them, have a fairly long life left in them.
Hon. D. Miller: That's true. The C-class, or double-ender, which this ship's category is, is in that category. The B-class and others are not. There's a very small number of vessels whose life can be extended. A large number -- the majority, and more high-cost ones -- cannot.
D. Symons: I have some confusion sometimes, because the vessel I was referring to is C-class, and you're coming out with another class of vessels called the Century class, which is also a C. For a while I thought they were both the same, but apparently they aren't.
You have the first of the Century-class ones being built by Allied Shipbuilders Ltd. now. This vessel was expected, when the news release was made, to be in service in 1996. I am wondering if you might be able to give me an idea of how far along that particular vessel is. Are you up to launching it or doing sea trials? Is it on time, and is it on budget?
Hon. D. Miller: It's on time, on budget. Hopefully, we'll launch it by the end of the year.
D. Symons: I wonder if it's on time. If you say it's scheduled for delivery, I assume that delivery would be like a turnkey operation and that the ship would be in operation in 1996. Your answer would imply that it's not.
Another reason the government has talked about going with the ferry program, and particularly the fast ferries, is that this is a job creation project. I wonder if the minister would comment on a news release from B.C. Ferries on October 10, 1995, which says: "Ship Construction Creates 160 Jobs." I wonder if he might be able to tell us how long these jobs are for. I gather that unless you are going to continue to build ship after ship, or are going to sell ships offshore, which we've been highly unsuccessful in doing, these jobs are very temporary. The people you're training in these jobs won't have jobs open to them when B.C. Ferries stops building ferries.
Hon. D. Miller: This issue was extensively canvassed in the mini-estimates supply debate not that long ago. There were some interesting numbers that I cited at the time with respect to the employment opportunities that have been created so far as a result of the fast-ferry construction. There's no question that this is tied to a larger initiative, which is revitalization of B.C. shipyards. Quite frankly, if we're going to be out there and if we're going to have shipyards and be competitive, then we've got to be on the leading edge with respect to technology and a trained workforce. Surely that's something that all British Columbians would support. You never get anywhere unless you try. We've got the talent and the know-how, and we have a lot of people who are determined to be successful.
D. Symons: Again, to do with our shipbuilding procedure, if we look at the Century class one that Allied Shipbuilders bid on, I think they made a comment at the time where Mr. McLaren said that the government is getting a good deal and that they bid the job and bid it too low. I wonder if you might explain what "too low" means. Does that simply mean that they don't have any profit margin but that they're able to pay their workers? Or does it mean that they're going to have to get more money from the government, because otherwise they would go bankrupt? Is there something I can read into the comment that they bid it too low?
Hon. D. Miller: Those are the sweetest words that anybody putting a large job out to tender can ever hear. It's exactly what we like to hear.
Mr. Chairman, noting the hour, I move the committee rise, report progress and ask leave to sit again.
Motion approved.
The committee rose at 5:50 p.m.