[ Page 3729 ]

The House met at 2:05 p.m.

Prayers.

G. Brewin: I would like the House to welcome Mr. Peter Wolters, director of finance and human resources of the Legislative Assembly of New Brunswick. Mr. Wolters has been attending the Financial Management Institute of Canada conference. It has been held here in Victoria. He is going to be spending today talking to employees of the B.C. Legislative Assembly. He is joined in the gallery by our very own personnel director, Mr. Rod Newman. Would the House please make them welcome.

R. Thorpe: I would like to welcome a guest, George Layer, a writer from Summerland. George is in the House today, accompanied by his friend Sydney Carroll of Victoria. I'd ask the House to make them feel very comfortable.

H. Lali: I would like to recognize today one birthday and one anniversary. Today is the birthday of the hon. member for Vancouver-Burrard. He is 52 years old. Would the House please congratulate him.

Today is also the first anniversary of the re-election of this glorious government -- it's exactly one year -- which ensured that we would be here on this side of the House for five years and that the Liberals would be on that side of the House for the next four years. Would the House please congratulate us.

I. Chong: Visiting us today is a constituent from Okanagan-Boundary, Mr. Jim Burch, a CGA who practises in Grand Forks. Mr. Birch is a longstanding member of a number of committees for the CGA association. Would the House please make him welcome.

Hon. S. Hammell: Sam Weller, a friend of mine from the Sunshine Coast, is visiting Victoria. Would the House please make him welcome.

G. Wilson: Another constituent of mine is with us, Mr. Bruce Milne, who is the newly elected mayor of the district of Sechelt. He is in Victoria working on the Sechelt negotiations. Will the House please make him welcome.

B. Penner: Seated in the members' gallery are two people visiting the province of British Columbia from the great state of New York. They are Joe Sullivan and Julie Kranick. Would the House please join me in making them welcome.

F. Randall: On behalf of the members for Burnaby-Willingdon and Burnaby North and me, I would today like to welcome to the House from the city of Burnaby, Bob Moncur, the city manager there, and Chad Turpin, who is the deputy city manager. They are both here attending a Municipal Officers Association convention being held at Victoria's convention facility. Both the member for Burnaby-Willingdon and I worked with both of these individuals while we were on the Burnaby council. Would the House please make them welcome.

Hon. C. Evans: If we were here tomorrow, I would announce the passing of half a century for my seatmate to the right. But since we aren't going to be here tomorrow, I'd like everybody to wish the member for Cariboo South a happy fiftieth birthday.

The Speaker: Members, you will have noticed on your desk a copy of a pamphlet entitled "British Columbia Legislative Assembly: An Introduction." I'm happy to advise that it is the first of what I hope will be a series of documents. I also feel the need to put on record that I resisted the blandishments of staff to put my picture on the front cover.

Oral Questions

USE OF CONSTITUENCY OFFICE
FOR FEDERAL ELECTION CAMPAIGN

My question to the Deputy Premier is: what actions does the government intend to take and pursue to rectify the breach of conduct of the Minister of Small Business?

Hon. D. Miller: I'd suggest that if any member of this House has a complaint involving another member, there are processes to follow.

G. Campbell: My question again is to the Deputy Premier. Mr. Hughes has explicitly said that he has given no approval for any actions with regard to the minister's constituency office. Indeed, she did not even ask him for approval of her actions. Yet on Monday she told us she had explicit approval.

The Deputy Premier is responsible for the conduct of this government in the absence of the Premier. The minister says there's explicit approval; the former conflict commissioner says there was no such explicit approval. My question to the Deputy Premier is: has he ascertained who is correct with regard to that?

Hon. D. Miller: Well, Mr. Speaker, you can correct me if you think I'm wrong, but it seems to me, in my ten years in this House, that there are explicit processes available to members if they feel that a member has done something they should not have done. There are explicit processes that are available to members to raise those issues, and I would suggest that if somebody's got a problem in that regard, they avail themselves of those processes.

G. Campbell: The Deputy Premier and, surely, the cabinet have some standards which they expect to be met in the province. Surely they don't always have to go outside and say to someone: "Did we do something wrong? Should we review this?"

[ Page 3730 ]

Has the Deputy Premier reviewed this activity, and has the Deputy Premier ascertained whether it is the Minister of Small Business or the former conflict-of-interest commissioner who is correct with regard to the matter of the minister's office?

[2:15]

R. Thorpe: On Monday the Minister of Small Business said in the House that the use of her constituency office in Ladysmith for the federal NDP campaign had been approved by the conflict-of-interest commissioner. I quote: "All of the actions that I have taken with respect to my constituency office have the explicit approval of [Mr.] Ted Hughes. . . conflict-of-interest commissioner." Mr. Hughes has reported today that this is simply not the case.

My question to the Deputy Premier is: will he tell us what action he plans to take against the Minister of Small Business for this misrepresentation?

Hon. D. Miller: I'm beginning to sound repetitive, but the member should be fully aware. . . . If there's a lack of understanding about the rules or the processes. . .

Interjections.

The Speaker: Members, order, please. I believe we had quiet for the question. Let's have quiet for the answer.

Hon. D. Miller: . . .perhaps you could, hon. Speaker, instruct members opposite on the use of those processes and rules. But if people have a complaint, then they ought to go to the appropriate process and follow it through. Otherwise, we simply come to the conclusion that there's a bit of a political play going on here, which doesn't amount to a hill of beans.

R. Thorpe: Obviously it's a very big political play over there.

Mr. Speaker, the Minister of Small Business has appeared to have violated the trust of her constituents. She has violated the trust of the former conflict-of-interest commissioner and the rules of this House. Will the Deputy Premier agree that the minister acted improperly and that she should be fired from the cabinet today?

Hon. D. Miller: Well, there's a lot of heat and fury here that doesn't amount to much.

As I say, if members opposite truly believe that they have something they want to pursue, then they should pursue it. There are processes available to them. Their failure to do so will be very loud indeed.

USE OF MINISTERIAL STAFF
FOR FEDERAL ELECTION CAMPAIGN

Hon. J. Pullinger: My executive assistant is taking accrued holidays -- holidays that are owing to him, which he has earned. What he does with his holidays is up to him. Whether he goes to Hawaii or works on a campaign, that's his business.

R. Coleman: It's the use of her ministerial budget that is in question here. The Premier. . .

Interjections.

The Speaker: Excuse me. Members, order. I do want -- and need -- to hear the question.

R. Coleman: . . .stated that if any political staffers wanted to work on a federal campaign, they would have to take a leave of absence without pay. Did the minister ask the Premier's permission to depart from that edict to allow her own executive assistant to spend his taxpayer-paid vacation on a federal NDP campaign?

Hon. D. Miller: The Premier did say that if any political staff went to work, that would be documented and aboveboard.

But I'm a bit perplexed on that point, because I note that in 1988 in the city of Vancouver, the then mayor's personal assistant was caught issuing a news release from city hall. The telephone number was the city hall telephone number. I note that in 1993 the then mayor's political aide, Michael McDonald -- that's a familiar name; is he around these buildings now? -- was provided with a city hall office to work full-time on the mayor's leadership campaign. I also note that when the then mayor was confronted with these allegations, he dismissed those incidents and said that his staff were using their holidays.

I know that gang over there change their policies like they change their socks, hon. Speaker. But does that mean we should pay attention to them?

GUIDELINES FOR USE OF STAFF
IN ELECTION CAMPAIGNS

Can the Deputy Premier. . .

Interjections.

The Speaker: Order, members, please.

G. Farrell-Collins: . . .tell this House how many other executive assistants, how many other ministerial assistants or how many other staff members from the members opposite are working on campaigns while on holidays?

Hon. D. Miller: I would repeat that the Premier said that any time off taken would be documented and aboveboard, 

[ Page 3731 ]

and we'd be happy to provide that. I am intrigued on that point, because it does appear to me that if the opposition is trying to argue that Canadians should somehow be limited from using their individual vacation allotments, then it would be intriguing if they would get out on the road and perhaps argue that point with average Canadians, because I think they would be rebuffed absolutely.

G. Farrell-Collins: We're not making up these rules. It was the Premier who made up the rules and the guidelines. Yesterday the minister stood outside this House and said that she was following to the letter the guidelines the Premier laid down. Can the Deputy Premier stand up in this House and table those guidelines, and tell us how they differ from the edict issued by the Speaker?

Hon. D. Miller: Well, hon. Speaker, I guess all of us were. . .

Interjections.

The Speaker: Members, to coin a phrase, the clock is ticking.

Hon. D. Miller: . . .somewhat bemused when the leader of the Liberal Party attempted to explain the million-dollar mailer and the complete repudiation of all the excess of rhetoric that we continue to get from this group across the way. We do have an obligation, and it's not just the governing party. We have an obligation, as the Premier said in this House. . .

Interjections.

The Speaker: Order, members.

Hon. D. Miller: . . .that political staff working for a political party be well-documented and aboveboard. We are prepared to do that.

G. Farrell-Collins: I'll repeat the question for the Deputy Premier. Will the Deputy Premier stand in this House and table the guidelines that were issued by the Premier? Will he stand in this House and table those guidelines that were sent out. . . ?

Interjections.

The Speaker: Order, members. I'm sorry, Vancouver-Little Mountain. Members, I must hear the question. This is getting quite ridiculous, frankly.

G. Farrell-Collins: Will the Deputy Premier stand in this House and table the guidelines that the minister opposite referred to -- if, in fact, there are any? Will he tell this House how they differ from the edict that the Speaker made with regard to this issue?

Hon. D. Miller: I said we had an obligation to ensure that we do document the use of staff and to ensure that it is aboveboard. We are quite prepared to do that. Perhaps the Opposition House Leader might be prepared to advise the House, and beyond that, British Columbians, who made the decision about the million-dollar mailer, because I don't think that one ever came out yet.

C. Clark: Clearly the Premier told this House that there were guidelines in place, that things would be done aboveboard and that everyone would be aware of what was happening with staff during an election. But it means that we have to discover it in the middle of election. We have to raise it in question period again and again, and the minister has to go outside this House in order to actually answer any of the questions. Can the Deputy Premier tell us exactly what those guidelines are, what his standard for aboveboard is and why we didn't know about this before the election started?

Hon. D. Miller: I hate to see an opposition member standing up complaining that they have to raise something in question period. It certainly illustrates that in the balance of this sitting, at least, they've had some trouble deciding what to raise in question period. We have a responsibility -- and let me be clear. . . . I think this is the third time I've answered this -- the third time -- just for the record, so that everybody is clear. We have an obligation to inform the public about the use of political staff and to ensure that that was aboveboard.

Now, beyond that, beyond the allegations. . . . It's clear there is no substance, because there has been no formal complaint laid, and the refusal of members opposite to use the processes that are available seems to me to illustrate the paucity of their arguments. Perhaps this is entertainment before we leave for the weekend and get on with the federal election campaign.

The Speaker: The bell ends question period.

Petitions

Tabling Documents

Leave granted.

I. Chong tabled a document.

The Speaker: Mr. Clerk. Oh, I'm sorry, Okanagan-Penticton -- to table an afterthought? [Laughter.]

R. Thorpe: No, I've had the thought for some time. I've just been waiting for the documentation, but thanks for your concern, hon. Speaker.

I rise on a point of privilege. Having earlier today received a letter from Mr. Ted Hughes, QC, and. . . .

The Speaker: Excuse me, member, I'm going to interrupt you right now, if I may, and ask you to just take your seat for a moment. I know you're rising to reserve your right, but because this is a delicate matter, I wish to make very clear one point. Though I do not for a moment question my own ability to rule impartially on these matters, I think that impartiality, like justice, must indeed not only be done but be seen to be. Therefore I am giving notice to this chamber that to hear the motion of privilege, to hear the member's right to reserve the right to raise a matter of privilege and to adjudicate on this matter of privilege, I have asked the Deputy Speaker to take over for me in that capacity. With the member's indulgence, then, I'm going to ask the Deputy to take the chair now to hear your comments.

[ Page 3732 ]

[2:30]

Point of Privilege

Orders of the Day

ENVIRONMENT, LANDS AND PARKS
STATUTES AMENDMENT ACT, 1997
(second reading)

[The Speaker in the chair.]

G. Brewin: Hon. Speaker, I wish to make an introduction.

Leave granted.

G. Brewin: It gives me great pleasure today to welcome to the House a group of 73 grade 6 students and some adults, led by their teacher Mr. Moffitt. They're from Cathcart Elementary in Snohomish, Washington. Welcome, all of you. Will the House please make them welcome.

J. van Dongen: Hon. Speaker, I'm pleased to participate in this second reading debate on Bill 14. This bill deals with a number of amendments to a number of acts, but I'm going to comment on the issues revolving around two main areas. One is the amendments and the issues dealing with appeals to a number of pieces of legislation, including the Environment Management Act. I also want to comment to some degree on the amendments to the Pesticide Control Act, particularly from the perspective of agriculture.

In terms of the issues dealing with appeals and the rationale behind those changes, I generally support the amendments proposed. I think the decision by the minister to go from a three-stage appeal to a two-stage appeal, which in effect eliminates a management review within the ministry, is a good change. I'm a firm believer in effective appeal mechanisms, particularly for decisions made in regulatory areas. But I think there is also the possibility of a proliferation of appeals, where I don't think anything productive is added to the process. So I think the minister is on the right track in terms of eliminating a management review. This is definitely more efficient, costwise. It shortens the time frames for an appeal to be heard, and it gets us immediately into an independent appeal process, which I think people expect.

I just want to make some specific comments with respect to appeals. As I read the bill, there are some variations possible, particularly with respect to the Pesticide Control Act, in terms of the time limit for people to file appeals. Generally there is a 30-day time limit for people to file an appeal once a decision has been reached on their particular issue.

One of the things that I would like to see generally -- I know it applies under the Pesticide Control Act, but I'm not sure it applies generally under the other individual pieces of legislation -- is that there should be an opportunity for the appeal board chair to review situations where the 30-day time limit has been missed and give people an opportunity for consideration.

One of the areas that needs further thought and discussion is not included in this bill, but it would improve appeal processes generally. That is, for the various decision-making bodies -- whether they're individuals, regulatory people or some of our civil servants operating under these various acts -- there needs to be more of a standardized and formalized process, whereby they set out the reasons for the decision, what the decision is and clearly inform people of the time limit for the appeal, their right to appeal, how to proceed on that, etc.

I don't think that necessarily requires legislative change. I think it can be done in terms of management policies that are implemented within the ministry for each group of civil servants that has responsibilities for these various acts. I think there has been a general problem in that area, because people don't always understand that they have a right to appeal, they don't understand there's a time limit, and they don't understand how to go about it. So that is one sort of general comment that I would make.

I have a concern about section 2 of the bill, which speaks to section 11 of the Environment Management Act. Subsection (14.1) talks about an appellant having to deposit an amount of money that the board "considers sufficient to cover all or part of the anticipated costs of the respondent and the anticipated expenses of the appeal board. . . ." I think that is quite a heavy-handed amendment section to add. I support the amendments further down in the bill that give the board some authority in terms of costs -- to award costs at the end of an appeal. I support the conditions that give the board some leeway to deal with what they consider to be vexatious or frivolous appeals. I think those are good amendments. But I do have a concern about the potential heavy-handedness of the proposal for subsection (14.1) of that act.

I think it could create a situation where people with limited resources could lose their right to appeal. I know that this section is at the discretion of the appeal board; hopefully, it will be used judiciously. But I just question the need and the propriety of having such an amendment in place. If the board has the authority to award costs, then that should be a sufficient deterrent for people to make sure that their appeals are not frivolous.

I guess I could go as far as to say that I've seen situations where at one time people didn't have a right to appeal but do now. I've seen situations where people had appeals and, clearly, costs should have been awarded against the regulatory body because of the kind of tedious, stressful and in some cases irresponsible processes that the individual citizen was put through. I recognize that may be a controversial amendment to suggest. I'm not going to suggest it as an amendment, but I raise it as a point to balance off the intent of the amendment proposed under subsection (14.1).

I also want to again reinforce my strong support of a good, effective, efficient appeal mechanism. From that perspective, I definitely support the general thrust of all of the amendments that the minister is proposing.

I suggest that for her thought and consideration -- I know this requires more discussion -- there are decisions in other areas of the Ministry of Environment, Lands and Parks that could do with some thought in terms of a better appeal 

[ Page 3733 ]

mechanism than the ones we have now. I'm talking in particular about agricultural leases and other similar leases of Crown land to individuals or small business operators, such as we have in the freshwater fishery. We've experienced great difficulty in both those areas. What happens, in effect, is that the only appeal people have is to the minister herself -- or himself. I'm sure that the minister, just in her short time as minister, has seen some of the difficult situations that arise there.

In other situations where we've had amendments to legislation. . . . I'm thinking particularly of an amendment to the Health Act a couple of years ago that gave people an opportunity to appeal sewage applications on site. That has very substantially decreased the number of phone calls and the workload to senior Health staff and to the minister -- I was given by a senior civil servant the figure of 85 percent. I have no doubt that it has resulted in a better process and a feeling, at least, that people have some avenue to go to that is, hopefully, neutral -- and in most cases I think it has been -- for a second opinion. I simply raise that with the minister as an area that is probably more difficult than some of the amendments she has proposed here but is probably an area that we need to think about.

I also like the aspect of an effective appeal mechanism, such as is being proposed. What I also like about it is that it's a form of accountability for staff. You only need to compare a regulatory regime where you have no appeal mechanism for people to go to and how that develops over a period of time, to a regime where you have appeal processes such as this in place. It provides one form of staff accountability that I think can be very useful for supervisors and managers.

It's interesting that if you study appeal processes in different jurisdictions, some staff are always involved in appeals, and other staff seem to be able to work out issues, subject to the legislation, more effectively and with less hassle and less cost. Again, I make that comment simply in support of the general intention and thrust of the amendments proposed.

[2:45]

I have corresponded with the Minister of Health, and I've spoken to the Minister of Environment's staff about it. We're working with senior staff in the Ministry of Health to develop an amendment which, hopefully, we can include with this bill and that would accomplish the goal of providing for the small number of cases that are not covered by the current appeal mechanism. While the cases are small in number, in most of these situations the implications are very onerous and serious for the individuals involved. I've studied a lot of these cases, and I simply cannot agree with some of the decisions that have been made by staff. I think that if there was a proper appeal mechanism, that would help deal with the situation.

Now I want to just turn to the issues revolving around the amendments to the Pesticide Control Act. These issues are mainly covered in sections 5 and 6 of the bill. The first thing that I want to mention to the minister is the concern expressed by the stakeholders, particularly some in the agricultural community. Just to refer to two letters they wrote to the minister. . . . They were surprised by this legislation. They weren't consulted on it. Possibly the minister and the ministry staff felt that previous consultations on previous legislation was sufficient. I simply put on the record the concern that there was no discussion about this bill with people like the B.C. Fruit Growers Association and the B.C. Horticultural Coalition. Hopefully, any amendments to regulations that emanate from this bill, for example, will be discussed with them prior to those happening. I just wanted to mention that.

I'll just quote from the May 7, 1997, letter from the B.C. Horticultural Coalition. I think it sums up their concern very clearly:

"This bill contains many of the elements of the earlier environmental protection act. At that time, we raised the concerns that the bill would place unrealistic demands on our industry, increase regulations and ultimately raise the cost of doing business in British Columbia. Our industry would be placed at an economic disadvantage to our competitors. The results would be lost jobs and the contribution we make to the provincial economy."

Section 5 of the bill introduces two new definitions: integrated pest management and pest management plans. This is really the source of the concern from agriculture. The way the bill reads, there is nothing that exempts them from the need to either have a permit or a pest management plan.

We're speaking now to what's proposed for section 6 of the Pesticide Control Act. I know there has been a fair bit of discussion back and forth that we've been involved in. Certainly there has been consultation with the Ministry of Agriculture, and I was pleased to see that. I was also pleased with the representations that the Ministry of Agriculture made to the Ministry of Environment on behalf of the industry. There has even been some work done by the minister and her staff since the first time second reading of this bill was talked about.

I just want to indicate that I'm pleased to see that the minister did introduce the consequential amendment to the actual regulations, which attempts to clarify as clearly as possible that there is no intent to remove the existing exemption that agriculture has from the need to have a permit, as set out in this section of the proposed act, or an approved pest management plan. I think that that certainly meets the concerns partway and, hopefully, will give the industry sufficient assurance. I think that amendment, together with ongoing consultation on changes being contemplated in regulations, will be a good thing.

With that, I guess I could make other comments about some of the specific parts of the bill, but those are the two areas. The appeals are certainly very much in the right direction; there are some specifics that I would like to continue to work on with the minister and the Minister of Health. My comments on the Pesticide Control Act were just to register some concern about consultation and to register real concern that the need for filing integrative pest management plans not be expanded to include people like greenhouse operators and other farm operators. That would create, I think, some very horrendous requirements, particularly when integrative pest management plans need to be modified.

[ Page 3734 ]

I know that a lot of agriculture has very significantly reduced the use of pesticides, herbicides and other chemicals. I know that the greenhouse industry in particular aims to manage their pests with absolutely no pesticides, but there are times when they need to do it on an emergency basis. I think that if they were subject to this legislation, it would create some difficulty.

As I understand these amendments, the intent is to help put in place longer-term pest management plans that will reduce the need to issue permits on an annual basis, with significant cost and bureaucracy. I think that from that perspective, I do support the amendments proposed.

G. Farrell-Collins: I ask leave to make an introduction, if I may.

Leave granted.

G. Farrell-Collins: Earlier this afternoon a group of 40 students, parents and teachers from Vancouver Talmud Torah School in the riding of Little Mountain were here in the House. They were here during question period; I didn't expect them quite that early, but they were here. They're now out having a tour of the Legislature. I would ask that if members run into them in the hallway, they make them feel welcome here in Victoria.

J. Wilson: I feel compelled to say a few words on this bill, and I'll try to go through it in some type of order. Under the Environment Management Act, the appeal board which is being set up. . . . No doubt there's some streamlining here; however, I feel it is important that we keep in mind all of those out there who may be affected by an appeal. If you're a small operator or an individual, this has the potential of restricting your ability to be heard if you're forced to put up a bond or a sum of money that will cover all costs that will be incurred by the board or through the hearing.

When we go through a civil or criminal court, we're not required to post the cost of the court proceedings before we're allowed to be heard. I realize that this is written into a lot of legislation and that this is the way it is done, but to me, it is an infringement on the rights of the individual.

My understanding is that some amendments to this act will be presented with regard to the application of the act on private property. Although I haven't seen the amendments, I believe it is necessary to take all. . . . What I read here is that anything related to Crown land, or leases in some cases, may be required to follow the requirements in this act. However, if it's applied to private property without some changes, it would have a very detrimental effect on the agriculture industry, not only in crop production but in the horticulture industry as well. They rely heavily on herbicides and pesticides in order to be able to have a product to market.

The section that deals with integrated pest management is very complicated. It's something that most people in agriculture would not have the ability to deal with. They would have to hire a consultant group in order to put it together. It would have some harmful impacts on the industry.

In some places there is some wording that I feel should have been changed. In section 6, you cannot ". . .apply a pesticide to a body of water or an area of land. . . ." The exception there should be private land, not just land.

The time of notification to an appeal board may work in most cases, but there are areas in this province where people work in places that are somewhat remote. To decide that sufficient notice is the fourteenth day after you have deposited a notice with Canada Post does not work. If you live in a remote area, very often you're busy working and you don't have time to pick up your mail every second day, let alone every week. Sometimes you may go three or four weeks without collecting your mail, especially if you have to drive 100 miles to get it. Something else should be put in there. Maybe this works fine where you have daily mail delivery and people can access their mail on a daily basis, but in other cases you may want to deliver a notice by hand.

[3:00]

The other question I would have to ask here is: do these sections refer to pest management people using pest management plans, or will it be a broad-brush application and cover all of those people who are involved in agriculture and are working within the confines of their private property?

There should be an additional section in the amendment. If the amendment comes in, there should be something in there that will allow certain people exemptions from these rules. It could end up being another burden on the backs of people that can ill afford additional costs.

There is another section under section 36(3)(i) of the Waste Management Act. I believe the intent of this. . . . It deals with permits, and they can be cancelled within three years after issuance of the permit, or after failure to comply with the permit. I feel that is a pretty hard and fast rule. Somehow I have a feeling it's tied into solid waste management, and it may have some consequences for the regional districts around the province. In some cases, you could see a considerable tax increase if their permits are cancelled after three years, if they are unable to comply with regulations which have come into place.

Before I get to appeals. . . . Under the Environment Management Act, authority under the appeal board, there should be something in there that will give the appeal board authority to dismiss an appeal on a summary basis, in some cases. If they decide that this is frivolous, abusive or otherwise without merit, there's no need to go any further on it. And they should be able to throw it out and not have to worry about spending taxpayers' money or an individual's money, or whatever. It would save time and save costs if they could determine where it's going in the beginning.

Another point is that they should be able to make a decision if an appeal relates to a permit issued under the Waste Management Act and that permit complies with the regulations, standards and policies of the Minister of Environment. Appeals that would come in there have already been approved under permits in the past, so there shouldn't be any need for hearing appeals in those cases.

Section 24 deals with the Water Act: "An order of the comptroller, the regional water manager or an engineer may be appealed to the Environmental Appeal Board established 

[ Page 3735 ]

under the Environment Management Act by" -- and it goes on to list the persons who might be subject -- ". . .(b) an owner whose land is or is likely to be physically affected by the order, or (c) a licensee, riparian owner or applicant for a licence who considers that their rights are or will be prejudiced by the order."

The question I would ask is: is this clause put in here for some other legislation which we haven't had a chance to talk on yet? Are there other implications that are not being explained? Because it would appear they're anticipating a lot of problems by including this in a bill before the problems arise. Is there more legislation coming in other bills that is going to be a potential threat to a lot of people, and is this a way of dealing with it before the fact?

That pretty well sums up all of the concerns I have with it. I would have to say that if this bill can do what it's intended to do, which is streamline the process, cut down on the paperwork and make things more workable, that is what we are all aiming for, I think, at this time. With that, I would like to close.

The Speaker: Seeing no further speakers, I call on the minister, whose remarks will conclude the debate.

Hon. C. McGregor: I'm certainly pleased to respond to some of the concerns that have been raised by the hon. members of the opposition in regard to this act. But let me first say that I am very pleased to hear the broadly based support from the member who's just spoken, as well as from others, on a number of matters.

The first is the principle of integrated pest management and their support for this as a principle of good public policy in how we manage pesticide control. I would agree with them. I do believe that integrated pest management planning, in the instances which this act is designed to cover, is indeed good practice and policy, and will create greater efficiencies for all of us within government and for those who must also appropriately manage these chemicals.

I noted with interest the comments of one of the members on the other side around spill response and, in fact, her support for the polluter-pay principle. I'm certainly pleased that the opposition does support that principle, because indeed it is one that we promote in multiple policies and legislative frameworks within this ministry.

Certainly I note with some of the same level of concern the issues related to appeals. And not to draw attention, necessarily, or to be difficult about the matter, but I did hear two different points of view expressed by members of the other side. On the one hand, I heard some of the hon. members suggest that the appeal process must be designed in such a way as to make it easily accessible for all members of the public because they should have an ability to have an appeal heard. On the other hand, I also heard members suggest that we should be able to summarily dismiss some of those appeals if they're viewed to be frivolous or causing some harm to the legitimate applicant.

Trying to balance those two issues is indeed what the appeal process is designed to do. The act does go to the point that the individual is given the opportunity for an appeal. I appreciate some of the comments others made about the formality of the appeal process and how some applicants may feel that that makes the appeal difficult to access, but I want to assure those members that, as much as possible, the environmental appeal agency makes this process as simple as possible. It's meant to be informal in nature, and in fact many appeals are dismissed through an informal mechanism or a mediation process prior to an actual hearing. There's certainly no intention that people who want to be a party to an appeal should have to have a lawyer to be able to engage in those appeals. That certainly isn't the practice, and it certainly isn't what the legislation has in mind.

On the matter of deposits and the ability to assess costs, again I heard two different points of view from the members opposite. There is a concern, and one that I would share as well, if there were a requirement to pay a deposit up front in the case of every applicant. I just want to assure the members opposite that that is indeed not the case.

The environmental appeal agency has actually only used the deposit provision once, and that was after an applicant had not shown up for two hearings. So the Environmental Appeal Board assessed a deposit, and then the person who was launching the appeal determined not to continue with the appeal. Obviously, it's meant to be used as a tool and a mechanism to avoid frivolous appeals. Certainly I know the members opposite have concerns as well that the process not be one that is abusive in any way.

On the issue of the Pesticide Control Act, I do appreciate the comments of the members today in that regard. Of course, it was as a result of the consultation we had with members of the opposition prior to the introduction of the bill that we recognized the concern they had raised about the need to introduce an amendment to the act to make it clear that the Pesticide Control Act was not meant to apply to farmers. So I have the intention of moving the amendments that have been introduced in my name on the order paper, when we get to those sections of the bill, to make it abundantly clear to the members opposite and to the agricultural community that it was not meant to capture them, that they are currently exempt from the need to apply for a pesticide permit and that that exemption would continue.

There were some concerns, I believe, raised around the issue of appeals under the Wildlife Act, and there were concerns, really, about the adequacy of the expertise on the board. Certainly for that member, I'd be quite happy to share the biographies of those members who are on the Environmental Appeal Board so that she can see the full range of their expertise and see that there is an ability for the person who has applied for the review, as well as for the individual who is representing the ministry, to call expert witnesses, if that is indeed a necessary part of the appeal process. So I do want to assure the members opposite that there is a recognition that specific expertise and detail is often needed to bring forward these appeals, and in that case we do.

[3:15]

There was a concern about the appropriateness of moving the responsibility for the Crown land registry. I'd like to reiterate that this responsibility has been transferred to the director of Crown land registry services from the surveyor general, who now reports to the director. And as the director is not a statutory office, we cannot vest responsibility with that person without making greater changes to the act. Those changes would not be warranted, because future reorganizations may assign the responsibility elsewhere. I will delegate 

[ Page 3736 ]

the responsibility for the Crown land registry to the director of Crown land registry services once these amendments come into effect.

In closing, I'd just like to thank the members opposite for their diligence and their interest in this act and, in fact, for their support on a variety of the principles that this act is designed to do. At this time, I move second reading of Bill 14.

Motion approved.

Bill 14, Environment, Lands and Parks Statutes Amendment Act, 1997, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

Hon. C. McGregor: I call committee on Bill 9.

I note that the minister responsible is on her way, I believe, so we can just take a very short break while she joins us in the House.

The Speaker: We will do that. Before I call the committee Chair, I recognize the member for Burnaby-Edmonds.

F. Randall: In the gallery this afternoon we have approximately 50 grades 5 and 6 students from Second Street School in Burnaby-Edmonds. They are accompanied by their teacher Ms. Loraine Hodgson and a number of other adults. There's one adult I see there who was very active in my campaign and helped us get elected -- Joane Fry. Would the House please make them welcome.

TOURISM BRITISH COLUMBIA ACT
(continued)

The House in committee on Bill 9; G. Brewin in the chair.

On section 6 (continued).

Hon. J. Pullinger: I would just like to begin by introducing once again my staff, who are present here today. On my left is Lyn Tait, the deputy minister. Seated behind us is Rod Harris, the CEO of Tourism British Columbia. With that, I turn it over to members.

G. Wilson: With respect to the issue at hand here, I understand that a lot of what is proposed in the language might be deemed to be somewhat boilerplate in terms of the creation of a Crown corporation, and therefore that much of it is taken from the Company Act and previous acts that relate to Crown corporations in terms of its structure. However, because of the nature of this Crown corporation and how it is going to be funded, and the extent to which -- and we canvassed that in earlier sections -- this Crown corporation may in fact impose upon people who are involved in the tourism industry a possible source of taxation -- or, if not, fees -- I think there is an opportunity there for Crowns to make that imposition as a result of the requirements that this act will put in place.

I note that under section 6, not unlike many other Crown corporations -- in fact, most Crown corporations -- this one will be allowed to acquire, hold and dispose of property. It will also be allowed to borrow and invest money. Now, it's important for us to know what the minister has in mind with respect to the borrowing powers of this Crown corporation, because this is a corporation -- as we will find out later when we take a look at the special levy that will be made with respect to the Hotel Room Tax Act -- that will be funded, in large measure, through the moneys that are coming out of a proportion of the hotel tax.

Yet if this corporation incurs debt, which it is clearly able to do, the question is: where does the liability on that debt fall in the event that this Crown corporation requires additional or extended revenues to cover the service of that debt? It's expensive to borrow money, as the minister well knows. I'm curious to know what the minister has in mind with respect to section 6(b) in terms of the borrowing capacity and powers of this Crown corporation.

Hon. J. Pullinger: The borrowing powers are fairly standard. They are there for things like lines of credit and so on, as the Crown corporation sees fit, if that answers your question.

G. Wilson: I wonder if we can try to be a bit more specific than that. B.C. Ferries is a Crown corporation. It went to cabinet last year, and it got approval to borrow $800 million. That's a lot of money. Somebody has to pay it back, because it is a Crown corporation we are all responsible and liable for, and we're all going to have to carry its debt. The taxpayers of British Columbia clearly have to be quite conscious and aware of how Crown corporations are chartered, within the concept under which they are struck, and how they will be allowed to borrow.

I wonder if the minister can tell us more specifically the ceiling or the amount of borrowing that is anticipated for this Crown corporation. Are there guidelines that will be provided, or are we going to have to wait for this business plan that the act calls for before we'll know how much increased debt this Crown corporation is likely to place upon British Columbians?

Hon. J. Pullinger: Right now it's hypothetical, if we're talking about specifics of borrowing, but there are two points that I think may help the member. One is that this corporation will clearly function in a very similar fashion to any business enterprise. It therefore requires, as I mentioned, some kind of borrowing flexibility for a line of credit or other things to enable it to maximize its business opportunities, which is why the industry very much wants to have this kind of flexibility.

The other point, and the concern I think the member is alluding to, is about accountability. He's correct. The future plans will be laid out annually in a business plan that is mutually approved. It will be a public document. Also, any borrowing, accrual of debt or anything of that nature is governed by the Financial Administration Act. The Ministry of Finance would therefore be the fiscal agent, and that kind of activity would be undertaken through the Ministry of Finance.

G. Wilson: All right. I guess one of the things I'd like to know, given that there is a very specific understanding of the funding base for this corporation -- and it's established within the act -- is if the minister anticipates that the government would restrict its borrowing to the annual value of that funding allocation. If it doesn't do that, then essentially, this is really establishing another Crown corporation that can greatly increase the debt load British Columbians are going to have to face.

Hon. J. Pullinger: I can't comment on the hypothetical questions, because they are hypothetical, but clearly the corporation 

[ Page 3737 ]

will be required to put together its budget and its business plan, and it will be expected to live inside its funding sources.

G. Wilson: I'm really not trying to be argumentative here, and I'm not trying to deal in hypothetics. I'm trying to find out what was specifically intended in terms of borrowing powers when the act was drafted. We know, as is boilerplated in most of these acts -- notwithstanding the Financial Administration Act -- that Treasury Board has the provision to control or limit expenditures, but it also has the ability to accept expanded borrowing, as it did last year with B.C. Ferries to the tune of about $800 million. Now, the fact that it's able to borrow and invest money suggests that this corporation is going to be able to act -- as many do -- almost like a corporate entity that is chartered quite independent of government revenue, even though the funding source is tied.

So I'm not trying to be argumentative; neither am I trying to be hypothetical. I'm trying to find out at the time we're introducing this legislation whether or not it is anticipated that there will be a ceiling on the amount of borrowing available to this Crown corporation. Is that anticipated in this bill?

Hon. J. Pullinger: I think it would be helpful to the member if I was to elaborate a bit on the kind of borrowing that I expect may be undertaken by the corporation. The reason for creating the corporation, of course, is to provide a little more flexibility and to allow this marketing agency to respond more flexibly and readily to marketplace circumstances and needs as they arise. I would expect that the kind of borrowing this corporation may engage in would be primarily along lines of credit -- that kind of borrowing -- for things such as. . . . If there was a business opportunity coming up six months down the road, and for business reasons they needed to deal with that now but the full funding wouldn't be available until later, the corporation might in fact take advantage of a line of credit to engage in that business activity. The line of credit would be paid off as the money came in. That would be a hypothetical example.

Essentially, it's so they have the ability to flatten out the normal peaks and valleys of funding and expenditure. In the marketing business, timing is everything. They need to be able to respond seasonally and in accordance with opportunities to market this province.

That's the intent of it. I don't expect that there would be other kinds of borrowing. That's the kind of borrowing I would intend. It's certainly fiscal management borrowing on a line-of-credit basis. And, no, there isn't an explicit ceiling. That would have to come with a business plan, and it would be dealt with at that time.

[3:30]

What I was trying to get at is whether or not there's a limit. What I'm hearing is that there are not any borrowing limits anticipated on this Crown corporation, and that's what I was trying to establish.

I'd like to talk, then, about 6(c), where it suggests that you would "negotiate and enter into agreements" -- again, this is somewhat boilerplate, I understand -- "with any person, including but not limited to agreements with the government of Canada, the government of a province, first nations or local governments or with an official or agency of any of them." It seems that would preclude entering into contractual agreements with private sector companies, because all of the agencies mentioned here are predominately government corporations -- unless the "not limited to" line says "and anybody else whom the corporation deems to want to enter into the contract with."

If that's the case -- and I read it that way, hon. Chair -- then the next concern I have is under section 6(e), which says you can "incorporate subsidiary corporations, with the prior approval of the Lieutenant-Governor-in-Council." Now, the trend in Crown corporations at the moment, as a matter of public policy, has generally been to move to what are called commercial Crowns; i.e., self-funding, self-perpetuating, self-paying. If we're going to have Crown corporations, that's probably the better way for them to be, generally speaking.

I want to come back and use B.C. Ferries as another example. B.C. Ferries incorporated a subsidiary whose sole purpose was constructing and selling aluminum catamarans. That provided a marketing agency that allowed B.C. Ferries the opportunity to greatly expand its debt load as a result of the increased borrowing it was allowed.

With the creation of this Crown corporation, given the fact it is going to be so directly tied to tourist promotion and marketing in the province -- something that is very competitive, something that is going to require a great deal of effort and energy -- I'm concerned that we do not create a government-funded, government-supported agency which will directly compete with individual agencies who are already in the business of tourism promotion and do so with government subsidy and an unlimited restriction on borrowing. If we do that, government becomes the tourism promoter, not the people who are involved in the industry themselves. As a matter of public policy, that's not a good idea. I'd like to hear the minister's thoughts on that.

Hon. J. Pullinger: There are a number of questions that I'll attempt to address. First, I simply want to reflect back to the member's comments around borrowing and ceilings. Those kinds of arrangements. . . . I just want to be very clear that lines of credit would be established through the Ministry of Finance, in accordance with overall government policy and budgets and so on. It would be reflected in business plans, etc. I just want to be very clear that the corporation will determine those issues in future as it needs to and will do so through the Ministry of Finance. I would imagine that any requests would be to do with their realistic needs. I'm not being deliberately vague, but it's a future issue. The accountability, the process, the business plan, is there through the Ministry of Finance. I want to be very clear about that.

Secondly, unlike the B.C. Ferry Corporation, this corporation has a very narrow focus and mandate: it is a marketing agency. I therefore don't anticipate that it will have anything significant in the way of capital expenditures or that kind of 

[ Page 3738 ]

expenditure. Its function is to take the funds, the $18 million-plus funds this year -- and that amount will grow as the industry grows -- to use to market British Columbia in a variety of ways. It's a very clear, very narrow mandate.

The issue of competing with existing advertising agencies and so on -- that's not the case. I imagine they would use advertising agencies for different projects, just as government does. This is, in fact, the model that industry has wanted for quite some time -- a couple of decades that I know of -- whereby industry has the primary voice within the context of government about how this marketing takes place in British Columbia.

That would be their mandate: not to market any one individual business or enterprise, but rather to market British Columbia, the regions of British Columbia, and the sectors such as. . . . We have accommodations guides; we have golf tour guides, etc. Their mandate is the very broad-brush-stroke mandate: to market this province, to attract people to come here, to encourage them to move around in the regions, and to encourage them to stay longer and spend more money here. So that's their mandate.

G. Wilson: I guess we can explore this matter of borrowing in a little bit more detail under section 11. Unless, of course. . . . I don't know if it's in order, but since we have the very creative and talented Minister of Finance with us, he might want to tell us how much he's prepared to lend this institution.

Let me come to the last question I had on section 6. Again, it has to do with making sure of our ability to make sure that people in the private sector who wish to involve themselves in the tourism promotion of the province are not constrained from doing so if they are not blessed by this new Crown corporation. The concern I'm hearing from people in the industry is that this is going to become a closed shop, and if you want to succeed in British Columbia tourism, you're going to have to succeed through a very close adherence to and be tied to this corporation, or at least have representation on it.

I know what's anticipated in terms of the broad range of people who will sit on the board, and I don't take issue with that. But I do take issue with small ma-and-pa operators, whether they're bed-and-breakfast operators or people involved in very small industries, who will not directly have representation and who may find that they can't have their names included on these brochures or in these broad-based marketing agencies unless they're connected into this corporation. So where it talks about negotiating into agreements, I'm hoping that doesn't mean that small ma-and-pa operators -- people involved in rural British Columbia who just want to run a small tourism agency -- are going to be prohibited from having access to moneys they might ordinarily get now unless, of course, they toe the line or pay a fee or in some way become locked into this corporation. I think that's a very real concern, because an awful lot of the people in British Columbia who make their livelihood from tourism do so as a family operation, not as a broader business or corporate enterprise.

Perhaps the minister can comment on that.

Hon. J. Pullinger: Good points. I share the concern that there's broad representation and that the little operators are able to have a voice and are treated equitably. I am sure the member is saying that with the understanding that in some regions of the province the industry tends to be much more on-the-ground, grassroots, smaller mom-and-pop than it does in others.

The reason for the structure of the board -- which has been the subject of some considerable debate outside this House as well as in -- in which there are nominations from industry. . . . Ten seats will be nominated, in one way or another, through industry, through processes to be determined by an MOU -- the initial one will be signed shortly -- and thereafter by the policy and bylaw of the board. So there are ten industry seats, and then there are five government seats.

The reason for that makeup is to ensure two things. One is that there is significant representation from industry on that board. It's because of the nature of this Crown agency. In my view it's imperative that the overwhelming majority, if not all, have some connection with tourism and tourism marketing and the tourism industry, etc., which is very broad, as the member knows. The other reason for that particular makeup is to ensure that there is diversity. That is explicit in the act. I was adamant that it be in the act, and it is absolutely in line with other things that our government is doing.

So in terms of it becoming a closed society, that's not possible. There will be limitations on terms. Certainly, I as minister will make every effort to make sure that some of those small community-based voices are included on the board, as well as regional voices, men and women, visible minorities, etc. -- everybody who has something to contribute from different perspectives.

Essentially, there's a huge amount of effort going into making sure, maybe for the first time, that it isn't a closed shop. It will be more open than it's ever been, and more inclusive. Certainly if people have concerns about the board, they have all of the normal political responses, through your office or mine or directly through the ministry -- however -- to air those concerns, and they'd certainly be considered.

The other issue you raised had to do with whether or not small businesses could be included -- or perhaps, to put it the other way, could be excluded from something. The board will and should operate on clear policies. I would just draw one. . . . It's a federal program that's used provincially. It's called Canada Select, whereby accommodation is inspected and rated, and on the basis of that it's included or excluded from the accommodations guide. But there's a set of criteria. If you meet them, you can be included; if you don't meet them, you can't. If you met them and then complaints come to my office, which happens, and subsequent inspection determined that you no longer meet them, then you will be excluded next time. So it's a clear screen that you have to get through in order to be included, and you're rated accordingly. As minister, it would be my expectation that programs have that kind of accessibility, where it is transparent and accessible to everyone, based on objective criteria.

I. Chong: The questions I have on section 6 relate to some of the questions perhaps already posed by the member for Powell River-Sunshine Coast. If I risk being repetitious, I hope the hon. minister will indulge me.

The first part, subsection (a), "acquire, hold and dispose of property," I guess causes some concerns for those people who are looking at this Tourism Act to ensure that the corporation, once established, does in fact hold to the purpose of marketing tourism. However, when it gives the broad powers of this corporation. . . . When this act allows and empowers this corporation to "acquire, hold and dispose of property," that can broaden the marketing that this act was intended to do, and it may broaden the mandate of this particular act to the detriment of marketing.

[ Page 3739 ]

[3:45]

Hon. J. Pullinger: I think I understand the member's question, and I will address it. It seems to me that the member is concerned that this corporation will get into investing to make additional funds to then market with. That is not within the mandate of this corporation. The intent of this part of the legislation is to allow the corporation very simple things, like its own lease, for instance. For instance, it has to have the mandate, under the legislation, to acquire, hold and dispose of the property that it houses itself in. So its own lease would be covered by this section of the act.

Apart from that, I think the primary use for this ability would be for intellectual property such as trademarks. This section would give the corporation the right, as I mentioned in an earlier part of this debate, to put a Tourism British Columbia trademark logo on a hat. They own the intellectual property of the logo. They can put it on a hat and sell that hat to increase revenues to the corporation, if they so choose. I anticipate that that would be the primary kind of property dealt with here, other than its own lease. Anything different from that would have to be dealt with in a business plan in advance, and at that time it would have to be demonstrated that it's within its very narrow marketing mandate. So I anticipate there will be little, if anything, else.

I. Chong: So what I'm gathering from the minister is. . . . Again, that does become sort of hypothetical as well -- that we assume that the only thing this corporation may be dealing with is intellectual properties. That seems to make sense, but my concern is, as I gather from other members, that there may be other kinds of property. I suppose if it were that simple, why would we not ensure that that would be included in this act? Because, you know, in "acquire, hold and dispose of property," there is very little definition there to provide any kind of comfort. If the board goes beyond what was intended, not having had the benefit of this particular debate, how would we then be able to ensure that the interests of the taxpayers of this province have been properly dealt with, with this marketing?

Hon. J. Pullinger: The constraints are thus. Under section 6, one constraint is: "For the purposes of this Act." In other words, (a) to (f) can only be undertaken to carry out the purposes of the act, which are quite narrow. Another constraint would be the business plan, which must be approved by me. A third constraint would be that anything to do with borrowing, accrual of debt or anything of that nature would be done through the Ministry of Finance. That would be another constraint. All of that, of course, would come within the larger budgetary and policy framework of government. It's actually quite constrained, both in the wording of the act itself and with the external constraints.

I. Chong: I thank the minister for that. It does explain it a little more. As I go through all these sections, I see we are deferring a lot of debate and discussion for the business plan, and that probably will be a fairly extensively debated section.

The other thing I want to move on to in this section is (b), the borrowing and investing of money for the purposes of this act. As the minister responded to the member for Powell River-Sunshine Coast, her anticipation would be that the borrowings would be limited, as would be the investing -- the borrowings, in particular, being restricted to perhaps a line of credit situation.

I would like to canvass that a little bit further and ask the minister: if a line of credit were established and were permitted to allow for an acquisition of perhaps another intellectual property or whatever, which didn't perhaps produce the revenues it was intended to produce, thereby creating a loss or a deficit. . . . I'm wondering whether the minister is able to advise how that would be treated -- whether the creation of a deficit situation may occur at the end of a particular year because the borrowings resulted in a greater expenditure than the tourism revenue dollars they had anticipated, whether that deficit is permitted to exist within this Crown corporation, carried into another year, and how that might impact on the accumulation of debt in this province.

Hon. J. Pullinger: I appreciate the member's concern. As she expressed, it is hypothetical, so I'm not able to give anything by way of a very concrete answer. However, I can say this: the corporation will be expected to live within its budgets. I do not expect it to be engaging in ventures of a high-risk nature. That's not the nature of the business that takes place currently. I don't expect that will change.

I expect that if borrowing takes place, it would be, for instance, to meet seasonal obligations. The budget starts April 1, and the tourism season starts very quickly thereafter. If the corporation wanted to enter into an agreement with some agency to undertake a massive marketing initiative for something or other -- your imagination could fill in the differences -- they might want to borrow that money in April in order to have the marketing when it matters -- i.e., before the tourism season. Similarly, they might want to do it in January, at the end of the fiscal year when they're running lower -- whatever.

But those are the kinds of things, just to deal with the humps and valleys of the realities of the business world, which I know the member is also familiar with. So those are the kinds of borrowings that I expect. But overall, the corporation will be required to undertake initiatives that will not result in loss to the taxpayer or in it going outside its approved budgetary confines.

I. Chong: That does explain it somewhat. I appreciate the minister looking at it from the borrowings that may occur at the beginning of the season, where you expect the revenues to come in. Also, the fact that she mentioned that if the corporation were to borrow in January, February -- and that's where I'm leading to. . . . If borrowing occurred in January or February for a line of credit reason, in anticipation of the revenues that it's meant to match against until the end of March. . . . If those revenues didn't materialize, then clearly at the end of the fiscal year we would have a situation where there could be a deficit.

[ Page 3740 ]

I'm wanting clarification from the minister as to whether or not that deficit may be allowed to occur in this particular Crown from one year to another. If you budgeted $18 million of anticipated revenues to come in for 1997-98, for example, and your expenditures were $18 million. . . . If you'd anticipated it to perhaps exceed that and you'd borrowed on a line of credit to assume that, and it didn't materialize, clearly there is a deficit that occurs at the fiscal year-end. Is this Crown corporation permitted to have that? How many years are you allowed to allow this to flow from one year to another?

Hon. J. Pullinger: The board will be expected to govern itself in such a way that throughout the fiscal year, it lives within its means. If the board determines that it needs or wants at some point during the year, whether in month one or month nine or whatever, to undertake something that requires some advance funding that it wants to borrow, it would have to be certain, as much as that is possible, that in the next month or two or three -- whatever it has -- it would be able to meet the deficit it had accrued. In other words, it's a month-to-month deficit.

As the member knows, in forecasting -- and this agency will be in a position where it will have to do some economic assumptions and future forecasting, which is only an exact science in hindsight -- it will simply have to use prudent assumptions based on all the best economic models it has, and live within its means.

I. Chong: Before I move off the topic of borrowing and investing, I want to be clear. As was stated at the very beginning, when this bill was introduced, this is an independent legislated agency. I suppose, with independence, the board would expect some ability for it to, I guess, deal with its budget and perhaps create a deficit if it were permitted. The reason I'm asking this particular line of questioning is: because of that independence, are they able to create a deficit? If not, then essentially, if I can assume that the minister is suggesting that this agency would be required to produce perhaps a balanced budget -- if I can use that phrase. . . . If it did not produce a balanced budget, what would be the consequences?

As we understand, there are a number of organizations that the government is responsible for, and it implies that balanced budgets must be provided. But when those things are not provided, then the government may or may not make an exception to allow a deficit budget to occur, one year to another. I'm just trying to make sure I know the guidelines that are available to this Crown corporation, and given its independence, where the ministry draws the line on whether it's permitted to have a deficit at the end of its fiscal year. Whether it likes it or not, if that does occur, what steps would the ministry take to ensure some sort of control of that possible situation?

Hon. J. Pullinger: Let me deal first with the issue of independence. The agency is independent to the degree that any part of government can be independent, and as the member knows, a Crown is a part of government. So there is independence of the board for the carrying out of its business plan and its day-to-day operations, which is the part that is most important in the marketing business -- to have that flexibility. But outside that context, there are all of the policies and regulations and financial legislation of government that will constrain this corporation. It reports to me via the business plan. I remain the Minister of Tourism and the spokesperson thereof, etc. There will be daily interaction, I would assume -- or maybe not daily, but regular interaction -- between my deputy, myself, the board and the agency. That relationship will still be there, because I carry all of the rest of the responsibility for Tourism -- policy, land use.

[4:00]

I. Chong: The conclusion that I'm gathering from the minister is that there will be some controls because of the ability of the ministry to still deal with development and marketing, and also from her response earlier that the Crown corporation would not really be in a position to accrue debt, which is very important for those who are looking at this new act.

The other area I want to canvass, before I turn this over to other members who may wish to speak on it, is section 6(d). You've got: "For the purposes of this Act, the corporation may. . .establish advisory committees." I was wondering whether the minister is able to give us an example of what kinds of advisory committees would be established for this particular corporation, what the advisory committees would be empowered to do and what their mandates may be, as well. My thoughts on this would be whether these committees would be looking at ways to generate extra revenues and, if that were the case, whether they would be looking at things such as increased fees for the tourism industry. Those kinds of areas, I think, are of concern to many in the tourism industry.

Hon. J. Pullinger: The enabling clause that allows for advisory committees would be to allow committees that exist now, such as. . . . Rod Harris is telling me that the corporation has a marketing advisory committee that does its work and then reports out to the board. It makes recommendations to the board, which the board then accepts or rejects or modifies. I would encourage this new agency, because the tourism industry is very aware that we're at a crossroads in British Columbia. If we aren't very progressive and very aggressive and very creative, we could lose the wonderful edge that we've had, which has seen such phenomenal success in this industry over the last six or seven years.

I would expect, for instance, that they may well. . . . And I would encourage the board to do something like create an advisory committee on aboriginal tourism development, if that's what's happening in my ministry, so that we would be able to work together. I expect that there would be a first nations person on the board, because that it is a huge untapped source and resource for all of the people in this province. I would like to see that developed, as would this government. So it's just a possibility that this board could establish an advisory committee on first nations tourism development in British Columbia, or they could establish an advisory committee on northern tourism development.

So those are the kinds of things. Of course, I am simply flying in the wind in this -- it's all hypothetical -- but there is 

[ Page 3741 ]

one right now for marketing that goes to the board. There are a number of those, plus management issues, such as committees to make recommendations around names for replacement seats on the board -- sort of functional things like that.

Hon. D. Streifel: Hon. Chair, I request leave to make an introduction.

Leave granted.

Hon. D. Streifel: Touring the precincts today and present in the gallery is a body of students from the world-famous community of Stave Falls in my constituency. Stave Falls is around Dewdney Trunk Road on the top of the dam. There's a tremendous amount of history. I met and spoke with the students a few moments ago, and they're full of bright questions. I much appreciated the opportunity to speak with them. While I'm on my feet, I'll recognize the other famous aspect of Stave Falls: the Stave Falls Scottish Dancers. I really thank Mr. Robert Lewis for bringing his class over to have a chat with me today, and I bid the House make the students welcome.

I. Chong: The last question I'm going to ask on this section. . . . I anticipated that my other question would be my last, but the answer from the minister prompted another one, which basically leads to the next section, section 6(e). It says: "incorporate subsidiary corporations. . . ." I was wondering, in this particular case, about section 6(d) allowing the establishment of those committees without apparent restraint, other than the fact that the board must make those kinds of recommendations as to what sub-committees it thinks is necessary for the proper operation of the corporation. But section 6(e) requires the approval of the Lieutenant-Governor-in-Council. I'm wondering what would be anticipated in those kinds of subsidiary corporations that would require the Lieutenant-Governor to in fact provide the prior approval.

Hon. J. Pullinger: Nothing is anticipated. That's a standard clause, but in order to do something of that nature, it would require prior approval.

R. Thorpe: I don't want to beat this thing to death, but you did explain that you envisage that borrowing could be up to two or three months and that it would have to be paid back. So that does beg the question. . . . Obviously it will go, without too much of a concrete position from your government, that there should have been a ceiling. But we got over that. I just want to know: how are the funds going to flow? Are they going to flow on a monthly basis from government into this organization?

Hon. J. Pullinger: On a monthly basis according to a formula.

R. Thorpe: I guess we'll get into that in a little bit more detail later. One last question that I have on this section: is that funding flow automatic, or does it only start after the business plan has been approved? In other words, is the flow of funding on an ongoing basis, and is the business plan on another cycle, and do they dovetail? One's not contingent upon the other.

Hon. J. Pullinger: The funding will flow monthly. It's not contingent. There are rules around the business plan, which we can deal with at that section, but the funding will flow monthly throughout the year.

P. Reitsma: On sections 6(e) and 6(f), I have two questions. Section 6(e) says: "incorporate subsidiary corporations, with the prior approval of the Lieutenant Governor in Council." I wonder if the minister could explain that in relation to. . . . Would those subsidiary corporations be able to borrow, spend and acquire, and what are the financial consequences of those subsidiary corporations?

Hon. J. Pullinger: I don't expect that section of the act will be used. It's a standard provision in Crown corporation legislation that may be used in others, but I don't anticipate it would be used in this one. If, in the hypothetical situation, it were to occur that the corporation wanted a subsidiary corporation, then all that kind of detail would have to be laid out in advance in the business plan.

P. Reitsma: It's somewhat of a puzzlement. If the minister doesn't expect this to be used, then why do we expect it to be put in? Although I'm not being suspicious, I just wonder what reason there is or might be for that particular subsection being put in.

On section 6(f), just one question: do other things that the Lieutenant-Governor-in-Council may authorize relate to. . . ? Would that give an opportunity for the increase or decrease of guidelines?

Hon. J. Pullinger: Increase.

P. Reitsma: The guidelines set out in the act for that particular organization can be through the ministry. Can the ministry direct or advise, through the Lieutenant-Governor, that certain guidelines may be increased or decreased?

Hon. J. Pullinger: If I can just clarify, is the member specifically alluding to the incorporation of a subsidiary corporation, or guidelines generally? Generally.

The interaction with government occurs in many ways. One is: in the legislation, we set out the parameters. The business plan must be approved, so if the corporation were to be going off the rails there -- and I don't expect it will -- it would be dealt with there. There are guidelines, rules, around the Financial Administration Act, with which it must comply, etc.

By and large, I would expect that the normal processes of government will prevail. As for direct guidelines for the corporation, they will make their own through resolution of the board.

P. Reitsma: Through this section 6(f), would the Lieutenant-Governor be authorized to change the powers of this particular corporation or subsidiary corporations? Also, in view of the numbers, could this particular section make a change in the numbers in terms of the directors?

Hon. J. Pullinger: Those things that are legislated must be changed in this Legislature.

Section 6 approved.

On section 7.

[ Page 3742 ]

R. Thorpe: I think I just have one question here. Section 7(b) -- do I read this correctly? Obviously, a member of government -- since we tried to move an amendment for a member of the opposition. . . . Does this contemplate an MLA from the government side sitting on this board?

Hon. J. Pullinger: The section allows for any member of the Legislative Assembly, but I don't contemplate a member sitting on the board at this time.

R. Thorpe: Just a point of clarification. You don't contemplate any MLA sitting on this board at this point in time. Is that correct?

Hon. J. Pullinger: That's right.

I. Chong: Just a few questions on this section -- unless the responses provoke more.

First of all, the remuneration is to be set by the Lieutenant-Governor, which is perhaps normal. My question to the minister is: could she share with us what kind of basis that may be on? This being a new Crown corporation, I'm not sure how the salary or remuneration set by the Lieutenant-Governor will be determined. There must be some kind of standards, whether industry standards or government standards, that will be used. Perhaps she could share that information with us.

Hon. J. Pullinger: Travel, incidental expenses and remuneration rates must be consistent with Treasury Board directive 2/91, which is the policy on compensation for appointees to government agencies, boards and commissions.

I. Chong: Just one confirmation, then: that industry standards do not play a role in this particular section.

Hon. J. Pullinger: It is government standards that will set the remuneration.

Section 7 approved.

On section 8.

R. Thorpe: Just on the appointment of officers and employees: "On the recommendation of the board, the Lieutenant Governor in Council may" -- that's what it says, I believe -- "appoint a person as a chief executive officer. . . ." Who else can appoint the chief executive officer?

[4:15]

I. Chong: On section 8, I know there have been some changes in one of the other bills that were introduced earlier this session. I'm just wanting clarification on whether the employees that are contained throughout section 8 will be included in the government's FTE count or whether these are going to be treated separately. I know there's been some confusion over whether Crown corporation employees are counted or not.

Hon. J. Pullinger: They're not counted as part of the ministry.

I. Chong: So my understanding is that they previously were included because it was considered part of the ministry. Now that they're in a Crown corporation, they will not be included in that FTE count, if we were to compare one year to another. I guess that's my best explanation.

Hon. J. Pullinger: That's correct. Those positions that are presently in my ministry will move over to the corporation.

I. Chong: Very quickly, the other question I have on this section is. . . . I'm not sure where I had read it or come across it. Perhaps it was stated at some point; maybe the minister said it in her opening remarks. The expected staff that would be required for this particular corporation would be 61 people, which I understand is a 20 percent reduction over the previous year. I'm just wondering where those kinds of staff reductions are going to be occurring, if this is being moved directly from the branch of the ministry to the Crown corporation. I applaud the efficiency savings that may be occurring, but I'm just curious as to where in particular that 20 percent reduction is occurring.

Hon. J. Pullinger: That reduction was part of our government's downsizing last fall. It took full effect January 1 of this year. It's done.

I. Chong: With the new Crown corporation, if the ministry had anticipated they were able to carry on -- if they were carrying on -- with 20 percent less staff, it's not anticipated that we're going to see an increase in hiring through the Crown corporation. Perhaps their views are different, and they anticipate that they do in fact need those extra staff.

Hon. J. Pullinger: I expect -- in fact, I know -- that the board will be far more concerned with marketing and development issues, and will do so with the right number of people, not excess.

I. Chong: That was my last question. I just want to conclude by saying that it's good to hear that from the minister -- on this section, anyway -- because there are concerns that perhaps this was just going to become another bureaucratic nightmare.

Whenever Crown corporations are established, people are a bit nervous, and rightfully so, perhaps because they're not sure what's happening. Staff is hired, and then very quickly the revenues funding that particular organization are consumed by staff requirements -- as opposed to marketing, which is very much what we're concerned about here. So I thank the minister for her comment.

R. Thorpe: I wonder if the minister, in her own words, could explain section 8(4).

Hon. J. Pullinger: Within the context of government policy previously alluded to, the board may recommend remuneration for its CEO to be implemented by the L-G-in-C.

R. Thorpe: Could the minister explain to me, because I don't know, what level of government service the chief executive officer is, compared to government service?

Hon. J. Pullinger: Stay tuned. That hasn't been decided yet, because the recommendation hasn't been made. I would expect that it would be roughly an ADM level.

Section 8 approved.

[ Page 3743 ]

On section 9.

R. Thorpe: Financial management. Who will audit this Crown corporation, and how often will that audit take place?

Hon. J. Pullinger: Again, this is a decision that has not yet been made. We're just laying out the bare bones here, and, of course, all those decisions and details will be forthcoming as the corporate board takes over. I would anticipate, however, that the auditing body may well be the auditor general, but that decision is not yet made.

R. Thorpe: Obviously we both have to work at learning this particular bill, because I see that audit is covered by section 10. As we work with this, we'll both become more conversant with it, so that's good. At least we seem to have a common starting point.

I'm just wondering about the interim reports -- the financial management. Will there be just one report made available on a yearly basis? Or like other independent operating organizations, will there be quarterly or semi-annual reports?

Hon. J. Pullinger: Again, those details are to be determined. There will be one audit, so for sure one report. The board may well choose to issue other reports. Again, I think that would be a decision the board would have to make very carefully, based on the balance between accountability and transparency on the one hand, and the use of -- as the member is very well aware and appreciates -- limited staff time and limited dollars.

R. Thorpe: For what it's worth -- and I won't bring an amendment through on this -- I think it would be a good practice. I don't believe that the minister ever suggested for a second that we would compromise financial administration because of tight budgets. I don't take that at all, but I would just like to put on the record -- and I hope the minister would endorse this as it unfolds into the future with this independent organization -- that at least semi-annual statements or progress reports should be developed and that the public is made aware.

Hon. J. Pullinger: I would concur. I just want to clarify that we're talking about two levels. One is the very detailed audited level, and the other is the regular reporting, which I expect will meet all of the standard practices. I concur with the sentiments the member is expressing.

I. Chong: I have a number of questions on section 9, "Financial administration." Perhaps the minister can enlighten myself and other members on this side of the House. Where it says, "The board must establish and maintain an accounting system satisfactory to the Minister of Finance and Corporate Relations," would you be able to share with us what kind of satisfactory accounting system is permitted? Is that an accounting system that is currently used by all Crown corporations, or will this one permit particular differences or exemptions? I'm trying to determine whether or not this Crown corporation will follow through as other Crown corporations have.

Hon. J. Pullinger: This simply refers to the fact that the board is required to function according to the standard public accounting systems and, as I believe the member knows a lot more than me, the generally agreed principles of accounting for public and private GAAP.

I. Chong: I wasn't particularly looking for accounting principles as much as I was wanting to know whether the accounting system. . . . The wording here is: "An accounting system satisfactory to the Minister." I didn't know whether an accounting system satisfactory to the Minister of Finance would be the same as an accounting system that would generally be accepted for those of us in the private sector -- or who used to be in the private sector -- and also whether or not the accounting system that would be acceptable. . . . Is one for Crowns different than perhaps the ministry itself?

Hon. J. Pullinger: I'm advised that the system under construction is one that will not only meet the public accounts requirements but will be, in Mr. Harris' words, more robust than that -- in other words, meet higher standards.

R. Thorpe: It's always nice to hear that people have visions of robust accounting systems, especially in an organization that we've heard is designed for and is supposed to be focusing on robust marketing programs. I just want to make sure that I didn't misunderstand and that we're off developing an accounting system where. . . . As I'm sure the minister is aware, government is spending millions of dollars developing a corporate accounting system, and I would hope that we're making sure these things all dovetail together so that in fact we do have the efficiencies and that we do have more moneys for the marketing programs.

Hon. J. Pullinger: The member is correct. That kind of work to streamline systems has been going on across government for some time. I would fully expect that this would mesh with that.

I. Chong: Sometimes we're bouncing like a yo-yo when we're going through this committee stage.

I'll move to section 9(2), where it says: "Whenever required by the minister, the board must render detailed accounts of its revenues and expenditures for the period or to the date the minister designates." I was wondering whether the minister can advise whether that request to the board is only available to the minister or whether others are able to make a request for information, as well, without having to go through freedom of information. If a number of stakeholders were curious and wanted some information or if members of the opposition were wanting some information -- which should clearly be available, being that this was formally a part of the ministry -- would there be others who would be permitted to have a detailed account of the revenues expenditures. . . ?

Hon. J. Pullinger: The existing processes for garnering information would apply to this corporation.

I. Chong: I just want to quickly review this other subsection before I pose a question I may not need to. Section 9(4) says: "The Minister of Finance. . .may direct the Comptroller General to examine and report to Treasury Board on any or all of the financial and accounting operations of the corporation." I know that sounds rather standard, but I'm just wondering whether the minister can advise us. . . . When the comptroller general is directed to examine and report to Treasury Board, would it normally be reporting of a specific project or would it in fact be reporting on the operations to date and therefore present an interim financial report? Is that what is normally required when Treasury Board requires a report?

[ Page 3744 ]

Hon. J. Pullinger: This is an enabling clause that requires the bodies responsible -- i.e., Treasury Board, the Minister of Finance and ultimately cabinet -- to require any or all reports as deemed necessary.

J. van Dongen: To follow up on section 9(4), the possibility of having the Minister of Finance involve the comptroller general and report to Treasury Board on certain aspects of accounting and finance -- is that a standard provision? Is that what we call a boilerplate provision?

Hon. J. Pullinger: To the best of my knowledge, yes, it is.

[4:30]

Hon. J. Pullinger: The kinds of things -- and again this is hypothetical. . . . The Minister of Finance may well want a report on travel expenses or administration or a specific project. I am sure that any such request would be for a good reason.

J. van Dongen: With respect to 9(1), establishment and maintenance of "an accounting system satisfactory to the Minister of Finance," is there again a standard requirement in terms of a monthly recording of revenues and expenditures, and time frames in terms of when those records have to be completed on a monthly basis?

Hon. J. Pullinger: The reporting systems, as I understand it, vary somewhat between different Crowns, but the intent of this one is certainly to have some means of a monthly reporting system.

J. van Dongen: Would those monthly reports go, as a matter of standard practice, to Treasury Board or to the Ministry of Finance, or would they normally go to the board of directors within a Crown corporation? Particularly, what is anticipated in this case?

Hon. J. Pullinger: That is to be determined, but I would anticipate, as a minister, requesting that kind of report from the board.

J. van Dongen: Did I understand correctly that the minister said she would be expecting monthly reports from the board of directors in terms of the operations, particularly finance and accounting?

Hon. J. Pullinger: I would anticipate that kind of interaction.

Let me just address the broader question for a moment. This arm of government -- which is what it is -- is essentially a partnership with the private sector. In order for it to be effective, it must work very closely with the rest of my ministry. I think that's understood. Certainly one way to do that would be to have a lot of communication on the day-to-day or month-to-month finances. Those details will definitely be worked out as we move along here.

J. van Dongen: Again, the source of my question is to try and pin down the accountability, particularly of the board of directors, for the total operations: the finance, the accounting for the records and the management's review of operations on a performance basis. When you have a chain which, I understand, fundamentally involves the minister, the board of directors, the CEO and then the staff -- and the risk is fairly great within a government setting -- I always worry about interventions of some sort that hopefully have been duly authorized, and I'm sure they are in this case. . . . For example, if this act passes, then the Minister of Finance could ask for this or that. But we also have the involvement of the Crown corporations secretariat, and I always worry that there's some blurring of responsibilities. Ultimately the responsibility for the total operations, in my view, is the board of directors to the minister.

I'm wondering if the minister could comment on that in terms of how she sees that operating. Too often the board of directors, particularly of Crown corporations -- and we've seen some examples of it -- either don't fully understand that very specific channel of accountability or don't always carry it out. Sometimes they are given a false sense of security by virtue of having these other bodies, such as the comptroller general, Treasury Board, the Minister of Finance or the Crown corporation secretariat, sort of floating around and giving them the perception that maybe they don't have the full responsibility for this organization. I'm wondering if the minister could just comment on that a little bit in terms of how she would expect the board of directors of this Crown corporation to be accountable to her.

Hon. J. Pullinger: I expect that the board of directors, and specifically the chair, would work very closely with me. I would expect that they would carry out the day-to-day functions of the annual business plan, which has been approved jointly by me and the board. I would also expect, however, that the board and the operation be fully accountable through all of the means to do that, including the Crown corporations secretariat, the Minister of Finance, the auditors, etc. I would expect that they would meet the highest standards of accountability in that regard, and I'm sure that the board is also expecting to do that.

J. van Dongen: What would the role of the Crown corporations secretariat be, specifically, with respect to this board?

Hon. J. Pullinger: First of all, I'm not very familiar with the details of what that body does. I am informed that the Crown will file its annual report with the Crown corporations secretariat, and the Crown appoints an analyst, who works closely with the Crown.

The secretariat, in broad principle, was put in place to make the Crowns function better and to their maximum and together, with some coordination as well as accountability.

J. van Dongen: I'm not sure this is totally relevant to this section, but I think it is. Could the minister comment on whether or not there is any liability, or responsibility in some other way, on the part of the directors for the financial reporting and accounting of the organization? I realize this could be part of a broader question about director liability, but I wonder if the minister could just tell us. . . . I know that in public 

[ Page 3745 ]

companies now, there are certain types of issues or problems that directors can be sued for and can be liable for. I'm wondering if there's anything like that in this corporation.

Hon. J. Pullinger: I'm advised that a Crown corporation is not like a publicly traded corporation. The directors are not personally liable.

I. Chong: I was just going to follow up on that question asked by the hon. member for Abbotsford. I understand that this Crown corporation is not like other public or private corporations. But being that it is a board, we should be concerned about directors' liability, as non-profit organizations are also concerned about directors' liability.

What I'd like to know -- if the minister is able to share with us -- is to what extent directors' liability is or is not there for the particular board of directors here. There must be some measures or guidelines so that the board of directors do not feel that they are empowered to do what they will, without any form of responsibility or liability.

Hon. J. Pullinger: I am in the process of inviting legal counsel into the chamber to assist with that. But I note that under section 16 and 17, I believe -- in any case, later in the act -- that's dealt with more specifically. I would recommend to the member that if you have no further questions other than that one, we pass that question and move on. Staff will be here to deal with that question.

I. Chong: I did see section 17; I did read of the director liable to account. But it more or less referred to a director liable to account for personal involvement and where they stand to profit, versus directors' liability in other areas of the directors' powers.

As I said, in non-profit organizations, on various committees where people who represent the community serve, there is always concern. That's one of the reasons why community members are reluctant to become directors of organizations, recognizing that there are issues of liability to deal with. I just want to be clear on what that may be in this particular Crown, if it's set differently than private organizations.

Hon. J. Pullinger: First let me introduce Dennis Carson, legal counsel with the Ministry of Attorney General, who has worked with us in developing this legislation. He knows everything that I don't, which is considerable when it comes to the minute details of this.

I want to correct the record apropos of my last comment. The Company Act does apply to this board; in error, I indicated something different. I just want to clarify that my most recent advice is that in fact the Company Act does apply -- all the normal accountability.

I would propose, however, that we move from financial administration to the liability section, section 17, and deal with those specific issues there. I think that would be more appropriate, if the member is willing.

I. Chong: I am comfortable that if we were to move to that, we would address those issues of directors' liability. In that section, it does not allude to the kind of content that we might want to address. If the minister is giving me that assurance -- and I see she is nodding that we can deal with it -- that's fine.

I do have one more question on this section, and the hon. member for Abbotsford may also have a question. In section 9(6), the Minister of Finance and Corporate Relations is the fiscal agent of the corporation. By fiscal agent, do you mean for the purposes of borrowing or for the purposes of investing? What other role do you envision for the fiscal agent that the Minister of Finance would be involved with in this Crown corporation? Could the minister advise and share with us some of those details?

Hon. J. Pullinger: To ensure that I don't mess up the answer, I'm going to read it:

"The role of the Minister of Finance and Corporate Relations as fiscal agent includes: (1) carrying out negotiations with investment bankers and coordinating communications between investment bankers and the corporation; (2) monitoring financing requirements, reviewing and approving financing and financial hedging transactions and providing loans and debt management products to the corporation; (3) periodic review and approval of banking arrangements; (4) providing prudent and efficient investment management and banking arrangements of surplus cash balances and sinking funds, and advice on investment strategy."

The one comment I want to make on the last role or condition that the Minister of Finance has as a fiscal agent is about the investing of surplus cash, as she mentioned. Is that in fact a decision that the Minister of Finance can make on his or her own, or would the board have to direct the Minister of Finance to make that investment? In other words, if there was surplus cash in the Crown corporation, would the directive have to come from the board of directors first to the Minister of Finance, versus the Minister of Finance coming along and saying: "We would like to make this investment"?

[4:45]

Section 9 approved.

On section 10.

I. Chong: One quick comment. I know a question was posed earlier by the hon. member for Okanagan-Penticton regarding the audit. I want to be very clear on this. I know it's in its transition stage. I know we're not clear yet on whether the audit will be performed by an external third party or by a government auditor, such as the comptroller general or the auditor general. It is very important that we get that information as quickly as possible, because it may provide us with a series of other questions.

If the appointed auditor is an internal auditor versus a third-party audit, then I would like to know. . . . It says the cost of the audit must be paid by the corporation. If an internal audit were used, what kinds of costs would we be looking at? Would there in fact be a charge, say, from the comptroller general's office to the corporation? I want to be very clear that while this was a part of the ministry, those costs were not assumed by the ministry itself, and why there would be a change, if in fact there is such a change.

Hon. J. Pullinger: All the costs will be borne by the corporation. As I mentioned earlier, an auditor has not yet been selected. Stay tuned.

[ Page 3746 ]

I. Chong: The other part of the question I had for the minister, which perhaps didn't get recognized in my preamble, was. . . . When this Tourism B.C. agency was part of the ministry, perhaps there was no audit done. If that's the case, I stand corrected. If there was some sort of audit done in the past, were those costs borne by and taken out of the funding revenues that were available for marketing? Or were those costs a part of the ministry itself? Why would we make that kind of change, given that there is a substantial funding cut now that this corporation is set up?

Hon. J. Pullinger: I hope I've got it straight this time. Currently, even if the auditor general is appointed -- which is at the will of the auditor general, as the member knows -- there is a charge for that. Otherwise, today all the normal accounting practices and procedures apply, as they will to the new corporation. But the corporation -- I want to be clear -- will bear the costs of its own auditing. Once the corporation is up and running -- and we're providing some startup funds, as the blue book demonstrates -- it will be responsible for all of its own expenses. There will be none accrued back to the ministry.

I. Chong: I appreciate the clarification. Perhaps the minister can then provide one further clarification: in the past, was the Tourism B.C. agency in fact audited? Were those costs paid for out of the Tourism B.C. budget, or were those costs just included as part of the Ministry of Small Business, Tourism and Culture?

Hon. J. Pullinger: Yes, of course it has been audited. All of the normal accounting and auditing procedures of government have applied to that part of my ministry as to any other, and the costs have been borne by the ministry. Does that answer the question? Good.

[T. Stevenson in the chair.]

I. Chong: That does explain it. I guess I'm somewhat concerned that although it's recognized that costs should stay with the corporation, in the past it was a cost of the ministry and did not affect the budget for tourism marketing. It now appears to be a cost being transferred to the new Crown corporation. I'll leave that for a moment, unless the minister wishes to respond to that further.

There is another question I have regarding the audit process. It says "at least once for each fiscal year," which is the normal standard practice -- once for each fiscal year an audit is provided. But can the minister advise as to time lines, given that the first fiscal period will be ending March 31, 1998 -- whether the audit would be provided within six months, eight months or three months of the end of this particular fiscal year?

Hon. J. Pullinger: There are two parts to the question, I believe. The first is that it appears to me that what the member is getting at, in terms of who pays for what, is whether or not there is an erosion of the marketing dollars by the administrative function. Is that correct? We have fully accounted for that in the setting up of the new corporation and the transfer of startup costs. To the best of our ability, we have done that. That's number one.

Number two, the auditing as laid out in section 10 would take place as is normal business. It takes roughly three months, as a matter of standard practice, for the audit to be done. So I would expect that it would be done within that framework.

J. van Dongen: The question I have probably relates to both section 10 and section 12. Section 10 talks about the requirement for an audit to be done and to be paid for by the corporation. It says it needs to be done once a year, but it's not clear to me, in reading 10 and 12, that it's the audited financial statement that would form part of the annual report. I wonder if the minister could just comment on that.

I'm looking at it from two perspectives. One is a three-month time frame in which the legal obligation should be there to complete the audit of the annual finances. That's the first thing. Secondly, will the audit and the audited financial statements that are being talked about in section 10 form part of the annual report?

Hon. J. Pullinger: If I understand the member's question correctly, you want to know if the audit is part of the annual report. Is that correct? The intent of the corporation is, in fact, to do that. That's standard practice, to have a sign-off in the annual report saying that this corporation has been audited. And the new corporation will do that.

J. van Dongen: Well, if that's the intention, then I'm wondering why there wouldn't be more of a direct linkage between the audit, which is required under section 10, and the financial statement, which is spoken of in section 12(b). Again, I say that on two counts. One is that the financial statements are audited as the minister says is intended. The second is that we have the connection between the requirement to do an audit under section 10 and the three-month time limit talked about for the annual report.

I would ask the minister to consider an amendment at some point in the future before this bill is passed: that we have the three-month requirement on the audit and, secondly, that the audited financial statements are a part of the financial report.

Hon. J. Pullinger: The legislation is intended to provide the framework, and the level of detail that the member is speaking of -- which I appreciate -- will be provided through the bylaws and policies of the corporation. As I say, it is the intention of the corporation to meet or exceed normal business practices in that regard.

J. van Dongen: I guess I have two options here. I could ask the minister for her personal assurance that it will be the audited financial statement that forms part of the annual report. And I ask her for that.

But secondly, I also ask her to consider an amendment to 12(b), and I guess I'll put that on the record later. But I would like to have both those things, if I could get those from the minister.

Hon. J. Pullinger: I am advised that that's a standard practice with the Crowns.

J. Wilson: I seek the indulgence of the House to make an introduction.

Leave granted.

J. Wilson: Today we have the privilege of having 25 grade 7 students from Parkland Elementary School in my riding of Cariboo North. They are joined by their teacher Mrs. Semens and several parents. Would the House please join with me in making them welcome and wishing them a very enjoyable and informative visit to the capital city.

[ Page 3747 ]

Section 10 approved.

On section 11.

I. Chong: There are a number of questions that I believe we have in the business plan area, because a number of questions we posed earlier today and even some from two and a half weeks ago deferred us to this area. There are, as I said, a substantial number of questions, and I'm wondering whether the minister has all the staff she requires at this time for us to proceed. I see her nodding, so that's fine.

To start off with, on the business plan. . . . I think the business plan is a very important part of this piece of legislation because it does provide -- more so for those of us looking from the outside in and not being on a board -- just what kinds of activities may be here. We all recognize, for the development of tourism and marketing and the promotion of tourism. . . . But the business plan will give us that detail.

Part of that business plan, I do believe, has to have evolved from those involved in the tourism industry. Consequently, I would imagine that there should be available a memorandum of understanding, perhaps, as to what kinds of things are to be implemented in a business plan. I am wondering whether the minister is able to provide that to us.

I recognize that the memorandum of understanding we asked for some two and a half weeks ago. . . . We were advised it was a document that was being worked on. And now, some two and a half weeks later, I'm just wondering where we are in that process.

Hon. J. Pullinger: As well as (a), (b) and (c) laid out under section 11, the business plan would include things such as a business review, the objectives of the corporation, strategies that the corporation proposes to use to meet those objectives, and specific actions and programs that would form part of the strategies that meet the objectives. It sounds like the house that Jack built, but those are the kinds of things that I would expect in the business plan in increasing detail.

[5:00]

We've heard fairly consistently throughout the debate during committee stage that there would be bylaws and policies that the corporation will be preparing and that those will be prepared by the board. The board having not yet been established and having not yet met. . . . Again, we're not sure on those things. At this point it's important that the members on this side of the House have some idea as to those kinds of bylaws and policies that may be in place and perhaps may fit within the guidelines of the business plan. Easily enough, people who are in business and prepare a business plan certainly have the revenue and expenditure proposals, which is essentially their budget. That's to be expected.

Statement of assets and liabilities: again, it's not so much a problem, especially when you're a new corporation. You list very few liabilities, and assets will be those transferred by the ministry that currently holds some of those within its branch. Within the context of this legislation, it's not providing us that much information, and we on this side of the House, anyway -- and myself in particular -- want to be assured that we have some idea as to the business plan details.

Given that the business plan is to be provided before each fiscal year. . . . I know we're in a catch-22 situation. Before the fiscal year is now, but the board hasn't yet been established. So I'm wondering if there is something -- a memorandum of understanding -- being worked on which will then provide the basis of a business plan -- whether that is available and if that is available, and whether the minister is able to share that with us.

Hon. J. Pullinger: With regard to the largest issue that the member addressed, this legislation is not intended to provide that level of detail. This legislation is merely intended to set up the corporation and provide the broadest framework for its functioning. If the member would like to have some idea of what's in the business plan for Tourism B.C., I would be more than happy to send last year's business plan from the ministry to the member. With respect to next year's business plan or this year's business plan, those are under construction -- like the rest of the corporation -- and once it's finalized and approved, it will be public and available for the member.

I. Chong: I look forward to the minister having last year's business plan sent to us, if she could. I had not been able to arrange that. I don't know whether there were none available or whether our staff wasn't able to receive that, but I would appreciate the minister providing copies to us.

The other thing that I'd like to quickly canvass the minister on -- I have colleagues here who have a number of questions in this area -- is that the minister has mentioned that the new business plan is being prepared, and I'm wondering whether or not there is a time frame or guideline as to when that business plan will be prepared -- whether it's six months from now or three months from now. Surely those currently on the board on a temporary basis must have to provide some projections on revenues and expenditures that they're anticipating for this next fiscal year.

Hon. J. Pullinger: This is clearly a transitional year, so things are a little different. The business plan will be provided for in the memorandum of understanding that is yet to be finalized and is outside the scope of the legislation, as I know the member appreciates. In future years the business plan will be prepared and passed ahead of the fiscal year. In other words, for next year I expect that the business plan will be finalized and passed prior to April 1, 1998.

I. Chong: So just to be clear that this. . . . Being a transition year, I guess, essentially we will not be dealing with a business plan for the current year because we're already in this transition. So in fact, the first business plan we will have will be for the fiscal year '98-99, and that will be available to us sometime. I see the minister and staff nodding their heads, but as I see it, this fiscal year has already started. It will end on March 31, 1998. In order for a plan to come forward to us before April 1, 1998, that would occur sometime in the fall or winter or early in January, in which case it would be for the fiscal year '98-99. That is what I'm wanting confirmation on, and on the fact that there will be no business plan for this current year.

Hon. J. Pullinger: There will be a business plan for this year, but it's not in advance, because that would be in advance 

[ Page 3748 ]

of the legislation and the corporation. It's being developed. There will be one, I expect, in the not too distant future, and it will be made available publicly once it's finalized and passed.

The other issue is next year's business plan, and the member is precisely correct. I expect that to be finalized and passed prior to the beginning of the next fiscal.

I. Chong: Just for my own information, and perhaps my newness to this kind of activity, can the minister advise us: once the business plan for the following year is prepared and released, does that automatically get provided to all Members of the Legislative Assembly, or is that by request? Seeing that I don't have a business plan from the previous branch operations, I'm wondering: with this Crown corporation, will that now be automatic? As soon as it's available, will we receive a copy?

Hon. J. Pullinger: It would be available by request, in the interest of not printing documents that people aren't interested in and don't want to read. But it's certainly there and available.

The Chair: Member for Okanagan-Penticton.

R. Thorpe: You should remember that, hon. Chair, because that's where you want that powerboat in July -- just a little bit of tourism work.

The business plan is going to be critical, and I'm just wondering. . . . I don't want to focus on this transitional year we're in. The minister has said that she hopes the plan would be finished before April 1 of the fiscal year, so I'm just wondering if we could back up and see what kind of a process you see in your mind and how long you see that process taking.

Hon. J. Pullinger: If the member is referring to this year's business plan, just forever.

R. Thorpe: Forgetting this transition year, it's next year, the first full operating fiscal year. I don't know if you expect to have the plan ready by March 1, 1998. Where do you back around? Where does the process start? And in the broadest sense, what are the steps of the process?

Hon. J. Pullinger: My understanding of the process is that the board will begin this July or August -- in the summer some time. We'll probably strike one of the committees we talked about earlier and consult with industry and, I would expect, with communities and regions -- the grass-roots people this House has spoken about -- and develop the business plan to be ready sometime in the new year, to allow room for any interaction and fine-tuning before it's finalized.

R. Thorpe: When the plan is complete. . . . I know that one of the difficulties the industry has had is the uncertainty of government funding in the past, and we're going to talk about funding next. The business plan is also going to have to ensure that there is certainty. This is an industry that's growing, and it's moving all the time. I would hope that the minister, through the board when they start this process sometime in the summer, is going to ensure that some guidelines are given or that an understanding is taken so that the board members understand how important and critical this process is, and how important it is -- in my opinion and hopefully in the minister's opinion -- that it's done on a timely basis and ready to go sooner rather than later.

Hon. J. Pullinger: I would expect -- in fact, I know for sure -- that there's nobody more eager and enthusiastic about precisely that kind of process than the current SOA board. I expect, as there will be significant rollover and the same kinds of people, that the new board will share that kind of anticipation.

R. Thorpe: I'm encouraged by the minister's comments. I'm just wondering about the approval process. Once the plan is completed by staff and by whatever committee members or members of the board are on that, I assume that it will then go to the board for the board's approval. And I assume that it then comes to the minister for the minister's approval. Does it have to go anywhere after the minister's approval?

Hon. J. Pullinger: If I'm clear about the question the member is trying to get, it is whether it goes to cabinet or Treasury Board or anything like that. Is that basically the question? The answer is no. If there are changes, then it bounces back to the board and then back to me.

R. Thorpe: So it would appear that one of the advantages of this process that is going to happen is that while many organizations are tied up in the bureaucracy of Treasury Board, this organization has the benefit and the pleasure -- and I just want it confirmed -- of being excluded from that process. It's between the board and the minister to come to agreement, and after that stamp, they're off to the races.

Hon. J. Pullinger: I want to be very clear so that there's no misunderstanding. As long as the board is staying within its normal practices and budgetary confines and is not entering into borrowing arrangements and the other things we've discussed, and as long as it is in its confines that don't require things that we have already debated and that are explicitly laid out in the act -- which I expect it will generally do -- it goes nowhere else.

Borrowing, as we discussed earlier, must go through the Minister of Finance. If there are exceptional requests for funding or something, those kinds of things would have to go through normal government practices. I expect that the board will stay within the confines of its funding, and in that process, the intent is to make the planning process simpler, easier and faster. That's what this does, as the member correctly states.

R. Thorpe: One of the things I'm wondering about -- whether it's included in the business plan preparation -- is the enhancing of accountability for performance. We've heard of other areas of government and organizations moving to the accountability information matrix, where there are benchmarks, measurements, planning, results and those kinds of things. Is this contemplated in this organization?

Hon. J. Pullinger: Absolutely. In fact, those kinds of benchmarks, etc., are in place already. An advisory board we have now led the SOA process, so that has become part of the process.

[5:15]

I guess I'm a bit concerned that we're saying we're doing it, yet it's not here. In that connection I think it's important that 

[ Page 3749 ]

it be here. I'm going to move an amendment, if I may, which I do not believe has any cost impact on this organization. It says exactly what the minister and the government say. If I could just read my amendment, it would be:

[Section 11

To add subsection (d) to read as follows:

11 (d) the annual business plan will include clearly stated goals, with specific objectives, as well as predetermined measurable benchmarks, to ensure reporting is focused on results.]

On the amendment.

Hon. J. Pullinger: I would advise the member that this exact purpose is laid out in section 4(2) of the act.

R. Thorpe: I don't know what the procedural process is, but could somebody please point that out to me? I mean, I'd like to see it. I've got it open here. Whereabouts is it? Where does it say "establishing benchmarks"?

Hon. J. Pullinger: The entire section points to those kinds of things. "The need to conduct business in a consultative responsible and accessible manner" would clearly include goals and benchmarks, and "the importance of observing and encouraging effective and efficient business practices" would point to all of those same things.

R. Thorpe: I think that's a fair amount of a stretch. I think that's a big stretch, frankly. There's really no trick involved here; I'm not trying to trick anyone. This is the business plan section. When we raised questions about that earlier, we were told to wait until we got to the business plan section. We've waited, and now that we've got to the business plan section, we're being referred back to a part that we've already approved. In the spirit of cooperation for the industry and for us working here together, I wish the minister would consider adopting this amendment.

Hon. J. Pullinger: I appreciate the intent, but it seems that the principles I alluded to earlier in the act plus this section that we're dealing with, section 11(c), which says "other information that the Lieutenant Governor in Council may specify," would cover off those kinds of details.

G. Wilson: I would think that the amendment is a fairly sensible amendment in the sense that what it's attempting to do, and what we're attempting to accomplish, I think. . . . I'm not wanting to speak for the mover, but what's necessary here, because this is the creation of a Crown corporation, is that it's necessary that we start to determine performance-based plans.

What we've seen in the past. . . . I know that this is a new venture, and I don't want to unnecessarily impugn those that might be involved in it prior to them having a chance to prove themselves. We know that this is the hiving-off of a portion of what is now the Ministry of Tourism. We're actually taking a portion of the ministry and hiving it off into a Crown corporation. Therefore the plans that are put before us have to be subject to the same level of scrutiny that we would be able to provide a ministry in the estimates debate.

One of the things we do in the estimates process is assign, presumably, a level of performance against the expenditure of dollars that we put into each of these programs. Given that this business plan is put before us each fiscal year and is satisfactory to the minister, there's nothing in here that would suggest that that business plan will receive the level of scrutiny and attention that it might otherwise have if it remained within the ministry.

So it seems to me that this amendment, I would think, is both in order and appropriate. What it talks about is performance-based planning, and I think most British Columbians would prefer to see that. Maybe we could just vote on the amendment, and then, once it's approved, we can move on.

Hon. J. Pullinger: I appreciate the members' concern, and I also appreciate their intent. However, I think what it boils down to is just a simple disagreement about what ought to be included in the legislation and what we ought to leave for other venues, such as motions of the board, business practices and so on. I fully expect that everything that the members are addressing will in fact be the case; in fact, I know that will be the case. That's why the industry wants this kind of legislation -- so that they can run that kind of very discrete, tight, goal-oriented, action-oriented, flexible marketing program for British Columbia. So while I appreciate the intent of the amendment, I simply disagree that it should be in this legislation.

I. Chong: I would like to continue the comments made by my hon. colleagues on this side of the House regarding this amendment. Clearly, during our debate some two and a half weeks ago, as the hon. member for Okanagan-Penticton stated, we canvassed section 3, which states the purpose of this piece of legislation. We were told at that time that perhaps we should discuss this in greater length and in greater detail when we approach section 11, the business plan.

At that time the purpose of the corporation we were dealing with was development and growth in the tourism industry, and we wanted to discuss clearly what those goals would be. We also discussed the mandate of this piece of legislation, in section 4 and section 4(2), and then sections 4(2)(a), 4(2)(b), 4(2)(c) and 4(2)(d). At that time -- I have my notes here -- I recall that the minister, when we were asking about the direction to staff and its goals and objectives, had again stated that perhaps we should wait until we got to the business plan, where we could discuss this in greater detail.

Now that we are in section 11 and are discussing the business plan, it's very clear to us that there are very generic sections here -- or subsections, I guess. To add this particular subsection, in fact, would deal with the other two sections, 3 and 4. It would also allow, perhaps, for a stronger operation of this act and therefore allow us to deal with such things as accountability issues and with objectives that are going to be part of the mandate of promoting and developing the growth of the tourism industry.

Again, I would ask that the minister consider that this is a very good addition to this particular section and that in fact it does nothing to alter the ability of the board and the ability of this act to do its stated mandate and purpose.

Hon. J. Pullinger: I simply want to state again that the purpose of a business plan is to lay out clearly stated goals, specific objectives, etc. That's why one does a business plan. I appreciate the intent, but I think it is really inappropriate to add this to the legislation. Given that there was a great deal of negotiation undertaken with industry prior to writing the 

[ Page 3750 ]

legislation, I would be reluctant to make a change that really isn't a necessary change. The business plan provides for those things implicitly and specifically. That's why one does a business plan; that's why a business plan is required. I am absolutely confident, from my discussions with industry and with my own staff, that this intent will be carried out. But to put it in the legislation is just a level of detail that I don't think is necessary or appropriate. I know the intent of the member's amendment will be met. It's standard practice.

R. Thorpe: I'd like to call the question, hon. Chair.

Amendment to section 11 of Bill 9 negatived on the following division:

YEAS -- 24
Campbell	Plant	Sanders
Stephens	Coell	Nebbeling
Whittred	van Dongen	Thorpe
Penner	G. Wilson	J. Wilson
Reitsma	Hansen	Symons
Hawkins	Abbott	Weisbeck
Chong	Coleman	Nettleton
Masi	Krueger	Barisoff
NAYS -- 36
Evans	Zirnhelt	McGregor
Boone	Hammell	Streifel
Pullinger	Farnworth	Kwan
Waddell	Calendino	Bowbrick
Goodacre	Giesbrecht	Walsh
Kasper	Orcherton	Hartley
Priddy	Petter	Miller
Dosanjh	MacPhail	Cashore
Ramsey	Brewin	Sihota
Randall	Sawicki	Lali
Doyle	Gillespie	Robertson
Smallwood	Conroy	Janssen

B. Barisoff: I move that the committee rise, report progress and seek leave to sit again.

Motion approved.

[5:30]

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

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

Hon. J. MacPhail: I move that the House at its rising stand adjourned until 2 p.m. on Tuesday, June 3.

Hon. J. MacPhail moved adjournment of the House.

Motion approved.

The House adjourned at 5:36 p.m.

PROCEEDINGS IN THE DOUGLAS FIR ROOM

The committee met at 2:37 p.m.

ESTIMATES: MINISTRY OF
MUNICIPAL AFFAIRS AND HOUSING
(continued)

R. Coleman: I want to start out today, before I move on to some other areas, and using quotes in Hansard, and touch base with regards to group homes and to some of my canvassing yesterday. I just want to clarify a couple of quick points.

One of the points made by the Minister of Health was that the number of clients who have a mental illness who were funded through our ministry for supportive housing is 2,157. And then she goes on to say: ". . .I would also expect that there are clients in social housing beyond that who have mental illnesses who are not funnelled through our ministry. We are actually trying to determine that with B.C. Housing." I'm just wondering what the status of the determination of those numbers is.

Hon. M. Farnworth: We house people with mental illness as a matter of course, and we may not know that they have a mental illness. But we also have a commitment to house about 300 people with chronic mental illness, and we currently do that.

R. Coleman: I understand that the 300 are in group homes, and that came out in estimates. At time I was canvassing the question with the minister, it was with regards to group homes -- but seeing the shaking of heads, there's probably some confusion here. She said that the number that were funded through the ministry for supportive housing was 2,157. And the next question I asked on those that are funded under supported housing was: "Would the 2,100 you're referring to, then, be housing in a group home type of environment versus a social housing type of environment?" Then she went on to say: "No, they're not. Residential care is group home care, and there are 1,758 in residential care." The point she made to me was that B.C. Housing, along with her ministry, is trying to determine the number of people with mental illness outside of the ones that were housed and cared for by the ministry. And my question is: what's the status of that research?

Hon. M. Farnworth: In terms of people with mental illness, we don't track them. The 300 number I gave you in the previous answer. . . . Those are not in group homes; they are in regular B.C. Housing stock. So we have a commitment to house those individuals in public housing stock. Then there are other people outside the group home system, outside that public housing stock, who may have mental illness, but we may not be aware of them. We don't track those people. But the number I gave you is 300 -- that's over and above those who are in group homes and that the ministry is looking after.

R. Coleman: I understand that part of it. It's a question of where the minister said to me: "We are asking B.C. Housing to determine how many more there are and do this research." 

[ Page 3751 ]

I'm wondering if there's any status on that research. Has there been any communication that you're actually going to undertake this project to determine those numbers?

Hon. M. Farnworth: If there is a new directive or request, then it's obviously on its way over to B.C. Housing. It's not something we've done traditionally in the past.

There are some difficulties in determining who does or does not have mental illness. If there's somebody coming from a group home into public housing stock, after they've been through there, that may be one possibility for tracking individuals who are being referred to the system from outside group homes. But saying that we actually track someone with mental illness in our regular public housing stock, outside of what is available and what's managed by B.C. Housing for the Ministry of Health -- I think that would be very difficult. I think there are a number of issues raised round that. So if the Ministry of Health is sending over some proposals, certainly we'll look at them. But there's not an ongoing tracking proposal.

R. Coleman: What I would suggest, just for the record and for the people from B.C. Housing, is page 3514 of Hansard, May 21, 1997. The statement is: ". . .I would also expect that there are clients in social housing beyond that who have mental illnesses who we are not funnelling through our ministry. We are actually trying to determine that with B.C. Housing." So you might want to bring that to the minister's attention.

Just two other things quickly so I can clarify the housing issue. On page 3515 of the same Hansard, it says: "The Crown owns the asset, and all of the rules and leases that apply to that are determined by the B.C. Housing Management Commission." This is in reference to group homes. So on Wednesday we got into a discussion that the rules and direction and development were not determined by the housing commission, but in Hansard of that particular day the statement was clearly made that they are. So can you have your point of clarification on that particular issue?

I'd like to move on, at this point in time, to allocations for the upcoming year and the allocations for the past year, and I wouldn't mind actually canvassing to see how we've done in the last three-year period. I have a status report, here, of project summaries from 1992, so I'm not going to belabour all the information.

First of all, could we just deal with the units that are in preallocation, which is the conceptual stage: "assess for conditional unit allocation." I'd like to know how many there are in (a) group homes, and (b) social housing, and how many you are expecting in preallocation and what the status of those are.

[2:45]

R. Coleman: I'd like to break that 1,305 units down so that it can be determined what they are. I'd like to know, first: are the 1,305 all Homes B.C. social housing products for families, or what is the breakdown?

Hon. M. Farnworth: I can provide the following breakdown. For families, which the member just asked for, there are 757; for seniors, 212; a mix of families and seniors, 44 units; for special needs, 39 units; for homeless-at risk, 253 units -- for a total of 1,305.

R. Coleman: Are you saying that those 1,305 are going to be built in 1997 or that they're in various stages of approval?

Hon. M. Farnworth: They will be completed in the '97-98 fiscal year.

R. Coleman: Could you tell me where the 300. . . ? Was it 300 homeless-at risk?

Hon. M. Farnworth: It's 253.

R. Coleman: Could you tell me where the 253 units are -- how many projects, a breakdown of numbers. . . ? That will be a start.

Hon. M. Farnworth: There are 13 projects. I don't have the exact locations, but I will get that for the hon. member.

R. Coleman: These homeless-at risk projects: are they SROs, which is single-room occupancies, or are they self-contained units?

Hon. M. Farnworth: The vast majority are not single-room occupancies but are, in fact, self-contained units, and there are some there for youth and homeless-at risk.

R. Coleman: Are the units self-contained bachelors or self-contained one-bedrooms? For the youth at risk, is there one project or two projects in that regard, and how many units?

Hon. M. Farnworth: They're largely self-contained one-bedrooms, and there are some self-contained bachelors. I can give the member some of the locations of some of the projects. I think we've got '92-93. If we've got the others, I'll give them to you.

R. Coleman: The numbers are correct, but you just don't have the breakdown. Is that what I understand?

Interjection.

R. Coleman: Okay.

On preallocation. In February '97 you had one project with 20 units. Could you explain to me your definition of preallocation, what stage the allocation is at, what stage the project is at and the approval process.

Hon. M. Farnworth: Could I ask the member to tell me which project he's asking about?

R. Coleman: I'm not sure what project I'm asking about. It's from a briefing package I received from B.C. Housing. It's dated February 1997, and it refers to non-profit and homeless-at risk housing, project summary, stage. . . . In September of 1996, we had one project of 12 units under preallocation. In February of 1997, we had one project of 20 units under preallocation. I was just curious as to what kind of project that was. In addition to that, I wanted to know, frankly, what you determine is preallocation and how that's dealt with.

[ Page 3752 ]

Hon. M. Farnworth: That particular one, with the 20 units, is in Port Alberni. In terms of what is meant by preallocation, it's in the conceptual stage; it hasn't gone to design yet. That's what I can tell you about that.

R. Coleman: When we talk about the conceptual stage of a project, does that mean that we funded out of the million dollars we gave out to societies last year? We were speaking about it yesterday. We recovered 80 percent of the money and 20 percent of it was lost, or whatever the case may be. Does it mean that that's been funded to this group, that they have the land under option, that they've gone through some stage of rezoning, that they've come back and they. . . ? Have they been given some commitment that says: "When the money is there, you're going ahead"? Or is it just a case of preallocation: "Well, we have this project on the drawing boards; if the land stays in place long enough and the allocation happens to come through at the ministry, then we might be able to go ahead with this"?

Hon. M. Farnworth: The answer to your question is yes. In the case of this particular project, this is on B.C. Crown land.

R. Coleman: I'm not really sure you could answer that question with a yes. So basically, what we're saying is that these people have a conditional allocation. Would it be fair to say they have a conditional unit allocation for a project in Port Alberni of 20 units on preallocation? Am I incorrect when my description was that there's some commitment sitting here with regard to these 20 units? Or is there no commitment with regard to it, and there's just simply a thought, and: "Don't worry about it; that was just one more member of the NDP caucus going down"?

Hon. M. Farnworth: In this particular project, there were some issues to be resolved with the local municipality, particularly on siting and whether a certain lot or another parcel of land was available.

The fact is that it will be going ahead on this particular piece of Crown land. So the project is going from conditional to "It is a go." Those units will be built.

R. Coleman: Could you tell me what kind of project it is?

Hon. M. Farnworth: It's a special needs homeless-at risk project.

R. Coleman: What type of special needs?

Hon. M. Farnworth: Aboriginal.

R. Coleman: Now, the next level was. . . . There were 831 units in 25 projects; as of February 1997, they were at the design stage. When you're at the design stage, I take it that you've given them an allocation, that they're being designed. I don't know if they've gone through the rezoning process or not. But if they're at the design stage, I'd like to know what that stage means with regard to these 25 projects that are listed in February 1997.

On the anticipated construction starts. Obviously you're not going to have them all, but I would like them forwarded to me -- and also whether funding is in place to take them from the design stage to the next level.

Hon. M. Farnworth: In terms of the time lines for the 25, they should all be constructed and completed within two years. In terms of what design stage means, it means development funding has been arranged, land is secured, consultants are hired, the preliminary design has taken place, application is made for municipal approvals and a preliminary budget has been established.

R. Coleman: So we have 831 units sitting here in the design stage. They're going to go ahead in the next two years once funding is available, I would take it. You have to get your construction funding and all your approvals in place. Now, as to the 1,300-and-some units you mentioned earlier that were going ahead, is this 831 not included in that number?

Hon. M. Farnworth: Some of those will, in fact, be included this year because their construction will be completed this year.

R. Coleman: If they're only at the development stage, with development funding approved, and they haven't gone to the tendering stage, somebody's going to build something really fast in order to get it built this year. Because it's going to take. . . . You're getting into a six-month construction window.

I wonder if you could just clarify that point for me a little bit?

Hon. M. Farnworth: Some of them depend on a number of factors, one of the keys being the size of the project. In fact, some of the projects are quite small. Another thing that is a key determinant is whether the land has been zoned and municipal approval is already in place.

For example, for the site in Port Alberni, the zoning is already in place. There is one, for example, in Burnaby -- the Burnaby Association for the Mentally Handicapped -- and that is five units. So it's not a particularly large or complex project. I imagine that you can get those ones done fairly quickly. Clearly, the more complex a project is and the more extensive the things required, then the longer it will take.

R. Coleman: I must tell you that some small projects are more of a hassle to build than some big projects, to be honest with you.

Hon. M. Farnworth: I've watched some people build their basements. It has taken them forever.

R. Coleman: I have a brother like that, actually.

Just to clarify, some of these are included in this 1,300-and-some that you anticipate being constructed for occupancy within the plan in this fiscal year.

The next level, then, is that you have another 500 units that are sitting at "construction documentation." I would assume that by "construction documentation" you're talking about working drawings -- being in a position to actually go to tender with a CCDC contract, etc., to be put into place for the particular project. I'm just wondering if these are being held up pending tendering because of funding, or if they are just not being tendered because there are portions of the allocations that you're having difficulty with. If so, why would they have been moved into the construction documentation stage instead of being at the design stage?

Hon. M. Farnworth: These have gone through the normal process. They're ready to go; they're going to be built. We 

[ Page 3753 ]

wouldn't let them proceed to the next stage unless we were absolutely positive that they were in fact going to be built. So they will be built.

R. Coleman: Given that B.C. Housing basically has the ability to do 600 units a year under the mandate that it has, with 500 at construction documentation and then 831, some of which are going to go ahead, in another 25. . . . I'll get to this in a second. I'm just wondering how you're going to fund all of these, unless you're just spreading them out and holding the land for a long period of time.

The next one is that you have another 186 units that are going to tender, which is on top of this, again -- another 186 units. So if I start to add these up and you have 831 under construction, what is B.C. Housing's mandate, and where does it stand budget-wise for how many units per year you are trying to deliver and how many you are delivering to the marketplace?

[3:00]

R. Coleman: Just before I go on to my next point, I just want to know, with regards to this particular portion of the issue, then. . . . We have a variety of units in various stages of construction, and you're saying that the holdup is not financing. So we're able to finance these. But financing usually means that somebody is going to fund the cost over a long period of time. Everything I've read about the commission basically says that they are in a position to develop and fund about 600 units on an annualized basis. If that is the case, that's been the mandate and the direction of Homes B.C. It's what you're trying to accomplish. If I start reading these numbers -- and I'll get down to occupancies of 2,108 in a minute -- it appears to me that either you're achieving substantially more than 600 units a year -- closer to 1,000 a year -- or you're rolling allocations over from year to year, and it's causing a buildup at the other end. Previous years may not have had as many unites allocated. That's where I'd like clarification.

Hon. M. Farnworth: In terms of the budget, the subsidy budget is in place. The mandate is for 600, but that hasn't been seen as a maximum in B.C. Housing. The fact is that we have been building more than 600 a year. In fact, if you look back over the last three years, it's closer to 900 to 1,000 units a year. We have actually been quite successful in building more than 600 units.

R. Coleman: That was the point I was trying to get to. If you're building 900 units a year, you're subsidizing 900 units a year for a period of 35 or 40 years or whatever the case may be here. You're making a long-term financial commitment, which basically is reflected in the budget.

Your long-term costs are related to the capital cost, which is your funding and your carrying costs of interest and principal. In addition to that, you have other costs of delivery, which takes you into the other situation -- your overheads, your taxes, your utilities and all of those things to do with the operation of it. That's an ongoing cost to government over the period of the life of the project which will slide backward as the principal and interest are reduced, as long as we don't end up having to spend larger capital dollars to prepare for the future.

That brings me back to where, if we had 900 units of delivery of housing under a capital cost delivery system -- which is basically what we're doing; we're purchasing and leasing the land, we're building the product and what have you. . . . The question is: how many more units of housing could we do if a rent-supplement formula was applied to that capital cost? Because we wouldn't have to carry the capital cost of the product. That's what it comes to. I suspect we could probably be delivering somewhere around another 500 units year under rent supplement. But that's something that you'll be doing a review on, and I'm sure we'll get to it.

The other thing is under your own descriptions. Basically, if I read the introduction with regards to what you call GANTT charts with regards to your units, the actual, real number here for units to be built -- if I read this correctly -- is the number for construction only. Everything else is still sort of sitting at a final approval stage with regards to the committee. Actually, tendering, once it's awarded, is the same as the start of construction, but those two processes. . . . Up to that point, the executive committee can approve the budget under the construction documentation, but the project doesn't actually go ahead until you tender and actually make that final choice to go ahead. Would that be correct?

Hon. M. Farnworth: The answer would be yes, particularly for tendered projects, but a number of projects are in fact design-built.

R. Coleman: Your design-built projects. . . . Maybe you could just give me an explanation of what parameters you're using to describe a design-built today. That's almost like a movable goalpost within the construction industry and the development industry. Maybe you could give me your understanding of it.

Hon. M. Farnworth: It still goes through the same process in the same way until you come to the tendering point. It's not tendered, because the builder-designer comes, with the society, with a complete package that says: "We'll design and build it." That's what we mean.

R. Coleman: So that would go back to what we're basically saying -- and I'll just use broad numbers -- that a 20-unit project is based on the MUP, which is the maximum unit price established for that project. The society is receiving that amount as its total overall budget. They're consulting with their construction people to have to work within that MUP. You're approving the budget as an overall cost. Is that a turnkey-type of thing? Is that what we're basically getting to when we're talking about design-build in that case? Or are we talking about something different?

Hon. M. Farnworth: Under design-build, there's a cheque every month to draw down the cost of construction, as opposed to turnkey, which is: give us the keys; give them a cheque.

[ Page 3754 ]

R. Coleman: The cheque is basically for your soft costs and your hard costs and it's based on the budget. The cheque is going out as draws. At the end of the day, the society takes over and operates the project. Is that correct?

Hon. M. Farnworth: We get so used to doing this nodding back in forth that in fact we forget the Chair.

The answer is yes.

R. Coleman: I just want to be clear. We're basically delivering somewhere between 600 and 900 units a year. We're still doing them with a system where we're involved in the land, we're involved in the ownership of the construction, we're involved in the financing and we're delivering the product. And we're either having it managed by the commission or managed by a society.

Hon. M. Farnworth: That's correct -- apart from the fact that no Homes B.C. projects are managed by the commission. They're all managed by the societies.

R. Coleman: Is there a specific rationale for the fact that the commission has basically stepped back from the management of those, and the Homes B.C. ones, are now managed by the societies?

Hon. M. Farnworth: The decision was made in the early seventies in a shift to move away from public housing to what we now call social housing and having societies involved -- the third sector, if you like. That's been so for a long time.

Interjection.

R. Coleman: It's not like the stair-climber at all.

Hon. M. Farnworth: The stair-climber's easier.

R. Coleman: I'm not sure if it is. I was doing that this morning.

The occupancy of the 2,108. . . . I'm going to assume -- and correct me if I'm wrong -- that those 2,108 have built up over a two-year period. It says here that your occupied number of units in February 1997 would be 2,108. Or is that an accumulation of the Homes B.C. program, where, as we occupy, we increase that number on these charts to say: "We're now at 2,108 units"?

Hon. M. Farnworth: Yes. It is, in effect, an accumulation over the years.

R. Coleman: Did Homes B.C. come into place and actually get active in 1992 or 1993?

Hon. M. Farnworth: In 1994.

R. Coleman: Would all of these 2,108 have been done in the last three years under Homes B.C., then?

Hon. M. Farnworth: All but about 500 of them would have been under Homes B.C.

R. Coleman: What would the other 500 have been done under?

Hon. M. Farnworth: The province basically did them before Homes B.C. and from the start of the fade-out of CMHC.

R. Coleman: But none of the 2,108 are two-thirds, one-third with the federal government? They're all a product that we've developed as a province subsequent to the shutdown of the CMHC program?

Hon. M. Farnworth: That is correct.

R. Coleman: There were two projects on hold in February '97. Just a brief idea of what they were: in February '97, you had two projects on hold -- and to save you the trouble while you're looking through your papers. . . . There were two projects totalling 58 units that were put on hold and eight that were cancelled, for 141 units. First of all, I'd be curious about the two. And then, what caused the cancellation of eight projects?

Hon. M. Farnworth: The eight projects for the 141 units are basically part of budget cutting. The two projects that the member has mentioned are the Avalon project in Burnaby, where I believe there's a site problem, and in Fernie, which I think is almost out to tender.

R. Coleman: I caught "the Avalon project in Burnaby." I'd like to know what the site problem was. I didn't catch the second part of your comment.

[3:15]

R. Coleman: So I would suspect that if it doesn't, you're going to try and do a redesign, if you really want it badly enough, and if not, you'll just let it drop.

The other one was the Avalon project. You've referred to a site problem, and I'm just curious what that was.

Hon. M. Farnworth: Yeah. The first site we had with that project was a CMHC site on the George Derby lands that was a total dog. We've managed to get a second site that's a hell of a lot better.

R. Coleman: Well, I'm sure there are a few CMHC sites out there that are dogs. We'll be talking about those a little later.

At the same time, my understanding would be that the Avalon project is now under redesign on a different site, and you're going to try and bring it back. Is it just completely on hold at this point in time?

Hon. M. Farnworth: We're working to make it happen, and I am quite optimistic. Part of it will depend on next year's allocation. But there's been a lot of effort put into it, and I think it's a project that will eventually go through.

R. Coleman: Could you tell me what the project is? What is the anticipated user group of the Avalon project?

Hon. M. Farnworth: It's a family cooperative.

[ Page 3755 ]

R. Coleman: When you refer to something as a family cooperative, are you talking about a pure co-op, where the financing is actually carried back by the co-op and they're paying, or are we subsidizing the co-op in its operations?

Hon. M. Farnworth: This is a rental co-op.

R. Coleman: A little more definition of the rental co-op, if you please.

Hon. M. Farnworth: It's not an equity co-op; there's no equity appreciation. It's similar to literally thousands of them that exist around the province.

R. Coleman: So we're probably back to the seventies and eighties models of co-ops in CMHC, where the equity stayed in the project and the mean cost was basically whatever it cost to operate the particular project on a rental basis. The advantage was gained over a period of time because the cost was reduced and the rent. . . . Would the cost of debt servicing go down? Or are we talking about a co-op that has a set amount that we're subsidizing, similar to a social housing project? There's a number of varieties here, and I think we should be clear on what we're talking about.

To me, a rental co-op would be. . . . Say I build ten units. Ten people move in at day one, and they pay the overall costs of the operation because they're in there together -- in the co-op. And when they leave, they get their share back. If they've done any improvements, that's all they're entitled to; they're not entitled to any equity. And then the next person coming in pays just the membership fee, again, and then continues to pay whatever the costs are, which is the rent to the co-op. The co-op is one bulk mortgage, not divided title -- that sort of thing.

Hon. M. Farnworth: The model you've just described is exactly what it is.

R. Coleman: Within this co-op, then, are we rent-supplementing some of these people, as far as their subsidies are concerned, for their rental? Or are they all social housing tenants?

Hon. M. Farnworth: We are rent-supplementing 60 percent.

R. Coleman: Then I see we are using some innovative models within the marketplace, which is good.

I just wonder if you could tell me, out of the product that you've got under consideration -- this 900 units or what have you -- how many of them are pure social housing and how many are more along the lines of a rental co-op type of operation. We won't get into the private-public partnerships yet, but that breakdown. . . . When we talk about social housing, we deliver a number of different varieties of product. Is this a different variety of product than when we talk about a society having management of a total project all for social housing? This is a mixed use, where 40 percent are paying rent to a co-op and the other 60 percent are being subsidized in place. I'm just wondering what the breakdown is so I can. . . . I'm just trying to get some idea of pure social housing numbers that we're trying to deliver to the marketplace.

Hon. M. Farnworth: Apart from the homeless or those at risk, who are funded 100 percent, everything else, whether it's co-op or social housing, is all funded on a 60-40 basis.

R. Coleman: When we do this 60-40 basis, when we report our social housing numbers at 900 a year. . . . Is that 60 percent of all the product built, or are we building 900 and actually delivering, out of that, social housing at 600 a year?

Hon. M. Farnworth: That is everything. That's 100 percent of the product.

R. Coleman: So the non-profit sector, which is the side. . . . Basically, what we're doing is using our money a little more wisely, I think, and producing some product at a lesser cost because we're mixing the use of the projects. But we're actually delivering 900 units of housing to the marketplace, 60 percent of which is a straight social housing component. Is that a correct assessment of what you just said?

Hon. M. Farnworth: That is correct.

R. Coleman: I thought the numbers were higher, and now they're lower, but we're getting there. Could you explain to me what a NOHO project is?

[H. Giesbrecht in the chair.]

Hon. M. Farnworth: It's a program delivered through Homes B.C. that's designed to make it easier for lower- and moderate-income homebuyers to become first-time homebuyers.

R. Coleman: We have one of those under construction, for 29 units; and six of them under preallocation, for 120 units, in February of 1997. Maybe we can deal with the one that's under construction. I wonder if you could describe the project to me -- whether it's an equity co-op, a strata title, a straight condominium. . . . And what advantages were you able to gain for these people in order for them to bring in equity and in order to establish that they would get into this particular project to purchase?

I know it's a broad-based question. We may have to take it piece by piece. But initially there should have been. . . . There's obviously a land acquisition, and it could have been municipal or Crown land, or it could have been some other land. And then there's the building itself. The purchaser that comes into the project usually has to come with some equity, or there's some other form of financing -- it could be guaranteed by the province or whatever the case may be -- which allows them to get in for less equity. I'd just like a description of what that 29-unit project is and how it was put together.

Hon. M. Farnworth: Okay. The particular project that the member is talking about is an equity co-op. It's strata-titled Crown land. B.C. Housing is doing the low-cost financing. Habitat for Humanity and some of the co-op members are providing volunteer labour. The goal is to get the unit-cost financing to 89.5 percent of market value.

R. Coleman: Let's deal first with the equity co-op side of the equation. If I understand your quick summary there, we're basically talking about some sweat equity coming back in, which allows people to build up some equity in their unit through this volunteer labour. Would that be a correct statement? Maybe I should just clarify that first.

[ Page 3756 ]

Hon. M. Farnworth: Yes, in fact there is some sweat equity in there. There's also limited equity appreciation, and it's built on the construction management, which is another way of bringing down the costs.

R. Coleman: So would I be correct in assuming that in order to achieve the 89 percent value, we've taken the land, we've taken the building design and we've decided to appraise it to market, but we're actually delivering the product for less than what it's costing to deliver to market? We're allowing that appraisal to reflect within the overall equity of the project, which gets the 89 percent financing in place. And then, once that 89 percent figure is achieved, who's putting up the mortgage, and who's financing it? Who's basically securing the mortgage?

Hon. M. Farnworth: The answer to your first question is yes. In terms of the financing, they're all individual mortgages, and it appears at the current time that the Bank of Montreal will be doing all the mortgages on an individual basis.

R. Coleman: So we're talking basically about individual first mortgages on the strata title equity co-op unit to the purchaser at what would probably be around 89 percent debt-to-equity, with equity being the reappraised value.

Now, I would assume that the financing for construction has been put up by the commission through its own lending capacities; they would take it through Treasury Board or however you arrange that. And then these people come in, they put up their sweat equity or what have you, and they end up buying a unit.

How does the equity co-op work on the going out, when the person leaves the equity co-op and sells? For argument's sake, what is the control on -- for lack of a better description -- a residual payback, or control of the market, where we aren't just basically providing somebody with an 11 percent windfall profit on market value?

Hon. M. Farnworth: The resale price is going to be at 89.5 percent of the fair market value at the time of sale.

R. Coleman: How are you going to establish the 89.5 percent of fair market value on resale?

[3:30]

R. Coleman: The appraisal formula works fine in equity co-ops on the upside, not necessarily on the downside. Usually there's a formula that protects both directions with a bit of a control. Is there anything on the downside? When you have an 89 percent debt-to-equity ratio, if we have a slide in the marketplace, that's one thing. If we have 89 percent of appraised value on the upside, then they're taking their equity out and hopefully it rolls them over into another product, which allows them to get into another unit. I'm just wondering if there's any. . . . Are we providing any controls or guarantees or parachute clauses, for lack of a better description, on the downside of this particular equity co-op?

Hon. M. Farnworth: No. There are no downside clauses.

R. Coleman: There are a couple of other factors that come into play on the resale of an equity co-op that can affect the return to the person that is selling: the legal costs, the property transfer taxes and, of course, the real estate commissions. Are you allowing these units to get 89 percent after net sale or is it 89 percent of gross sale price? That actually can impact quite dramatically on an equity co-op's value in the marketplace.

Hon. M. Farnworth: It's in a specific agreement, and I'll get the actual requirement for the hon. member.

R. Coleman: While we're getting the agreement, if you could provide me with the disclosure statement as well, that would be helpful. That would probably solve a lot of the questions that I have on the turnover of the equity co-op.

The one thing I would like to know in the equity co-op is whether there is a restriction on resale or an age restriction in the project. The restriction on resale would be whether they have to be approved by the co-op for purchase or whether the person can market directly to the marketplace without going through the co-op?

Hon. M. Farnworth: They have to be approved by the co-op and by B.C. Housing.

R. Coleman: Just as a warning. . . . I know it's only the first project of 29, but I think the commission could be treading down a fairly awkward road if they're going to get into the approval of who's going to be allowed to purchase in a co-op on an equity co-op basis in the future. You might be very cautious in looking into how you're going to handle that.

Co-ops have had some traditional problems with regard to resale, and they're usually related to the number of bodies having a say in who can buy, and it ends up becoming a situation where if you're a friend of a friend of a friend you'll get in, but not where you're just being given the opportunity to purchase on a straight-up basis.

And that's something, as these things build -- especially with an 89 percent value to market in a tight housing market like the lower mainland -- that can create problems for you down the road that you might want to be very much aware of.

The other part of it is that I would assume -- and you can clarify it for me -- that as far as the operation of the co-ops go, they are going to be governed by the normal budgetary influences of the Condominium Act with regard to their strata fees, their maintenance and their 5 percent residual for capital reserve that has to be taken in under the act. Or have you changed that slightly and put the reserves to a higher amount for capital reserve for the future, or what have you?

Hon. M. Farnworth: For all intents and purposes this is strata by condominium.

R. Coleman: The construction of this particular project, I would take it. . . . Are the ones that are out there -- those other six preallocations that are sitting there -- all equity co-ops as well?

Hon. M. Farnworth: Two of them are equity co-ops. The other four are just straight strata title.

R. Coleman: So on the other four -- that's four straight strata-title projects -- are they achieving some lower cost as well, in order to make them affordable, outside of having the equity co-op application? Are they getting to 89 percent or 90 percent of value, or are they strictly a market-driven project? 

[ Page 3757 ]

That really wouldn't be to the formula, obviously, of delivering something cheaper to the marketplace. I'm just curious about what you're doing with the other four.

Hon. M. Farnworth: We're not sure yet where they will end up -- whether it's between 85 and 89 percent. For example, I think one of the projects is in North Vancouver. It's a Legion project, and they're going to bring land into the deal, which will bring the cost down.

R. Coleman: So you're achieving savings that you're passing on to the purchaser. Now, on these that you fund, how are you going to control the resale -- effectively, being fairness to marketplace -- without the bump taking place where somebody jumps in and. . . ? For instance, you're going to sell the equity co-op units for 89 percent of the market. It's going to be based on an appraisal. We're unsure about the part of the agreement that deals with the legal and the real-estate fees and what have you. On these ones, what is your control to ensure that the affordability stays in the project?

Hon. M. Farnworth: It's the same principle. If 85 percent is achieved, then it's 85 percent of resale. If it's 89 percent, it's 89 percent; if it's 88, it's 88. So the same controls, whether it's the equity co-op or the strata, are in place.

R. Coleman: But how are you going to control it? How are you going to make sure that happens in the future? I mean, I understand the concept. But how, with this coming forward, are we going to control that? Are we putting a restrictive covenant on resale? Are we putting something on title? Are we putting a section 215 covenant on? Or what is the case with regard to the control of that particular unit's resale? Because we're obviously making some investment in it with regard to finance.

Hon. M. Farnworth: In the case, for example, of the Legion that's bringing the land into the project, they will transfer title of the land to us. So title of the land, that asset, rests with us. That's where we have control.

R. Coleman: They're transferring the title of the land to PRHC?

Hon. M. Farnworth: Yeah.

R. Coleman: And you're leasing it back, then. . . ? Is this actually a lease-back market project, then, of 60 years, 90 years, or whatever the case, where the title of the land is held and it's tied into the ground lease and the strata-lot lease that controls the strata title? Is that how you're going to do it?

Hon. M. Farnworth: It's a Crown lease for 80 plus 19 years, and the restrictions are in the lease. So that's how we control it.

R. Coleman: So we have an 80-year ground lease with a 19-year bump, for argument's sake. Basically that takes care of one of my next questions, which would be about the control and the safety valve for people coming into the lease late and having a redevelopment opportunity, which has always been a concern with these projects.

The other side of the coin is that the ground lease, which is over the entire property, is usually with one entity. And the entity then has a sublease, which is a strata-lot lease on individual units that is sold relative to the same type of vehicle as a condominium. And the restrictions are usually in the strata-lot lease, not in the ground lease, because the ground lease is to an entity, which has to then have some approval back to you.

So who's holding the 80-year ground lease on the project?

Hon. M. Farnworth: The strata-titled corporation, whether it's the equity co-op or condominium, is the ground lessee.

R. Coleman: My experience with these would be that the ground lease is usually with the society -- i.e., the Legion society -- which then does the sublease to the individual unit holder, purchaser. Otherwise you end up without separation of the properties, and it doesn't sound like you're doing that here.

You're giving the ground lease directly to the strata corporation. And if you're giving the ground lease to them, then you must be giving them. . . . Are you still doing individual strata-lot leases with individual units? Or are there two leases in place? Or is there a ground lease plus strata-lot leases? That's just a mechanics. . . .

Hon. M. Farnworth: There's a ground lease to the equity co-op, which in turn subleases to the individual tenants. If the hon. member wishes, I can get him a copy of the lease.

R. Coleman: Just to clarify your last statement. The ground lease, you said, is to the equity co-op. In this case, these four aren't equity co-ops. So the ground lease is obviously to the strata. . . .

Interjection.

R. Coleman: Is it to the strata corporation?

Hon. M. Farnworth: Yeah.

R. Coleman: And I would assume there are some things in the disclosure statement with regard to these that you're going to control some of this with. I'd be interested in the disclosure statement, as well as the ground lease and the strata-lot lease, just for my own information. That way I can basically assess in my own mind that we're not exposing ourselves on these particular projects. Incidentally, these are some of the future ways as to how we can make things happen. So I'm not being critical here. There are just certain mechanics that I've found cause future difficulties in some of the structures of these things that have been fixed in other projects. We're all sort of evolving as we go through these, so we're going to have some experiences with them.

I'd like to just go back. I do have a number of other issues to canvass, obviously, and I don't know how long we're going today.

Interjection.

R. Coleman: Are we going to 6 o'clock? Well, I don't know, so it doesn't matter to me.

I want to move back to your seniors' allocations for housing, shortly. But I just want to canvass one other property before I do that, and it was one I canvassed in estimates last year. It's the status of a property that we paid for through the 

[ Page 3758 ]

Ministry of Social Services at the time. I know that the. . .is familiar with the property. It was referred to last year in estimates as the Chrisholme property. It's called the Campbell Valley Centre. It's about a 60-acre piece of property in South Langley, off 200th and 16th Street. It's in a funny zone, because it's spot-zoned within an agricultural land reserve for institutional use. It has an indoor swimming pool, a gymnasium and residences for boys. It was originally residences for boys; there were about five or six of them. Last year, after we did estimates, there were a number of people going back and forth with some discussion on the property, and I was just wondering what the status of that particular site is.

Hon. M. Farnworth: The property is currently vacant, and B.C. Housing is awaiting instructions from the Ministry for Children and Families. We expect a decision by the end of June -- June 30.

R. Coleman: I would assume, then, that there has been a request to the ministry as to what their wishes are.

Hon. M. Farnworth: Yes.

R. Coleman: That's good.

Now, I want to go back to seniors' housing and, first of all, clarify. . . . In your numbers, I think you had 200-and-some units of seniors' housing this year. Could we just clarify that number, because I didn't write it down?

[3:45]

R. Coleman: Are these also in a 60-40 split? Are they in some sort of a co-op, with 60 percent of them actually being subsidized and 40 percent that aren't?

Hon. M. Farnworth: Yes. That is correct.

R. Coleman: So that brings us a little over 120 units of actual subsidized seniors' housing that we're delivering. The issue of seniors' housing. . . . I have a colleague here who's our Seniors critic. That's why I want to canvass this now, so that she would have the opportunity to canvass this subject.

But I would just like to preamble this, because it's certainly an issue. For seniors in the future, as we see an aging population, we are going to have to deal with a number of crises in health care, a number of crises that have to do with intermediate and extended care facilities, and also deal with the seniors issue itself, particularly those people that need some form of subsidy or ability to have some fairness in the marketplace for affordability.

I know that the emphasis has not been to deliver seniors housing on a subsidized basis in the last number of years at B.C. Housing or at a number of other housing commissions across the country. The emphasis has been on family housing, which is where it was determined that the crisis and the highest-priority need was in the marketplace. I think that what we have to do is wake up to a couple of facts with regard to what's going to happen with seniors housing in the future. Your equity co-op formula may or may not be able to be adapted, but there are certainly ways we can deliver this form of housing and adapt ourselves to a marketplace so we can save a lot of money both in housing and in health care, with regard to how we deal with the delivery of housing in the next five to seven or ten years.

The critical side of it that I see. . . . I've had some experience and have seen projects where the value of the land was left in the project to buy down the mortgages to produce rental housing for mixed use within a project. So part of the project ended up as rental; part of the project ended up for sale. The sale units paid market value and the units that were rented paid market value, but the equity of the land in these cases was used as equity in the project to buy down the value, which allowed the society, or the organization that was attached to the project for sale, to produce a unit of housing that could be rented in the marketplace at break-even, at below-market, value to a senior within that community. The benefit of that is that there's no ongoing subsidy. There's no ongoing cash flow required. It's more of a design and an emphasis -- on our part as government and as opposition as well -- to get municipalities and groups that own land to use the value of their land for the long-term benefit of the community.

You can also tie in formulas of share equity, where there's a residual payback on resale that goes into sinking funds that can be used to produce this type of housing. I myself have had some personal experience with that side of the marketplace.

The critical thing, though, is that on top of that, first we have to wake up to using the equity for the benefit of seniors and providing this type of housing. This formula would also, obviously, work in other forms of housing. The critical thing is that because we can't afford to subsidize the aging population as it comes through, we have to come up with new ways of delivering affordability in the housing market.

The other key, though, is to get the entire marketplace to recognize that we have to design our product to age in place. We have to build buildings that are designed with facilities in them -- kitchen facilities, office space, amenity space and what have you -- that allow for the population within the building to stay in the building and age in place. The unit should also be designed with minimum six-foot-wide corridors in the hallways, which allows for the possibility of wheelchair access. To take it further, we should try to get the marketplace to recognize levered handles on doorways and taps, to put backing in the walls behind the ceramic tiles in washrooms for future things like grab-bars and what have you, and also to have units wired for nurse-call systems in the future.

The benefit of that is that the buildings can then start to service a number of needs of the community. These needs in the community would include things like having home care come in. You would be able to service an entire building of clientele. You would have nurse care come in and do exactly the same thing -- having facilities in the building to provide those services to those people as the population ages in the future.

It's very critical that we start to recognize these things in our marketplace as we go. I mentioned the grab-bars behind the ceramic tile because my experience in the marketplace has been that the seniors population doesn't want to buy the unit -- at the age when they first buy -- with them in place. That's an admission by them that they need them. They prefer to have the ability to put them in later if they need them. I think it's important that we recognize that.

So the movement in this form of housing has to be toward some innovation. If we use innovation, we can accomplish 

[ Page 3759 ]

what we have to accomplish to be successful for the future needs of the seniors population. It would also reduce, at that point in time. . . . It increases the age of people going into intermediate care or extended-care facilities, or whatever the case may be, because they now have the Closer to Home -- if we want to coin that phrase that we're trying to get out of this regional health care system. We now have the ability to provide those services to people.

We also provide an option for people to get away from being what I prefer to call hermitized seniors. We give them the option to get out of their home and into a building that meets their needs for the long term. They leave a single-family home where they're basically hermitized, closeted in and isolated because they can't afford to do anything else but live in that house. The equity is all tied up in the home. They can get into an affordable alternative that allows them to have some additional income so that they can live. It allows them to get back into the community, which is good for healthy living.

So there are a number of factors with housing for seniors that are very critical for us as a society to start to recognize. I wanted to give you my thoughts on that, and turn it over to our critic for seniors and housing, because she'd like to canvass some seniors housing issues. Then we'll go back into some of the more mundane subjects, I guess you could say.

K. Whittred: I would like to take just a moment to reinforce those very appropriate introductory remarks that were made by my colleague. To provide the minister with a little bit of background, I did attempt to canvass these issues with the Minister Responsible for Seniors, as I agree with my colleague. I think that every gerontologist, every geriatrician and every seniors' organization in the province agrees that housing is absolutely fundamental to the concept of aging in place. And with an aging population -- particularly that group of people over 85 -- if we do not attend to housing, then in ten or 15 years, or perhaps even less, we are going to have major, major crises on our hands with simply insufficient care facilities.

There are a couple of things that I would like us to get our heads around in terms of definitions, just so that I and the minister are sure that we're talking about the same thing. I classify housing as those facilities which do not provide care. And I also acknowledge that in the current discussion surrounding alternative seniors housing, this area becomes very grey. For that reason, I personally believe that this topic may perhaps be more appropriate for the Seniors ministry than this one; however, that is not my choice.

The second thing I'd really like us to get our heads around is the age of the population that we're speaking of. We very often talk about seniors. I don't know what image or stereotypical image comes to mind. Some of us may think of a skinny-legged guy in plaid shorts and a flowered shirt getting into his mobile home to go golfing. And that, of course, is a true stereotype if we're talking about the young seniors.

The point I want to make here is that the group that I think is demanding our attention in terms of housing today is the older generation of seniors. I stress that when we speak of seniors we span two full generations, and we're speaking largely of the 80-plus population. . . .

Hon. M. Farnworth: My grandmother. She's 90.

K. Whittred: Yes. So this is the group that we're most concerned about.

I would like to start by. . . . Well, one more point I might make in terms of this discussion, vis-�-vis my colleague's discussion, is that I will probably be speaking at a more conceptual level. I'm looking here more for what kinds of strategies and interministry discussions are going on and so on.

Now, there are two or three issues that will come up, I think, that are important. One, of course, is affordability. That is a factor that applies across the board to all levels of seniors. The second most important feature is appropriateness. This is where I get into that grey and hazy area between providing housing and providing care. I think that what becomes appropriate for, as you say, the 90-year-old is quite different from what we may consider appropriate affordable housing for almost any other segment of society.

I would first like to ask the minister, regarding the minister's or the ministerial philosophy. . . . I'm quoting now from the "Homes B.C." book: "Seniors projects will not be selected unless the sponsor is contributing sufficient equity to reduce the project cost well below the maximum unit price. At a minimum, sponsors of seniors projects must be prepared to contribute the value of the land."

Now, my observation from going around the province is that that particular edict has almost exclusively meant that seniors projects only are done if they're done by a church which already owns the land. I'm just wondering if the minister would comment on the reason for that and on his observations of my observations.

Hon. M. Farnworth: I'd like to make a couple of points. First, in terms of the program of Homes B.C., the first priority is and has been families. In the case of seniors, one of the requirements in terms of bringing land in is that that is the one way of reducing the cost, because once the seniors are in, they have a very low subsidy cost compared to families.

[4:00]

[S. Orcherton in the chair.]

K. Whittred: One of the first concepts I would like to address is this whole area of what we call assisted-living projects, or sometimes they're called assisted independence; they go by a variety of names. My colleague alluded to them. I would like to describe what most of the ones that I have seen are like. There are any number of them being built today in the private sector.

Generally, there is a life-lease component, so that an individual may go and purchase an apartment if they're at that particular stage in their life. Generally, there is what some of them call a "lodge" component or a congregate-living component, where the residents in that portion of the complex have a small suite to themselves but take meals communally. 

[ Page 3760 ]

Of course, services are provided, such as linen service, and generally there is a wide variety of services that the individual can pick and choose from. In fact, I spoke to one or more community planners who defined that sort of facility as a hotel. I guess there is a comparison. The third component that many of these complexes have along with them is an extended-care facility. So in fact they are a kind of full-service thing.

My concern about these is that the ones being constructed -- and again, virtually everyone in the community agrees that this is probably where the greatest need is, in this flexible-use housing -- are being built privately. They are very nice, and they are extremely expensive; therefore, they are only available to that segment of the population that can afford them. My question to the minister is simply: what strategies is his ministry considering to try to change that particular aspect?

Hon. M. Farnworth: In terms of the current Homes B.C. program, there is no strategy that deals with the concept the member has been talking about -- assisted living from entry-level senior to, if you like, elderly senior, where there's a great deal of care required. One of the things that is taking place in the ministry, though, is that we are doing a full program review that includes Homes B.C. This is one of the areas that is being looked at. We've started preliminary discussions with the Ministry of Health in terms of looking at where we need to go over the next few years, and I think this is an area that does need thorough investigation.

One of the things that occurs to me is. . . . We do provide a fair amount of seniors housing, but I would be inclined to agree with you: it meets a particular niche, but it doesn't cover a broad spectrum. It doesn't meet a broad continuum. . . . You're going from almost independence to a lot more reliance on care, and that's missing in the public sector right now. I do think it's something that we have to address. There is ongoing work in the ministry for a program review, but there is no specific strategy at this time.

K. Whittred: Seeing as the minister has brought up the idea of strategy, I would like to pursue that a little bit, because if there's anything that disappoints me about the responses that I got from the Ministry Responsible for Seniors in this area -- and now I hear it from the minister responsible for housing -- it is that there is apparently no long-term strategy in place.

I would like to refer to this report, which was put out by the Seniors Advisory Council, called "Shelter and Beyond: The Housing Needs of Seniors." It was presented in June 1993 to the Ministry of Health, which they report to. I'm also aware that there is an interministry committee, which I am told -- although I have no evidence -- meets four times a year to discuss the ongoing interministry concerns of seniors. I also have it right here in Hansard, from the mouth of the Minister of Health, that there is a strategy in place. And I quote: "We have exactly these kinds of discussions with the Ministry of Housing on alternative seniors housing." So to hear that there is in fact no strategy leaves me a little bit puzzled.

I want to refer to one of the recommendations from this report. It says:

"The Seniors Advisory Council believes that the government of British Columbia should develop a comprehensive long-range strategy for meeting the housing needs of seniors that will provide forecasts of needs, targets for meeting needs and a record of achievement in meeting needs."

Hon. M. Farnworth: In terms of the strategy I was talking about, I think it was in reference to the type of facility that exists in the private sector that the hon. member was talking about -- the entry-level, to a continuum of extended care. In that regard, there is no similar component in the public sector. In terms of a strategy for addressing that particular segment, it's true that there isn't a strategy in place. But there's a program review underway to develop a strategy to look at areas like that.

In terms of an overall strategy for seniors, there is a significant strategy in place within the Housing ministry. Currently, of all B.C. Housing -- 37,000 units in total -- 53 percent is seniors housing. So 53 percent of the people in social housing in the province are seniors. There's the SAFER program, which has 13,000. In CMHC housing in the province, there are another 10,000. So in total, there are over 42,000 assisted seniors housing units in this province, and a subsidy approaching around $50 million, which is 62 percent of all provincial subsidies.

So there is a strategy in place. There is a lot that's being done, but clearly there needs to be more done because, as the members recognize, there is an aging population. There is a program review underway that involves this ministry and the Ministry of Health. One of the areas that I expect it to look at is the area raised by the member in terms of making available some of the areas that are in the private sector.

In the public sector there may be a number of ways of doing that, either through government directly or through an area that I expect we'll canvass later, which is private-public partnership. But there is a need out there, and there is a recognition of it in this ministry. It's a reality that over the next ten or 15 years, the population is going to age substantially, and we do have to get ready for it.

K. Whittred: I appreciate the minister's remarks, and I am aware that there are a great many seniors who in fact are assisted in housing. I hope I can phrase this properly so that I get across the message I want to make. I believe that at this time, a great many of those seniors who are assisted are in fact assisted financially. In other words, they are low-income, and they are subsidized in their housing, which of course is very desirable. However, if we're comparing it to the point that I was making, we're really kind of talking apples and oranges here, because we're not talking about facilities that provide this segment of care.

One of the things I have heard when out and about in the community in the past year -- and I have been very busy talking to people -- is that one of the areas where perhaps we have been too successful is in the concept of aging-in-place. I'm sure the minister is aware that 20 or 30 years ago, there was an abundance of seniors housing, most of it subsidized, that was built by a great many worthwhile organizations: the Legions, the Moose, the Elks, the Kiwanis and so on. Those residences were filled.

The people were perhaps 65 or 70 years old, and they have done exactly as we hoped. They have aged-in-place, and so now those people are in those same complexes, which are aging. The complex is no longer appropriate for them; it no longer meets their needs. The phrase that is used in many circles is that shelter is no longer enough, and we have to go beyond shelter. It is that area where I do not see any sort of strategic planning, other than what is happening in the expensive private area.

Perhaps it would be most useful for us to simply have a bit of a dialogue about some of the options and some of the things that have arisen, particularly out of the Seniors Advisory Council report. That is a report that goes to the 

[ Page 3761 ]

government and is therefore reasonably authentic. One of the first points that is made on the role of supportive housing is obviously to supply alarm systems, communal meals, housekeeping and on-site support personnel. Let's take those one by one.

One of the most common themes I have heard that might work to keep costs down in meeting this supported-living endeavour would be simply to take existing buildings -- in some cases, existing private sector buildings -- and to modify whatever is necessary to include a communal dining room. That is much simpler than having to go out and build a whole other building.

Housekeeping is of course fairly easily supplied. For the on-site personnel, one of the recommendations that is given is that building managers and so on who live in facilities be provided with some sort of training. Perhaps the minister could respond to those comments, which come from this report.

Hon. M. Farnworth: Those are very valid points raised by the member, particularly some of the ones around private sector buildings and common dining rooms. Within B.C. Housing right now, we do a fair degree of training around managers. There's a whole series of initiatives currently underway, initiatives that we currently do. There's a major review planned for this summer in terms of seniors in B.C. Housing and some of the things that we need to be doing.

When the member talked about having been too successful, she's quite right. A lot of those facilities that were built 20 years ago by the Kiwanis, the Moose, the Lions or the Kinsmen have been very successful, but they were geared to a specific age group. They don't take into account the fact that we do have a significant population that is now over the age of 85 and does have certain needs.

[4:15]

One of the things coming up that I think is of critical importance, and that I think we need and that I am very interested in, is the fact that a lot of these older projects that we were talking about are coming up for renewal. They are nearing the end of their practical life. That's going to give us some real opportunities in terms of site development. I can think of one in my own constituency. It's on a huge site, and it has very low density. In the ability to be extremely creative in terms of replacement stock for what's there and for additional stock, there's a tremendous opportunity.

I think what you'll see when we start to replace a lot of this aging stock is that we'll have to make sure that what it's replaced with is appropriate in the way the member described, in terms of not just looking at it from ages 65 to 75 or 75 to 85 but allowing that 85-plus component to age-in-place with what's required to be there. For example, my own grandmother is a case in point. As I talked about, she's 90. She doesn't live here. She lives in Australia, and she still lives by herself and looks after herself. Where she lives has been upgraded over time, so things like the handle bars and the levers have gone in as required. That's the type of thing we need to be getting to in existing projects -- to make sure of things like that -- but also in new projects that are replacing some of the older stock.

K. Whittred: Moving on to another related area, is there coordination between the Ministry of Housing and the municipalities in terms of encouragement for innovative and flexible alternatives? I'm thinking here of things like granny flats and modifications to existing housing. The minister made mention of his grandmother. When my father died a number of years ago, there was no way that my mother would have stayed in her own home alone. What she did was add another kitchen, and her widowed sister came to live. That has turned out to be a perfect arrangement, because they both have their own digs, so to speak, and yet they have company. They've been able to age in place. It's exactly what we want. However as we all know, often municipal bylaws and so on stand in the way. I wonder if the minister could simply apprise me of what kinds of discussions he has had with municipal leaders in this regard.

Hon. M. Farnworth: That particular issue, I think, is an extremely important one, and there is an increasing awareness on the part of local government officials of that particular issue.

I can tell the member, from experience in terms of having sat on a council, that when it comes to social housing projects, it is much easier to approach a council with a social housing project for seniors -- that's targeted to seniors -- than it is for basically any other group. So in terms of a recognition and a willingness by councils to accommodate seniors housing within their communities, I would say that is not a problem. That is generally fairly easy to accomplish.

In terms of some of the other changes the member is talking about, I think there is a gradual improvement. It's one of the issues I plan on bringing up at our joint council process. We have to start looking at forward issues. The issue around granny flats is a classic one. This may be the wrong way of saying it, but many councillors are aging themselves. They are starting to look to their own future and are realizing the need for things like granny flats. The fact that there's going to be some major changes to the Municipal Act that will allow municipalities to do more will, I think, give them greater flexibility in terms of how they want to approach issues that may accommodate seniors. In my own area of Coquitlam and Port Coquitlam, it is easier than it used to be, if you're building your own home, to arrange it so that the type of living arrangement you just talked about can in fact take place.

I think what's required is a process of education at the municipal level, and I think the way to do that is through the UBCM, probably with some help from this ministry either through the Housing component or the Municipal Affairs component. Basically, in the case of seniors, I think it's very much an awareness problem. Once you raise the issue, once you start to make councils aware, there's a much greater willingness to be accommodating. I think that over the next five years, there's no reason why much greater strides can't be made.

[ Page 3762 ]

K. Whittred: I'm very happy to hear that from the minister, and I'm hopeful that municipalities will become a little bit more flexible in their restrictions on what is allowed and what isn't.

In speaking to many people around the province, I have been told that the greatest need in seniors housing -- if we're talking about income groups -- is for those in the middle-income group. If there's any group that's sort of identified as being left out of the available mix, it is the moderate- to middle-income bracket. In that regard, I just want to ask the minister a few things about some problems that I have encountered in looking around at different projects and so on, related to financing and CMHC rules and banks.

In my own riding of North Vancouver-Lonsdale just recently -- and I'll use these as examples -- there have been two major innovative seniors projects that have both been cancelled. They've both been cancelled for similar reasons. One was because, after everything had been gone through and rezoning and all sorts of things had taken place, in the end the developers could not get funding from the banks. Now, I know that this is not the problem of the minister. However, there appears to be a major problem regarding financing of many projects that are more in the middle bracket. One of them, I'm told, is that regulations demand that a percentage of the suites be sold prior to the end of construction. Seniors, being who they are and being very frugal, are often simply not willing to go out and put a down payment on a place sight unseen. I know my mother certainly wouldn't, and if I were 80, I don't think I would either.

So you have a built-in cultural discrimination, if you like, and I am told by many developers that that is one very, very serious drawback in the market for building seniors developments. I know that in addition to the two in my own riding that have gone under, one very close to home that has been in jeopardy and has problems is the Abbeyfield house right across the street from the Legislature. So although this is the banks, hon. minister, perhaps you can tell me what you might have in mind.

Hon. M. Farnworth: Again, I recognize the problem, because it seems that it's very easy to address the issue of lower income, where government comes in and is the guarantor. At the higher end, they don't need assistance. Perhaps if bank presidents weren't paid quite so much money, they or their spouses might be more aware of the problems associated with aging -- if they didn't have the financial comfort to keep them going.

R. Coleman: It's a stretch.

Hon. M. Farnworth: I know it's a stretch, hon. member, but we've got to start somewhere.

I think there are a number of areas that may offer opportunity. One is in the area of public-private partnership, where there is sort of a government participation, be it local government or provincial government. That may give some sense of comfort, if you like, to the banks that all these people aren't going to skip town and leave them holding the bag. I always find it amazing with banks and how they do things. Their view of the world is very narrow; it really is.

The other is that within the ministry we've held discussions in a number of areas on how we can make improvements. For example, one of the areas we've been addressing is the issue of leaky condos, and that involves sitting down with the industry. Maybe what the province can do is start to look at some forums that we could be involved in sponsoring. Or we can try and bring in the development community, government, community groups and society groups, and specifically go after and target banks and the financial institutions and lenders to try and get them at the table and say: "Look, here's a problem. Here's the way it's been addressed. Here are the problems that government needs to address in order to make things work better, and here's some of the things that government is doing. Here's some of the things that the development community sees as either obstacles or problems, externally or internally. Here's what they're doing. Here's what community groups are doing, and now this activity is. . . . Here's your role, and here's the problem as we see it. We need to address these problems." I think that's a role that either the ministry or government can play collectively. And that's an idea that I think is a possibility.

There aren't any easy answers. If there were, I think we would have found them by now. But given all the advertising that you see on TV -- like "Can a bank change?" -- maybe there are some opportunities now, though I won't hold my breath, to try and bring them in and point out exactly, if they really want to change. . . . Here's the problem, here's how the rest of us are trying to address it, and here's how you need to change.

K. Whittred: Yes, in those remarks the minister mentioned sitting down with the industry. I am pleased that the minister is at least conversationally aware of all these various issues. I'm still a little disappointed that there is not a kind of mapped-out strategy, but we'll deal with that later.

Getting back to sitting down with the industry, it takes me into one of the next topics that I want to address, which is the area my colleague alluded to earlier. It has to do with, if you like, what is called universal design or barrier-free housing or adaptable housing. I understand that this whole concept has been in place in Europe for years, and it seems to be out of sight of our builders. Looking at the community, one of the things I see in the marketplace is a great deal of what I consider -- from what I have learned -- to be totally inappropriate housing. There is a whole lot of housing out there that's being marketed to what are called empty-nesters -- which is almost me, almost an empty-nester. They are very nice condos, and so on. But they are totally inappropriate for those same empty-nesters 20 or 30 or 40 years down the road, which is the length of time empty-nesters have left to live.

I see an abundance of wonderful condos in three storeys. That is, of course, because it's cheap to build a 20-foot wide condo that's four storeys high. You get lots of living floor space, but you also get lots of stairs. In talking with planners, I am told that for as little as $1,000, homes can be adapted with things such as my colleague was speaking of earlier: the rails. That's something that needn't just be for seniors, and so on. Anyone can use a bathtub rail. Things like wider hallways, wider doors, plugs that are two feet off the floor -- these are simple things, many of which have no cost. Now, I won't ask the minister if he's cognizant of these; I'm sure he is. What I will ask is: has the ministry discussed with anyone the possibility of building some of these very obvious adaptations into the Building Code?

[4:30]

[ Page 3763 ]

to work with building inspectors and to advise on things like the Building Code in promoting adaptable housing and housing that can meet the needs of seniors.

Having said that, I'll also remark on the work that's been going on within the housing stock that's under our direct management. The fact is that things are being brought up to date. We do have a review in terms of what needs to be done. Rails and those sorts of things that the member commented on are being done. I also think that what the member is getting at is a broader societal problem, and it is outside the direct purview of government that can make changes directly. There is a need, I think, to educate not only municipalities but also builders on what it is they need to be doing. So there is some work within the ministry; we do have a full-time person. But clearly there is a much larger societal problem that needs to be addressed.

K. Whittred: Moving on now, I think we've had a good dialogue about some conceptual things, and I think it has not gone beyond the conversational stage.

Now I want to address a few more specific things. One is, of course, the SAFER program. I am frequently asked why the SAFER program has a cap. First of all, let me ask: what is the cap for the SAFER program? For the record, would the minister sort of describe this to me?

Hon. M. Farnworth: First, the program is geared to low-income seniors. There is a cutoff line at some point, in terms of 30 percent of your rent being available for subsidy. That's $520; the formula works up until that. After that, I think that produces an annual income limit of around $21,000. After that, it doesn't take into account whether or not your rent would be, let's say, $1,000 or $1,200 or $1,500. That's why it's there. The primary reason is a program targeted to low-income seniors.

K. Whittred: Again, I wonder if the minister can clarify for me, for the record, that cap of $520. Is that rent, or is that the cap on what SAFER pays?

Hon. M. Farnworth: That's rent.

K. Whittred: Now I can discuss a little bit with the minister why I get so many calls about this. It's not that people do not appreciate SAFER, but simply that in the lower mainland and in the capital regional district it is next to useless, because there is no such thing -- for the most part -- as an apartment that you can rent for $520. Therefore a great many people are not really deriving benefit out of it -- or at least they feel that they're not. Perhaps the minister could comment.

Hon. M. Farnworth: A couple of points. The rent ceiling hasn't been increased, in part, because of the amount we have available for subsidies. The object has been to try and spread that out to as many people as possible. But I would also point out that in terms of where the majority of people who actually make use of the SAFER program are, they are in fact in the lower mainland. I do, though, recognize the comments the member has made.

K. Whittred: I would like to tell the minister a story about an incident that happened a few months ago -- again, in my riding. There was a fire in one of the Kiwanian seniors complexes, at about the beginning of last December I think,. and 19 very, very elderly people were left homeless as a result of this fire. I wanted to comment on this, because it was the first time in my experience that I realized how easily a person could become homeless. These were, of course, the most vulnerable people in society. But what struck me was that in the entire lower mainland at that particular moment in time, even with mobilizing all the resources of emergency services and the clout -- whatever they have -- of the Kiwanian organizations, there were only five available low-rent units. So I simply pass that along as a comment and as an illustration of how very, very few low-rent units there are.

Let me just check my notes here to see what I haven't canvassed. One thing I want to canvass very briefly is another problem related to providing moderately priced housing. I'm sure this is not a problem the minister can solve, but perhaps we can discuss it. That is the price of land in the lower mainland and in the capital regional district. One of the spinoff effects that is happening in the area of seniors housing -- and is probably partly the reason that there is so little moderately priced housing available -- is that it's simply so difficult to develop it there. Therefore the developments that we do see are taking place in smaller communities sometimes, or even in Alberta.

The minister may be interested to know that when I was in Alberta, I took advantage of going and looking at some of these complexes. I found that in Alberta there were quite a number of supported-living kinds of projects available and that some of these were in fact attracting people from the lower mainland. I have been told by developers and people in the field that we are going to have to come up with innovative ways in which to utilize land. So my question to the minister is: does he have any innovative ideas?

Hon. M. Farnworth: Actually, I don't. I live in a condo.

Interjection.

The Chair: Members should direct their comments through the Chair.

Hon. M. Farnworth: Yes, hon. Chair. I take your caution under advisement. I hope the Chair will pass the same comment on to the hon. member for Okanagan West.

Anyway, there is a whole. . . . Hon. member, we could talk for hours on this subject, because the area of land use is something I have a great deal of interest in. We do have to use land better. We have to be more creative. We have to be much more innovative. There's a whole slew of things we can do to encourage municipalities in terms of densities, in terms of small lot lines, what we talked about in terms of granny flats, in terms of a whole host of things. But I also think that at the end of the day there's a fundamental problem, and that is that land here in the lower mainland and in the CRD is expensive, and it's not likely to get cheaper anytime soon. But I think there are some ways of dealing with that through some of the suggestions I have just made.

I also think there's a fundamental recognition that that's not going to solve everything. In fact, what the member said about Alberta is quite true, because you're not only balancing what's affordable, you're also balancing lifestyle against that. That's why you're seeing in this province, for example, the growth in retirement communities and many seniors going to places like Grand Forks, Kimberley, Nelson and Kelowna, where land is cheaper. They are able to maintain a similar lifestyle to that which they had, let's say, here in the lower mainland. There's the fact that we have a better climate, 

[ Page 3764 ]

and more people are moving here from other parts of the country. This is now becoming a significant economic generator in its own right for many small communities, as many communities are making the shift from single-industry towns or from an industry that has run its course -- a mine, for example. They are now finding that they have an availability in terms of affordable housing and affordable land prices. Many seniors see that as an attractive option and are taking advantage of it.

I saw a program the other day about a town in Ontario. What it has done is now being emulated here in British Columbia in an old mining town -- I think it's Elliot Lake -- where the mine shut down and people left town. They advertised in Toronto the availability of housing at a very low price, and started to do things like refit it and make it seniors-friendly for a longer time. The population of the town has almost doubled. It has stabilized, providing an attractive economic base. What is happening now is that you've got an active community that's predominately seniors. But because you've got that cheap land and because the town itself was innovative, all kinds of things are going on. It's a much more active community than it used to be. In fact, seniors now have more of their own disposable income, which they had tied up in a high-rent district in Toronto, to do other things and to be far more active, and -- as we talked about before -- the ability to age in place, along with the ability to actually enjoy aging in place.

While we can address some of the issues around land-pricing here in the lower mainland and making better use of land, at the end of the day that's not going to be the only thing we have to do. I think that the economic clout, the fact that seniors are living longer and the fact that they have many more options available to them now mean that we've got to encourage other places to be just as creative in how they use their land when there's a real opportunity there for them to do so because they've got cheap land, and get them thinking that there's a place for seniors within their community. There's an untapped resource available that can create a healthier, more vibrant community. All it's going to take, in many cases, is a little bit of effort to do some of the things that we discussed earlier, such as installing light plugs two feet off the ground, encouraging local builders in the community, where there's often a better rapport and it's easier to convince them to do something, to do a lot of these things.

[4:45]

K. Whittred: I appreciate the minister's comments. I am quite enjoying discovering that there is really not a great deal of difference in where we want to go with this issue. There is perhaps some concern that we're not getting there quite as quickly as we would like.

There is one comment I would like to follow up with on the minister's previous statement. His illustration of the suitability of small towns for seniors living is, of course, well taken, but it also illustrates my very original point about the need for strategy, because every time you have major shifts in this area. . . . This is not a one-faceted issue; this is a multifaceted issue. I am reminded of the comment that someone made to me about White Rock, which, of course, is a vast seniors mecca. But someone said that we can expect White Rock to be the Surrey school district a few years down the road, when there will be a demand for an exorbitant number of care facilities and so on.

The final thing I want to canvass with the minister is the role of the Ministry of Housing in the cataloguing or the reporting of available seniors units. I know that the Ministry of Social Services keeps a directory, and I know that there is a place to phone for affordable housing. I also know, however, that those agencies only have a few of the available spots, and the rest are administered by other agencies, I guess. I wonder if the minister can apprise me of the role of the Ministry of Housing in the cataloguing of resources and the dissemination of that information.

Hon. M. Farnworth: In each of the offices of B.C. Housing throughout the province, there is an internal housing registry, to call it that. Someone can either phone or come into the office and find out what's available. If there's nothing available, then other registries are funded through B.C. Housing -- non-profit registries, for example -- where we can direct people. One of the things we discussed earlier on was the need for better coordination between these. In terms of B.C. Housing, now all the offices are linked to each other so there is integration taking place. So if you were a senior in Prince Rupert and were coming down here, there would be an ability to find out what's available down here. And likewise, in Vancouver you can find out what's available through other offices of B.C. Housing. Then there's the ability to refer people to other housing registries.

K. Whittred: I thank the minister for his answer. At this point I might just share with the minister that this is one of the areas I have found to be a significant problem, by simply canvassing seniors and being around seniors organizations. The problem is that only a fraction of the available units are in fact registered with B.C. Housing -- or perhaps managed is the better word. To very elderly people it is very confusing to then have to go to a variety of other societies. I pass that along as a matter of information -- whether it is the responsibility of this ministry or perhaps the office for seniors, I don't know.

I think that about concludes those general areas that I wished to discuss with the minister. I will leave the specific things about the financing of life leases, and so on, to my colleague. I would like to mention that I have enjoyed this conversation. However, I am going to be watching very closely over the next year. I will be coming back next year to both your and the Minister Responsible for Seniors, because although I found in the estimates of both that everybody had the right ideas, I still don't see any programs on paper. By next year that is what I'm going to be specifically looking for, and I will be much tougher next year if those aren't in place.

R. Coleman: I'm pleased to be back to discuss some more issues dealing with housing. I would like to say, on the conclusion of my colleague's comments, that the confusion that exists is the result of the use of terminology within our own ministries. We have a ministry called Municipal Affairs and Housing. People expect that that ministry deals with housing, and not just one form of housing, but a variety of forms of housing, and they look for leadership and direction in that regard.

That's where I want to go now, because I think the strategic plan on the future of housing for this ministry and particularly for the B.C. Housing Management Commission is very important. I'm a real believer in the fact that you need strategic plans. I was pleased to hear that the commission, in July of 1996, went ahead with a contract to start to design a 

[ Page 3765 ]

strategic plan for the commission. At this point in time I want to canvass that strategic plan and some of the issues and directions it's taking in the context of what we're talking about and in other contexts.

[W. Hartley in the chair.]

I'd just like to ask sort of a technical question to begin with. We contracted the services of a company called Tudor Williams Inc. to assist in the development of the strategic plan. I'd like to know what the background of Tudor Williams is, what the amount of the contract is and, what qualifications they had in order to give you assistance with regards to a strategic plan, particularly in the industry of housing delivery.

Hon. M. Farnworth: Tudor Williams is a management consultant, communications consultant, with a long track record in the private sector. We can supply the member with the CVs and references, if he requires. In terms of the contract, the original contract was for $40,000, and since then there's been about $10,000 in follow-up work.

R. Coleman: Tudor Williams is from where?

Hon. M. Farnworth: Vancouver Island.

R. Coleman: The opening statement within the strategic plan says basically that the needs of the plan grew out of many changes that B.C. Housing experienced in the past few years, with changes in leadership, government and social environment. I realize that there's been a change at the senior management level of the commission since two years ago, or whatever the case may be. I'm just wondering what other pressures have been placed on the commission with regard to the leadership, government and social environment of the commission, which are being referenced in this particular report.

Hon. M. Farnworth: I guess there are three points that I'd like to raise. In terms of the member's question, one would be the introduction of Homes B.C. and the reorganization that took place with the introduction of that. The second is the budgetary constraints that B.C. Housing and the ministry found themselves in -- the same as other ministries -- which have been a challenge over the last couple of years. And third is one that's actually starting to take place and will present a significant challenge for the ministry but is not here yet, and that is the devolution, or proposed devolution, of CMHC stock from Ottawa.

R. Coleman: We're going to get to that, I promise. I promise you we will get to that devolution of stock.

The reason I bring this up, before I even get into the strategic plan, is that it would seem to me that certain pressures have been put on the commission. The commission is there, in my opinion, to develop a leadership role in housing. I think the Homes B.C. initiatives -- some of the private-public partnerships, some of the things they're trying to accomplish -- are starting to provide that type of leadership. One of my concerns when I started to read the strategic plan was. . . . I looked at the stakeholders that had been consulted with regard to the focus groups in this area and what have you, and I noticed that we were dealing with some developers -- which I assume were developers that we probably had done business with, because otherwise they wouldn't understand the commission -- and architects, tenants, non-profit societies and resource groups.

But what I didn't notice us doing as we tried to come up with a strategic plan was going to the next level of consultation in the community we were consulting with; i.e., seniors groups that were affected into the next level of housing -- we had the discussion on that a few minutes ago. I didn't see any reference, as we went into the focus groups, to any sort of care groups or people that have to deliver the services in housing, and I didn't see any reference to, basically, external property management consultation as to how we manage the product. I'm just wondering whether we did consult with people like that, or whether this plan, this consultation process, has somewhat eliminated this particular portion of the market.

Hon. M. Farnworth: The initial consultation took place with 141 different groups, individual organizations, and that resulted in the plan.

One of the things that's envisioned is a follow-up in terms of going out to that second level. One of the things we're planning to do is have Richard go out and meet with the municipalities. One of the things we need to do is what I talked about earlier: start to bring other people together either in a forum of some sort or a series of strategic meetings and then go to that second step. But it is envisioned that there will be further consultation.

R. Coleman: Then is this basically a draft report that's still going to be refined as a strategic plan? Or are we going to have it as an evolutionary-type plan where as we do further consultation, we may want to address some other issues relative to the plan?

[5:00]

R. Coleman: I love the term "envisioned follow-up." Envisioned follow-up indicates to me that something might happen. I'm wondering: when do you envision the follow-up process will take place?

Hon. M. Farnworth: When we use the term "envisioned follow-up," it means we're going to be doing more follow-up meetings. We're meeting with municipalities. The question is: can I give you an exact date? The answer is no, so that is what's meant by envisioned. But is the consultation in fact taking place? The answer is yes.

R. Coleman: I want to step back before I get into the strategic plan and go to one comment, which is basically the vision and the strategic directions of the plan. This is the vision of the plan. This is not an envision; it's a new vision.

The vision and basis is that B.C. Housing be a leader in meeting the need of affordable housing in communities throughout the province. I see that as obviously starting to head towards the leadership role that I was talking about: to broaden the base of information that's available through the commission, to work more as a stakeholder, to improve the relationship between the municipalities and the various forms of housing and development or the needs or what have you within the community. I'm wondering -- if I'm reading this correctly -- if that's how the commission also envisions this particular statement.

Hon. M. Farnworth: Yes, that would be a fair assessment; we do see ourselves as leaders. But we also see ourselves as 

[ Page 3766 ]

one of many leaders, because we are able to bring a certain perspective, a set of outlooks and a particular vision, but at the same time that's got to be shaped by the user groups.

We need to rely on seniors to provide leadership in what concerns them. We need to look at municipalities and work with them and recognize that they have a leadership role to play. It's a question of bringing all those things together, and then you'll achieve something concrete.e.

It's looking at what we've talked about -- and I'm sure we'll talk about them further -- like public-private partnerships, which are going to assume increasing importance over the coming years.

So it's a whole combination of things. But your original assessment is correct.

R. Coleman: That brings me to another series of discussions, and this is what my question would be: since 1992 or '94 -- whichever year we want to pick -- every project that we've developed with Homes B.C., we've developed with a society. The societies have taken on the management role and what have you in a project. The commission presently, if I'm not mistaken, has about 8,000 self-managed units in the marketplace. Would that be correct?

Hon. M. Farnworth: That's correct.

R. Coleman: Sometimes when you move forward, you have to remove your past in order to be able to be more functional and successful in what you might want to do, either with new product or new inventory -- which may be the CMHC situation -- or with private-public partnerships or what have you. I'm just wondering if there's also been any discussion at the commission about devolving the existing stock out to non-profit societies for management and operation.

Hon. M. Farnworth: Yes, in fact there has been some discussion, and I expect that there will be more. There are some examples currently taking place. Glenshiel seniors home has just been devolved to a society. I expect that in terms of discussions around CMHC and what they want to do, that may in fact be very much an integral part of discussions there. So the answer is yes.

R. Coleman: CMHC, I think, is actually a different discussion, because it's a multibillion-dollar opportunity if we use it right. But at what stage, then. . . ? I know there's been some discussion, and you've mentioned one project. How serious are we about taking that step at the commission to basically become the leaders in a portion of the marketplace by taking maybe some of the pressure off our staff in order to move forward to handle the private-public partnerships and the Homes B.C. initiatives and the initiatives we may want to do on seniors housing and what have you? To be able to, as we position ourselves, handle the strategic plan by having certain other things which may be holding us back from actually implementing that plan devolved from us. . . .

Hon. M. Farnworth: There's no simple answer, because it is a fairly complex situation. I guess one of the key things that I would say is that discussions aren't just preliminary; they are in fact actively being considered and actively being explored. When opportunities present themselves and they're deemed suitable, then that's starting to happen. I think what you're going to see in the future is that that's going to occur more and more. In terms of what happens with CMHC, I think there will be a real opportunity, as that gets closer, to do a complete focus on how a lot of the stock is managed and how a lot of the stock is delivered. And that will, in its many ways, act as a catalyst to. . . .

Interjection.

Hon. M. Farnworth: Catalyst, hon. member. I won't ask you to spell it.

But there is an opportunity, and there is an intense interest in the ministry in this.

R. Coleman: Maybe we can just deal, then, with the one seniors project example so that I can see how you manage to do this. First of all, what program was it previously funded and managed under? How many units? And what did you do? Did you turn it over to a society, and what society?

Hon. M. Farnworth: It was wholly provincially funded: 73 units. We created a new non-profit society. In fact, if you look out the window, you can probably see it. There's no further government subsidy required.

R. Coleman: Did I hear you say there's no government subsidy required? It is not a subsidized project, then.

Hon. M. Farnworth: That is correct -- your hearing did not let you down. There is no further government subsidy required. It is a fully break-even project.

R. Coleman: What's the age of the project?

Hon. M. Farnworth: You may sit down and steady yourself.

R. Coleman: No, I think this is wonderful. Wait until you see some of this CMHC stock.

The project is, again -- and I'll preface this so we can save a lot of time -- still owned by PRHC under an operating agreement designed by Homes B.C.; and because the debt load is probably lower, the rent's actually covered. As a result of that, I'd be curious as to the age of the project. What provisions for capital reserve do you have in place for any renovations in the future?

Hon. M. Farnworth: They must have built them well before you and I came on this earth: 1908.

R. Coleman: That's amazing -- 1908. Is this something we bought and then renovated in later years? If it's 1908, we're talking about a concrete building; we're not talking about a wood-frame building. And if that's the case, when we turned it over to this society, had we done an upgrade for sprinklers and what have you in the building? Or is that something we're going to have to deal with in the future?

Hon. M. Farnworth: It is actually a wood-frame building. It was purchased for the museum expansion in the 1970s. It was upgraded with sprinklers in the 1980s.

R. Coleman: I'm curious. I find this one intriguing, because the first veterans' hospital was actually built and funded by the Elks in Boston, Massachusetts -- I think it was 

[ Page 3767 ]

in 1917. And that was quite a breakthrough for non-profit involvement in any type of health care or housing in the U.S. at the time. And I'm just curious. Obviously we didn't own this originally; I wouldn't think we had a ministry of housing in 1908. So when did this particular property come into our possession? When we talk about wood-frame construction, it must have. . . . I'm going to have to go and look at this one, because something that's lasted from 1908 to 1997 may be able to teach our construction industry a few tricks.

Hon. M. Farnworth: It was previously a hotel. We bought it in the mid-1970s.

But in terms of construction, if the member's impressed by something from 1908, I know a few buildings that have been around since, oh, the middle of the fourteenth century, which I can show him. They're still standing, and they're still working really well. So maybe they can teach us even more about construction.

R. Coleman: But I would doubt they used that form of construction. That's the curiosity.

I would like to move on, then, to the corporate strategies in the report, because I think they're important. Your guiding principles, I think, basically send you in the direction that I think you want to go. I think the direction is fairly clear that the strategic priorities deal with housing programs and organizational effectiveness and efficiency. It mentions housing stock and public support for affordable housing and partnerships. That is where we get into private-public or whatever types of partnerships.

We may want to recoin that phrase, because everybody's calling everything a private-public partnership today. I think that term actually started with the housing market, and I think it was originally coined by CMHC in some housing initiatives that they put together. So now everybody's into private-public partnerships.

The goal in the housing programs is to simplify the housing programs themselves, to reduce the cost and to improve access, with fair, consistent housing policies. I'm curious, given what we've dealt with already, as to where the simplification is going to come from with regard to housing programs.

Hon. M. Farnworth: I guess the best way to explain this is to look at what has taken place over the last few months, as an example, and then at how that's going to apply over the next while.

One of the things that's been around -- income verification -- used to be extremely rigorous. It took a lot of staff time and probably wasn't particularly efficient. There's been a thorough re-examination of how income verification takes place, and the fact is that we've been able to streamline it substantially and free up staff time that can be applied to other areas. This is going to be done in other areas, and I think it's going to result in a simpler provision of programs.

[5:15]

Hon. M. Farnworth: As an example, you had your income verified when you first applied and then when you reapplied. If your income changed, we asked you to report that in, and that was verified -- and when an offer of tenancy was made. So there were up to five different stages -- five times -- when your income would be verified. Now what we do is say that what's important is when you have an offer of tenancy. That's the key time; so your income is verified then, and that cuts out four different verification procedures.

R. Coleman: I know that in my experience in the non-profit housing sector, the verification of income took place at tenancy, which you've just described. It didn't take place before that; it was just on an application. It was done then, and it was done annually. On an annual basis, everybody had to do an income verification and supply it.

The only other time there was a verification of income was if, during a period of time during the year you were in tenancy, your income dropped. Then you had the ability to come in, do another form and have your rent adjusted. But there wasn't a provision. . . . You didn't have to come in if you got a raise in that period. It basically allowed you to get a little bit ahead in that 12-month period. So your income verification was done on an annual review only, unless there was a drop in your wages. I don't know whether that's changed, but that's a simplified version of what my experience was.

Hon. M. Farnworth: What you've just said still takes place. This was before you even got in the door; this was before you got into your unit. So these steps took place prior to you actually getting a unit. So in a sense, that was unnecessary red tape taking place, when what really counts is how much money you are making when you come in and you are approved for a unit. And then follow that through with an annual verification. If your income changes substantially, then you've got an opportunity there. There's certainly not a need, while you're standing in line waiting to get a unit, to have your income verified four or five times.

R. Coleman: So basically, the commission has eliminated some red tape, because the societies were already doing that. They weren't taking the time to get the income verification; they were just building their application lists, and then they would short-list. Part of their tenancy was that they had to prove their income and have it filled out and accepted by the commission, because the commission actually does sign off on the income verification form, if I recall, when somebody is tenanted in a unit.

The other concerns were with regard to needs and access within social housing. We have four goals. These goals or strategies that we're outlining to ourselves with regard to needs and access are obviously important. However, I was just wondering. . . . Item No. 3 under the strategies is: "Identify and respond to individual client and community needs with flexibility and timeliness." Is that an indication that the commission is going to have a more flexible-hour philosophy toward housing? Where is the flexibility and timeliness change that's going to come as part of the strategic plan?

Hon. M. Farnworth: I'll give you an example of where the flexibility comes in. If you're on the waiting list, it never used to be that chronology was taken into account. So you could sit on there for years, and you could keep getting. . . . You know, you work your way up, and then high-priority placement people come in and you keep getting bumped down. Now chronology is taken into account; that now forms a component and makes the system fairer for everybody. There is a recognition that yes, you have been waiting for a long time. That's an example of how we intend to be more flexible.

[ Page 3768 ]

R. Coleman: One suggestion in this area, then, would be to go back to the relationship between societies' and the commission's database management of the vacancies and the lists. As no doubt the minister is aware, 25 percent of the units in most non-profit society-managed projects are identified as what we always refer to as B.C. Housing units. B.C. Housing had the option to fill those units from their list, not the societies' lists. So you had these two sets of lists running around, and you had this difficulty with enforcement and control -- knowing who's skipping from one place to another and owes us money. That's one side of it.

The other side of the coin is: there's a massive duplication taking place on lists across the province. For instance, in my own community, there are three or four social housing projects that are managed by societies. Each one of those societies maintains its own list of applicants. What happens, if somebody wants social housing, is that they'll apply to those four societies' lists; they'll apply to five societies' lists in Surrey; they'll apply to B.C. Housing's list. And you have all these people on lists wanting housing. If we went out and looked at it statistically, we'd probably find there might be 50,000 or 60,000 people on waiting lists, but there may be duplications as many as five or six times on individual lists.

If we're going to look at flexibility and timeliness, then we should be looking at it from the standpoint that we're going to get control of our data, so that we're dealing with our needs within the social housing marketplace in one place with regard to those lists, and so that duplication is controlled and we can actually start to deal with some of the issues.

Hon. M. Farnworth: Those are extremely valid concerns, and they are ones that are shared by the Housing Commission.

One of the things that's taking place is that we are looking at ways of looking at that integration. One of the tools that may be a possibility is the Internet. That may be a method. In order to put something like that together, though, we're still looking at probably 12 to 18 months. But we are working on the problem.

R. Coleman: If you can get that done in 12 to 18 months with the devolution of CMHC and a number of other things you're going to be facing in the next 12 months, you're going to be doing very, very well. I'm serious about that. I think you're going to be looking at some major workloads coming at you, and you're going to have to make some very serious decisions about what your priorities are. That's why we had the discussion about existing stock and the discussion that we only have so much staff; we only have so much space; we only have so much time. We're going to have to be very cognizant of that.

I just want to touch on item No. 9 on the housing program side. That's the improvement of the coordination of housing delivery between ministries and municipalities. I think that's very critical, given our discussion of yesterday. We literally have ministries that are telling us that you're managing product that they're actually managing. There's that much confusion just in that interministerial function insofar as there are no policies, procedures or whatever. It is very important that that be improved. As part of the strategic plan, it was something that was flagged to me as something that was important, that I think it was good to put in.

I guess my question is in two areas: one, because you're the Minister of Municipal Affairs, what type of coordination with municipalities do you think you need to improve with regard to housing? And secondly, how are you going to improve the coordination with other ministries?

Hon. M. Farnworth: Currently there is an ADM committee set up to look at special needs between ministries on an interministerial basis. I can see the scope of that being expanded, and I think that is going to deal with the problem that we discussed yesterday.

In terms of municipalities, there's a whole series of things that can take place. One is a focus in terms of my ministry, the Municipal Affairs side of it, in terms of getting out the emphasis on housing policies and on some of the things that municipalities need to be doing. We've conducted the safety systems review, which looks at a whole series of safety systems issues in the province. That will have an effect on things in terms of building codes and building inspections. That's one area. The fact is that we can also raise it at the joint council table, putting importance on housing issues. There's a whole host of stuff. I think I outlined some of it earlier on in the question on seniors.

Having said that, and hearing the bells ringing, I move the committee rise, report outstanding progress and ask leave to sit again.

Motion approved.

The committee rose at 5:28 p.m.

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