[ Page 4079 ]

The House resumed at 6:42 p.m.

[The Speaker in the chair.]

Hon. D. Miller: In Committee A, I call the estimates of the Ministry of Small Business, Tourism and Culture, and in this House, the estimates of the Ministry of Employment and Investment.

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

ESTIMATES: MINISTRY OF
EMPLOYMENT AND INVESTMENT
(continued)

C. Hansen: Just before I turn it over to my colleague from West Vancouver-Capilano, who obviously wants to ask some questions about P3s -- public-private partnerships -- I did want to not let the subject of the trade and convention centre drop just yet. I had a couple of more questions that we didn't get to before the break.

Specifically, I want to ask the minister what consideration he would give to any alternative proposal -- for example, the B.C. Place proposal that might come forward. I understand his comments that he made earlier, before the break, about the need for the integrity of the process and the need that the proponent -- the one proponent that's now left as part of that process -- feels to be dealt with fairly. But at the same time, if there is another proposal that comes up that makes sense to the taxpayers of this province and that is worthy of consideration -- and I'm not indicating that the B.C. Place proposal is in fact one that should or should not be endorsed -- my question is whether or not there is an opportunity for that proposal to be heard before any ultimate decisions are made in terms of a trade and convention centre for this province.

[6:45]

Hon. D. Miller: The difficulty with theorizing is that it tends to be. . . . People can read into that what they will, regardless of how, theoretically, you want to phrase your discussion. But in theory I presume they could, if they wanted to, ask to meet with government and pursue their objective.

Beyond that, I'm not really prepared to get into a theoretical discussion, because I really do think, given the kind of commitment made by the proponent that's currently sitting in front of government, it would simply be a bad sign or a bad signal for government at this stage to start talking about other proposals. Not that these questions aren't questions that others have posed -- and I appreciate that -- but I prefer at this stage to continue with the evaluation that we're doing and to be better informed about the potential for this proposal before making any further comments about other opportunities.

C. Hansen: I know my colleague has some questions about the trade and convention centre and other P3s that are being discussed. So with that, I will defer to my colleague from West Vancouver-Capilano.

J. Dalton: I do want to carry on with the general theme of P3s. But before I do that, I should advise the minister and his staff that I have the "Building Partnerships" document in my possession. That's the one that Bob Kadlec. . . . The minister has the same one, so we're both singing from the same hymn sheet. On page 29 of that document, there is a reference to the trade and convention centre project. Perhaps the minister can assist the committee, because in the last paragraph at the bottom of page 29, dealing with projects that are underway, it says: ". . .the Vancouver trade and convention facilities and the multi-use school project" -- at Burnaby Mountain, which is indeed underway, I understand -- ". . .which were identified by the provincial government and are underway." Do I interpret the word "underway" as meaning that because we're now in the processing stage of examining the one RFP -- because there are no others. . . ? Is that what is meant by underway?

Hon. D. Miller: Again, I didn't, in discussing this with Mr. Kadlec, get into that level of detail, but one has to make some assumptions. The trade and convention centre is underway in the sense that the process which would ordinarily culminate in a decision being made with respect to a successful proponent was started. That's been complicated to some degree, but nonetheless, that's my interpretation of underway. The Burnaby Mountain secondary school is not, in a sense, underway; there is some work being undertaken. There are interesting policy questions that flow from the school project particularly. In other words, how do you incorporate. . . ? If you want the private sector to take some of the risk, how do you achieve that? That's raised a number of policy questions.

So I'll confine my answer to that narrow question, which is "underway." I would say that in terms of the kind of work that's being undertaken, the trade and convention centre is probably further ahead. The Burnaby school is still very much an issue that will ultimately be determined by some of the policy questions being determined by government.

J. Dalton: I have one more question on the trade and convention centre. As my colleague the member for Vancouver-Quilchena has asked in a line of questioning, given that there's now only one proposal in the examination stage -- the other two have dropped out for various reasons -- if that proposal were to be turned down, then are we back to square one? Because clearly everyone, and certainly Tourism Vancouver and others, recognizes that we are long overdue for a new and updated trade and convention centre. Perhaps the minister could comment on that.

Hon. D. Miller: Again, mindful of my own caution about engaging in a hypothetical or theoretical discussion. . . . I would say that if, for whatever reason -- and I'm not suggesting this for a moment -- the proposal that is before us were to be rejected, then yes, indeed, I would assume we'd be at square one.

[ Page 4080 ]

J. Dalton: Then I suppose we might speculate -- although I don't need a response here. . . . But as my colleague has been saying, maybe then we're going to be looking at the B.C. Place proposal. Who knows?

With regard to the document "Building Partnerships," which was commissioned by the previous. . . . I can't recall whether it was the previous minister or a previous minister, given that this government and its cabinet changes quite a bit. But the now Premier was the minister of record when this document was commissioned, if that's the right term.

I was advised of the existence of this document when Larry Blain, who is one of the task force members, spoke on the Lions Gate crossing issue at a board of trade meeting recently. He very kindly provided me with a copy of this document. There's some interesting reading in it, and I would recommend it to all members, whether from the lower mainland, the interior or wherever. I think there's some interesting background information that we should all pay some attention to.

Hopefully, we're getting closer and closer to where we may actually put some of these P3s to work. The minister has already commented that the Burnaby school project is really not underway. We know the trade and convention centre isn't truly underway, because they haven't even made the decision yet whether the Greystone proposal will or will not be accepted.

I can tell the committee that the discussion at the board of trade panel -- the Minister of Transportation was the lead speaker that day -- was very interesting. Of course, coming from the North Shore, naturally I have a somewhat vested and vital interest in the outcome of the Lions Gate crossing.

There are several things coming out of this document that I want to ask the minister about. Firstly, can the minister advise the committee as to what the cost of the preparation of this report was?

Hon. D. Miller: Not off the top of my head. I'm sure we could find the information and forward it to the member, though.

J. Dalton: Then I want to get into more specifics of the meat of the document. I might tell the minister and his staff that I've discussed some of these concepts, both before I came into possession of this document, and since. There are some interesting reactions and interesting theories that people from Great Britain and other jurisdictions have about P3s. I hope we can all profit not only from reading the report of the task force chaired by Bob Kadlec but also from other jurisdictions.

On page 9 of the document, I think the author suggests there are about a dozen P3 examples or types, if I add them up. But I've had other people suggest to me -- and I'm just going to submit this to the minister for his consideration -- that truly, there are only three P3s, and perhaps all of these others are variations on these three.

One is described as a financially free-standing P3. These are projects that require no substantial government investment. The government role is to ensure that the private sector users are not exploited -- for example, by excessive tolls, if that were to be the way to repay.

Second is services sold to the public sector. These are partnerships where costs are met mainly by charges from the private sector operator to the public sector body. That's where value for money, which is very vital -- and we see that in this document as well as others -- is the whole purpose of the exercise.

The third type, from other people's perspective, is joint ventures -- which, of course, is the title -- which you'd guess is a true partnership between the public and the private sector.

I'm wondering if the minister would care to comment whether the dozen or so that are listed on page 9 in the Bob Kadlec report are, or are not, variations of these other three. Quite frankly, I think it's a lot easier for the public. If they were to pick up this document and see all these so-called variations on P3s -- and they use some B.C. examples that I'll get to in a moment -- I think this would only add confusion to the overall concept. We're all searching for value for money; we're talking about public dollars here, in whatever sense. If the minister has any comment, I would be interested.

Hon. D. Miller: No. I recall meeting with Mr. Kadlec when he presented the report. I was quite surprised, actually, that the member said he wasn't aware of it, because we did make it public at that time last year. Be that as it may, I thought the work of the committee was invaluable in terms of trying to understand the so-called P3s and, as Mr. Kadlec advised me, to make sure that we get it right.

I think that there can be an enthusiasm for this type of approach that perhaps is not always realistic. I think it may be more useful to look at the narrative text in terms of what a P3 is and what the benefits that can flow are.

I was also pleased that in the introduction, the report essentially confirmed what I said in response to one of the earlier questions of these estimates in terms of the challenge faced by British Columbia with a growing population base, the need to continue to invest in our infrastructure and the difficulty that that really creates, with respect to understanding the issue of debt. Quite frankly, my own view is that undue alarm has been raised about that issue in a not very responsible fashion -- but that's sort of getting into politics.

P3s provide an opportunity for government to work with the private sector. There are a variety of models that can be used. Essentially there are some benefits, whether they are having capital costs from government off book. It seems to me that if there's an element of risk that the private sector is prepared to undertake, that's one of the advantages. I think there are some advantages just in terms of the cost-saving approach on construction -- the sort of design-build-operate types of P3s.

What we wanted to do overall in B.C. was to approach the question after having this kind of report prepared. The Minister of Finance and I in fact followed up earlier this year with an announcement that we would be pursuing P3s where we thought it was appropriate, and we are currently examining some projects to see how they might fit.

[7:00]

I'm sure nobody will quarrel with the value-for-money concept. We know that this government is pressed to the wall 

[ Page 4081 ]

in its financial circumstances. Therefore it is certainly true, as the minister has told us now, that we all have to be searching for other ways to finance important projects in particular, whether they be underway -- such as the convention centre, if indeed it is underway -- or a bridge that I hope will be underway very soon, although I don't have any great confidence in some of the things that have been going on on the North Shore just in the last few days.

So we do agree on value-for-money and risk. Those are the key components to identifying the requirements as to what is or is not a P3. Whether we argue that it's design-and-build, and then various models of that are or are not P3s, it doesn't matter. But just for the information of the committee, the document does cite various B.C. examples of P3s. Happily, the Westview exchange is now finished, which is in half of my riding. I share that with my colleague from Lonsdale.

We're very grateful that the light is now officially or otherwise gone. The Premier actually rode through in a white convertible on the day we had a caucus meeting in Kamloops, so we weren't invited to this august event. But the minister went through saying that the light was gone. I went home that night and took a taxi ride through the Westview interchange. Guess what: the light was still there, and the light was still there, hon. minister, for another three or four weeks. However, that's not your ministry. I think it was another photo op that the Premier had, as my colleague was referring to earlier today in question period. So the light is gone. That's good.

Mount Washington Road is cited on page 15 as an example of a P3. That one, of course, is being paid through a surcharge on lift tickets. I guess we'd say that's a user fee.

Qualicum library and town hall are mentioned on page 14. That's known as -- I'll just use the initials -- a DBFLOT. Members can look up on page 9 of the document what a DBFLOT is. I get a bit confused as to whether in fact there are a dozen so-called P3s or really only, in essence, three P3s. That's just for the record, hon. Chair.

Can the minister tell us whether he sees, in his capacity as the minister who is now responsible for or in charge of the document in question -- and I presume, then, of some of the recommendations that are coming out of it, which I'll get to in a moment. . . ? Can the minister see that there is truly an opportunity for a P3 project on the Lions Gate Crossing issue? I think, and I've always said, that this is the flagship for what we're going to do in the future. If we kill this one, I think the rest of the people in this province who haven't left for Alberta and Hong Kong will be packing their bags -- and they're probably on their way.

Hon. D. Miller: I was actually going to pose a question in return. The member may not want to respond, and that's fine if he doesn't. But going back to the fundamental issue, I heard the phrase something about "being against the wall on debt." I described earlier the province's position, which others might look at with some envy, in terms of the debt-GDP ratio of some 20 percent, I think, that exists in this province. Just out of curiosity, I wonder if any member opposite might care or risk to venture an opinion as to what might be an appropriate relationship between debt and GDP.

There were some economists. . . . In fact, I was a bit unhappy. I cited some senior Canadian economists not long ago as arguing that it was between 30 and 35 percent. I was immediately castigated and accused of wanting to double the debt, but I think it's a legitimate question. Since our job is to discuss public policy, this is probably a reasonably good forum in which to do that. So I would await with anticipation any suggestions the members opposite might have with respect to what that ratio might be, given the pressure on government to build infrastructure, and particularly the pressure put by the member opposite, who, as I understood it, was saying thank you somewhat for a fairly significant capital construction project. That must have been a few bucks.

He seems to be enamoured with the taxpayers of British Columbia offering an additional $70 million for doing something with respect to the crossing between North Vancouver and Vancouver. I don't want to get involved and embroiled in the intense debate between that member and the local North Shore mayors, but in fact the member. . . . I was accused of being insensitive to mayors at one point in my brief career in Municipal Affairs. I can only say that my insensitivity pales in comparison to that of the member opposite, who is truly hard-nosed when it comes to characterizing the municipal leaders on the North Shore.

Look, the report is there; it's an interesting document. We've followed up by appointing an advisory committee, with some members who were part of the original committee. Larry Blain, who's a gentleman I have a lot of time for, is the vice-chair of that advisory committee. I met with them two weeks ago, and we had a reasonably good discussion about some of these issues. I want them to be involved. I want them to be there, if you like -- even if it's oversight -- to ensure that we get it right as we move forward on P3s and that we maximize the benefits to the taxpayer and try to get some projects that for a variety of reasons might not proceed in a timely way. So we'll follow the advice of the committee and the advisory committee, and we do have a lot of work to do in terms of further work on the three projects that we've talked about here today. That will be ongoing. And when there's an opportunity to make specific announcements, we'll be very happy to do that.

J. Dalton: I realize, of course, that we're indirectly, at least, touching on another ministry, and I happen to see that the minister's colleague, who is that very minister, is sitting behind him. So we will deal with that in due course.

I don't mind making a couple of comments in response to something that the minister said. I think we all have to take note that the credit rating of this province has been downgraded. The fact is that we're losing in this competitive world.

Hon. D. Miller: So what's your answer?

J. Dalton: Well, the answer is to get rid of the NDP, hon. minister. That's the answer.

I will also comment at this time about the $70 million that the Minister of Transportation and Highways threw on the table on April 18. It is the responsibility of this government to maintain the highways and bridges of this province, and all that is is a pothole-filling operation -- it's nothing more. I can tell you that this government and the Mike Harcourt government and the Socred government going back any number of years have sadly neglected the Lions Gate Bridge, and that is a fact. It's not just your government, hon. minister, and it's not just the Harcourt government. You can go back ten or 15 years and see the neglect.

I grew up in Sentinel Hill looking at that bridge every day, driving on it and paying tolls. When they took the tolls off in '63, I think we could all see that we were down the road to ruin. When you compare the Lions Gate, for example, to the Golden Gate -- which is only a year older, a lot bigger, but well maintained -- where there are tolls. . . . Also, in California, 

[ Page 4082 ]

of course, they toll other things. They don't pick on the North Shore, as your colleague, hon. minister, was telling us. If we want improvement in the Lions Gate, what did she tell us? You pay for it through tolls. There are no tolls on the bridge over the Fraser River in Prince George. There are no tolls on the new Island Highway. There are no tolls on the Patullo. There are no tolls on the Alex Fraser Bridge. So stop picking on us.

Just because the North Shore overwhelmingly votes Liberal, I don't know why you people can't wake up and realize that you do have a responsibility.

Interjection.

J. Dalton: And the member from Burrard who lives on the other side of the pond. . . . I have no idea what he thinks about the Lions Gate, other than probably to turn it into scrap, ship it to Japan and turn it into Toyotas. That's probably what he thinks.

The Chair: Hon. member, on vote 24.

J. Dalton: Back to the issue. Would the minister agree that for any P3 project to be entertained and put forward by the private sector, the private sector would expect a return on its investment?

Hon. D. Miller: Yes. My experience in life, which is one of the reasons why we have such a big difference between that side and this side of the House, is that there are those who would argue that the only imperative we ought to be concerned about is the private sector return on investment. And for the rest of things, you know, the world will unfold as it should. We categorically reject that; you're absolutely right.

I am intrigued. . . . I just picked up a few of the member's observations. I happened to grow up on the North Shore -- I didn't grow up there all the time, but I lived there a lot. I even graduated from high school on the North Shore. How's that? I recall when they had tolls on the Lions Gate Bridge. If I'm not mistaken, I heard the member say that when we took those tolls of in '63, that's when we started to go to wrack and ruin. At the same time, he seems to be vehemently objecting to the reintroduction of tolls. Now, I'm not quite sure what that means -- whether we should have kept the tolls on until 1996 or whenever, and then taken them off. I don't know, but it doesn't make a lot of sense.

He's also saying that $70 million is not enough, and previously, I believe, through a few gentle barbs, that our credit rating has been downgraded and our debt is too big. Now, in that time that he took, he's managed to mix a number of contradictory positions, it appears to me: "Your debt's too much" -- therefore one reasonably assumes you shouldn't spend as much; "Seventy million is not enough" -- so you should put more in; and "I liked tolls in '63, and they should never have taken them off, but don't put them on now." I hope the member will appreciate that I am somewhat puzzled by what appear to be contradictions.

Again, I guess I must express my deep disappointment. Words cannot convey the level of disappointment I feel. Having invited the opposition to venture even a timid suggestion as to what ought to be a reasonable debt-to-GDP ratio, sadly there is none forthcoming. It may be that it is simply a subject that's a little too hot and that people want to avoid a public policy debate on that question. I don't mind, but if members opposite show continued reluctance to discuss it, then I can only think that there's only one motive.

J. Dalton: With regard to my comment about the tolls coming off in '63, if we had had any foresight back then -- and clearly it was lacking and is still lacking -- we would have recognized that there had to be regular and annual maintenance of the Lions Gate crossing so it wouldn't fall into the state of disrepair we're at today. We were told at a briefing recently that the engineers who oversee this structure. . . .

The Chair: Hon. member, this is not appropriate for this vote. It's vote 24, which is Employment and Investment.

J. Dalton: Hon. Chair, the minister has invited me to respond, and I am doing so.

The Chair: Hon. member, vote 24.

J. Dalton: I will comment, then, about tolls in a general sense, because that's one way we may be looking at to repay the investment. The minister has recognized that if the private sector puts something into a project, they will naturally expect something out of it. The GVRD position on tolls is that all crossings in the lower mainland should be tolled by the year 2006. The Minister of Transportation, when she was asked about this, said: "No, there's no way that this government will agree." All she will agree to is that if it's a site-specific improvement -- particularly on the North Shore, because we love to pick on Liberals -- then nail them. So that's my comment about tolls.

Back to the question of return on investment. At the board of trade panel for which the Minister of Transportation and Highways was the lead speaker, Larry Blain was one of the panellists, and Pat Boname, mayor of West Vancouver, was invited late to join that panel -- only on our initiative, because the board of trade for some reason also ignored the North Shore. The minister was asked a question from the floor as to what return one might expect from one's investment, and her answer was: "None." Would the Minister of Employment and Investment care to reply to that interesting comment, which I can tell you caused a ripple of shock through 150 business people? If that's the approach and attitude this government has to P3s, then we're all doomed to failure.

[7:15]

Look, I find this a somewhat bizarre conversation, with all due respect, because the member seemed to appreciate that capital required a rate of return. He seemed to appreciate the document that Mr. Kadlec, the committee chair, produced for public consumption. But he seems to have completely missed the point with respect to risk. I mean, it's a pretty safe world when you're guaranteed a rate of return. Why would we offer the private sector a guaranteed rate of return if we're in fact utilizing and looking at the potential for P3 to both share risk and achieve savings? I mean, a guaranteed rate of return doesn't seem to me to be the kind of inducement in the private sector world that produces those results. I could be wrong.

Any complaints the member has with the board of trade are his and his alone, as are any complaints he has about municipal politicians, whether they be in the GVRD or indeed on the North Shore -- which is a wonderful area. I spent a lot of time there when I was young. I took my schooling there, learned a few things. I don't know that we're educating anybody now in this discourse, but. . . .

[ Page 4083 ]

J. Dalton: I at no time talked about a guaranteed return on one's investment. The question that was put to the Minister of Transportation was simply what return might one expect, and she said: "None." That's certainly no guarantee, and it shows a lack of understanding of what a true P3 should be. This government is inviting people to come forward with RFPs on bridges, schools, convention centres, you name it -- and then we learn: "Well, good luck."

I think we have to have a more friendly atmosphere, quite frankly, otherwise people truly will pack their bags. Well, they are already, and there's nothing to refute that particular point. We all know that people. . . . The Premier is here. He won't admit to it, but he knows he's driving people out of this province. I'm hoping that somebody will stay in this province and put together a meaningful and well-thought-out proposal on the Lions Gate crossing together, in spite of all the roadblocks this government has put up. We'll have to see.

As far as the little family quarrel with the North Van district council goes, that was not of my making; it certainly wasn't of my making. I didn't invite that council to pass the motion they did a week ago. Interestingly enough, every one of those council members is in Ottawa at this moment at some convention. Enough said.

We covered a point earlier that I wanted to raise -- but we don't need to go back to it -- as to the so-called projects that are underway. We know that neither is truly underway, so the last thing I want to get some comment from the minister on is the recommendations that Mr. Kadlec and his committee have put together on page 32 and the pages following. The minister has advised us that there is in fact an advisory board that has been established, so that's fine. Can the minister tell us if that board will be publishing regular reports, so that we'll get an update of its findings?

Hon. D. Miller: No, I have not contemplated the publishing of reports but rather the utilization of the committee as a true advisory group to inform government.

J. Dalton: Would that advisory board have any role in any proposal for the Lions Gate crossing that may come forward?

Hon. D. Miller: It's clear, Madam Chair, from the questions and the statements made by the member that there appears to be some difference of opinion with respect to the Lions Gate crossing issue. It's not my. . . . Well, in fact, I'll say it very clearly. I will not allow the advisory committee, which is appointed to advise government to ensure that we try to be consistent with the recommendations of the task force, to be drawn into some political debate. That will not happen. So don't look for any attempt to try to drag that committee in. Rather, they will act as an advisory group to myself in terms of how we're proceeding as a government, to be as efficient as possible to get the maximum benefits for the taxpayer. Any fights about opinions held one way or the other with respect to the crossing can be carried on, whether on the North Shore or anywhere else.

J. Dalton: Thank you, but I don't consider that an answer. If indeed a proposal or, as I hope, several proposals are put forward on the Lions Gate crossing within the time lines and the guidelines that the minister -- your colleague, hon. minister -- has set out. . . . If a proposal or proposals are put together, we know there's a screening committee, for want of a better term, which consists of the three North Shore municipalities, the Squamish nation, the parks board, the city of Vancouver and the GVRD. Are those people going to rule, then, on a P3? In which case, what role does this document and the advisory committee play, if any? That's what I'm asking.

Hon. D. Miller: I believe I did respond a couple of times to the role of the advisory committee.

J. Dalton: I guess I can take it, then, that the advisory board and all of the things that are mentioned on page 32 and 33 are strictly an academic exercise and have no ring of reality to them. That wouldn't surprise me, quite frankly, given the track record of this government.

I would like to ask about a couple of other things. In fact, this is mentioned on page 33, and I think this is where we have to get some satisfactory answer, hopefully, to my question about the Lions Gate crossing issue. "It is recommended that the government proceed with the early initiation of pilot projects from the following infrastructure categories. . . ." And guess what is the first bullet mentioned under that: "Bridge-highway infrastructure." Does this committee, this advisory board, not have a role to play in the decision-making process on the Lions Gate crossing?

Hon. D. Miller: Bingo.

J. Dalton: Well, bingo is actually a Nanaimo question, and I'm on the lower mainland at the moment; we can deal with the Island Highway later. We're getting nowhere fast -- which is typical. Sort of reminds me of the Hydro questioning of last year, hon. members.

What else do we have. . . ? Well, we recognize on page 33, as I referred to the committee earlier, that value for money, of course, is the key part of this P3. And the risk factor. . . . We commented earlier back and forth about risk, although I don't think a government that's this way inclined understands risk in the true sense -- not in the true private sector sense. I guess their idea of risk is how many union members they can gather under one umbrella or room; that's the only risk they understand.

One other thing on page 34. This will be my last question, I think, depending on how the minister responds, if at all. Item 5: "P3 guidelines for use in planning and budgeting capital projects should be established." Do we have any such guidelines? Has the advisory board or the ministry or anyone on his staff dealt with the guidelines that have been recommended by the Kadlec task force?

Hon. D. Miller: We're working on it.

T. Nebbeling: Madam Chair, first of all, at the risk of being cut off by you. . . . There are, indeed, partners with the provincial government in the private sector that have a return on capital incorporated into their regulations of agreements. One that comes to mind is Centra Gas and its capital investment; they have a guaranteed return. That system does exist within government relations.

I'm not going to go on with the Lions Gate Bridge, although indirectly I will come to my point, to stay in line with the vote. What I would like to ask the minister is a couple of questions on partnerships with the private sector that go beyond the Lions Gate Bridge. I, for one, believe that if we as a province are going to deal with our needs for roads, bridges, hospitals and all that sort of infrastructure, we're going to 

[ Page 4084 ]

have to work together with the private sector. I have written to the Ministry of Highways, as a matter of fact, suggesting that in order to deal with the crossing of Burrard Inlet, talks with the private sector -- not just over the crossing but about the growth strategy for the lower mainland -- would be a catalyst to find partners who can participate in projects that are not just bridges or tunnels and that can create profit centres that, in return, can be used for paying for part of this infrastructure. Has the minister considered having dialogue with the private sector whereby, for example, land would be part of a package? It would become part of the dialogue to see where profits can be created. And then, in return, some of these profits would be channelled toward costs. And that should not just apply to the lower mainland but to wherever in the province we need infrastructure, such as roads and bridges.

Hon. D. Miller: Very briefly, with respect to the pipeline and Centra Gas, I don't want to get into that sorry history, but it was under another administration. There was massive public cost to that pipeline project. It was debated in this House. And at the time, my caucus -- which was in opposition -- voted against it, based on the economic arguments. But that was done by another administration in terms of the issue you pointed out in respect to rate of return.

The members must appreciate that these are members drawing from a variety of experience in the private sector: Mr. Kadlec, president, former director of B.C. Gas; Larry Bell; Tony Tennessy from the International Union of Operating Engineers. These are people who have interest in the issue of capital spending and bring a body of expertise. I think we should respect the fact that it's not as though they were trying to give government something that it wanted but rather, as a group, they tried to do an evaluation of the potential for P3s for government. And as a general statement we've indicated that we accept the recommendations in the report. We've looked at three discrete recommendations, and internally, we're looking at the rest. To the extent that it provides an opportunity for infrastructure in unique ways that have not taken place before. . . . We see some examples now starting to come; the Mount Washington ski hill is one. It allows those to proceed where you get private sector-public sector interest coinciding and a willingness to share risk or find revenue sources aimed at debt retirement. We want to pursue those. In a modern government, it seems prudent that you look at those very carefully.

We've also established an ongoing advisory committee of many of the same members, because it's not enough just to get the report and say: "Thank you very much. See you later." I think it's important to have people who have been through that process involved on an ongoing basis to advise government -- but not, as the member earlier tried to indicate, to get dragged into political debates about the wisdom of a particular quantum when it comes to a new crossing for the Lions Gate Bridge, what it should look like, all those kinds of questions. Why would these people want to get involved in that? They wouldn't. So we'll try to proceed, and if the members have useful ideas and comments, I'd be happy to entertain them.

[7:30]

I'm very happy to hear that the minister actually has an open mind when it comes to finding partnerships that can, indeed, make things happen. I, of course, coming from Whistler, have lived with the very best example, whereby a mountain operator, in order to find capital to invest in an uphill facility such as Blackcomb Mountain, was given development rights on a land mass that was Crown land. And much of the profit from that development on that Crown land guaranteed a return on the investment that was made on the hill. As a consequence of that, we have seen Whistler become what it is today. Had the government or small investors had to rely on exclusive investment without a background like the mountain was given, such as I just described, Whistler would never have succeeded in becoming what it is today.

That same principle of enticing the private development sector pension funds today to form conglomerates that can deal with the need of the growth that we're going to experience in the lower mainland. . . . We know that the growth of the population will double over the next 15 years. It is anticipated by research that we will need 60,000 to 67,000 single-family houses. That means we will need shopping plazas; it means we will need hospitals and schools. And knowing the incredible profit centre that will be created in the next ten or 15 years, because with development comes profit. . . . Knowing that it is happening at this time, not to be proactively involved in trying to create consortiums that would possibly be partners in building this housing need, this shopping mall need, the hospital need. . . .

Why not at this time establish a scenario where land could be made available by the government as the partner, and then in return, in the future the developers will return a substantial amount of profits that otherwise would be spent on land cost to the consortium that builds the roads and the bridges? It is a concept that I think originated with the Lions Gate Bridge, where the Guinness family was given land to develop, to pay for the bridge. It's what has built tremendous ski resorts in British Columbia, including Mount Washington to a certain extent.

Today it creates some tremendous opportunities to realize that the needs of the future may well be part of financing this infrastructure. Once we recognize the principle that maybe it is worth talking about the crossing again. . . . Because I don't think what we plan to do with the Lions Gate Bridge today will deal with the future needs. So, hearing the minister having an open mind on the concept of partnerships and maybe working with that idea of the future needs of this lower mainland of this province, I hope it can encourage some further dialogue.

B. Penner: It's a pleasure for me to have an opportunity to participate in the estimates debate for the Ministry of Employment and Investment. I rise today to participate in this debate in my role as the B.C. Liberal trade critic, and I'd like to begin by speaking a little bit about the recent Team Canada trade mission to the Far East which took place earlier this year.

As the minister will know, our Premier, the Premiers of nine out of ten provinces, I believe, the Prime Minister of Canada and upwards of 500 business people from across Canada took part in the Team Canada trade mission. By virtually all accounts, the trade mission was a tremendous success. And I think we all can take some pride in that, particularly in light of the fact that even the separatist leader of Quebec, Premier Lucien Bouchard, took part in the Team Canada mission and was often seen on stages that prominently displayed the Canadian flag. I think it's good for all of us to recognize that working together we can certainly do better than working alone, individually, as provinces.

[ Page 4085 ]

I also participated in one component of the Team Canada trade mission. I attended just the last stop, and that was in Bangkok, Thailand. I'm pleased that I was able to do that. There were a significant number of British Columbia businesses represented on the Team Canada trade mission, as I'm sure the minister knows. In fact, approximately one-third of all the business delegates taking part in the trade mission were from British Columbia. And British Columbia certainly signed a significant number of the agreements on that trade mission.

My question to the minister is fairly general to begin with, and it is: what kind of follow-up process has his ministry and the B.C. government taken in terms of meeting with the private sector businesses that took part in the Team Canada trade mission? And what kind of a strategy do we have to continue on with the momentum that was built up in the Asia-Pacific region because of the Team Canada trade mission earlier this year?

Hon. D. Miller: In addition to the ongoing relationships we have with many of the firms. . . . Two weeks ago the Premier did meet with all of the members of the mission who were able to attend a breakfast meeting and had a discussion generally about the pros and cons -- the weaknesses, the strengths -- in terms of a follow-up discussion with the private sector companies that participated in the mission. So that is ongoing work. Obviously there will be more in the future. I think the focus will switch to some other jurisdictions where trade opportunities exist -- Latin America, South America -- at some point in the future. In the meantime we maintain our relationship on an as-needed basis with the firms -- and other firms, obviously -- who are interested in the export business.

B. Penner: I thank the minister for that response. I wonder if the minister is able to put a dollar figure on the value of agreements signed by B.C.-based business on this most recent Team Canada trade mission, which, as the minister knows, included stops in Seoul, Korea, Manila in the Philippines, as well as Bangkok, Thailand. I'm just wondering if the minister has those figures.

Hon. D. Miller: The total estimated value of both consummated contracts and memoranda of understanding -- which don't always but can lead to contracts -- is in the $750 million range.

B. Penner: I noted that in his first response the minister indicated that in terms of B.C.'s interest in pursuing exports, there may be a shift in focus as time goes by, perhaps toward other parts of the world. I'm wondering if the minister has any insight as to future plans for Team Canada trade missions. Firstly, are there any ongoing discussions about another trade mission? When would he expect that trade mission to take place? And what would his preference be, on behalf of the B.C. government and as the minister responsible, in terms of countries to be included in Team Canada trade visits in the future?

Hon. D. Miller: I just want to be clear: I'm not suggesting we shift our focus at all. In fact, if you look at B.C.'s unique position in Canada and the trade that exists between British Columbia and the countries in the Asia-Pacific, we clearly are the Canadian province least dependent on trade with the United States. I think the balance of Canada is of a fair preponderance -- 85 to 90 percent. We're far less than that, in the 50 to 60 percent range.

We see our principal opportunity as being in the Asia-Pacific region, and we'll continue to have that as our primary focus, but not to the exclusion of other opportunities that might exist. We participated last year, for example, in a Team Canada mission to India. We had some people there for a brief period of time to investigate whether or not there was potential, and we're prepared to do that wherever in the world we think there is some potential.

We also think that given the high profile of Team Canada -- it is a federal initiative; it's not a provincial initiative -- it seems prudent to participate. Indeed, as the member pointed out, all Canadian provinces participated, even Quebec, because it's in their self-interest. And we'll continue to do that. But our focus, really. . . . We have a major trading partner to the south which continues to have ready markets for some of our products, and we want to continue to have access there. But we want to expand the potential which I think exists in the Asia Pacific as well.

B. Penner: I'm wondering if the minister could shed some light for me, a member who's fairly new to the whole area of international trade. . . . I wonder if he could explain, for the benefit of myself and others, just how much consultation the federal government actually gets involved in in terms of setting the itinerary for Team Canada trade missions. In other words, does the federal government consult actively and in a legitimate way with the various provinces in determining which countries they're going to visit in future years? Or is it simply a matter of the federal government sending you an invitation after everything is arranged, saying: "Please feel free to join us on this next Team Canada trade mission"? I'm just wondering if the minister could enlighten me as to how the process actually takes place in determining where Team Canada goes in the future.

Hon. D. Miller: It is a federal initiative, as I indicated, but it's clear that the federal government took British Columbia's lead. It goes without saying that B.C., perhaps for obvious reasons, but because of people in the past. . . . Mike Harcourt, for example, was known as a champion of promoting AsiaPacific trade; he continues to be involved and has received awards in some countries -- in Japan and others -- for the kind of work that he's done. He knows on a first-name basis many of the business and political leaders in the region. It's taken years to cultivate that. I think the kind of work that Mr. Harcourt did in fact benefited the federal government as they looked at the Team Canada mission to the Asia-Pacific.

We want to be there. We are a major player -- British Columbia is -- in the Pacific Rim in terms of trade and will continue to be so. But if there are other opportunities, there is consultation. Ultimately, a decision to launch a Team Canada initiative is one taken by the federal government. We look for strategic opportunities, consulting with the business sector in British Columbia as to how we can assist in maximizing benefits and arranging contracts and memorandums of understanding. That's part of the business of trade. We want to be as aggressive as we possibly can in participating in that and expanding trade opportunities.

B. Penner: I'll continue to press the minister for just a few more specifics on that topic of planning for Team Canada trade missions. The minister's point is well taken -- that our interests aren't necessarily solely related to Team Canada trade missions, that we are well within our rights and should in fact go out and pursue other opportunities independently of what anybody else is doing in Canada. I agree with that.

But I'm just curious about how much consultation really does take place between the federal government and the provinces. 

[ Page 4086 ]

This is not a trick question. I'm sincerely interested in just knowing whether or not Ottawa actively listens to our input as to where we think we should be going. Or is it simply the federal Trade minister and the Prime Minister's Office deciding in Ottawa where they're going to go? Do they consult with British Columbia, the third-largest province in Canada?

Hon. D. Miller: We do work in cooperation both with respect to the specifics of. . . . I think it would be obvious that if the federal government wanted to lead a Team Canada trade mission to some jurisdiction, and a vast majority of the Canadian provinces were saying, "Look, we have no interest whatsoever," it probably wouldn't happen.

We use the federal services that are available. I recall, when I was in Japan in '92, being very impressed with the work of the Canadian embassy officials. They knew the ground, the trade issues, Canadian issues. They had contacts. They proved to be invaluable. So we do work in a very close, cooperative way with the federal government on these trade issues.

[7:45]

I would think the ministry probably did embark on some type of follow-up consultation with the private sector participants. I expect also that the minister would have reviewed some kind of a report from his staff on that, so that in the future we'll know what our strengths are and also what our weaknesses are, and those areas that we need to work on. Is there such a report?

Hon. D. Miller: There will be. It's not as though this is the first time we've ever gone abroad with a Team Canada mission. I mean, British Columbia governments have been engaged in this activity for quite a number of years. We have people in the ministries who've also been involved in that for some time. So we do evaluate the mission. We seek the input of the participants; we consider that in terms of our evaluation. I guess we'll produce a report of some kind. But it's really there to strengthen, I guess, our expertise in the future. So that's part of an ongoing way that government operates.

B. Penner: I was trying to listen closely; there were some people speaking close to the minister. I'm just wondering if the minister very succinctly could indicate whether that was a yes or no -- whether or not an analysis was prepared by the ministry as to the success and/or weaknesses of our strategy following up on the Team Canada trade mission this past January.

Hon. D. Miller: I did indicate that we do that evaluation. We do ask the people, the participants, their opinions. We incorporate that in our evaluation. And we share that evaluation with the participants.

B. Penner: I thank the minister for that answer.

Moving now from foreign trade to domestic trade within Canada, I'm going to seek an update, as it were, from the minister in terms of the internal trade agreement as it relates to the ten provinces in Canada. I know that there has been some controversy in this province, particularly on the part of the minister. He has expressed his concerns about British Columbia's ongoing involvement in the internal trade agreement update and negotiation process. I'll take my seat here in a moment and let the minister bring us up to date about where British Columbia stands in relation to the internal trade agreement.

Hon. D. Miller: We outlined our position some time ago -- that is, that we're not prepared to entertain any further deals with respect to the desire of the federal government, at least, and some provinces, in the sort of medical-social service sector. . . . We're staying at the table just to make sure that our interests. . .that we know what's going on. But that's it. We're not doing anything else to further developments with respect to the Agreement on Internal Trade.

B. Penner: I know that over the past 12 months there was some concern expressed by this minister, as well as the Premier of British Columbia, with regards to actions taken by other provinces that were seen by this government to amount to job poaching. One of the anticipated benefits of the internal trade agreement is that there would be mechanisms with teeth in place to prevent provinces from, or to punish provinces that go ahead and engage in, unfair tax subsidies or other incentives in an attempt to lure jobs away from other provinces. It would seem to me, at least on the surface, that we could all agree that it would be a laudable goal to have an agreement, which would be binding on the member provinces, to try and restrict that type of unsavoury behaviour on the part of other provinces that are desperate to take jobs away from British Columbia. Given that this is a sentiment expressed by the Premier as well as this minister -- that we don't want other provinces unfairly offering tax subsidies and incentives to lure jobs away -- I'm wondering how the minister reconciles his position not to fully engage in the internal trade agreement process, since that was one of the stated objectives of the internal trade agreement.

Hon. D. Miller: Quite easily. We're not going to expose our health or social systems, which we're in charge of. British Columbia is our sovereign place, if you like -- not to get too carried away with that. If we choose to introduce, for example, health care systems that have public bodies in terms of the delivery of services, and if we think that pursuing those issues in the Agreement on Internal Trade could threaten our ability to do that, then we're not going to do it. It's simple.

We have nothing to fear in British Columbia. Do you think we're worried because occasionally some province might poach some jobs? Is that a fundamental threat to our economic well-being? No, it's not.

R. Neufeld: It is to mine.

Hon. D. Miller: There's a fellow who's next door to Alberta. He may want to get up and talk about that. I'd be happy to discuss that with him.

However, look at the trading patterns internal to Canada. I spoke about B.C.'s position, which is outstandingly unique in Canada in terms of where we do our trade: our lack of reliance -- or exclusive reliance -- on the United States, the enormous prospects for expanded trade and investment in the Pacific Rim.

[ Page 4087 ]

We're not going to waste our time and money fooling around with some Mickey Mouse case where a provincial minister in New Brunswick says, even though we've got an Agreement on Internal Trade in this country signed by the provinces, and even though that agreement says we ought to do such and such: "I don't care what the agreement says, we're not going to do it." I or this government take the only position that makes sense for B.C.: who cares? We're going to have somebody at the table to make sure that our interests are not compromised. We're not going any farther; that's it.

B. Penner: It seems to me that the province would have more credibility -- in terms of making sure that there was an agreement that protected our interests -- if we were active participants, believed in the process and believed that we needed an internal trade agreement in Canada that protected against job poaching between provinces, right across this country.

I certainly take it very seriously when jobs are lost in British Columbia. I don't think we should downplay the significance of those families that see their jobs lost and see the dislocation that results because of some of the unfair practices that other provinces have engaged in. That is why I am so frustrated that this government seems willing to turn its back on what was a promise -- albeit in a document that originally was flawed -- to protect us from other provinces that would engage in that type of activity.

If the minister takes the view that the current agreement is not satisfactory, it would seem to me that the proper remedy, rather than turning our back on the process, is to make sure that the new agreement that they're presently working on has teeth, is able to punish provinces that get out of line and take unsatisfactory action. It would seem to me that that is the more rational approach, rather than saying: "Well, it's broken. We're not going to bother fixing it."

With that said, I'll defer to my colleague, who I understand has some questions to ask on this topic.

[T. Stevenson in the chair.]

R. Neufeld: It's interesting, listening to the debate on the poaching of jobs. I guess I share some of the sentiments of the minister about someone from New Brunswick coming and trying to poach our jobs. What can we do? But I'm not sure whether the answer that the minister gave is really what I think we should be doing.

In the constituency that I represent, I don't think it's so much poaching jobs, because Alberta doesn't send people across the line into British Columbia to actively try to poach jobs out of northeastern British Columbia. But as Energy and Mines is also your portfolio, you know the importance, as much as anybody, of the oil and gas industry to the well-being of the province. Along with that -- it's not just the oil and gas industry in a shell -- goes the service industry.

We have a city neighbouring us, Grande Prairie, that's growing by leaps and bounds -- huge. Most of it is due to the fact that much of the oil and gas industry is centred out of Grande Prairie. In fact, if you look at any statistics in Alberta, you'll find that Grande Prairie is one of their fastest-growing areas, the one with the lowest unemployment rate. We know that there's a lot of economic activity that takes place between Grande Prairie and British Columbia.

I guess what happens is companies come in and poach jobs from British Columbia residents. We see it on a daily basis. There are hundreds of companies that have their headquarters set up in either Grande Prairie or Hythe, Beaverlodge, Baytree -- anywhere right close to the border. They come here and do the work that British Columbians who are actually living in Fort St. John should be doing, because Fort St. John is the centre of the oil and gas industry in the province. They come and take the jobs away. They compete unfairly, simply because it costs a lot more to operate in British Columbia than it does in Alberta.

With that, I just wonder if maybe the minister could tell me what plan the government has to try to alleviate some of that unfairness that we seem to foist onto our own companies when it comes to trying to compete with those companies in Alberta. We have the equipment; we have the expertise, the knowledge and the capability to invest. It's all in British Columbia, and it's all headquartered in Fort St. John; it's there. They can compete with the best of them, but when unfair -- I shouldn't say unfair -- taxes in the province are so high compared to Alberta, it becomes very difficult to compete. I just wonder if there is some grand plan. I haven't seen it yet in the six years I've been here, and I've argued about it every year. But maybe after a while, we'll finally get to a position where we're going to start looking at this kind of thing seriously.

Hon. D. Miller: Well, I thank the member for his question and his outlining of the situation up in the northeast. In fact, I really could draw from the statement made by the member that he is looking for more protectionism. He's complaining because of Alberta workers coming into British Columbia and taking jobs that presumably the member would prefer to see stay with British Columbians. Indeed, that's one of the issues that we talked about in a broader debate on the MAI not too long ago in this House, and that's the ability of any particular jurisdiction to do things in their own self-interest.

We have retained the ability under the Agreement on Internal Trade to utilize our Crown corporations in a manner that benefits the society, if you like, and the economy of British Columbia. We opened a $100 million project this morning -- the Premier and I. We were just doing the one component, the Duke Point terminal, but that connected with the parkway to the Vancouver Island Highway. We all know we've had lots of debate and everything else about this billion-dollar project.

Well, what did we do? We were taking -- you know, borrowing -- money, admittedly, but the B.C. taxpayers were paying the bills of this billion dollars over a period of time. We said: "Well, look, it makes sense to us that we should be able to have some preference for B.C. jobs." It makes sense to us that we should not allow competition for that work based on who can drive wages down to the lowest possible level. It makes sense to us that we ought to be able to say in terms of social policy: "We think there ought to be equity hiring. We think women should have an opportunity to get more jobs than just holding the stop sign on the highway, and that minorities, aboriginal people should have opportunities." We said: "We think there should be greatly enhanced apprenticeship opportunities." And we did it.

Now, we were criticized mightily -- continue to be criticized to this day by the opposition; I'm not sure which position the Reform Party took on this -- because we acted in the best interests of British Columbians. You know what? They don't like that. The people who do these trade agreements don't like that. We discussed the free flow of capital and those kinds of questions before.

[8:00]

[ Page 4088 ]

But we are traders. In my view, we need not fear being competitive or exposing industries in British Columbia to competition. You can't duck that; you can't hide that. We sell our commodities internationally; therefore we have to be competitive, and we are.

I was at the Toyota wheel plant, an initiative started by a government in the member from Delta's constituency. We both had a great time there.

Interjection.

Hon. D. Miller: Oh, you never got there. I passed up a good party to go, but anyways. . . .

I was delighted when I talked to the principals of the company and they told me that this is the most competitive plant they have, regardless of where it is in the world, which shows me that we can be competitive.

In the face of some of the violations of the Agreement on Internal Trade, quite frankly, after looking at it and getting the kind of response we got from New Brunswick, this was the considered opinion -- and I think it was the right one: why should we spend even a nickel more of money in terms of staff time or even spend another minute of our own time in terms of an exercise in futility? It doesn't make any sense.

But we want to pursue initiatives that lead to economic opportunity in the province. This is why, the member knows, we've had some discussion about a northern strategy for this province, why we're proceeding to organize a Premier's summit on northern development for the fall of this year and why we extended an invitation to that member and his colleague to participate. We think there are more opportunities.

I recently met with the Minister of Transportation from Alberta. It's clear we have some joint interests. Collectively, we think that we can draw much more of the northern Peace River grain down across northern British Columbia and out through the port of Prince Rupert, which is a day and a half closer to some of those Asian markets. We've got some work to do, and it's ongoing. I've got some of those initiatives underway. As I explained to the minister from Alberta and as he agreed with me, if B.C. and Alberta do this together, then we've got a bit more of a voice when it comes to dealing with the federal government and the Minister of Transport, and when it comes to dealing with the Wheat Board or with the railways. They'll pay more attention to a minister from B.C. and a minister from Alberta standing together, saying: "Here's our goal."

I met with the agricultural groups from the Peace, who tell me that if we're successful. . . . My colleague the Minister of Transportation and Highways has been in the region recently, and about a month ago she announced an extension or expansion of the hauling distance, so you can now haul grain by truck to the load centres. The people in the Peace, in Dawson Creek, tell me that there's a very real opportunity for a malt or a barley plant -- I can't recall which -- as a result of some of these initiatives. So we are looking to pursue any strategies that will result in enhanced jobs and economic benefits for British Columbians, including the Peace region.

There are issues. . . . You cannot draw a wall; you can't put a wall up. We do live next door to the province of Alberta, which in our view does not have any greater economic advantages overall. But they do in terms of some issues. For example, there's the sales tax question, and that's obviously an attraction for people to stay on that side.

I suppose you always get this. In every province in Canada, you probably get this back-and-forth on those communities where they straddle or are in close proximity to the border. I don't know -- I don't get too concerned about it. Quite often, I think you can look for excuses why certain conditions prevail, but my view is that we ought to look for opportunity. I have just handed a copy of the. . . . I don't know if the member received a copy of the press release dated May 20 -- "B.C. and Alberta Agree to Promote Northern Development" -- but that's just an example of the kind of work we can do of a cooperative nature.

In fact, I was delighted, because as we discussed some of the potential developments in the agricultural sector, Mr. Paszkowski, the Alberta minister, said: "I understand there may be potential for a malt or barley plant on the B.C. side. That doesn't bother us in Alberta at all." So that's not bad. I think we can develop a good, cooperative working relationship. There may always be those irritants in terms of the sales tax issue, but I think we can do a lot working cooperatively to enhance the economy of both our provinces in the northern region.

R. Neufeld: The minister brought New Brunswick into the issue. I really didn't want to deal with New Brunswick; I'm talking about northeastern British Columbia.

You talk about me wanting some sort of protectionism. I think the minister explained very well who wanted protectionism on the Island Highway. You totally eliminated anyone else from bidding on it from Alberta. So when it happens on the Island -- when it happens on the most western part of the extremity of British Columbia -- we put barriers in the way so that it's only local hire. But when we go to northeastern British Columbia, it's all for one and one for all. That's the part I guess I just don't quite understand.

Now the minister talks about. . . . I'll give him a good example. I wish the Minister of Forests were in here to hear this right now. When you talk about spending government money. . . . I realize you related it to the Island Highway, a billion-dollar project, and all those things. Okay, fine. But FRBC money, as I understand it, is supposed to be spent in British Columbia to actually enhance British Columbia's forests and to use as much British Columbia labour and people and expertise as possible. Well, you just put out a contract out of Chetwynd for just over a million dollars over three years that magically all goes to Edmonton because they have a post office box in British Columbia. Now, that's an interesting process, because it was not done on a dollar-bid basis as much as on what you could perform for that dollar. So on the yearly basis of contracts through the three or four years -- I just can't remember off the top of my head whether it was a three-year or a four-year contract, but I believe it was three -- it worked out to just around $400,000 a year.

Each company that bid. . . . In fact, some from the lower mainland, in conjunction with some people from northeastern B.C. bid on it, and they were the second bidder. But what happened was that even though each year they were going to spend the same amount of money, the company from Alberta could do a lot more work on the ground for the same amount of money. So I guess that's what we do then, eh? We just let it go. It has gone to Alberta.

[ Page 4089 ]

The taxes will be paid in Alberta. The personal income taxes will be paid in Alberta. All the equipment will be paid for out of Alberta. The whole thing is over a million dollars, and almost all of it is going to stay in Alberta, other than for someone having to live in a camp or in a hotel in northeastern B.C. That's fine, isn't it? To heck with those folks up there. That's northeastern B.C. -- we can live with that. There are just a few. We shouldn't worry about it. But when we're talking about Vancouver Island and when we're talking about a billion-dollar project on the Island, I don't think that you get much competition out of Alberta on Vancouver Island. In fact, I think you hardly get a whit of it out of Alberta, but we certainly compete in the northeast -- and compete daily.

I'm not talking about protectionism. I'm talking about a level playing field -- as level as we can get it. I understand that some of our costs are going to be higher. I've been in the construction business and that kind of business long enough to know that. I've been around long enough to know that, so I understand our rates are going to be a little higher. But when we have a government that continually foists a larger cost onto our British Columbia contractors, and when people who work in that industry in British Columbia have to try to compete with those folks from Alberta, it gets darn tough.

Mr. Minister -- through the Chair to you -- I find that you say I'm someone who wants to drive wages down to the bottom of the pit. I have never in my life stood in this House and said that. In fact, you can go back to the record and find out where I have constantly said that people should be getting a good salary, a good wage for the job they do. I've been on that from day one; I've never been any different.

I find it interesting, you know. Folks who live in Alberta -- in Grande Prairie, Beaverlodge and Hythe -- charge the same equipment rates as we do in B.C. The people who are doing the work make about the same money. They gross about the same money, but there's a tremendous difference -- we can't compete. It's not just the 7 percent. That's been around since the beginning of time, and that's one portion of it. But your government put 7 percent on labour. Just think what it costs to put an undercarriage under a D8. Guess where it gets done? In Grande Prairie. It doesn't take a rocket scientist to figure out why. And I'll tell you, there are tons of D8s in that country. Where do you think these trucks go to get their work done?

You know, you constantly put those things on, and then your Labour minister comes along with some bizarre idea that they're going to eliminate the favouritism that we had in British Columbia, the variance, for the oil and gas industry. You just say to British Columbia contractors: "I'm sorry, folks, you're going to have to pay the double time. But you're still going to have to compete against that person east of you who doesn't have to."

Those are the kinds of barriers I'm talking about, and they're fully controllable by your government because your government is instituting them. That's the root of the problem. It's a matter of a level playing field, not of protectionism. In fact, I qualified my statement last time by saying the people in northeastern British Columbia have the knowledge, the expertise and the ability -- an experienced labour force -- to be able to do the work. But as you continue to tax them and continue to put on rules and regulations that they have to live with, they can't compete against those folks east of the border.

I'm assuming you don't care, because you were saying there are a few things we're going to lose. Well, there are two or three companies I know of -- large companies -- that are contemplating moving out of Fort St. John. If hundreds of jobs mean nothing to you. . . . I know they're not all union. Guaranteed, the oil patch isn't union. It's non-union pretty well straight through. But let me tell you, those folks make some darn good money when they're out there working. But those people should be just as important to British Columbia, to your ministry, to your government as those people on Vancouver Island who got the protectionism so that no one can come from Alberta to bid against them.

And that is what I'm talking about: a level playing field. You and I will argue about it until I get enough information across to you to demonstrate that there is no level playing field. In fact, it's terrible. So what's the minister going to do about levelling out the field so our folks can compete? That's all they want to do. They want to stay as British Columbians. They want to be in British Columbia. They want to live in Fort St. John. I'm not just talking about half a dozen contractors; I'm talking about hundreds of workers. That's where they were born and raised, and that's where they want to make their home. What are we going to do so those men and women can keep their jobs?

Hon. D. Miller: I mean no disrespect, hon. Chair, but first of all, the Island Highway agreement does not restrict contractors coming from other parts of Canada. What it does say is that if you're going to operate in B.C., here are the rules. It takes away any advantage that somebody might have by saying: "Well, I'll just offer my workers half the normal going rate, and people are so hungry they'll take it, and I'll win the contract." That's all it does. It doesn't prevent Alberta contractors from coming to B.C. After so many years in play, I would have thought that fundamental would have been understood. I'm sorry it wasn't understood.

But we don't restrict companies from coming in from other parts of Canada. We simply say, as we've done with the Island Highway, that there's an agreement with respect to wages, there's apprenticeship, equity hire, those kinds of things. So it gives us a bit of ability to control some of those kinds of issues that are important.

I am sincerely working to try to address some of the economic issues faced by the northeast, which arguably has not had to deal with some of the very severe consequences that other parts of our province have. By and large the northeast part of the province has been fairly buoyant. It's an economic bright spot in terms of the kind of investment in oil and gas, particularly gas. The receipts are very good. The revenues are very good for the Crown. We're able to maintain the revenue-sharing for municipalities in that region, recognizing a historic agreement brought in by this administration -- by one of my predecessors -- in terms of trying to recognize the nature of the industry in that part of the province. We've had some success in dealing with a $100 million investment in Fort Nelson for a new oriented strand board plant, which has benefited people in the region. We're working with others in the private sector to look at other opportunities. I mentioned the potential for an agricultural plant.

[8:15]

So we maybe have some differences, but I don't think we have any fundamental differences about wanting to enhance 

[ Page 4090 ]

the opportunity for British Columbians. We can't do that by putting up a wall, by building a wall and saying: "Albertans, you can't come in." Nor can we always, in every instance, simply tailor the economic policies of a province to suit the conditions that might apply in some border communities.

I mentioned the sales tax as one issue. We've got studies that show that we're as competitive as Washington or Alberta or any other place in Canada, quite frankly, and certainly competitive with the U.S. when it comes to the ability to track, whether it's cost structure, tax structure or whatever.

One billion dollars -- look at some of the statistics. The northeast was the only region in our province, as the member is aware, with 22.7 million cubic metres of gas, worth $1 billion, in 1995 -- not bad.

We'll continue to pursue those issues. As I say, there won't always be a nice, neat answer to every question when it comes to some competition that comes across the border. Whereas a business located on the Alberta side that services equipment used on the B.C. side or maybe even both sides. . . .

There is no pact, and you know that. And if there was, the party that you used to represent and that was in power in this province for many, many years would have done something, and they didn't. So it's fine to raise those issues, and you're doing your job and representing your region. We're going to work on those issues together. But at the end of the day there may be some that won't be solved, because as a matter of practical reality they can't be.

I tried, when we started this debate -- which really was on the issue of the Agreement on Internal Trade -- to illustrate British Columbia's position, which is to do what we ought to do for British Columbia. That is the position of this government, and it will be the position of this government as long as this party is in power. It wasn't this party that signed that Agreement on Internal Trade. Maybe if we had had the opportunity to be more proactive at that time and had been in the driver's seat, it might have been a slightly different agreement.

R. Neufeld: I appreciate what the minister is saying. The economy in the northeast is fairly buoyant; there's no doubt about it. But in all fairness, does that mean that as long as it's buoyant -- as long as we're exporting $1 billion worth of natural gas a year, as long as it's giving revenue to the Crown -- we shouldn't be concerned about those jobs, those men and women who are out there, who want to live in one of the communities I represent?

I know the OSB plant was put in Fort Nelson; I worked on that with the minister when he was Minister of Forests. I appreciate that. That's a plant structured in one place. Those people will live there if they want to work in that plant.

The oil and gas industry moves constantly. We're not just talking about the production end of it; we're talking a lot about all the work that leads up to it. The minister, I'm positive, should be aware of all the work that takes place before you even get a well in place, before you build a straddle plant like the one they're going to build in Taylor and invest the millions of dollars that they're going to. The pipeline that's coming from Fort St. John to Chicago. . . . There's $4 billion worth of investment by private companies, certainly.

I'm talking about the unfair advantage that Albertans have, to come to British Columbia. You mentioned -- and you wanted to bring politics into it -- a party that I used to represent. Well, to be fairly straightforward with you, Mr. Minister, that party brought in the labour variance so that we could compete. You took it away. So who hindered there?

Your government brought in the corporation capital tax, not the previous administration. Your government decided to tax labour, to increase sales tax, to increase the regulatory burden on everyone in the northeast -- not the previous government. So I think that to be fair, the minister has to respond to that.

How are we going to level the playing field? That's all that people are asking. Like I say, if it's cricket, if it's fine with this government to see people move their businesses just across the border into Alberta because they can compete and come in and take our work, then fine. I guess we'll have to change governments and see if we can't get that changed. But I would rather see the minister take a different tack and try to level the playing field.

Now, I don't think we can have a cookie-cutter approach to the whole province, because the whole province doesn't compete the same as the northeast does with Alberta. They do in the southeast in a few places. You're represented by those areas. I'm sure you have the same things said to you that I am saying to you now. Somehow we have to look at it, and we have to look at it seriously.

There are companies moving. I don't know what it takes to make government say: "Yes, maybe there is a problem. Maybe there are some things that we can do." That doesn't mean you throw the baby out with the bathwater or think that just because the economy's buoyant, yeah, we lose a few and we gain a few. We don't gain any; we just lose. It's obvious. All you've got to do is take a drive to Grande Prairie and a drive to our country, and you'll see what's happening. Have a look around. See what transgresses the border.

But the minister didn't answer the one question I had, and that was about the FRBC contract. I know he's not the Minister of Forests, but he conveniently brought up the issue about the OSB plant in Fort Nelson, so I'm sure he could address that. It's fine in the northeast of B.C. if we have a million-dollar contract with Forest Renewal B.C. that goes completely to an Alberta company, is it?

The other issue is. . . . We can put all the political rhetoric aside. How do we look seriously at trying to develop policies in the northeast so that we can compete? It's not in the minister's purview either. But, for instance, you force the variance that the oil and gas industry used to enjoy onto companies that are registered in British Columbia, because that's the only place the Ministry of Labour has any authority. The Ministry of Labour cannot go to Alberta and ask: "Are you enforcing the right rules?" They can't do that legally. The only way they can is if someone from that Alberta company complains, and that's a chance in a million -- it's not going to happen. So those companies do come in -- it's in fact true. They don't play by the same rules. They don't have to, because it's so movable. It's all over the country, and there's no way that you can get enough inspectors to keep up to it. But somehow. . . . If just some of those little things weren't enforced by your government -- if you didn't do them -- those companies would stay in British Columbia. They produce fuel taxes and all kinds of revenue -- I mean all the mirage of taxes that you people have.

We'd have those companies continuing to do that, and not only that. Their employees, the men and women that work for them, would be living in Fort St. John and Dawson Creek. They would be quite happy to live there; that's where 

[ Page 4091 ]

they were born and raised. They want to live there; they want to maintain a job in British Columbia. But when their company moves to Alberta, where do you think they're going to go? They're going to go to Alberta. Then what do we get out of it? The revenue still keeps going. We still export a billion dollars worth of natural gas every year -- or maybe a little bit more -- but none of it sticks to home.

It's just like running a business. It doesn't matter how much you gross; it's how much you can stick in your pocket. It's the same as working for someone. It doesn't matter if you make $200,000 a year, if you can only keep $10,000 of it. There's not much point in it. That's the problem, and the minister hasn't answered that.

Level the playing field. Level it a little bit closer. They understand that they're going to be a little higher, but somehow level it a little bit closer. Don't continue to put those job-killing -- that's what they are -- rules and regulations only on British Columbia companies. If you were putting them on Alberta companies, then the playing field is even. But this way it's not.

Hon. D. Miller: I don't know how we got. . . . We seem to be at odds here. I never suggested for a moment that we would rest on our laurels, not for one moment. The member knows full well, given the work that I've talked to him about and the work that he's aware I've done in terms of northern development. . . .

Interjection.

Hon. D. Miller: Right -- he knows that full well.

I'm sure that there are other examples. For example, B.C. is a net importer of roundwood. Some of it comes from Alberta. We have industries in B.C. that are competitive regardless of those differences, which the member thinks are the only reasons someone would locate in an Alberta community as opposed to a B.C. community. We have industries that are competitive enough to beat the pants off Alberta industries in wood manufacturing, and the wood comes into B.C. They don't say: "God, our hands are tied. Oh, look at the tax structure; look at all this. We can't do it." They do it. So I refuse to accept that somehow people's hands are tied so tightly because of tax and these other so-called restrictions, which are benefits to working people, that somehow things are going to rack and ruin in the Peace, and everybody is going to locate in Alberta and nobody in B.C. I refuse to believe that.

Are there ongoing issues? Have there been for years? Yes, there are. By the way, we get higher bids in B.C. for the gas rights that we put up for auction. May sales of oil and gas rights were $27 million into the province.

Interjection.

Hon. D. Miller: Every time that member and other members stand up and talk about the need for roads and hospitals and schools, as they've done, where does the money come from? It comes in part from the $27 million we bring in in one month -- and it helps. And $128.5 million is the year-to-date total. Looking at that objectively, things are booming in the oil and gas patch. People are running to B.C. and bidding in record numbers for those rights. Does that indicate to you that somehow they don't want to do business in B.C.?

Interjection.

Hon. D. Miller: You're talking about the service sector.

In addition to that, we are working with industry. I announced on June 5 that we were inviting the natural gas industry to provide input into our review of the royalty price calculation. We're working with industry in a variety of other ways in terms of the regulatory regime that exists within this province. And we're pursuing any and all objectives in terms of growth in our economy and opportunities for new job creation.

I was simply trying to point out, with no disrespect to the member, that when you can get a major investment like $100 million in your riding, surely you ought not to dismiss it so easily, and you ought to recognize that there have been major investments in your constituency. There will continue to be. I've met with the Alliance and all the other pipeline people. If I believe what they tell me and if they're successful, we'll see an increase in price and even more activity in British Columbia.

The member knows that we've been working with Pac-Rim LNG to see if we can't develop an LNG facility in British Columbia, taking gas from that member's constituency and providing jobs in terms of pipeline construction. That member is well aware of it. So don't try to portray the actions of this government as simply negligent, not concerned, sitting on our laurels. That's not true, and you know it.

We'll continue to work in a cooperative way with you and others. I've had some very good discussions with the regionally elected people in the Peace River region, with industry and with others throughout the north who are interested in gauging in terms of their own future. We'll be pursuing that, and I give the member my word: I'd like you to be a part of that.

Now, there will always be these kinds of issues where company A cites some reason why they don't want to be in B.C. You try to look at the regulatory regime to make sure that you're not too much out of whack with what's happening in other parts of Canada. And we're doing that. You try and should have the courage to take measures that give you even more protection for British Columbians. But isn't it strange that whenever we do that, it's opposed? It's not supported by anybody in this House except members of my own party.

Anyway, I think for this hour of the evening we're both kind of getting -- not carried away, necessarily -- a little passionate about some of these things. And it wasn't my intention when I got to my feet originally. So if there are other issues the member wants to raise, I'd be happy to try to answer any questions.

[8:30]

But the minister is getting confused with what I'm saying. Yes, the major companies are coming to buy land at record prices to drill in British Columbia. I'm not talking about those companies. Yes, they will come there to buy the right to drill for that gas and oil, and British Columbia should be happy, because that's what keeps all our homes warm -- every one of them, probably including yours. What keeps our cars and buses and trucks running is the crude oil that's produced out 

[ Page 4092 ]

of the northeast. You're right, it's great, and it all brings revenue to the Crown, and it's billions of dollars per year. There's a $2-billion-a-year investment in the northeast. I know all that; I'm aware of that; I appreciate that. And I want to see it continue. I want to see British Columbians be able to get as much of that pie as they possibly can.

So what I'm talking about are the service companies that have to go out and do that work, that move the equipment and the drilling rigs from point A to point B to have it done, that come in and put in the dehys and do all the work that has to be done and the labour that goes along with it. That's what I'm talking about.

It's a service industry, and it's being hampered by the labour variance. That's just one part of it. It only applies -- and this is all I'm talking about -- to the regulations and the restrictions that are put on British Columbia companies only. That's the problem. Yes, it is. You shake your head no, but it definitely is. In fact, you should ask your colleague. He's sitting in the House right now. He's meeting with some people tomorrow from the northeast and from Calgary about this same issue and how it's having a dramatic effect. I know everybody wants to shake their head and say: "No, it isn't." But that in fact is not true -- it is having an effect. Yes, we should be concerned if a few start fleeing, because more will follow. More industry will get built up in Alberta and Grand Prairie, just across the border, to come in and compete with us more.

I'm not talking about a barrier at the border. I'm talking about a level playing field so that everybody operates, more or less, under the same rules -- understanding that in British Columbia it's going to be a little more expensive and always has been. I'd put that on the record. That's what I'm talking about, Mr. Minister. I know they'll come in and continue to spend the money for the right to drill, and keep filling the coffers of British Columbia by $400 million or $300 million a year in the oil and gas industry in royalties and land sales alone -- let alone all the other taxes, and those kinds of things, that go along with it. But I'm talking about a level playing field.

I know the minister's getting tired of talking about it because maybe he doesn't like talking about it. Maybe he doesn't want to admit that there isn't quite a fairly level playing field. I'll let it go for this evening, because it is getting late, but I'm going to come back to the issue; I'm not going to let it die. I'm going to come back to the issue until we can get some answers as to how we're going to deal with British Columbia companies and British Columbia labour, men and women, so they can continue to live, pay taxes and be part of British Columbia. That's what I'm talking about.

[G. Brewin in the chair.]

Hon. D. Miller: Just to clarify -- and I'll be happy to debate the member any time or discuss these issues with the member at any time -- the laws of British Columbia apply. They do not apply on some selective basis in terms of where your company headquarters happen to be. The member raised some issue about being able to pursue companies across the border, which may be legitimate, but I'm not the Minister of Labour and I don't intend to get into that kind of detailed discussion. We have laws in B.C., and they apply to people working in B.C.

There are some legitimate debates, I guess, about whether or not there should be minimum requirements in terms of things like a minimum wage, overtime or hours of work. I guess there's a debate. Your argument is even more selective than most arguments I've heard on that question, because you argue that we should relax those standards close to the border. It's okay to have them in other parts of the province, but we should relax them close to the border.

R. Neufeld: If it ain't broke, don't fix it.

Hon. D. Miller: That's not a bad saying, but I think I can just. . . . I'll get carried away again, Madam Chair, so I think I'll just sit on that point. Perhaps we can pursue this again at some other point.

G. Wilson: I'm pleased to be able to enter into these estimates debates. Before I start in on aspects of international trade and investment -- and I have some questions for the minister. . . . The minister asked a question earlier on in these estimates to members of the opposition generally. I don't know if it was a rhetorical question or whether he wanted an answer, but I'd be prepared to venture an answer if he could just clarify it. He said: "What percentage of the GDP is an acceptable debt to carry?" I'm just curious if he was referring to taxpayer-supported debt or if he is talking about gross provincial debt in terms of a percentage. If he wants to give me that clarification, I'd be happy to. . . .

Interjection.

G. Wilson: If he's talking about taxpayer-supported debt, my answer to that would be 26 percent. There's some reason for that. I don't know if we want to get into that debate tonight, but I would say it's 26 percent -- and for some good reason.

In terms of this discussion, I have here the stats from May 1997 -- the current statistics. It would seem to me that the indication here is that British Columbia. . . . If I could just read from this, because this is generated from the Ministry of Finance and Corporate Relations and came out on May 29, 1997. It says: "British Columbia was ranked tenth among the provinces and territories in terms of economic growth last year. This was the second straight year that B.C.'s growth has been among the lowest in the country." Only Nova Scotia and Newfoundland were lower. There are some interesting stats as to why.

I think part of the reason. . . . I don't want to lay this at the feet of the government necessarily, because there are an awful lot of factors that, frankly, are outside of the control of the government directly. But one of the reasons, in looking at these statistics, is what's going on with respect to our primary extractive sector, particularly our mineral sector and our forestry. I think we're suffering now at the hands of international agreements that are being struck by larger enterprise -- bigger than the province of British Columbia. That is tying us, to a large degree, in terms of our ability to put in place the kind of job stimulants that we need in order to have investment come into British Columbia and do well in British Columbia.

I'm curious to know how the minister views this. For example, British Columbia -- if we just look at the forest sector alone -- was negatively impacted, in my judgment, by the FTA and NAFTA. Our softwood lumber deal is still, I think, a serious problem we're having to try to overcome, especially if you're not among the few that can get tariff-free export. We're now facing a broader set of OECD rules and regulations that are being negotiated -- which we have had some debate on in this House, and I hope that we can come 

[ Page 4093 ]

back to that motion at some point and pass it -- with respect to the multilateral agreement on investment, which is going to give even greater freedom for international investors to come in and to bypass what may be domestic regulation with respect to domestic job creation and domestic investment.

All of these things are threatening to a province which has done very well, thank you very much, by allowing a certain degree, a certain amount, of government regulation -- if I can put it that way -- with respect to the marketplace. So I would be curious to hear from the minister with respect to that -- what strategy the province has with respect to these international agreements and to what extent the minister, in his own working in the ministry, is now starting to look toward a strategy that would build in the necessary. . . . I don't like the word "protection," because people will think that all of sudden we become protectionist traders. However, I would say that the Americans are among the most protectionist traders in the world.

Frankly, if we don't start to put in place some rules and regulations, it would seem to me that the current statistics of May 1997 are likely to be repeated again next month and a month beyond.

Hon. D. Miller: Well, on a broad base, you cannot be protectionist anymore. I think that's fundamentally true. You could use the levers you have at your disposal, as we've attempted to do here in British Columbia: for example, utilizing Crown corporations to achieve certain objectives, looking at utilization of our resources to achieve certain employment objectives -- those kinds of things. But again, I'm not fearful of competition. The member's right, of course, with respect to the U.S. They tend to be, I guess, trade bullies to some degree. They always like to get their own way, and they've got the economic muscle internationally or in the world to make life difficult when they don't get their own way.

As the member knows, coming from Powell River-Sunshine Coast, the forest sector has been a sector that's not only cyclical in nature. . . . I remember the good old days when we used to be able to rely on the counter-cyclical nature of pulp and lumber, so that when one was down the other one was okay and generally carried you through. Then we hit a particular year when all of that which had been a regular cycle, quite frankly, went out the window. They both started moving together, and the next thing you know, they were both down together. Now we have a situation where pulp has been down and lumber has been fairly strong. I think that's had an impact on the investment side in pulp; it's clearly had an impact on the export receipts.

That's probably in the nature of the industry. The way to smooth that out, over time, is to advance the industry to a higher stage where you're not so reliant on just a straight commodity but rather, you're into a variety of products and markets. That tends to smooth out those bumps -- or at least those dramatic ups and downs in terms of that. So if you're in pulp, you've got to look and say: "Well, are there opportunities in, say, coated paper? Are there opportunities, instead of manufacturing pulp, in creating new products like MDF or OSB?" Those are the strategies that you have to look at over time. Similarly in the solid wood side, in terms of more tertiary manufacturing, driving up the chain -- and we're doing that. There are lots of examples. I won't go on and on about that.

At the same time, develop other parts of your economy where there's real potential, which we've been doing. We talked about the knowledge-based sector and some others that we are pursuing. Make sure that you're maximizing value, or potential, in the primary resource sector. Surely, with three major mines opening -- two this year and one next year -- we'll see some good improvement in terms of the export side, the ore that's shipped out, the jobs that are created, the spinoff benefits in terms of the private sector, but also the benefits that are obtained through taxation at the local, regional, municipal and, indeed, federal level.

I look at the whole issue of international trade as one where you have to be aggressive, in terms of looking for new opportunities. You have to be wary of the impact that issues like the MAI might have on you. You have to convey those in a focused way. The federal government has the initiative, has the lead. They are, really, the level of government that engages in these multilateral trade discussions. We can put heat on them; we can register our concerns. And you have to do that on a continuous basis -- make some noise.

I'm not unduly concerned. I think that we ought to take a position, and we have taken a position, on the MAI of just conveying. . . . We signed a letter to the minister today, trying to put the motion in the letter and asking that they do certain things. We'll see what comes back. I don't imagine that just simply writing a letter to the minister is going to get what we want. But to the degree that it's an issue in our society and people are prepared to make noise about it, then I think governments pay attention.

I think I've tried to touch on the various points that the member raised in his question.

[8:45]

We are collectively facing some very tough challenges in the next decade or so, as these international agreements start to allow for a greater degree of movement of capital to be able to acquire assets, and to take that asset base and move products into a variety of different markets to take advantage of lower and cheaper wage rates for manufacturing. That's the name of the game. I know that I'm not telling the minister anything he doesn't know. When you look at the GDP of the top five major international corporations, we're talking about an enormous financial power that will certainly supersede our capacity or ability to effectively deal with local employment if, through our own statutes and through the Legislative Assembly here, we don't have the opportunity to be able to put British Columbians first, to protect jobs in B.C. first.

The interesting factor in international investment, which is part of this minister's portfolio, is that we clearly have to attract investment. But we don't want footloose investment. We don't want investment that's simply going to come in on an asset-acquisition basis, buy up assets, marginally put value to them and then shift those out to Mexico, or wherever they happen to get cheap labour, and leave us without the ability to be able to diversify significantly enough to meet the new challenges of a global economy. Yet these new agreements are going to put greater and greater restrictions on our ability to do that.

British Columbia has had some major success stories. I don't need to go through them all, because the minister knows them better than I do. But for the record, certainly I think we 

[ Page 4094 ]

have seen that Ballard is one example. There are many other examples: McDonald Dettwiler is another one. We can go through a whole series of initiatives where, through joint venture operations and initiatives, there have been some very successful ventures taking place in the province.

I think one of the areas where we've been able to effectively counter some of these international forces is through the use of our Crown corporations. I'll be back in this House, presumably later in the week, talking about B.C. Ferries, fast ferries and selling off aluminum catamarans and what have you. But the minister knows that through Crown corporations, we have been able to effectively inject into the economy a certain amount of capital expertise and training initiative that secures a labour base in some sectors and provides us the opportunity to go into joint ventures with private companies.

Under the MAI, which is just one example. . . . I got word today on this new tax thing they're putting together -- the international tax structure -- so that governments now will be restricted on how we're going to be able to deal with offshore corporate tax, the newest thing to come down the tube. But even under the MAI, I think our ability and capacity to use the Crown corporations to be able to maintain that domestic base is somewhat threatened.

This minister has the Crown corporations in his ministry. He has to know, I am sure -- and I'm sure his staff will be well aware of it -- of the extent to which British Columbians have been dependent on that security in the past. I, for one, am concerned that our ability to maintain that approach to economic stability in some of the sectors -- primary sectors, energy sectors; B.C. Hydro is another example -- is going to be severely threatened by these new agreements.

I'd like to hear the minister's comments on that. It seems to me that if we don't take action now, quickly, to protect this base of investment, we're going to pay a very, very high price in the not too distant future.

Hon. D. Miller: Again, we have had some of these discussions previously. I must say, though, I'm not fearful; I really am not. I think the job of successfully developing an economy is, first of all, understanding it and then being prepared to apply the levers, whether they're direct government levers or through Crowns that make sense.

I talked in my opening statement about the comparative or competitive advantage we might have in some sectors. In forestry or in natural resources, for example, I think we certainly do -- to the degree that those resources can't be taken away somewhere else.

World trading patterns have changed, and no longer can you rely on the old tools in this world. The barriers that were put up, either to protect your domestic industry from foreign competition, or to maintain some perceived advantage you had by limiting whatever, are changed. They're fundamentally changed, and it doesn't make sense now. For example, we lost. . . . The member might recall that there used to be federal rules governing the exporting of unprocessed salmon and herring, which were lost under a GATT challenge. We fought that all the way, but we lost it. Now, did we lose all the processing? No, we didn't. Because we're competitive, we have some perceived advantages in terms of doing that where the fish are landed. We're not a net importer, but we import a lot of fish and manufacture that. We import a lot of wood. We're a net importer of wood, and we manufacture that. We can do that and be competitive.

I think that's the message. You have to develop the skills of your people, you have to develop the technology, and you have to work with sectors to make sure that they in fact are competitive. That is not a guarantee, but it helps. There are lots of very good examples in B.C. now. You have to nurture those sectors of your economy that can better withstand the kinds of shifts that take place, or can take place, on an international basis.

I keep referring to what I think is arguably a very good success story in this province, and that is the knowledge-based sector. Direct employment has gone from 20,000 in 1988 to more than 40,000 last year, and it grew by 22 percent in 1995. Now, what are the comparative advantages we have in that sector? How can we grow it? Well, we harness the power of our post-secondary institutions. We have focused programs in terms of developing skills so that when companies are looking about worldwide, it's not so simple.

All of a sudden it's not just cheap labour. All of a sudden they have to say: "We need to do particular functions and we need people with these sets of skills" -- whether they're engineering skills or computer skills or whatever they might be. When they ask, "Where can we find them," you ask: "What's it like in that jurisdiction? What if we located there?"

Again, that draws out one of B.C.'s advantages that the Premier often talks about. You have to know what those are, and you have to work on where you think there may be some weaknesses and where you can shore them up. I do that, and our view over here is that we have no fear. Clearly we have some disagreements with some of the issues that are being proposed through the MAI.

With respect to being involved in these broader international trade issues, I think the western Premiers said: "If we're good enough to go on Team Canada missions, maybe we're good enough to sit down with the federal government and actually be consulted on what you're doing in terms of these international agreements." That's not a bad approach. If four western Premiers can say that amongst themselves, then I'm sure more Premiers can say that amongst themselves. If they do, then I'm sure that we've got a federal government that would be more receptive than they ordinarily might be with the absence of provincial Premiers speaking with some unified voice.

G. Wilson: I notice it's getting late. I'm not going to sort of get into a long, drawn-out debate on this, but this is a subject that I feel quite passionately about. It seems to me that those who are well skilled and well trained and who have the benefit to be able to take those skills and get involved in corporations which are becoming increasingly international in scope become footloose. They're able to move. They have mobility, and they can move with corporations. Money moves and corporations move.

But there's a whole bunch of British Columbians who don't have that mobility. They're the people whom I think the member from Peace River North was just talking about, who are living in the north. They want to work in the north; they want to be able to take benefit of the money that's in the north.

I have some in my own riding. I'm sure -- I know -- this minister has some in his own riding. I think we have to be mindful of those people for whom those options, the options of this new globalized economy, are just not as attractive as they might otherwise be, because they don't have the capacity or ability. We have to build those protections into our workforce at home so that we do look after British Columbians first.

Having said that, I just want to shift very slightly for a moment to the whole question of international taxation, or the 

[ Page 4095 ]

degrees to which international corporations are now moving towards a standardized taxation system. Apparently this is now the latest scheme. I don't know if the minister's staff have been consulted about it, but it appears now that the international agreements will also build a standardized tax scheme into it. This will allow corporations who come in and are treated like domestic corporations as a result of the MAI to be taxed upon a domestic tax base and be able to be taxed by the country in which they are chartered.

To me, this is problematic, and I don't fully understand exactly what's involved with it. But it would seem to me that what they're talking about is putting in what they claim is an equitable tax rate for companies that want to come to Canada and to be able to work in Canada but that want to pay a tax rate that's comparable to their domestic rates. I wonder if the minister can tell me if there has been any consultation with the federal government to his ministry on this. If not, maybe we need to gather some more information.

Hon. D. Miller: No, I'm not aware of any. Certainly we're prepared to see if we can find some information on it.

I want to touch very briefly on one of the member's closing statements in his last response, because I think there is an argument. In the absence of some competitive environment, how does industry change? I've always believed that you shouldn't. . . . There has to be a push in order to get a result, otherwise you get a little lazy. Sometimes it's not bad being a little lazy, but if you recognize that change has intensified -- and technology has really driven that -- then you can't sit back and say: "Well, we've always produced this, and we're always going to."

That seems to me to say that you can't ignore the working people who have been part of that production process, and it wasn't until we actually developed some of the technology programs, the training programs, Skills Now, Forest Renewal, that we had the wherewithal to actually go to the working people in those sectors and say: "Yeah, you can keep pace. You needn't be fearful of change. We're prepared to spend some money to invest, to give you the new skills that you're going to need to keep pace with this change." It seems to me that that's fundamental as well, and that you have to recognize that that's going to happen -- always. That's a key component, but we'll see.

[9:00]

G. Wilson: That's exactly as I understood it to be -- that they want to have some kind of an international agreement with respect to rates. It has been driven largely by the European community, which is saying that if we can standardize and move toward standardized systems in the economic model, then what we need to do is try to seek to standardize North America-wide.

I have a couple of closing questions, very briefly, because I think we will come back to the Crowns and other agencies that I'd like to ask questions on. With respect to that proposition -- and I don't want either to tip my hand or get too much into the work on the nationality unity issue -- one of the things that I've been spending a lot of time on in the last little while is the national tax system and the degree to which there have been a series of moves over the last decade or so to try to move toward a more equitable tax system nationally in terms of making sure there are limited or no competitive advantages with respect to interprovincial tax systems.

One of the areas in which the greatest contention seems to be is not through a PIT, a personal income tax, but through the corporate income tax -- the corporate capital tax, essentially. I'm curious to know whether there is any. . . . This is a bit selfish on my part, because if there is, I'd like to get it as quickly as possible. If there have been recently, over the last while, any initiatives within this ministry to work with comparable ministries elsewhere with respect to the whole proposition of investment and a move toward a standardized corporate tax system at the provincial level. . . . I'm not talking about federally initiated tax; I'm talking about provincial tax. If there has been work done on that, might that be made available?

Hon. D. Miller: I'm not aware of any work. I don't know that my colleague the Minister of Finance. . . . He has certainly never raised the issue in any respect. That's not to say that there might have been some side conversations on that question, but I'm unaware of any work.

G. Wilson: I appreciate it. There's a reasonably detailed bibliography of material through Ministry of Finance officials, and so there is some discussion on that level. It was just strictly on the question of corporate investment, as to whether or not there have been discussions. I understand that there may not have been, and that's fine.

My last question, then, with respect to international investment, has to do primarily with the extent to which there is now a movement toward external purchase of private timberland, forest holdings, and the extent to which there has been a significant movement toward the purchase of private lands in forests by offshore owners. Is the ministry keeping tabs on that? Is there somebody that's got a handle on what that is and what the implications of that might be?

Historically, as the minister will know, while there have been both public and private lands, most of those private land holdings have been in the hands of British Columbia companies. It seems to be a trend that's now very quickly changing. I'm curious to know whether or not those investment patterns are being monitored and, if so, if there's some information that might be made available on that.

Hon. D. Miller: With respect to the patterns, I would think that the Ministry of Forests would probably have some information. But again, the ability to regulate still rests with the Crown. If it was the opinion of the Crown that dire consequences would result through a lack of regulation, then I'm sure that would be considered. In fact, over the last couple of years there has been some attempt to introduce modest regulations on private lands and, prior to that, the incentives on the tax side, through the Assessment Authority, of private forest lands.

They are a good contributor to the provincial economy. One would reasonably conclude that from the investor's point of view they would want to maximize the return on their investment and therefore utilize the lands and the timber that grows there in a way that brought in the maximum return -- over time, as opposed to the short term. That's where you can get some differences. Perhaps the Ministry of Forests may have some more information on it, but I don't.

[ Page 4096 ]

D. Symons: I'd like to just discuss something that I think came up a little earlier. Maybe it's from a different angle, but it deals with public-private partnerships. I gather that there was a committee set up at the beginning of the year, a private board, to look into that. Mr. Tennessy, I believe, is the chair of that group. I'm wondering if you might be able to tell me if there have been any documents tabled from that group -- minutes of meetings or reports to the government on public-private partnerships.

Hon. D. Miller: Gee, I don't know. I met with him not long ago; we had a pretty good discussion. They're not going to be reporting in a public sense. They are there to advise government.

D. Symons: I thank the minister for that answer. I wonder if the minister might then share with the House the flavour of those meetings you had with the committee.

Hon. D. Miller: I'm not really sure what the flavour was.

D. Symons: Well, that's unfortunate. I would hope that the minister would be paying attention at these, because I think it's an area that British Columbia should look more closely at. Maybe the minister wasn't looking that closely at it.

Washington State in 1993 introduced a bill that really covers public-private partnership initiatives. I'm wondering if the minister -- who seems to have vacated -- could give us an idea of whether British Columbia is moving in that direction, so that we're going somehow to enshrine the ability to do this.

M. Sihota: Before the minister answers that question. . . . You know, it seems to me that there is tremendous opportunity in British Columbia for us to take a look at public-private partnerships. In fact, as a government we've done that for some time. Most recently, I know, the government has been looking at public-private partnerships in a number of areas. For example, in terms of capital projects, we've looked at private capital and school construction, most recently in Burnaby. There was some debate within government over looking at P3 projects in that regard, to see whether or not there were some opportunities for private investors, with a reasonable return for them, in return for us, as a government, being able to offset our debt.

At the same time, we most recently put out a tender, I believe, for opportunities on the PNE with regard to P3 projects. I think that presents wonderful opportunities for government, as well. So, that said, I want to commend the minister for his hard work in this regard. Take a look at all those public policy options.

D. Symons: I do hope that the substitute minister for everything -- and, indeed, the member for everywhere, as well -- who just spoke is speaking for the cabinet besides giving his own personal opinions on this. Because, indeed, I would have to endorse what he said -- that this government is working on and considering public-private partnerships.

So my question to the minister, who was taking a rest break there, deals with the concept of enshrining this somehow in legislation or in regulations, so that we would be able to know what the parameters are for this, and so that the public companies interested in getting involved in this would then be able to know what sort of projects they could get involved in -- that the government would be in a position to be able to work more closely with them on this.

Hon. D. Miller: Well, I'll seek your guidance, Madam Chair, but it's a bit disappointing that the report on P3s that we released -- when? -- in October 1996 didn't manage to fall into the opposition's hands until a week ago or something. So despite our efforts to put that out publicly, somehow we've not done a good enough job.

But I really would seek guidance. This is a very large ministry; we have a huge number of component pieces. Are we going to get through them in some kind of sequence, which I understand is the desire of members opposite? Are we going to bounce around, cover a topic, leave it. . . ? My impression was that we'd finish and go on to other topics. But then we come back and start doing this. If that's the way it's going, then I think this is going to be an exercise in futility.

D. Symons: He might, just for clarification's sake, tell us whether he agrees with the member for Esquimalt-Metchosin, who gave the views of the government, I assume.

C. Hansen: I just want to respond to the minister's comments regarding sequencing and jumping around. Certainly we have extended the hand of cooperation on this. I recognize, as the minister does, that there are 35 members of opposition who have questions, and we will certainly stay within parameters. But the commitment that we made to the minister is that we would first of all address general ministry operations. For the benefit of the minister and the benefit of everybody, it's our intention to deal with those issues that fall under a particular deputy minister, which is what we are doing. The fact that we deal with an issue such as public-private partnerships and then come back to it half an hour later is certainly not inconsistent with that.

Our objective is to make sure, as I mentioned earlier, that we are using officials' time effectively. Part of that is that we're not going to jump from talking about B.C. Hydro and then a day later come back and talk about trade issues, then go to B.C. Rail and then back to trade issues again. We will do our best to work with the minister and his office over these coming days to make sure that, as I said before, the officials' time is used as effectively as possible. But I know that my colleague from Richmond Centre does have some questions about P3s, and certainly I think the minister should agree that that is entirely in order.

D. Symons: I appreciate the comments from the member for Vancouver-Quilchena. I think I would not have deferred to the minister on that, anyway.

I wonder if we might just move a little bit, because I believe B.C. Transit, which is not in this minister's purview, is involved in an arrangement with Bombardier in developing areas where they might export the technology for SkyTrain. Indeed, I was debating issues relating to transit with the minister last year, I think. I'm wondering if you might tell us. . . . It seems that you're involved in things elsewhere in the world -- one of them being Kuala Lumpur -- where public-private partnerships are involved, but you really aren't doing it in British Columbia. And I'm wondering why, if it's good somewhere else, it's not good here.

Hon. D. Miller: We do look for those opportunities -- obviously the member refers to B.C. Transit and Bombardier -- and we'll continue to look for them.

C. Hansen: I began at the indulgence of the minister, who may think we're jumping around, but I too had a few questions 

[ Page 4097 ]

about the MAI -- the multilateral agreement on investment. From information that I had obtained, which I quoted from when we had the debate on the resolution in this House several weeks ago, I was of the understanding that there had been consultations from the federal government to the province. I may have misunderstood the minister's comments, but do I take it from what he said that there have been no consultations with the provincial government on this matter?

Hon. D. Miller: Well, it depends how you describe consultations. If our opinion was being sought and listened to, then I would say that the discussions have failed to meet the definition of consultations that I think is appropriate, which is why we have communicated -- and I have communicated to the Trade minister again today -- asking that certain things be done. I want to say that I don't think this is an issue that should be subject to some fearmongering. I think there are some legitimate questions that we and the public may have with respect to the implications of this multilateral agreement on investment. My view is that they ought to be canvassed in a pretty good way by the public and others, prior to the federal government believing they've got a mandate to act for all of Canada.

I think these issues are important; I think these trade agreements are important. They certainly govern our lives here in western Canada, in British Columbia, to some degree -- for example, softwood lumber and the implications for managed supply or limited supply into the export market. And I think that's a reasonable position for British Columbia to advance.

I see little smatterings of reaction around the country -- some in B.C., some in other parts of the country -- that are now starting to emerge. Whether that becomes an issue that the federal government feel they have to pay attention to, I'm not certain. Perhaps there has to be a little more noise, a little more discussion publicly about these issues, before we'll get the kind of discussion -- at least, at the public level -- that I think they deserve.

[9:15]

Hon. D. Miller: We are informed. In other words, our officials -- at the officials' level -- are advised about what's happening, but it's really not consultation.

One of my officials has just advised me -- and I'd forgotten about this -- that there was a full-page ad in the Globe and Mail recently. I'm not certain of the number of people or the organizations behind that, but they were expressing their concern about the MAI. So it does appear that there is some growing concern in Canada.

I just think it's useful, it's certainly. . . . We as politicians all tend to pay lip service to public consultation, but there are some areas where I don't think we do enough. I think this is one area where, in terms of trying to educate, we ought to do more. That's the wish of this House, and I've conveyed that to the federal minister.

C. Hansen: Certainly some of the questions and issues that have been raised in this House by the member for Powell River-Sunshine Coast, initially, and expressed by others in the chamber since, about the MAI -- and by other bodies, such as the Canadian Centre for Policy Alternatives, I believe. . . . There are some very serious questions and the question of what the impacts would be on British Columbia. Is there any work being done in this ministry to look at what the implications of the MAI are for certain sectors in British Columbia?

Hon. D. Miller: Yes, we're trying to have an understanding of what they might be. Part of the difficulty -- I mean, even going back to the brief debate we held earlier on the Agreement on Internal Trade and our decision not to proceed. . . . In that case, if we do proceed and include the so-called MASH sector, there's a difference of opinion with respect to what the implications are on our ability to do from a policy point of view what we want to do, for example, in New Directions in Health. Quite often until you get to an end point of a dispute, to a decision, you don't know.

I'll use one example to illustrate that. We were assured under the free trade agreement, the FTA, that if it came to a trade dispute between our two countries, at least there was now a dispute settlement process. That was really quite a large selling point of the FTA. I can think of lots of people who bought that: "Well, we'll have a panel. We can draw from experts from both sides of the border. It will be impartial; it will consider issues of law; it will render decisions." We went through that, and won a binational panel on the softwood lumber countervail imposed by the United States. Did it make a difference? Absolutely not.

So you always have that sort of lingering suspicion that you have a difference of opinion about interpretation, about what these things mean and what the processes are to resolve it. It's always better to err on the side of caution, particularly when it comes to protecting your ability in your own jurisdiction to do what you think is right -- to expand your economy, to try to create more jobs, to use the levers that government has at its disposal to do that.

There's a difference among Premiers. It's clear, even looking at the New Brunswick example of the United Parcel Service, that job-poaching took place. B.C. wasn't the only province that was impacted by that. Other provinces were impacted, but they were indifferent. They didn't even consider raising a challenge under the agreement on internal trade, even though they privately thought that there was a violation. I was on the phone with all of them. They were indifferent. They weren't about to launch any kind of challenge under the agreement.

So there's a variety of opinions. But I say let's start in this case with some meaningful public discourse on what's being proposed and what the impacts are. It's nice to occasionally get a senior federal politician on record as to what things mean. I haven't seen any of that yet, and it has some fundamental importance. So let's try to make it as public as possible.

C. Hansen: I wonder if the minister could outline for us the issues he sees a B.C. position being developed on. We've had some concerns raised, for example, about the ability of Crown corporations to do business. Is that an area where there will be some analysis done on the part of the B.C. government by his ministry? The ability to set job targets, for example, which we have under the jobs and timber accord, is an issue that's been raised. Is that something that will be looked at and evaluated as to whether or not that is a concern that has foundation, or whether there are positions that B.C. should be taking to make sure that agreement is worded in a way that 

[ Page 4098 ]

protects our interests? Could the minister give us an outline of the kind of research that would be developed by his ministry in this area?

Hon. D. Miller: Well, the member has really touched on some of the significant areas. In fact, that was primarily the focus of the debate that we held in this chamber. Really, the role of government, directly or through its agencies, Crowns, is to lever job creation. . . . Our view is that proposed texts could limit the ability of the province to negotiate with investors over the job targets, for example, that we're looking at in the jobs and timber accord. So broadly stated, the theme, if you like, is: don't put any restrictions on capital mobility or what capital can do. I don't know. As a fundamental principle, I should say that particularly when it comes to natural resources, quid pro quo is one that all members in this chamber accept. After all, we only allocate timber on the basis that there will be a benefit that results -- an economic benefit and jobs.

C. Hansen: I want to phrase my question in a way that's very specific. What kind of study or evaluation will be done by this ministry in terms of the impact, or the potential impact, of the MAI on the province?

Hon. D. Miller: We are doing an analysis of the text that has been shared with us by Canada to see, in our view, what the implications are. There was a request that we make that document public. I think prudence dictates that I ought to, and I have asked the federal minister whether they have objections before I do. Most importantly, it goes back to the public discussion that I think is important. That's where these kinds of issues can come out. We will supply any information and any analysis that we have with respect to the wording of the text, but we need to get that out in the open, and at this point only the federal government can do that.

C. Hansen: I can understand why the minister would be reluctant to release information provided to him in a restricted manner from another jurisdiction. But would the minister undertake to make public the documents that look at the impact of this proposed agreement on British Columbia?

Hon. D. Miller: I think I have to exercise some discretion if in fact an analysis reveals the text. I don't want to be coy about it. At the end of the day, in terms of making that public, the interests of British Columbians come before the interests of the federal government, so it may be that that's the route we will choose. We have not at this point. I've written to the federal minister -- I only signed the letter today -- asking that that be made public. I'll have to give some due consideration for whoever the new federal minister is -- perhaps it will be Mr. Eggleton -- to respond to that.

Again, to cite some of the published reports in the paper, there was an article in the Globe and Mail of April 3. According to the article in the Globe, key elements in the draft treaty are: "No government will be able to require foreign companies to hire locally, comply with employment targets, establish a head office here or achieve a set level of research and development as a condition of being allowed to invest." You know, that's just one. Obviously, when you read that, those cause you some concern. We'll have to wait and see what response we get from the feds. In the meantime, we have made our views known to them. If members of the opposition wish to support the government by way of a letter to the minister, I'd be very pleased if that were the case. Let's get into some discussion here. We'll be raising that in other provinces, other jurisdictions as well, to see. Maybe they don't have as much concern; maybe they do. We'll have to wait and see.

C. Hansen: One of the things that I did request from the. . . . Where is this coming from now? The investment trade policy division in Ottawa. . . . There's some background. They sent me some reading materials which basically contradict a lot of the concerns that have been raised, but I guess that doesn't diminish my interest in the subject as a result. I know it certainly doesn't diminish the interest of the member for Powell River-Sunshine Coast. It's obvious that there is a need for much more public dialogue on this.

I would like to ask the minister if he feels that there is an opportunity to influence the negotiations that are taking place. If we find issues that are not in British Columbia's best interest, is there an opportunity for us to have an impact on those negotiations at the negotiating table?

Hon. D. Miller: That question requires a two-part answer. I do believe it is possible internally in Canada to have some influence on the position taken by our federal government while they're at the table. Whether or not -- I just say this simply because I don't know the answer -- our federal government has the ability to have some influence at the international table is another question. I'm not well versed enough in that field to give a proper answer, but Canada is a player internationally. It's a significant player. I'm sure its voice would be heard. The second part of the question I can't answer.

C. Hansen: There are 29 members in the OECD, of which Canada is but one. Certainly I would hope that Canada has a say in those negotiations as they unfold and that as one of those 29 members at the negotiating table, we will have an impact so that Canada's interests can be protected. I wonder if the minister is of the opinion that it's better for Canada to be at that negotiating table or if it's better for Canada to withdraw from that negotiating table.

Hon. D. Miller: I believe that they should stay at the table, as we have done in terms of the Agreement on Internal Trade in Canada, if only to understand what's happening there, what's being proposed and to protect your interests.

I was going to add that one of the proposals made, I think, by Canada. . . . It's kind of interesting because the European Union, I believe, has reached some agreement with the U.S. with respect to the Helms-Burton initiative -- the U.S. initiative where they are essentially trying to restrict companies outside of their borders from trading with a country that they happen to dislike for some reason. They are punishing, or proposing to punish, companies -- for example, companies in Canada -- that trade with Cuba. Canada has proposed rules to prohibit countries from passing laws like the U.S. Helms-Burton law. I certainly support that, but I don't think they've gotten too far on it. Nor do I think that Canada has reached agreement, unlike the European Union, with respect to -- not an opt-out of Helms-Burton -- a way to avoid the effect of Helms-Burton.

[9:30]

[ Page 4099 ]

ministry involved in any way on the national scene or interprovincially in terms of Canada's opposition to the Helms-Burton law?

Hon. D. Miller: Yes. I'm not exact on this answer, but I do believe that discussion has taken place at sort of the official level, if you like, across Canadian provinces with respect to that. Look, all Canadians are clear: we find it odious that the U.S. would want to do this. We have companies in British Columbia that do business in Cuba. I've personally received an invitation from my counterpart, the minister responsible for trade in Cuba, and if I think it's appropriate to visit that country in terms of furthering the trade interests of B.C. based companies, then I'll indeed do that.

C. Hansen: I want to move on to another subject. I almost feel guilty bringing up a subject that I'm going to look for some detail on -- the industrial incentive fund -- because it's probably not the time of day to do that. But it is the area I was going to move on to next, and I do have some questions for the minister. There is an extension of the industrial incentive fund this year of $50 million, and I wonder if the minister could outline for us what that $50 million is designated for. What commitments have been made for the disbursement of those funds to date?

Hon. D. Miller: Yes, there's a variety of projects. We really needed the room. In fact, at the risk of sounding heretical, I'm not convinced of the reason for the need for a cap. But fair enough, that's a decision. . . . In other words, the investments we make are hopefully sound investments. There's a return on that investment. There's a provision, where. . . . Sometimes they don't work out, but if opportunity arises -- for example, a major initiative from the private sector where there's potential to participate on behalf of the province -- then you certainly don't want to hinder yourself or your ability to participate by saying: "Oh no, we've reached our cap, and therefore we can't consider it."

I talked about the Avcorp announcement -- that's been announced already; that's a deal that was consummated -- Dynapro; Evans Forest Products Ltd.; Georgia Straight Entertainment; the Huckleberry mine project; Newbridge Networks; the Royal Oak Mines project; and the Stikine Nation Power Corporation, which is a small IPP -- an independent hydro power project -- up in the Dease-Telegraph region. So there is a number of proposals that we're involved with that required an increase in the cap to participate.

C. Hansen: This fund has now been in existence for 12 years. I'm wondering if the minister could advise us what the cumulative disbursements are under that fund, if he has that information at hand.

Hon. D. Miller: The total disbursed is $308,161,935.

C. Hansen: I was wondering if the minister could advise us how much has been repaid under this fund in terms of receipts. How much. . . ? Well, let's deal with that one first, if I may. To what extent have loans that have been made under the industrial incentive fund been repaid to the treasury or to the fund?

Hon. D. Miller: The total principal repaid is $73,778,163.

C. Hansen: Could the minister also advise us how much has been forgiven by the government in total? How much has been written off as loans that may no longer be collected? Could the minister give us a breakdown of some of that information?

Hon. D. Miller: I'm not able to give the circumstances -- in other words, the companies involved -- for reasons of confidentiality, but the amount written off is $22,938,433.

C. Hansen: Is there also a category of loans that have been forgiven under this? If so, what would that amount to? Is there also an amount of loans that have been forgiven, or is that part of those that have been written off for other reasons?

Hon. D. Miller: No, it's in the same column. I should have added that that amount is over the current life, which is about eight years, of the program.

C. Hansen: In the estimates under vote 25, we've got an amount for reserves for doubtful accounts and concessionary loans. Could the minister advise us on an amount of $3,396,000 that has been allocated for that line item? I wonder if the minister could give us a breakdown of where that amount comes from and how many of those are moneys that were extended under this industrial development fund.

Hon. D. Miller: The total, I'm advised, is $6.3 million. The $4.9 million, the concessionary agreement, is part of the Royal Oak package, and the balance is expenditures that are really written off through the JPC. In other words, there's an understanding with the involvement of the job protection commissioner that those would be non-recoverable.

C. Hansen: I was intrigued when the minister said that he could not disclose the names of companies for which the loans have been forgiven or written off. I find that surprising, and maybe I didn't understand the minister's comment in that regard. Certainly, on loans that have been forgiven or written off as doubtful accounts or concessionary loans, I would expect that that's information the public should be entitled to.

Hon. D. Miller: Madam Chair, I apologize in terms of that answer I gave, in terms of confidentiality. I was in error.

There are four accounts where, through the Ministry of Finance, amounts have been written off: Gregory Forest Products, $500,000; Health Care Diaper Ltd., $46,788; Specialty Woods International, $700,000; and Vancouver Energy Ltd., $694,817. There may be questions about those particular companies, and we'll see what we have at hand. If the member wishes to have more information about those, let me know, and perhaps we could pursue that further along in estimates.

C. Hansen: At this hour of the night, I'm trying to wrap my head around some of these numbers, and it's probably a subject area we should have dealt with in a morning sitting when we were all probably a bit more alert. But with the four accounts that the minister just mentioned, the total, I believe, would be approximately $2.5 million -- if I got the numbers accurately as he was mentioning them. But he said earlier that we have $22.9 million that has been written off, and I'm wondering what accounts for the balance of that.

Hon. D. Miller: The totals that I read had to do with the fiscal year ending March 31, 1997. The $22.9 million that I referred to in my earlier answer is over the full life of the program. I don't have all of those going back eight or ten years.

[ Page 4100 ]

C. Hansen: I think I know what the answer is to this, but I do want to put it on the record. Could the minister provide for us a listing of the investments and loans that have been made under this fund since its inception, a list of those that have been repaid and also a list of those that have been written off, forgiven or otherwise disposed of? Is that something that could be provided?

Hon. D. Miller: Anything that is in the public realm, I'd be happy to provide.

C. Hansen: I certainly would not want to take up the time of the committee going through a detailed line-by-line on that item, so if the minister could provide that, it would be much appreciated.

I've got couple of small items. I don't want to start on a whole brand-new subject area, given the hour. So with the minister's indulgence, I would like to deal with a couple of miscellaneous items, if I may.

There was some publicity last October about two B.C. ministries that gave instructions to staff in terms of relations with the media. One of them was the Ministry of Employment and Investment, where a directive came out that ministry staff who were not senior communications officers "are not to talk with the media." I'm wondering if the minister could explain the rationale behind a directive such as that.

Hon. D. Miller: Well, I can only wish that that advice had been given to me on occasion, but it wasn't, so I live with the results.

I don't know that there's been a particular problem. I can't recall the directive, but we try to provide information when people inquire. Obviously we're getting into the realm of dealing with political issues, judgments and those kinds of things, and that's the purview of politicians. But I can't recall the circumstances.

C. Hansen: I wonder if the minister could explain to us why a policy directive like this would be necessary in a ministry. It certainly seems unusual compared to the approach that's taken in other ministries, and I wonder why this ministry would put out a directive like that when it's not deemed to be necessary in other ministries.

Hon. D. Miller: Again, I can't recall the circumstances.

I think it's useful, in terms of the communications side, where you do have a group of people whose job it is to disseminate information, if it is agreed that that goes through a single source and there's some consistency. That's all to the good. But I don't think there is a particular problem. Whether it's dealing with members of the public, the opposition, the media or whatever, I can't recall receiving any complaints as a minister over the past. . . . Well, I can't recall ever receiving complaints as a minister -- except occasionally in question period.

C. Hansen: In view of the hour -- and I gather that the other House has risen -- I move that we rise, report progress and ask leave to sit again.

[9:45]

The House resumed; the Speaker in the chair.

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

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

Hon. D. Miller moved adjournment of the House.

Motion approved.

The House adjourned at 9:47 p.m.

PROCEEDINGS IN THE DOUGLAS FIR ROOM

The committee met at 6:44 p.m.

ESTIMATES: MINISTRY OF SMALL BUSINESS,
TOURISM AND CULTURE

Hon. J. Pullinger: It's my pleasure to present the estimates of the Ministry of Small Business, Tourism and Culture for the consideration of the Legislature. The entrepreneurial spirit is alive and thriving in British Columbia. This is evident in the exponential growth of small businesses in this province, in tourism -- perhaps B.C.'s fastest-growing industry -- and in tourism-related industries. And it's evident in jobs. Tourism has grown over the past six years from a $4 billion to a $7 billion industry in our province, British Columbia's third-largest export industry. In the past decade, 300,000 new small businesses have opened. These entrepreneurs have created thousands of jobs. Small business accounts for about 730,000 jobs, an increase of 72.5 percent during the decade.

[6:45]

Promoting culture, heritage and sport and keeping alive the fire of our future and our past strengthens our identity and also provides jobs. Activities that attract people, that give us a chance to show off the beauty of our province, that introduce others to the warmth of British Columbians -- these activities all generate jobs.

When thousands of participants and visitors come to Victoria this summer for the 1997 North American Indigenous Games, they will witness and participate in an event of historic proportions, and their very presence will create jobs. When visitors step back into the past that was this province's reality, into Barkerville and Fort Steele, their very interest in our heritage translates into jobs. When every seat in a Vancouver theatre is sold out to hear the pride of Dawson Creek, Ben Heppner, people are put to work.

My ministry is a diverse and fascinating one, filled with good news. Still, it has been a challenging year. In the process 

[ Page 4101 ]

of reducing spending, we've had to take a hard look at the programs the ministry offered, and we've made some difficult decisions about where cuts would be made. Before doing so we consulted stakeholders, who said resoundingly that they wanted less government, less bureaucracy and less red tape.

In tourism this government has listened to our industry partners, and as a result we now have a new legislated agency for tourism, with formula funding based on a percentage of the hotel room tax, enshrined in legislation. As the tourism sector grows, the agency's revenues will also increase. The new agency is a partnership with industry, and new opportunities exist to raise funds from other sources.

As an independent agency, Tourism British Columbia will work closely with the private sector, giving it greater flexibility to capitalize on new opportunities and create more jobs in B.C.'s growing tourism industry. Tourism B.C. will be overseen by a board which will have financial, legal and management authority. The board will represent regional and sectoral tourism industry interests. The new agency will pursue innovative partnerships and new revenue-generating activities, with a focus on marketing and business development.

The small business sector and cooperative part of my ministry. I am pleased to say that small business is the growth area of British Columbia's economy. Our most recent statistics indicate that there are about 290,000 small businesses in B.C. That's 98 percent of all businesses in the province. Almost half of all B.C. jobs are small business. By 1994 small businesses accounted for 728,000 jobs, an increase of 72.5 percent over the decade. About 300,000 British Columbians are self-employed, and 42 percent of those are employers themselves.

When small business speaks, our government has listened. Business leaders have told us that they want to eliminate the deficit, and we have been diligently working towards that aim. They want us to reduce red tape, cut taxes for business and reduce government presence in businesses. And we're doing all of those things.

Last year our government introduced two initiatives to assist small businesses: a two-year tax holiday for qualified new small businesses and a 10 percent reduction in corporate income tax for small business. The income tax exemption for newly incorporated businesses gets them off to a more solid start, encouraging them to grow and create jobs. The tax rate reduction takes a further tax burden off small businesses. An estimated 2,000 new businesses per year will meet the qualifications for the tax holiday, and the tax rate reduction will benefit about 40,000 small companies.

Business has said that it wants less government and less red tape, and we've responded to that. At seven -- actually, I think it's nine now -- government agent's offices, as well as the Canada-B.C. Business Service Centre in Vancouver, we have reduced paperwork and simply made it easier for people to get into business. We've done this through my ministry's one-stop business registration program, which allows people going into business to complete four essential registration forms in one visit to one terminal. It also shortens the process from about two months to about two weeks.

The Canada-B.C. Business Service Centre has the most complete business information available in the province. There, existing and new businesses can register their businesses and find essential forms, advice and information. Now a new interactive business planner which we recently launched at the centre means anyone with Internet access can develop a complete business plan, with all the advice available in the world, at their home computer.

As well as the small business sector, we have the equity branch, which is helping business by administering equity investment programs that provide risk capital to small and medium businesses. Independent evaluation has shown that the employee share ownership plan, equity capital program and the Working Opportunity Fund fill a risk capital gap for fledgling or expanding small business. This capital helps keep businesses on firm footing so they can create jobs. The employee share ownership plan encourages employees to invest in their employer and to participate in the affairs of their employer by being shareholders. The equity capital program assists B.C. small businesses in attracting much-needed equity financing from private sector investors. The Working Opportunity Fund is a labour-sponsored fund which raises funds from working British Columbians for investment in small and medium businesses.

One of the focal points of our government is youth. Many of our kids are finding that prosperity and job independence are theirs to create by going into business and by being their own bosses. Through my ministry's extremely successful youth business and entrepreneurship program, You-BET, young people are learning and developing business skills. Last year, about 1,600 young people took the introduction to business workshop, which is a significant oversubscription to a plan designed for about 1,000 people. Of the 1,600 people, about 10 percent completed the full course, and there are now dozens of new businesses owned by entrepreneurs between the ages of 19 and 24. The success of the program exceeded even our most optimistic projections, and indications are that that success will be repeated over the next year.

This year for the first time, the You-BET program is introducing cooperatives as an option for young people who are interested in going into business. Cooperatives, of course, have been part of British Columbia for over a century and are a significant component of the province's economy. Some 1.8 million B.C. residents now belong to cooperatives. Credit unions are a great example of cooperative business. Now there's a new generation of co-ops providing viable alternatives for communities that want to retain some control over their economic development, for people in business who want to improve their competitive edge by cooperating together and for individuals or communities that want to put social and community values on a par with business values through the cooperative model.

Film is one of the higher priorities of our government and certainly of my ministry. During 1996, the film and television industry edged out Ontario to become the third-largest film industry in North America, at $537 million spent directly in British Columbia. The net economic impact of film in B.C. was $1.5 billion.

Not only are the dollars impressive, but so are the opportunities for B.C. talent -- the artists and technicians who work on the films. In 1978, people hired locally on productions accounted for about 40 percent of the average crew; today that number is about 97 percent of the average crew. Today also, there are more than 10,000 British Columbians who are directly employed full-time in the film industry. When part-time and seasonal work are added in, that number leaps to 25,000 per year directly employed in this exciting sector. We have an enormous infrastructure with ability to crew and service 30 projects simultaneously. The size of the infrastructure certainly is reflected in the size of the industry -- it's very significant.

One of the reasons that we have this kind of capacity is our government's willingness to enter into partnerships with 

[ Page 4102 ]

the industry, such as the deal we made with MGM last spring. MGM put money into capital improvements at Bridge Studios, which is the government-owned facility in Burnaby, in return for a guarantee of stage time. The film and television industry has a multiplying effect throughout our economy. British Columbia accommodation suppliers, accounting services and vehicle rentals are only some of the businesses that benefit directly and significantly from production activity.

I recently announced film production incentive programs that will extend the industry into regions and will assist the creation and production of film and broadcast productions originating in cities such as Victoria, Nanaimo, Kelowna and Kamloops. I'm proud that we've been able to make this contribution to the growth of B.C.'s own film industry.

Culture, of course, is a significant part of my ministry, and our government remains committed to public support for the arts and culture, and to a strong and independent B.C. Arts Council. Culture provides jobs and economic activity -- something which the Arts Council reminds all of us regularly. Statistics Canada estimates that there were some 52,000 jobs in the cultural sector in B.C. last year, compared to 42,000 in '91 and 28,000 in 1981, which is a phenomenal rate of growth. The continued growth of this dynamic sector is directly related to cultural policies aimed at ensuring the development of our artists.

The past year has seen some notable cultural achievements by B.C. artists. For instance, Elektra, a mixed adult choir from Vancouver, represented Canada at the international choral symposium in Sydney, Australia, and received a wonderful reception. Timbre, a community choir from Port Alberni, gave an outstanding performance at Carnegie Hall. Richard Margison, one of the world's greatest tenors, came home to Victoria and received an honorary degree from UVic.

Perhaps the top cultural achievement of this government is the new Arts Council Act and the appointment of B.C.'s first independent arts council to administer cultural funding. I'm very proud of the council's accomplishment. We also have the new Cultural Foundation Act, which establishes a means to attract increased giving to the arts through tax incentives. As well, we have B.C.'s first cultural policy that clearly sets out our priorities.

Heritage is, of course, part of culture and therefore very significant; and we're committed to promoting the preservation of our heritage. We must increase public awareness of our history and our identity of who we are as British Columbians in a rapidly changing global marketplace. I want to ensure that heritage values are on the agendas of provincial and local governments, as well as the private sector. Last year there were some $108,000 awarded to 68 projects under our Partners in Community Heritage program, and last February I announced $185,000 to complete a new visitor reception centre at Fort Steele, our major heritage attraction in the East Kootenays. Those costs will be recovered through the government share of revenues from stores in that structure.

Other noteworthy activities from last fiscal year include these: the Heritage Trust allocated $735,000 to 76 projects; a restoration of the historic McLean's Sawmill near Port Alberni; and the restoration of St. Ann's Academy in Victoria was $16 million.

The Royal British Columbia Museum is the showcase of this province's culture and heritage, its beginnings and its journeys. The strength of this world-class museum lies in its clear and balanced mandate, which requires that it collect, preserve, research and disseminate information about the human and natural history of British Columbia. Last year the museum became a special operating agency with an approved business plan, which was approved following extensive consultation with communities across the province.

While hundreds of thousands visited the museum last year, the museum also visited people with its living landscapes program that went into the regions of British Columbia. The summer exhibit Showcase of Wonders reached hundreds of thousands of summer tourists and featured the participation of more than 50 British Columbia communities. As well, the museum produced two 13-part television episodes: "Safari Ocean Adventures" and "Investigators of the Last Frontier." Both aired throughout British Columbia on the Knowledge Network and nationally on the Discovery Channel, as well as internationally in 32 countries.

About 750,000 people -- one in five British Columbians -- are registered members of a provincial sport organization. Of this group, three-quarters are under the age of 19. Our government recently announced Sport Safe, Canada's most comprehensive program to fight harassment and abuse in sports and recreation. Provincial sport and recreation organizations must have anti-harassment policies and procedures in place as a condition of government funding. With Sport B.C., exceptional policies and procedures have been developed with the full cooperation and support of the sport community. Volunteers, parents and children will know what harassment and abuse are and what to do about it should such incidents occur.

[7:00]

We're making it a priority for youth to be involved in the decision-making around sport. Sport and recreation have the power to help us address issues affecting youth. It's more effective for the taxpayer to provide healthy alternatives than to deal with the consequences of not doing so. Each year the B.C. Games -- Summer, Winter, Disability, Seniors and the Northern B.C. Winter Games -- bring sport opportunities and community celebrations to British Columbians of all ages and backgrounds across the province. In 1996 more than 45,000 participants and volunteers were involved in B.C.'s five sets of multi-sport games. Recognizing the tremendous opportunity these games provide, the provincial government and the B.C. Games Society have moved the Summer and Winter Games to a two-year cycle, so that the entire package of games can remain a viable community celebration.

Our regional sport delivery program is also helping to build healthy communities. This program was launched in November '94 to bring sports services and programs closer to home for athletes and coaches throughout the province. The program has established four regional centres: Prince George, Kamloops, Abbotsford and Nanaimo. Four coordinators and 46 coaches have been hired to deliver sports programs in their regions. Healthy individuals make for strong, healthy communities, and the regional sport delivery program is providing jobs, resources and partnerships to support community development.

[ Page 4103 ]

This ministry is about jobs. It's about the entrepreneurial spirit; it's about keeping who we are, past and future, strong and relevant. It's about encouraging partnerships and innovations that will strengthen the economy. It's about helping young people find opportunities in a changing world, while keeping them in touch with our heritage.

By teaming up with the private sector to market our province, we combine our strengths to increase our share of world tourism markets. By making it easier to go into business and stay in business, more British Columbians will be at the helm of their own economic destinies. By building on our distinction as the home of world-class films, we not only present British Columbians to the world but provide new and exciting job opportunities for our citizens and especially our youth. By making it possible for residents and visitors to touch our heritage and get involved in our culture, we promote industries that benefit all regions of the province.

I'd like to thank my ministry's staff for their professionalism during this year of change. I appreciate their support, and I am certainly proud to be associated with them. We will continue developing programs and initiatives which are truly representative of and responsive to the needs of British Columbians. I'll be pleased to answer any questions after that general overview.

I. Chong: I thank the minister for providing such an in-depth overview of her ministry. Unfortunately, last year we did not have the pleasure of having that information, as there was a temporary minister at the time, as the current minister now knows. So it's a refreshing change, especially this year.

I just wanted to comment very briefly. Last year I made fairly lengthy opening remarks, but I feel that, it being my second year as critic for this particular ministry, I won't engage in that particular line of conversation.

I do want to comment on some of the things the minister has spoken about and in particular the statistics that the minister has given us. I think we all know that statistics are as good as the people who provide them, and we all know that depending on who you get your statistics from, you will get the answers you're looking for. So what we will be looking at over the course of our estimates debate is to solidify the statistics that the minister has provided. And where there are areas of dispute or of difference, we will be looking to this ministry to help us and assist us in clarifying those particular figures.

In the area of small business, I recall that last year the temporary minister and I disagreed on things as simple as bankruptcies, where he felt that bankruptcies were down and I felt bankruptcies were up. I produced half a dozen or so articles to show that that had in fact been the case. So clearly there are those kinds of changes.

Also in the area of Small Business, sometimes what might be included in the statistics are home-based businesses. Whether or not they should be will also be an area that we can probably canvass. As well, you know there are more and more people going into a self-employment mode when their corporations or government have downsized. When they set up their small businesses and incorporated were those counted as jobs or not? All those kinds of areas of reporting cause confusion to the general public and cause confusion, I think, to those of us who want to get to the bottom of things. So I do want to say that those are the kinds of things that I think it's incumbent upon us to ask -- and for the minister, if she's able to, to provide us with that information, so that we both clearly know what statistics we're looking at.

It's encouraging to know that the minister feels jobs are on the rise, and that's part of this ministry. We've seen in the past that, again, those figures have been manipulated. We feel there have been job losses, perhaps in certain sectors, perhaps not in this particular sector. But clearly there are jobs that aren't. . . . Numbers of jobs have been lost. We want to again confirm those so that we know. By setting targets, we will be achieving those targets or be able to measure the effectiveness of programs to make sure we meet them.

The minister also mentioned the tax freeze, and I also mentioned this last year to the temporary minister -- about the tax freeze given to small businesses. Once again, I felt at the time that perhaps there hadn't been a more realistic approach taken, given that there are more small businesses that are starting up. Only those that had taken the initiative to incorporate would be able to benefit from the small business tax break.

Other questions that we will be posing when we do get into Small Business -- and I'll give this as a forewarning to the minister -- are such things as: what will happen after the two-year freeze? What effectiveness has there been with the two-year freeze? As we know, a lot of small businesses lose money in their first two years of business, anyway. So where are we headed? And was in fact that program -- if you can call it that -- as useful as it was. . . ?

A number of members on our side of the House have had questions posed to them from their constituencies, and from small businesses in particular, that have been concerned about the direction that this ministry is going in the area of entrepreneurial programs. They're concerned that small businesses are suffering from too much regulation, too much red tape.

One particular industry I'm aware of -- as I'm sure the minister is -- is the Auto Dealers Association. I know they probably have canvassed the minister, as they have canvassed us on the opposition benches, that there has to be a second look at those issues. Even though the businesses dealing with auto vehicle rentals are. . . . It's a small business as well. Some may not think so. But again, they're suffering from things there, as well. So we will be looking at the things. . . . We all recognize that 48 percent of all the jobs in British Columbia, I believe, are generated from small businesses.

As we move into other areas such as Tourism, the minister knows that we've had some dialogue on the Tourism British Columbia Act recently, through second reading and committee stage. But there are still some questions as to what is left within this ministry, as to where they're headed. My colleague from Parksville-Qualicum will probably start off and lead us with those questions in that area.

We will also be looking at the culture and arts, recreation, sports and sport fishing areas. Last year, unfortunately, due to the timing, there wasn't sufficient time to canvass those areas. And since the year has passed there have been a lot of questions raised, as well as from people in the cultural arts industry, particularly about funding. But, again, we've agreed that funding isn't the only issue, and we will be asking the minister if she could provide us some information as to the B.C. cultural policy that her ministry is looking at or perhaps is considering changing.

Also, last year we didn't have sufficient time to canvass the B.C. Film Commission, the PNE, the B.C. Pavilion Corporation or the Royal B.C. Museum. I would like to serve notice to the minister that in fact we will be spending a fair bit of time dealing with those.

[ Page 4104 ]

Amateur sports and recreation, as well, deserve some attention this year. Given that a number of programs have been cut on the educational side of it, that directly impacts on amateur sports as extracurricular activity. That spawns away from the education side of it.

The other area we will perhaps be canvassing with the ministry as well is the community grants program, the B.C. 21 projects. As the minister is probably aware, that question was raised last year. It was also a topic of discussion in our Public Accounts Committee when the minister, I think, was still on that. If not, then it's an area that we still wish to pursue, and we would like information on that perhaps, again, closer to the conclusion of the estimates.

So with that, what I would like to do at this particular time is allow my colleagues to start -- I know they're anxious -- with questions. And we would like to start off by asking a number of questions with regards to the Tourism division of this ministry. With that, I'll defer to my colleague.

P. Reitsma: Thank you very much, Mr. Chairman, and good evening to the minister as well.

I have quite a number of questions. The ministry will be very unhappy about some of the statements the minister will hear; some of them they will be happy about. It's an accounting session, an accountability session. For the beginning, I wish to go back to the promise of the former SOA, because I want to go into the philosophy and set some parameters to compare with the new Crown corporation that has been formed.

Before I start. . . . Tourism, of course, is my background. I've been in the industry for 31 years. I started working with cruise lines on the Holland America line. For a number of years, I've been able to traverse almost every ocean and most continents, except for Australia and New Zealand. Actually, I've been everywhere else for about three and a half years. I'm in the tourist industry at the moment, in travel agencies. I used to have four; I'm down to about one or two. I operate a motel, which I've done for eight or nine years.

So I'm not only interested but fairly conversant in the industry. In fact, I've done it for 31 years. It's a marvellous industry. My goal, my aim -- and I hope the minister and ministry's as well -- is that there's no reason in the years to come why tourism ought not to be the number one industry in the province. I've done a lot of guiding of tours, national and international, for big companies and the Holland America line, Princess Cruises, the Royal Viking Line, Globus Gateway, Trafalgar Tours. I've been down in South America. I've been in Africa on the savannas, if you like -- game -- through the canal many times -- everywhere.

But I've also done Totem Circle Tours, going through the Island up to Port Hardy, Prince Rupert, up to Prince George, down into the Okanagan. I've taken tours up to the Penticton area, the Okanagan area and all over B.C. as well.

Interjection.

P. Reitsma: I will yield to my colleague from Terrace so that he can get in his Terrace. . . . I have been in Terrace a number of times, as well, as a matter of fact.

So, indeed, I'm extremely interested. It's been all of my life, the tourism industry. However, I'd like to respond first and go back to the former SOA, which was announced in about December 1995. It was reannounced in February, and finally, of course, it was officially announced in April of 1996. During the estimates, as the minister knows, because she wrote an article refuting some of the comments I made in terms of the new Crown corporation -- I'm jumping ahead a little bit -- I mentioned that I thought the formation of another Crown corporation -- the action, not the tourism ministry -- was quite sleazy the way it came about.

Hon. J. Pullinger: That's not quite parliamentary.

The Chair: Member, could I. . . ? Just take your seat for a minute. I think we're here to debate the minister's estimates in as parliamentary fashion as we can, so we would use language that is suitable, as well. Temperate and moderate, I believe, is the way it's phrased.

P. Reitsma: If the Chairman wishes me to retract that, I'll ask the newspaper to do the same thing. But I was referred to in the newspaper article by those comments, as well.

What I find unsavoury is the formation of a new Crown corporation. As I mentioned, in 1995 and again in April 1996, just before the election, the Premier and the Minister of Tourism of that day -- we've had a quite a number, actually -- proudly announced that after two years of negotiation with the Council of Tourism Associations, a long-term deal had been struck. The reason I mention that is because I know that COTA will be listening to this and will be getting the transcript of this, as well. Like everyone else with COTA, we only have one thing in mind, and that is the welfare of the tourism industry in B.C.

[7:15]

After the election, the signed contract -- which, as I mentioned, became another victim of the broken-promises list -- was thrown out, and a new Crown corporation was established. The funding was cut by 25 percent, and the minister remained silent. The hospitality-tourism industry -- which, as I mentioned, has been part of my life for a long, long time -- is B.C.'s second-largest industry at the moment, employing more than 225,000-some people. In effect, it is established that one in every eight people in B.C. is employed, directly or indirectly, in the tourism industry, and one out of every five newly created jobs is in our industry -- which is extremely important.

As I mentioned, the Liberal Party advocates honesty and truth in budgeting and sticking to promises made and agreements signed. It is unfortunate that this government didn't believe in that noble philosophy. In fact, that's why so many people don't believe this government. That's why it changed to a new Crown corporation, with a reduction in funding of some 25 percent.

Although I was unsuccessful last year in pushing the government to legislate the tourism funding, which is so extremely important. . . . We all know that once you've got 

[ Page 4105 ]

legislation you can easily change it, as we've seen in FRBC and as we've seen in the plus or minus guaranteed in the municipal grants. It's really almost not worth the paper it is written on. Nevertheless, we the B.C. Liberal Party and the caucus. . . .

Interjection.

P. Reitsma: I wonder if I should yield to the comments.

The Chair: Through to the Chair, please, member. Continue, but through the Chair, please.

P. Reitsma: The Liberal position, of course, is to support legislative funding. It's going to be more difficult to change that, although it has been done, but that's just a majority decision. Over the span of a year we've had four Ministers of Tourism and three deputy ministers. This revolving-door attitude doesn't promote the continuity and stability the tourism industry is looking for, which I think is extremely important.

The Liberal Party strongly opposes the sideshifting and the hiding of the tourism funding through yet another Crown agency. I find this credit-card approach to hide expenditures from current expenditures is another reason the debt has risen for the sixth consecutive time. We just don't use that type of fiscal philosophy in our party. Debt, of course, is future taxes for our children, and at some time it has to be paid.

Before I go to the first question. . . . When in opposition, the NDP prided itself upon its commitment to invest in tourism. Now in government, the NDP has abandoned the industry. In fact, under the NDP the industry has been hit hard with increases and a myriad of taxes, licences, fees, permits, massive reductions in the tourism industry's budget, the lack of a developed strategic plan in the industry, Employment Standards Act increases in the minimum wage and uncertainty regarding aboriginal treaty negotiations, which are all part of and very important to stability for the industry.

Leading up to the first question, on August 12 when I addressed the then minister, I stated COTA's position that the industry requires a secure, long-term funding source which will ensure the future of B.C.'s competitiveness. This source would include the already significant marketing dollars generated by industry. The government source should be linked to the performance of the industry. This funding would then provide for long-term budget certainty for sustainable market development and marketing.

This form of budgeting has been used successfully in other jurisdictions and has resulted in a significant net increase in the overall contribution. COTA believes this can be realized in B.C., so I asked the minister at the time if he wanted to render a comment. Curiously, the minister of the day said: "No, it is an approach to budgeting which I don't think makes sense."

So the first question to the minister is: does she concur -- and if she does, it's obviously opposite to the views of one of the ministers in the past -- that legislative funding will ensure stability and continuity in our industry?

Hon. J. Pullinger: I'm going to resist the temptation to follow the member on the low road and respond to many of his comments. I will simply say that I am very aware that for at least two decades, the tourism industry has wanted the kind of legislation that we introduced and passed very recently in this House. I find it a little difficult to take seriously the member's comments that this is somehow a Liberal initiative. The facts are well documented, the lobbying has gone on for years and years, and I'm very proud that our government has finally delivered something that the industry wants so very much.

The Chair: Before I recognize the member, I must caution all members that the matters of legislation and the need for legislation are not suitable debate for estimates.

P. Reitsma: I'll disregard the low road. At least we have a two-way street when we approach problems. I'd like to reiterate that in August of last year -- and, in fact, in April of last year -- we specifically asked the government to legislate funding. If the funding had been legislated, there would have been security, stability and continuity for three years, as was promised. That promise, of course, was broken.

I'd like to go back to establish some parameters which I can use later for the new Crown corporation in terms of the philosophy, goals, mandate, business plan, marketing, success and FTEs of the former special operating agency. I believe that it is important for us to do some comparison. To the minister: what were the goals of the former SOA?

Hon. J. Pullinger: I'll read the beginning of the planned actions -- "Marketing, General" -- but then I would refer the member to the business plan for details. I'd be happy to provide a copy, if you'd like it, rather than take the time of the House to simply read the business plan into the record.

What the business plan for '96-97 says is:

"Tourism British Columbia will work to increase awareness of British Columbia as a preferred tourism destination and ensure that the supply of tourism resources matches the demand for them. To do this, it will develop cooperative joint-venture partnerships with industry and other government agencies. It will also identify and develop revenue-generating products and services."

In terms of the operational side of the SOA, what is or was the government trying to achieve with the special operating agency?

Hon. J. Pullinger: With the SOA, we were taking one step along the road that we have walked to the end of, really, with the Tourism British Columbia legislation, which we just passed in the Legislature. That was to provide a voice for tourism, greater stability for tourism funding and the ability to do better planning. We have taken a giant step forward with this innovative legislation, which we recently passed, in that we are providing legislated dollars, flexibility and the means by which Tourism British Columbia can carry surpluses forward and generate its own resources. So the SOA was one step towards what we have now done, which is what the industry has wanted for some time.

P. Reitsma: Again, of course, we know of the passing of the bill in terms of legislated funding. I would be curious to know from the minister why no legislated funding was proposed or enacted for the former SOA to solidify it and to really have things come to closure. Instead of the whole package, why was 

[ Page 4106 ]

no legislated funding proposed or enacted on the former SOA? I believe a three-year guarantee was proposed. So I'm curious to know, whilst there will be legislated funding now, why there was no legislated funding for the old SOA.

Hon. J. Pullinger: An SOA is an agreement between any given ministry and the Ministry of Finance. We have now legislated funding in legislating the Crown corporation.

P. Reitsma: I have to pick up on the agreement between the industry and the government.

Hon. J. Pullinger: The Minister of Finance.

P. Reitsma: The Minister of Finance -- that's fine -- or the government. I cannot walk away -- or run away, really -- from the fact that indeed there was an agreement. There was a three-year agreement. A certain business plan -- and I'll get back to that later -- was developed and agreed upon, and also funding was agreed upon for three years. As I mentioned earlier, hands were shaken; contracts were signed; photos were taken. That was an agreement. That agreement was a promise that has been broken. It's broken. Those are the facts. What were the challenges of the old SOA, and are the challenges still ongoing until we are in the new Tourism British Columbia? I can wait, if you like, until you've conferred. My question was: what are, or what were, the challenges of the old special operating agency at the time it was formed?

[7:30]

P. Reitsma: When I talk about challenges in my own business, with my own tours, the challenges I have are to make sure everything is there, that reservations are looked after, that people are picked up on time, that they awaken on time and that people have a good time -- in other words, to have a good, working, operative business plan. I'm still talking about the former SOA, which in later years will form the basis to compare the new Tourism British Columbia Crown corporation, so there are some benchmarks. What were the long-term goals, and how well have those long-term goals been progressing towards achieving the goals that were set out?

Hon. J. Pullinger: The SOA has not been in existence long enough to track any long-term trends. The goals of the marketing branch of my ministry, which has operated with an advisory board for the last year, are virtually the same as the goals of the new Tourism British Columbia Crown agency, and that is to market British Columbia and to develop the industry. The purpose is to develop the industry and create jobs throughout British Columbia. We have had remarkable success in the last five years. We've gone from a $4 billion industry to at least a $7 billion industry. The industry virtually doubled, or came very close to it, since 1991, with several thousand new businesses and 23,000 estimated new jobs. The industry has done remarkable work.

It's also very clear that we're at a crossroads in tourism. International competition is increasing, and in order to keep our competitive edge, we will have to be very diligent and very careful to stay on the leading edge. That is why industry is so thrilled about having the new Crown agency, through which it can partner with government to ensure that we keep that competitive edge.

P. Reitsma: Is the government developing and maintaining the capacity to deliver results in the future?

Hon. J. Pullinger: Results of what?

P. Reitsma: Results in terms of trying to achieve what they wish to achieve.

Hon. J. Pullinger: This government has just introduced and passed legislation that is a landmark, that is leading the country, that is historic and that the tourism industry is extremely pleased with. By moving our marketing function into a Crown agency, I expect we will have advantages by that agency working very closely with industry in keeping British Columbia's tourism industry on solid footing and keeping our competitive edge in the world.

P. Reitsma: Does this government have the ability to maintain or improve results and the capacity to deal with the future, and with what kinds of marketing tools?

Hon. J. Pullinger: The marketing of British Columbia for tourism will be done through the new Crown agency, which is historic, which is a landmark -- the first in Canada. They have all the tools they wish to create at their disposal, including legislated funding, a board which will be dominated by people from the industry and the flexibility to enter into new kinds of partnerships and agreements in order to continue to market British Columbia in the best way industry and government together can.

P. Reitsma: I'll finish the operational part of the questions. I'm still talking about the much-heralded, old special operating agency that the whole industry, including myself, was so much looking forward to. I guess when Father Christmas came around, it wasn't in the bag, unfortunately. What was in the bag, of course, was reduced funding. Sometimes when you're under the gun, I suppose, and they're not empty bullets, you take what you can get under the threat of all-or-nothing.

In terms of the planning, could the minister provide some analysis of key issues and trends?

Hon. J. Pullinger: The industry trends are very much upwards. We've gone from a $4 billion to at least a $7 billion industry since 1991. We also have seen a market increase in jobs. The tourism industry has been part of what has kept British Columbia very much on the leading edge of job creation for the last six years. We also see in terms of industry trends themselves. . . . Again, I'm simply reading from the business plan. I'd be happy to provide the member with the business plan, which he is welcome to copy and mail to people if he would like, for a lot more of the details.

Industry trends make it very clear that as the North American baby-boomers age and their children grow up, there will be an increasing demand for soft adventure and specialty getaways. The World Tourism Organization indicates that the number of people travelling within their own countries annually is estimated to more than double the total number of people who travel internationally. The number of major U.S. markets with direct air service to B.C. has doubled 

[ Page 4107 ]

to 25 since the 1995 Open Skies agreement came into effect. Open Skies is transforming British Columbia into a more competitive North American long-haul market. European outbound travel grew 4 percent in '96; overseas travel by Europeans grew 7 percent, nearly double the outbound rate, reflecting decreasing prices, airline deregulation and increased competition. British Columbia, with its image of being clean, safe, friendly and unspoiled, is positioned strongly to attract more European visitors.

In other words, the trends are very good. Over half of the tourism dollars in British Columbia are generated from British Columbians travelling within the province. Our government's initiatives to build the infrastructure of this province -- good roads like the Island Highway that we recently opened, Duke Point terminal that we opened today -- are providing the kind of infrastructure that tourism needs. The creation of 250 parks in the province has certainly underscored and reinforced British Columbia as Super, Natural B.C. and a wonderful place to visit. We've won international awards for park creation, and our resource management in British Columbia has gone from one of the worst to one of the best. We have one of the best education systems in the country, in that we have increased the amount of and the variety of training. We're getting young people back to work, in part through the very successful Destinations program, which cooperates with the tourism industry.

In short, this government is very actively involved in creating the human resources and other infrastructure to assist this industry's growth. As well, we are protecting the natural resources on which the industry very much depends. I would say that within the normal vagaries and vicissitudes of the marketplace, we can look for the tourism industry to continue its upward trend in growth.

P. Reitsma: Part of the question, of course, was answered in terms of the trends. With tongue in cheek, since the minister mentioned two rather wonderful happenings in a riding which also abuts a portion of mine, I noticed that the paper last week picked up on the fact that although the Nanaimo Parkway is in my riding, apparently my staff had to phone the day before it was going to be opened to find out what it was all about and to try to get an invitation for me -- which surprised me in a way. According to the paper that picked it up, since it's in your own riding. . . . It's the same with the B.C. Ferries Duke Point, which has been in the making for a long, long time. As a matter of fact, dare I say. . . ?

An Hon. Member: You voted against it.

P. Reitsma: As a matter of fact, a couple of years ago I was on the mayor's task force that recommended it.

Interjections.

The Chair: Order, members, order.

P. Reitsma: But dare I say all or most of the Island Highway. . . . Wasn't it thought about in the fifties, sixties and seventies, and in '86 it was announced by the Socreds? But that's just a side comment.

Incidentally, given the fact that. . . . I know it's a bit anecdotal, Mr. Chairman, but the sun is shining and there's a blue sky. Another two papers phoned me today, asking: "How come, as a riding member, you weren't there with the rest of the dignitaries and the MLAs?" It's probably because I'm in the opposition, I suppose, but I was happy to be there.

The second portion of the question is the key issue. The minister has identified a couple of. . . .

Interjection.

P. Reitsma: I could take my chair, hon. Chair, and let the member from. . . .

An Hon. Member: Yale-Lillooet.

P. Reitsma: Harry Rosen, as they used to say.

The second portion of my question is: could the minister provide some analysis of additional key issues? I appreciate that infrastructure is a key issue, but would the minister be able to identify some of the key issues and give some analysis of those?

Hon. J. Pullinger: I think the best way to deal with the kind of detail the member is looking for is by providing him with a copy of the business plan, which I'm most happy to do. In fact, we can probably get one over here before too long.

P. Reitsma: While I am interested in the business plan, I'd like to reiterate that I speak on behalf of people who would like to know and would like to hear what the minister has to say on that -- not necessarily verbatim, quoting from a business plan, but with some personal spirit and commitment. I'm not suggesting that she should be one of those crystal-ball seers, because they often seem to explode, anyway. But I think some enthusiasm, commitment and personal observations are very important, because I think that one of the key issues is schooling and training. I wonder if the minister could comment on those.

Hon. J. Pullinger: Hon. Chair, I'd be delighted to answer questions about my ministry estimates. I really don't think it's a good use of the House's time for the hon. member and I to engage in an esoteric philosophical debate about the issue. But I'd be more than happy to do that outside the House and to provide the member with any information -- the business plan or whatever -- for that kind of detail. But I really think that in the House we should be answering questions about the spending estimates of my ministry, which is the subject at hand.

P. Reitsma: Before we go to my colleague from Okanagan-Penticton, I think it is extremely important because one out of every eight people in B.C. is associated, directly or indirectly, with the hospitality industry. One out of every five new jobs created in B.C. has to do with the hospitality industry, directly or indirectly.

As far as I'm concerned, some of the tools in our industry to make it a more flourishing one, a better one, so that more people come to hotels, which means that more hotel tax will be collected, which means that more. . . . As the minister promised, there's a wealth of possibilities to increase the funding. Those are basic ingredients for healthy, sustainable, stable, secure business. I find it extremely important, and as I see it, those are key issues.

[7:45]

[ Page 4108 ]

Interjection.

T. Nebbeling: Yeah, the accent -- one Dutch accent after the other. We're taking over.

An Hon. Member: Double Dutch.

T. Nebbeling: In 1996 the back-country operators were called to meetings throughout the southwest area to hear the layout of the policy for back-country operators. Shortly after that, around the end of 1966, a call was put out for operators to apply for permits. A lot of the smaller operators provided proposals for operations. Everything looked quite good until recently it became known that Lands and Parks, which has been dealing with the applications, is no longer responsible. Can the minister confirm that, or is that just a rumour?

Hon. J. Pullinger: I didn't understand the last part of the member's comment. I would appreciate a little clarification.

T. Nebbeling: I don't mind doing that if the minister is willing to promise that when I'm asking the questions, she's not talking to her advisers -- because that's the reason she didn't hear.

Interjection.

T. Nebbeling: It's not chippy; it's a fact.

The question I was asking is: can the minister confirm that Lands is no longer responsible for the implementation of the back-country tourism policies?

Hon. J. Pullinger: It's amazing that after all of that, it was a question that has nothing to do with my ministry. You'll have to ask Crown Lands.

T. Nebbeling: I'm extremely sorry that the minister is so touchy. But this is a tourism issue, and I would have expected that the minister would have known what the commercial back-country policy would entail and what the objectives are for the Ministry of Tourism's involvement. So if the minister is not aware of it, maybe she can ask her advisers what the future of the commercial back-country recreation policy is.

Hon. J. Pullinger: My ministry has been actively working with COTA and the Ministry of Environment to move the back-country recreation policy forward. It's my understanding that a discussion paper and recommended changes have been developed by the ministry responsible.

T. Nebbeling: I'm happy to hear that the minister suddenly realizes that as Minister of Tourism she is indeed involved with the back-country commercial recreation policy.

Having heard that answer, can the minister give me a clarification on what has happened with the many requests for permits that have been submitted to the Ministry of Forests and the Ministry of Lands, and the status of all these different applications?

Hon. J. Pullinger: I would refer the question to the Ministry of Forests and the Ministry of Lands.

T. Nebbeling: I'm not here to embarrass the minister by showing the lack of knowledge of such a very important tourism component. . . .

The Chair: Member, could I ask you to take your seat, please. We're dealing with the estimates for the Ministry of Tourism, and I would ask the member to direct his questions to those estimates.

T. Nebbeling: I am baffled, because we are talking about tourism operators. We're talking about winter tour operators like snowmobile operators and cross-country ski operators. We're talking about heliski operators. These are tourism operators, and I'm just asking a question about whether the minister has any information on where the applications are for these operators, to be assured that come the following winter, they will be able to work in areas where they've been working for the last number of years, but this time with a permit -- under the new policies that have been set out by this government.

The Chair: Perhaps the member could pursue another line of questioning.

R. Thorpe: I wonder if the minister could advise me of what financial and human resources in her ministry are dedicated to back-country marketing.

Hon. J. Pullinger: There is no one in the ministry whose express job it is to deal with the Ministry of Environment. We do have a land use branch, which involves itself in any land use questions, including the back-country recreation policy. The way it functions is that staff are deployed, on a priority basis, to the issues that the ministry and government are dealing with. There isn't a specific unit in the ministry, if that's what the member is looking for.

T. Nebbeling: By the same tone, in the past the fact has been recognized by the Minister of Tourism that ecotourism -- and the commercial back-country policy applies to ecotourism -- has been a growing part of the industry and creates substantial revenue. From time to time the minister makes it very clear that she's proud of the fact that the tourism industry today creates $7 billion. No doubt the minister knows how that $7 billion is made up in components. There must be satellites within the ministry that allocate and recognize certain funding for tourism. Would the minister maybe give me an idea of what the revenue is from ecotourism in this province today?

Hon. J. Pullinger: I don't have that kind of detail here, but I'd be happy to provide to the member, in writing, with whatever it is that we have along that vein.

T. Nebbeling: It's clear that it is a segment of tourism that is growing. I would expect that the Ministry of Tourism is interested in seeing what is happening in this particular sector. The lack of policies being in place after this period of planning. . . .

I believe that the government actually hired an outside consultant not only to plan but to present the policies to industry operators and to come up with recommendations for issuing permits. The fact is that this is an important component that is being developed, especially for the European market. Can the minister give me an idea if, within the expenditure that is planned for the coming year, there is a certain amount of money put aside for marketing ecotourism?

Hon. J. Pullinger: Tourism British Columbia is simply the marketing arm, with some development responsibility. 

[ Page 4109 ]

The status now of the special operating agency advisory board will be the same mandate for the new Crown agency.

I think what the member is looking for is the various marketing programs and projects, such as those for the wine industry in the Okanagan and things like that. Those are done through the regional tourism associations. They have been provided with funding by Tourism British Columbia, but they have not been directly. . . . Marketing for that has been done on a regional basis.

T. Nebbeling: I'm aware of how it was done in the past. But we have to recognize that we are in a very unusual year this year, and that is because of the transition to the special operating agency. What is happening is that the marketing of this component of the industry, which is in its infancy and does not have big organizations behind it right now, has clearly not been taken care of. Next year I hope to see a different story because the special operating agency will be in place. But this year, because of the transfer, there is very little happening from the agency itself.

Is the ministry picking up any slack at this point? Is there any money in her budget to show that some money is channelled towards the promotion of that very important component, especially for the European market, which the minister earlier identified as having tremendous potential in this province?

Hon. J. Pullinger: I just want to correct the record. The special operating agency advisory board is in place now. It remains in place until such time as the new Crown agency is up and running, at which time the board for the new Crown agency will take over.

I don't disagree whatsoever with the member that these different parts of the tourism industry are all very important. That's precisely why I'm working very closely with COTA and the tourism industry to ensure that their voice is the one that directs the activities of the marketing function in British Columbia. That's what has been happening in an increasingly formalized way. As of later this year, when the new agency comes on stream, there will be a very great deal of industry control to determine where the marketing dollars are spent -- for just that kind of reason.

T. Nebbeling: I appreciate that answer from the minister. I do appreciate the fact that this is a difficult year as far as promotion is concerned, because all of these different groups are not totally in control of their destiny until the new board has been selected.

I'd like to go back to the problem of the uncertainty that has been created in the area of commercial back-country recreation. I want to illustrate it by telling a little story to the minister to show that we cannot afford to sit back and let this whole industry dwindle away.

There has been a snowmobile operator in the Whistler area for four years. His payroll is $425,000. He runs 30 machines; he's got 30 people on the payroll. After four years this individual got a notice two weeks ago from the Ministry of Lands that he can no longer operate in the area where he has been operating. The reason is that the back-country policy demands a permit. I know that is not your ministry, but as the Minister of Tourism, I want you to hear the problems that are happening. The operator has basically been told: "Sorry, you're out of business. Due to layoffs in different departments, we don't have time to take your particular application under consideration, so go away." I've talked to the Minister of Environment, Lands and Parks about this one. I've talked to some of the bureaucrats within the ministry, as well. They're all very much aware that this is a ludicrous situation. Here is an operator who employs 30 people, and he is basically told: "Sorry, you're out of a job." The bank will be there to take his machines.

I know it is not the intent of the government to see this happen; I know it is not the intent of the minister to see this happen. But these are the kinds of situations that are developing right now in that particular sector of the tourism industry. Now that she's aware of these kinds of things, I hope the minister can put some pressure on whoever is responsible for that particular policy implementation and for handing out permits. That is my question. Now that the lands branch is no longer involved in creating or implementing policies for handing out permits, who today is responsible for that tourism component of this province?

[8:00]

T. Nebbeling: I appreciate that answer. After what the minister said, then, the minister should be able to tell me how much money is allocated in the budget right now to try to channel developing the particular industry component in the direction it should go.

Hon. J. Pullinger: I just want to reiterate my previous answer, and that is that we have a land use planning branch that works on land use issues, including this one. There is not an individual or individuals, nor is there a separate budget for this particular policy. We just have a land use planning branch that provides a voice for tourism in all of these various issues, and it is that branch that is working with the ministry responsible.

T. Nebbeling: I really appreciate that answer, as well, because that is what I've been trying to find out. The branch that is responsible for dealing with the many applications that are in there right now. . . . There was a proposal call in December 1996 for operators to come forward. They spent money on making presentations, and I've got a stack in my office to show you. It has happened. So these proposals must be in that land planning branch. I just hope that the minister, because of what we have been talking about for the last 50 minutes, can indeed start focusing on making sure that these operators are not going to stand on the side come next season -- and next season starts around November, December. But prior to that, they have to do the hiring. They have to assure the banks that they will indeed be financially viable again, as they have been -- many of them. But now it all depends on having a permit. Hopefully, the minister can put some urgency on making sure that these permits are going to be issued and that everything will move forward.

P. Reitsma: Just a couple of questions on CBR, commercial back-country recreation. I'm glad that the minister, after something of an initial hesitation -- "it's not my ministry, it's another ministry" -- has found out that, indeed, it is part of the ministry, maybe indirectly. And of course it's extremely important to our industry.

I would like to quote, though, from. . . . To pre-empt the next question:

[ Page 4110 ]

"On February 6, 1995,[ the minister at that time] announced that a new interim policy was being implemented and that the moratorium on accepting new applications for commercial back-country recreational use of Crown land was being lifted. The need for this new set of regulating standards arose from the rapid growth in adventure and ecotourism activities in the years leading up to the policy development process which began in 1990. The policy was the culmination of an extensive public consultation process, and stakeholders from industry, environmental associations, outdoor recreational organizations, first nations and the general public were involved."

My previous colleague mentioned some problems in his particular area. I know of a number of small businesses I've seen there that don't know how long they're going to be there, because of the difficulties in land tenure. But they've had their taxes increased three or four times, which really. . . . It is very difficult to set goals of financial priorities and, of course, to try to anticipate the years to come. Again, what they want is certainty and not uncertainty; stability, not instability. And of course they would like some tenure rather than having to wait, which is now the case.

To what extent, may I ask the minister, has the ministry been involved in terms of developing the process for commercial back-country recreation, noting that in that particular memo the pricing aspects or the policy "will not be examined at this time" -- which is 1995 -- "but will be re-evaluated in three years"? Are there any preliminary figures available? But also the first question: to what extent has the minister's ministry been involved on a proactive basis?

Hon. J. Pullinger: Our ministry, the lands branch of this ministry, simply works on this issue with the Ministry of Environment, Lands and Parks to provide policy input in terms of developing the back-country recreation policy and making sure that tourism's voice is heard in the development of that policy. The other issues that the member raises are best visited through that ministry; they are under their jurisdiction entirely.

P. Reitsma: I'm relieved and pleased to hear that the minister mentions that her ministry is directly and indirectly involved. The concern expressed by the stakeholders, particularly in our industry. . . . And when you talk about Crown land, of course, you're talking about length of tenure term. This is extremely important for future budgeting, of course. I'd like to point out to the minister that when you have ecotourism -- like hunting, hiking, boating, fishing, water sports -- on Crown land, near Crown land or using the facilities of Crown land, it is extremely important to have a long-term land tenure so you can plan. Everybody in small business knows that planning is one of the pillars of success.

Could the minister, through her branch and involvement, give this assembly some indication in terms of how the problems regarding the length of tenure terms is being addressed, and if it's being successfully addressed?

Hon. J. Pullinger: My ministry is very involved in the policy development, as is the tourism industry, including COTA -- the Council of Tourism Associations -- in order to ensure that tourism has a strong voice as this policy moves forward.

P. Reitsma: My last question is on CBR, and it's not necessarily a chastisement. The problem, in general, when governments become bigger. . . . I dread thinking of decisions from Ottawa that take years and years. And this is not being negative, but as I compare that with decisions made on the municipal level, because you're much closer and much faster, there appears to be a fair amount of overlapping. I hope that the process could be sped up or at least that a genuine attempt could be made by all the ministries involved to cut through the red tape and the bureaucracy and eliminate as much of that overlapping as possible. That is very important, and I say that in the spirit of very constructive criticism.

I. Chong: I'd like to ask the minister a few questions before I return the floor to the member for Parksville-Qualicum, who has additional questions regarding the special operating agency from last year. But what I would like to ask particularly is regarding the 1996-97 budgeted amount for Tourism B.C., which as she's probably aware was $23,408,000. I understand that that total expenditure was substantially less by the time we got to the end of the year due to the program spending review that was undertaken. What I would like to ask the minister is: can she advise us of the final approved expenditure for the '96-97 fiscal year for Tourism B.C.?

Hon. J. Pullinger: The entire budget of $23.4 million was spent last year, with the exception of the $1.3 million that is being carried over this year and will go to Tourism British Columbia.

I. Chong: I find that somewhat confusing. As I understand it, the final total agreed-upon expenditure for '96-97 was actually reduced to $18.5 million, of which only $17.2 million was expended, and $1.3 million is left to be carried over. I just want that confirmation. I say those figures not to put the ministry staff on the spot, but because those were the figures given to me. That's what I was just trying to confirm, because at the briefing, I didn't know whether all the figures had come in at that time or whether that was still an estimate that staff had. So I'm just trying to get a more confirmed amount -- whether the $23.4 million was in fact reduced to $18.5 million, of which only $17.2 million was expended, and if that $1.3 million is what's going into the new SOA.

Hon. J. Pullinger: I think the member has the numbers from last year and this year mixed up. Last year the $23.4 million was all expended, with the exception of $1.3 million, which has been carried over to this year. This year the budget, based on the percentage of the hotel room tax -- laid out in legislation as retroactive to April 1, so it's determined by that percentage -- will be an estimated $17.1 million, plus the $1.3 million one-time startup costs, which makes it $18.4 million. So that's this year's budget as opposed to last year's. I think that's where the confusion is.

I. Chong: I thank the minister for that clarification. I appreciate that, because that's not the impression I had. I got the impression that the industry had been substantially reduced in their programs for the current year and then again for the ensuing year, and that that's one of the reasons why they were somewhat concerned.

So having had that answered, I would like to move back quickly into the special operating agency. I know the hon. member for Parksville-Qualicum also has a number of questions. The minister said earlier that the old SOA's business plan, which she gave us some information on, was designed 

[ Page 4111 ]

to meet some targets. That business plan mandate was for awareness of and also to deal with preferred destinations. Can the minister advise us as to whether some of those targets were met and share some of the results of the tourism marketing? Were a number of preferred destinations successful? And was awareness of more remote areas successful, as well, in the business plan mandate?

Hon. J. Pullinger: The broad answer to the member's question, which I think is the one she wants, is that yes, the targets were met by and large. Again, I can provide that detail, but rather than read it here, I'll simply provide it to you in writing. But the targets are clearly set out, and they were by and large met. I'll just give you one example. The gross revenue was predicted to be $7.1 billion, and it was in fact $7 billion. As the member knows, it's a little bit mushy measuring that, so I would say that that's a met target.

I. Chong: I would appreciate some information, I suppose, from the minister, because in her comments I thought that preferred destinations was one of the mandates, targets and goals. Without some examples, if she's not able to read them into Hansard. . . . We don't have the benefit of knowing specifically what was done during last year's particular program to deal with preferred destinations unless she's willing to share with us a few examples. I see the minister nodding yes. I would appreciate just a couple of examples so that we are aware, and then perhaps the more formal complete list, if she is able to provide that.

[8:15]

I. Chong: Just to reaffirm a previous comment I made about the funding -- that the $23.4 million for '96-97 was entirely expended and that for 1997-98, the anticipated amount through the new special operating agency will now be $18.3 million, of which $1.3 million is expected to be a startup cost. So essentially, for operations, if you will, we only have $17 million. Given that that's some $6.4 million less than the previous year, where in particular has the ministry advised the new special operating agency to be looking for this decline? Given that this is a division of the ministry that requires all of its dollars to do a proper and effective job of tourism marketing and promotion, where would the $6.4 million in savings be expected to be found?

Hon. J. Pullinger: The special operating agency advisory board has been working closely with my ministry to review all of the programs delivered. Some of them are a little antiquated and can certainly use an update. They have been working diligently to determine how they will expend their portion of the hotel room tax for next year. I expect they'll be coming forward to me very soon with a business plan in which they lay out all of those details.

I think what the member is looking for is how the decisions are being made. It's very much the industry who are now represented on the special operating agency, and those individuals have been consulting broadly with the larger industry to ensure that the dollars that are available to the industry -- the public funds that the industry has to market British Columbia -- are spent in the very best way possible.

I. Chong: The concern that I have is given that the entire amount, $23.4 million, was required in one particular year -- and I certainly understand that in any kind of program review that's undertaken, there will be some savings found. . . . But in this kind of a program, $6 million less to be spent is 25 percent. I understand there's a fairly broad-brush approach taken to all the cutbacks for all ministries and that 25 percent seems to be the most logical number that's appearing as we go across each ministry. But in this particular branch, where can we possibly expect to see those kinds of savings found? Given that it is a division or a branch entirely dedicated to spending promotional dollars to generate the billions of dollars that are expected in the tourism industry and to create the numbers of jobs that the ministry is hopeful will be created. . . . I guess what I am looking for is: specifically where are you targeting? Where can 25 percent reduced funding possibly benefit this special operating agency?

Hon. J. Pullinger: Tourism British Columbia has had a 23 percent cut, which is in line with the other cuts in my ministry, as the member correctly points out.

The funding for the marketing of British Columbia through this ministry has, for a number of years, gone up and down with revenues to government. What we're doing here is trying to create a baseline, a starting place and a mechanism through which the industry can have some control over its marketing destiny, if you like. In allocating the legislated amount, the industry now knows where it's starting and can plan forward with more certainty than it's ever had before. While I would obviously love to see more money go there -- and I'm sure we will, as the industry grows -- it now also has the opportunity for industry to really get involved in the decision-making in a way that it never has before.

It also has the opportunity to engage in partnerships and to raise funds through partnerships or other mechanisms, which we've discussed in other venues, such as using their trademarks and so on. Those will now be retained by Tourism British Columbia, whereas when the marketing function was part of my ministry, those funds must, by public accounting rules, go back into the consolidated revenue fund and are not available to be retained by that function. So while indeed there is a cut, the industry is pleased that it finally has the kind of security it's been looking for for many years. And it also has the flexibility and the opportunities to do innovative and creative things that it has wanted to do. That's essentially where we stand today. The detail will be coming forward to me in the business plan, which I don't have yet.

I. Chong: Again, I am concerned about the funding cut, as I'm sure the minister is. I'm wondering if in fact the estimated amount this year, at $17 million -- exclusive of the $1.3 million startup cost. . . . Because again, I don't factor that into being used for marketing, as such -- just to get the ball rolling, if you will. It is anticipated that the 1.65 percent dedicated hotel room tax is going to provide the $17.1 million. If in fact the industry gets moving very quickly and if they're able to increase that within this current year as well. . . . Is it certain that if the revenues were greater than the $17.1 million -- and it would possibly go up to $18 million or $19 million -- then would that be permitted, and not the total $18.5 million?

[ Page 4112 ]

Hon. J. Pullinger: Good question. Yes, absolutely. By making the revenue based on a percentage of the hotel room tax, that means that as the industry increases and grows, that percentage will become more valuable, and that flows through the legislation directly to the new agency. So the member is absolutely correct. If the industry this year performs better than expected, then their revenues will rise higher than expected.

I. Chong: A question now on the reverse effect. If in fact the $17 million is fairly accurate, shall we say, and that is all that is provided for the new SOA, we clearly see that the 23 percent reduction to this budgeted amount from the previous year has a direct impact on the total revenues that are anticipated. So for example, if the $7 billion in tourism revenues suddenly drops to $5 billion for some strange reason, and we can see that it's directly proportional to the fact that there's been a decline in the budgeted amount for this, is there any provision for the ministry to be able to supplement or complement the funding? Is there any room that the ministry would have to provide additional funding? Or will that be one of the benchmarks that we'll be looking at to see whether this is a success or a failure?

Hon. J. Pullinger: The funding to Tourism British Columbia will come through that formula and only through that formula. So if the tourism industry was to go completely in the tank, so would their funding. Having said that hypothetically, I should say that the estimates that industry and government have come up with are very realistic and on the conservative side. So I fully expect, as does industry, that those estimates will hold for this year.

I. Chong: I thank the minister for that answer, because I think it's important for all those concerned -- the stakeholders included -- that if the funding is going to be solely from the special operating agency based on the hotel room tax -- the dedicated amount -- and the ministry cannot provide any supplementary amount, then the industry will certainly have to work particularly hard to ensure that they meet those targets.

But it's a disappointment. Clearly, if a $6 million or 23 percent decline in the budget reflects a 23 percent decline in the total revenues -- which we certainly see are far greater than the expenditures -- and there's no mechanism for the ministry to step in and allocate an amount, I would be very concerned that we'd moved in a rather backward step. I just wanted to make that comment. If the minister cares to answer, I'll allow her to.

But I would like to move on to another question, which gets us back to the special operating agency that was established last year. The agreements that I understand -- and the hon. member for Parksville-Qualicum has also mentioned a few times, and I know, in second reading of the Tourism B.C. Act, that I mentioned agreements were made, deals were signed. . . . I know the minister felt those things did not happen, and they were not correct. I just want, for the record, to state that the particular agreement I saw that was signed -- and what has caused a bit of anxiety, I guess -- is the Tourism British Columbia framework agreement, which was signed on February 24, 1996, by the secretary of Treasury Board, the Deputy Minister of Small Business, Tourism and Culture and the assistant deputy minister of the tourism division of the Ministry of Small Business, Tourism and Culture.

Because that agreement was signed on February 24, 1996, and then an announcement of the special operating agency was made in April of 1996, these are the things we were referring to when we were in second reading debate of the Tourism B.C. Act and also in committee stage. And that's one of the reasons why I feel it's important that the minister is aware that we didn't pull these things out of the air. In fact, these were things that the stakeholders, the tourism industry, had alluded to that was some sort of commitment by this government, and that's one of the reasons why we are so insistent, why we are so concerned. Something that was signed once before has now fallen by the wayside.

We want to be positive, and we want to be certain that anything that's signed now will have some certainty. I'm sure the minister can appreciate the steps we're taking now to ensure that we have this for the record so that next year, if we have to revisit this, we're comfortable in that. So my question to the minister is: if the new business plan is developed for this year, will any of the ideas, any of the parts of the framework agreement that were signed in February of 1996, form part of the new business plan for this year? Is that some sort of groundwork that was done, or will it be provided in some memorandum of understanding -- which I'm hopeful is going to be developed?

Hon. J. Pullinger: I would simply like to also put on the record that our government's primary commitment was to protect health and education, and we have done that in a way no other province has done. That was what we ran on in the last election, and that's what we've done.

In the agreement that was signed, the commitment was to long-term stable funding, and we have followed through with that commitment, as well. It's unfortunate that pulp industry prices went into the tank in the last three months of the last fiscal year, which took the industry and virtually every economic forecaster across the country by surprise, and that cost the province -- my best memory is $800 million -- which meant we had to cut. Our commitment was to protect health and education; that's what we've done. Our other commitment was to long-term stable funding for tourism. This agency is something they've wanted for decades, and we've done that as well.

[8:30]

Given that the new legislated authority is going to come about this year, which this side of the House is also very supportive of, we are just trying to be firm in our understanding that there will in fact be an agreement that can be relied upon. I have no doubt that the minister will do everything in her powers to ensure that the agreement and the board run efficiently. But my question to the minister was about the fact that there was a framework agreement developed and whether or not that framework agreement -- the points that were raised, any of those conditions -- will be used and developed in conjunction with the business plan that is now underway or the memorandum of understanding that may or may not now be developed. I just want to find out whether 

[ Page 4113 ]

there's anything in the framework agreement that we can look upon that will be virtually duplicated in a business plan or memorandum of understanding.

Hon. J. Pullinger: The old agreement -- the special operating agency -- is superseded entirely by the new legislation.

I. Chong: I appreciate what the minister is saying; that normally is the case. But as I say, my question to the minister is whether or not anything from the old framework agreement is going to be used or reviewed at all in the development of the new business plan or memorandum of understanding.

Hon. J. Pullinger: The SOA framework agreement was a governance model that has been entirely eclipsed and superseded by the new governance model, which is laid out in the legislation. Last year's business plan, as put together by the advisory board and my ministry, will be built upon in this year's business plan, I assume. But they're two separate issues: one is the structure and the governance model; the other is the business.

R. Thorpe: The minister has commented several times tonight that tourism is a $7 billion industry in British Columbia. I'm just wondering if the minister could explain to us on what basis they're able to arrive at that number.

Hon. J. Pullinger: The model that we're using is a B.C. Stats model, using inputs of the B.C. visitors survey, the international travel survey and the Canadian travel survey.

R. Thorpe: Could the minister advise if that's an independent model that is used? Or does the ministry have inputs into it?

Hon. J. Pullinger: They're independent data sources.

R. Thorpe: Not tonight, but would it be possible for us to receive a detailed briefing or booklet or binder -- whatever you've got on this -- that could show us some recent history and projections going forward based on that model?

Hon. J. Pullinger: Sure, I'd be very pleased to forward to the member, to the best of our ability, the information that he's requesting.

R. Thorpe: The minister and various members have said that the number of employees in this industry is in excess of 220,000, if my memory serves me correctly. Could the minister advise how in fact they arrive at that number?

Hon. J. Pullinger: The source is the monthly reports of the Canadian Labour Force survey.

R. Thorpe: Perhaps we get that in the amount of paper we get in our offices from day to day. I'm just wondering if we could also receive the material which pertains directly to the hospitality and tourism industry.

Hon. J. Pullinger: We'll be happy to provide the member with some, but not ad infinitum. They're all available through Statistics Canada.

R. Thorpe: I realize how important fiscal prudence is to this government, and I certainly wouldn't want to be part of a budget speech of increasing the costs of operation of this government. If it's a great financial difficulty for the ministry -- and, of course, you can see my tongue in my cheek here. . . . If you'd just tell us the source -- I'm sure it's on the Net or something like that -- then we could get that.

More importantly than that to me, though -- but which is important because I'd like to have a baseline -- is that we've heard that we're going to create several thousand jobs in this sector over the next five years. I'm wondering what mechanisms are in place on a timely basis that this government is going to measure itself against. Is it these independent statistics? Or is it other statistics that we're going to measure against the goal we've established for ourselves?

Hon. J. Pullinger: We will be consistent with the statistics we're using.

R. Thorpe: If I could make a couple of general points on vote 52. . . . Under STOB 20 I see expenditure for Tourism of $1.665 million, and I believe that's for professional fees. Obviously I don't want it down to the nth degree, but I certainly would appreciate the top line, what the key elements are, please.

Hon. J. Pullinger: That amount is for a variety of things, such as visitor surveys and the reservation information service.

R. Thorpe: Perhaps that is how they were grouped, because it does say professional services, etc., and I would have thought. . . . Perhaps staff could provide us with some detail on that. I mean to the nearest $25,000; I don't need to go any lower than that.

With respect to building costs, I note that under STOB 65 there's $123,000. Are those costs for tourism offices in Victoria and Vancouver?

Hon. J. Pullinger: I just want to clarify for the member that what's in the blue book this year goes until July, so the numbers are partial figures, because that's simply provided for until the new agency takes over. The numbers the member is asking about are the amounts paid for the various building leases for tourism, both here and in Vancouver.

R. Thorpe: Would that be principally two office locations?

Hon. J. Pullinger: Yes.

R. Thorpe: With the significant reduction in the overall cost of operations or funding going through to the new Tourism B.C., is it anticipated that both of those locations will remain operating, or will they be scaled back too?

Hon. J. Pullinger: Certainly that is a future decision of the board, so I can't say with any certainty. My understanding at this time is that the two locations will remain, but the board will be looking for ways to reduce costs.

R. Thorpe: Since they are under STOB 65 and since they are only until July and since the new board will be having to make some decisions on how they operate, could the minister advise whether those are long-term leases? If Tourism B.C. wants to make a decision in a relatively short time frame, are they going to be able to get out of those locations, or are they potentially going to be saddled with long-term leases?

[ Page 4114 ]

Hon. J. Pullinger: One site is tied up for a couple of years; the other is month to month. However, I understand that the board has reviewed the lease situation and that it doesn't appear that that will be problematic for the board.

[8:45]

Hon. J. Pullinger: The leases will be taken over by the new board. They will have to make their decisions based on the reality of that one lease, actually, with the two years to run. The other one is month to month.

R. Thorpe: Just for the record, could the minister advise us which lease has two years to run and which one is month to month?

Hon. J. Pullinger: Vancouver has approximately two years to run.

R. Thorpe: With respect to grants, I believe it looks like $592,000 is budgeted up to the end of July. Could the minister advise us, in a broad sense, who those grants are to?

Hon. J. Pullinger: I apologize for the confusion. The estimates are a little bit different this year because of the changeover. So while this funding is not absolutely tied, it is in fact expected to be the first part of the funding that goes to the regions.

R. Thorpe: Goes to the regions -- is that the six new super-regions?

Hon. J. Pullinger: This amount is simply the interim financing while the existing board, which will be very much represented on the next board, reviews its programs and determines where to go next. So it's in fact interim funding.

R. Thorpe: Is that interim funding of $592,000 to the existing nine regions that operate in British Columbia?

Hon. J. Pullinger: This is a portion of the grant to all nine.

R. Thorpe: It's my understanding that the nine regions are going to go to six super-regions. Can the minister describe in some detail the amount of consultation and the process that was undertaken to move the nine regions to the six super-regions?

Hon. J. Pullinger: The nine regions that exist today are duly constituted societies, so nobody but they themselves can deconstitute themselves. While there may in fact be some changes as to how marketing is done, there's no intention to change the actual societies. So I want to be very clear that they are societies that are in place. The North-by-Northwest, etc. -- those are societies. Tourism British Columbia is going to be working with all of the regions. There may be a different approach to how the marketing is done, but there's no move to change those regions. That's up to the members of the societies.

R. Thorpe: Perhaps when you work with it every day, it seems a little easier to you. Looking at it from afar and obviously not being privy to the amount of detail you are, it was and is my understanding that in fact nine regions, some of them individual societies, are being amalgamated and new societies are going to be formed. Is that correct or incorrect?

[P. Calendino in the chair.]

Hon. J. Pullinger: I can understand that it is a little confusing, especially in this time of change. But if the societies choose to change their configurations, then they themselves have to do that. That can't be done from above or anywhere except from the members themselves.

My understanding is that there is a review of how the regional marketing is done and a move to try to find ways to use dollars in the most effective way possible, perhaps a little differently. If the societies decide to dissolve and reconstitute in a different way, they can certainly do that. But that's not a requirement. That would be a decision of the members of the society.

R. Thorpe: I didn't know I'd be spending quite as much time on this particular area as it now appears I will be. But I'm getting the impression that the regions are arm's length away from Tourism B.C. and basically are being allowed to make their own decisions, whether they stay as they are, join together or do something new.

But is it not fact that these nine regions are being forced into a direction because the funding allocations to those regions have been cut back so severely that they have no other options but to form six consolidated super-regions?

Hon. J. Pullinger: What's taking place here is that the Tourism British Columbia advisory board is reviewing the way all the programs are delivered. They have determined that it would be more effective to deliver marketing under some regional brands, if you like. Say there's two of them, the East and West Kootenays. Whether they become one tourism region or stay as two tourism regions cooperating together is up to them. I hope that's clear. While the marketing structure may change, they have the option of remaining two societies and working together or in fact dissolving both societies and creating one society out of the old ones. So that's their choice. There's nothing to force them one way or the other. But yeah, the member is correct in that the marketing approach is changing somewhat.

R. Thorpe: One final question. I just got a copy of a note. I believe the distribution of the note had everybody in the building getting a copy, so I'm sure this question won't come as a surprise. There was something about the ministry removing fax machines from various tourism organizations and the fact that, I think, they were being charged $55 a month. One organization -- I don't have a copy of the letter with me -- had agreed to double the fee and pay it in advance. I just wonder what's going on with respect to some communication services that perhaps were supplied to the regions.

Hon. J. Pullinger: Under former governments, three of the nine tourism regions received ProvNet service. It's not appropriate for ProvNet to go beyond government itself. 

[ Page 4115 ]

Generally it doesn't, and therefore this is being changed. Those three are being asked to. . . . Actually, the service has been withdrawn from the three; two have done so quite willingly, understanding the anomaly of the situation.

R. Thorpe: The one I'm referring to is not going without making a little bit of noise -- of course, I'm talking about the Okanagan-Similkameen Tourist Association.

The fact that the funding is coming out of the consolidated revenue fund and is going to be in the estimates books going forward -- because it's on revenue here. . . . Would that not qualify these organizations because that funding is coming out of government revenues to a government agency?

Hon. J. Pullinger: The societies that have had these are not Crown corporations or any part of government, so it's not appropriate that they get this.

P. Reitsma: Just as a side comment, I wasn't going to let the minister get away with blaming the reduced funding on the weather, the pulp industry and you name it. If I haven't gone on the record, I want to be on the record. If one talks about. . . .

An Hon. Member: Do you want to take a break for ten minutes?

P. Reitsma: No. I'm not. . . .

The Chair: Okay. We'll declare a short recess.

The committee recessed from 8:59 p.m. to 9:06 p.m.

[P. Calendino in the chair.]

P. Reitsma: Just for the record, I wanted to wait until I was able to speak to the minister. With my municipal background, I'm not used to asking questions when it's impossible to get an answer. As I mentioned earlier, I wasn't going to mention that, but since it will be on the record now. . . .

When the minister mentioned funding that was cut because of the weather, the pulp mill and you name it. . . . The fact of the matter is that in April 1996, promises were made, contracts were signed, hands were shaken, pictures were taken and it was all guaranteed. It makes me rather mad when unacceptable flimsy excuses are being used, because that goes to the heart of integrity, it goes to the heart of believing, it goes to the heart of promises being made. Indeed, this promise was broken, and certainly not with the blessing of the tourism industry. Maybe there was no room in this wriggle room -- the famous quote -- but the fact of the matter is that in my own business, like everybody else, you stand up and fight and you ask questions about why something that was promised was broken. That's what happened, and that's what is important.

On a kind of throwaway question. . . . It's not off the topic, but I'll go back to the former SOA in a moment. . . . As the minister knows, a pleasant thing will happen a week Saturday, with the Artificial Reef Society and the sinking of the destroyer escort HMCS Saskatchewan. With tongue in cheek, if it were to be sunk with a blast like the Premier did today at the opening of the Duke Point ferry terminal. . . . We were all standing there. They had one of those little cannons. Believe me, most people got about a couple of inches off the ground, because there was an incredible blast.

Be that as it may. . . . Since Jacques Cousteau's people are coming from New York with Mr. Cousteau -- being about 87, I understand, he's in very frail health -- could the minister advise us if any direct or indirect money from the Tourism ministry is going to partially offset some of the cost of the sinking of the HMCS Saskatchewan through the Artificial Reef Society? Is there any funding coming at all?

Hon. J. Pullinger: Not to my knowledge.

P. Reitsma: I understand that on the Sunshine Coast one of the destroyer escorts is going to be sunk, as well. To the best of the minister's knowledge, is any Tourism money funding, through any particular organization such as Community Futures or any other organizations. . . ? Is any ministry funding, directly or indirectly, coming to that project?

Hon. J. Pullinger: Community Futures is a federal program. About as close as I could get to any funding being part of the various ships that have been sunk is the fact that there is a publication put out by Tourism British Columbia which shows dive sites.

P. Reitsma: To rephrase my question: is the minister aware of any direct or indirect funding by her ministry, with those proceeds going towards the cost of sinking the destroyer escort off the Sunshine Coast?

Hon. J. Pullinger: The same answer.

P. Reitsma: There's no direct or indirect funding? Simply yes or no will do.

Hon. J. Pullinger: The same answer as before. I am unaware of any funding. The closest that I can get to any funding that might be assisting any of those ships would be the Tourism brochure pointing out dive sites. Other than that, I know of no funding. If the member has any other information, I'd be happy to hear it.

P. Reitsma: Let me assure you that this is not a trick question at all. I've heard some comments and what have you. I understand that a third destroyer escort is going to be sunk in the Alberni area -- I think it's in 1998. I understand there is some $200,000 through FRBC that's going to be made available. That's what people are saying in the Alberni region. To the best of the minister's knowledge, there's no direct or indirect funding forthcoming to that sinking, either?

Hon. J. Pullinger: The same answer: not from my ministry.

P. Reitsma: Okay, thank you very much. That takes care of this one.

Before I go back to the SOA. The minister, of course, talked about funding and a cut in funding. Could the minister advise us on what kind of relationship exists between the provincial Ministry of Tourism and the appropriate counterpart on the federal level, in terms of working together, exchanging information, funding and so on?

Hon. J. Pullinger: I'm tempted to respond to the question about the relationship with "amicable," but the member probably wants a little bit more than that. There's the CTC and 

[ Page 4116 ]

the tourism alliance, and we have staff persons on each of those boards. We work very cooperatively and closely with them in developing our various strategies.

P. Reitsma: Is there any co-oping taking place in terms of federal and provincial ministries, or officials from time to time sharing offices or going to conferences together and things of that nature?

[9:15]

P. Reitsma: What does the minister think of the. . . ? And there's a reason for that. I don't know if the minister has had an opportunity, or her officials, but what does the minister think of the federal approach to funding for tourism? I don't know if the minister has had an opportunity to work together with her federal counterpart to talk about funding, etc. I wonder what the minister thinks of the federal funding approach.

Hon. J. Pullinger: I'll be happy to answer questions about the provincial Ministry of Tourism.

P. Reitsma: Given the fact, of course, that the previous question was a correlation, and that is with working together, I simply wonder through this last question if there is any funding working together or if the minister is not aware of it.

In view of the fact that funding was cut almost 25 percent in the provincial budget, I would like to quote from the Vancouver Sun of February 19, 1997, the headline: "Tourism Funds Will Compound, Industry Claims." Now, this may be a federal initiative, but most certainly, let me assure you, hon. minister, it has provincial overtones as well.

I'm not quoting everything, but I have a few excerpts: "Boosting federal spending on tourism will have a ripple effect across Canada, creating jobs and spreading the wealth, officials said Tuesday." I put emphasis on "boosting federal spending on tourism."

Again, for the minister's information, it's February 19, 1997, in the Vancouver Sun. "This is an industry that makes it a dime at a time" -- I know; I happen to be in that industry and operate a motel -- "and it doesn't all go into one pocket."

The TIAC -- the Tourism Industry Association of Canada -- president said: "We are very pleased with the budget, more than we have been with past budgets. Certainly we are looking forward to coming through with our side of the bargain."

"Tourism B.C. president" -- and that's why part of the B.C. overtones come into place -- "Rod Harris commented: 'We are delighted. It's very exciting news.' Harris noted Canada's spending abroad on marketing programs has lagged behind other countries such as Australia, which are competing for the same tourist dollars. 'This is the challenge we face, and every little bit helps.' " The TIAC, which is an industry lobby group, said an increase -- and this is the clincher -- of 30 percent. . . . It went from $50 million to $65 million -- $15 million at a time when dollars are scarce, and this is why one talks about leadership. The $65 million will be matched dollar for dollar by 1,400 private sector partners, which gives it a budget of $130 million for this coming year -- quite a bit more than the year before. They said that this investment, "coupled with a Business Development Bank of Canada program designed to promote non-urban tourism sites, will open more of Canada to overseas visitors." Of course, we are part of Canada.

Leading up to the question, every visitor knows Jasper and Banff and the major resorts, but there are other places. You can't keep going to the same well and expect the product to remain as robust and healthy. So my question is: knowing that our budget has been cut by almost 25 percent and given the fact that the federal budget. . . ? I was glad to hear that the minister and her officials do work together and exchange information. Obviously it's not the same information in terms of philosophy; one is up and one is down. They are focusing on the non-urban tourist sites. Before I go back to the old SOA, might I ask what the ministry's marketing philosophy is for the non-urban sites in B.C.?

Hon. J. Pullinger: I'm delighted to hear my staff quoted, applauding the fact that the federal government has increased funding up to $65 million for the entire country. Clearly the federal government has cut 40 percent out of health care, but I am pleased that they have managed to add a little to tourism, albeit their total budget is about $65 million for the entire country.

The regions of British Columbia have historically been funded through Tourism British Columbia, and previously directly through the ministry, for regional marketing programs. They have marketed their areas as they saw fit. As we have discussed, Tourism British Columbia is undertaking a slightly different approach, which I believe will be more effective, and it will also continue to market British Columbia as a whole.

P. Reitsma: While the minister gave me a bit of a foothold into the open door of what we should not be discussing in terms of "they also cut 40 percent of the health budget," I also have a one-liner. They also cut the deficit from $33 billion to about $16 billion. But that's just a side comment, and I think the deficit here. . . .

Interjection.

P. Reitsma: You'll have the opportunity when you respond, hon. minister.

Of course, our debt almost doubled in six years. We know that we're talking about Tourism estimates, not about federal health care budget cuts. That's why I really don't want to talk about decreased deficits on the federal level and increased deficits on the B.C. level, because that's not what we're talking about.

Be that as it may, might I ask what cooperative, new, exciting programs there might be, together with the federal counterpart and the rest of the provinces of Canada? Is there an organization? Is there a board of some sort that discusses -- although B.C. is part of it -- the nationwide promoting of tourism and that expects B.C. to promote their own within that realm?

Hon. J. Pullinger: For the record, I would like to be very clear that the federal debt run up by the Liberals and Conservatives has indeed declined, as the debt run up by the Socreds 

[ Page 4117 ]

here has indeed declined -- both deficit and. . . . I note for the record that the member for Parksville-Qualicum does not want the debt increased, and I'll pass it on to the ministers responsible for capital spending and assure them that he does not want any capital spending in his riding.

The business plan is being. . . .

The Chair: Excuse me, minister. Is there a point of order?

R. Thorpe: Hon. Chair, I know that from time to time it's difficult here, but I think we should really try to stay focused. If we're going to get into editorial comment, I think we're going to have to get into a lot of editorial comment, and I'm not so sure that's as constructive as we could be.

The Chair: Point of order well taken. I would advise both the minister and the members raising questions to stick to the issues at hand in the Ministry of Tourism.

Hon. J. Pullinger: I appreciate the member's comments. I have ignored a huge amount of editorial comment and would be pleased to see it stopped from the other side.

Tourism British Columbia is developing its business plan. It is the intention of Tourism British Columbia to work cooperatively with any and all other agencies across Canada which it make sense to cooperate and work with.

P. Reitsma: For the record, I didn't start it, and that's why I won't say anything about the fixed-wage policy or the health labour accord. That's why we're not doing that.

Hon. J. Pullinger: Point of order.

The Chair: Excuse me, member, would you please take your chair. On a point of order, the Minister of Tourism.

Hon. J. Pullinger: That member on his feet is the one that has actually been going outside the bounds of the debate throughout the evening. If the members opposite are going to raise points of order about whether or not we stay within the bounds of this discussion and whether or not we make editorial comment, then I would appreciate that side getting together to agree that they're not going to do so.

The Chair: I just ruled on the points of order, and I would like the members to remain on the issues and not make any more editorial comments. I would appreciate it. I will now recognize the member for Parksville-Qualicum again.

P. Reitsma: Thank you for your wise ruling, hon. Chair.

This is not policy. I wonder if it has ever been considered, and I relate it, first of all, to the federal one.

"The industry got another boost with Finance Minister Paul Martin's announcement that Ottawa has agreed to review the efficiency of its GST rebate program for foreign visitors. Martin said Ottawa will evaluate the 'efficiency and effectiveness' of the visitors' rebate program in encouraging tourism. The program was designed to cushion the impact of the GST on tourism and keep big conventions and trade shows from fleeing the country. Foreign conventions, for example, are permitted to claim rebates on eligible purchases such as meeting rooms, hotel rooms and convention services."

Just a question to the minister: has any discussion ever taken place, or is discussion likely to take place, or has discussion been considered, in terms of a similar program on the PST, particularly for conventions, as the federal counterparts are doing on the GST?

Hon. J. Pullinger: The PST falls under the purview of the Ministry of Finance.

P. Reitsma: Rephrasing the question, then: would the minister consider giving the tourism industry a boost -- entertaining the thought in order to stimulate business -- by approaching the appropriate ministry to discuss whether or not there's some merit in looking at the PST as it relates to the tourism industry, particularly conventions, as the federal counterparts have done with the GST? Would the minister consider the possibility of talking about that to the appropriate ministry?

Hon. J. Pullinger: I am actually surprised by the member's comments. He's suggesting that we should give a tax break to people from other countries, which will mean either reduced services or increased costs to British Columbians. The tourism industry, I would like to point out, has doubled since 1991, or virtually doubled. It's gone from $4 billion to $7 billion. We're undertaking a number of innovative measures to ensure that tourism remains competitive in this province. In terms of small business, we have certainly taken some initiatives there to cut red tape and to make small business more readily viable, especially in its early years, including a tax break for our own British Columbia small businesses.

I heartily endorse those kinds of initiatives, which benefit British Columbians. I will encourage and undertake any discussions or other efforts to ensure that we continue to benefit British Columbians. But I reject the notion that British Columbians should lose services or pay more in order to benefit people from outside the province.

[W. Hartley in the chair.]

I. Chong: I just want to make it clear for the record that I'm hoping that the minister did not misunderstand the line of questioning that was posed by my hon. colleague from Parksville-Qualicum. The idea, as I understand it, is to find out the policies that work at cross-purposes with other ministries. In this particular case, we recognize that the Ministry of Finance is involved with the PST, but I understand that his line of questioning was just to see whether there was something in the works to perhaps encourage more tourism activity from overseas, from foreign visitors. The idea was not necessarily to be giving tax breaks to them, because we all recognize that British Columbia is certainly, in itself, a destination that foreign visitors want to come to.

[9:30]

[ Page 4118 ]

and Highways, where there was no consultation with that ministry in dealing with highway signs, which tourism organizations rely heavily on. They have been somewhat concerned that there will be a new cost to them. So a policy introduced by the Ministry of Transportation and Highways clearly impacts on the Ministry of Tourism.

What we're seeing is that a number of policies that are developed or that emerge out of one ministry can in fact impact on the Ministry of Tourism. I want to be clear that the minister understands that we're always looking to see whether there are policies developing or policies that may be developing and what might be in the works. I would ask the minister to consider the comments in light of that, because what we are trying to establish is that ministries do speak to each other. Is there a forum for that to occur, whether that's at a deputy ministers' council or whatever? There certainly should be a place, and if there is a place, then perhaps the minister can advise us that this does occur.

Hon. J. Pullinger: Those kinds of consultations do happen. They happen at all levels, from cabinet through the ministry. A number of the issues raised -- for instance, the decision of another ministry to have cost recovery for advertising signs on the highway. . . . We've actively worked with that ministry and in fact exempted smaller businesses as a result of those discussions. Some concerns remain, so we are continuing to work with that ministry to deal with the outstanding concerns. But there have been discussions on a variety of levels on those policies.

There is a process within government that we do try to capture other ministries' inputs where it's relevant. Obviously, with such a huge organization and under any government, that sometimes goes amiss. But by and large there's a great deal of input from this ministry and minister on these kinds of issues.

R. Thorpe: Could the minister expand on what businesses she was able to have exempted on the proposed new Ministry of Highways signage-billing program?

Hon. J. Pullinger: I'm reluctant to get into a debate about highway signage. The questions about process are absolutely appropriate, and we do provide a great deal of input into those kinds of processes. For other questions about other ministries, I would direct the member to the estimates of those ministries.

R. Thorpe: I do understand what the minister has just said, but the minister did make the statement that through consultation with other ministries, she was able to exempt or get exemptions. . . . Or at least I thought that's what I heard. Maybe if I didn't hear that correctly, we could have the record read. Or you could just say that's not what you said. Did the minister in fact indicate that in her ministerial consultations, the ministry in fact got some exemptions for tourism and small business?

Hon. J. Pullinger: The discussions around the signage policy took place at a number of levels. This ministry's job is to ensure that the impacts on small business, which is. . . . As the member knows, the majority of tourism businesses are small businesses. It's well known, and the policy in the first instance reflected that discussion. However, there remain some outstanding concerns, so we're continuing those discussions to deal with those outstanding concerns.

R. Thorpe: With respect to. . . . I didn't know we'd be getting into a discussion on signage at this point in time; I thought we'd get into it sometime in the next little while. Could the minister then advise. . . ? How do I phrase this correctly so we can talk about it? What kind of a budget allocation exists in Tourism B.C. or the estimates of the ministry to work with small business and in particular tourism operators on signage throughout the province of British Columbia?

Hon. J. Pullinger: Again, this is similar to other questions about exact budget or FTEs designated to do certain things. There are a variety of policy issues that happen on a daily basis within government. We in the ministry deploy resources to those issues in the most effective and efficient way possible, but as there is no department to deal with the back-country recreation policy, there is also no department to deal with signage. It's simply that with the limited resources we have, the corporate services branch on tourism policy or Tourism British Columbia are the most appropriate people from those parts. In other issues that come up, there may be other people or other parts of the ministry that are deployed. But it's simply that there is no pigeonholed budget, nor is there any pigeonholed individual or individuals to deal with these policy areas. It's simply the most appropriate person at the most appropriate time.

R. Thorpe: Can the minister acknowledge that the Ministry of Tourism has in fact received written representation from COTA with respect to this possible imposing of signage fees in British Columbia? Can the minister advise if she has passed those concerns on to her cabinet colleagues?

Hon. J. Pullinger: I am not aware of a letter. There may be one; it hasn't come to my attention yet. If the member has it, I'd be happy to have a copy of it sent to my office, and we'll certainly check. However, I think what's more important is that we had a meeting last week, which the tourism industry attended. I wasn't able to, so staff from the ministry attended on my behalf. So Transportation and this ministry were represented, plus people from the tourism industry, including some from COTA.

R. Thorpe: I guess my point is that funding commitments have had to be reduced for whatever reason. I think one of the roles that I would hope the minister and the minister's office can play is with a voice through to other ministries. If we continue to reduce funding for whatever reason -- and I'm not going to get into those because we said we wouldn't -- I think it's very, very important, as Tourism B.C. tries now to get off the blocks and move forward, that at least their concerns are having a voice through your ministry to the cabinet. So I would very much appreciate that undertaking.

Hon. J. Pullinger: Indeed, a very important function of this ministry and for me as minister is to advocate within government and elsewhere for the industry, and we certainly do that. I'm retaining the policy function in the ministry, in part, for that reason.

Also, I don't expect that the new agency will kind of disappear into the sunset. I fully expect to work very closely with the new board and the new agency, and therefore will 

[ Page 4119 ]

retain probably a closer relationship with the industry than has been in place historically. So absolutely, that is an important function and one that I fully intend to retain.

R. Thorpe: Well, yes, since the new Bill 9 does indicate that the business plan will come to you and that you have final sign-off, I do expect you're going to play a fairly active role in that.

I'm just wondering if the minister could advise how many overseas tourism offices, either direct offices or agency offices, are in place at this point in time and where they are located.

Hon. J. Pullinger: I probably can provide the names of the places. There's one in Australia, California, Germany, Japan, the U.K. and Taiwan, as well, of course, as Victoria and Vancouver.

R. Thorpe: Could you advise the annual cost of operating those offices?

Hon. J. Pullinger: I don't have that breakdown at my fingertips, but I'd be happy to provide that in writing to the member, as closely as we can.

R. Thorpe: I appreciate that answer. Just a point of clarification, and maybe you could put it in the note to me: will those funds come out of Tourism B.C., or do they come directly out of the ministry? Wherever the funding for it comes from, I'd appreciate that being included in the note.

Hon. J. Pullinger: The funds come from Tourism British Columbia.

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

Motion approved.

The committee rose at 9:43 p.m.

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