(Hansard)
THURSDAY, JUNE 12, 1997
Afternoon
Volume 5, Number 22
Part 1
[ Page 4327 ]
The House met at 2:06 p.m.
G. Brewin: I have two introductions today, and one is on your behalf, hon.Speaker. I have great pleasure in introducing to the Legislature a member of the Danish parliament, who is a member of the Social Democratic Party. Her name is Ms. Tove Lindbo Larsen. She is the vice-president of the health committee and the former minister for Greenland. She has joined us today, and would the House please make her welcome.
If I may, hon. Speaker, I have a family from Nanaimo who are here: Nelson and Donna Allen -- I'm not quite sure where they are, but they are in the gallery -- and Nelson's children Barbara and Blair Allen from Victoria. Nelson is a school trustee in school district 68. Donna is a counsellor at Nanaimo District Secondary School and an activist for the Harewood Family of Community Schools. Would the House please join me in making them welcome.
P. Reitsma: In the gallery today is a good friend of mine from Parksville, Jim Banks. He is a councillor and deputy mayor of the city of Parksville. In fact, he was my councillor for six years when I was mayor of Parksville. He has also been the administrator of the Trillium Extended Care Hospital for 16 years. Would the House please make him welcome.
Hon. D. Streifel: It's kind of a great day for me today -- an introduction
this morning of a school from Mission, and this afternoon another school from Mission is
here: Fraserview Elementary School, with 22 grade 7 students and their teacher, Mr. Fred
Ewert. Hon. Speaker, I'd like to emphasize that when classes and teachers come to visit
me, that's exactly why Mission is Mission, with the cooperative community spirit we have
there and the work we've been able to do over the last few years
M. Coell: In the Legislature today are a number of community leaders from my riding. I would like to introduce them: Gary Lunn, the newly elected MP for Saanich-Gulf Islands; Don Amos, mayor of Sidney; Nichola Wade, acting mayor of Central Saanich; Linda Michaluk, mayor of North Saanich; Rian Martin, president of the Saanich Peninsula Chamber of Commerce; Fraser Smith, representing the peninsula first nations; Carl Mawby, president of the North Saanich Ratepayers Association; and Allan Claxton, chief of the Tsawout band. They are here to support the Save the Sidney Courthouse Coalition. Would the House please make them welcome.
Hon. P. Priddy: From the excellent city of Surrey and the excellent riding of Surrey-Newton, there are 53 students from Panorama Park Elementary School, who are herewith their teacher, Mrs. Graham, and other wise and responsible adults whose names I do not have. I would ask the House to make them welcome.
S. Hawkins: In the House today I have been asked to introduce the following people: Marie Rosko, president of the Sidney Business Association; Edward Connor, vice-president of the Sidney Business Association; Elizabeth Kinch, president of the Central Saanich Ratepayers Association; and Patricia Chilton, director of the Central Saanich Ratepayers Association. They are all here today in support of the Save the Sidney Courthouse Coalition. Would the House please help me make them welcome.
The Speaker: This gives new meaning to the phrase: if it's worth doing, it's worth doing twice. [Laughter.]
E. Walsh: I am privileged today to welcome the CUPE delegates to the precincts. They are here this week for their annual convention. At this time, I would also like to recognize Bernice Kirk, who is president of CUPE, B.C. region, until her retirement this weekend. She has spent many years of long, devoted service to the largest membership of a CUPE local in the province. I would ask the House to join me in congratulating her and welcoming the CUPE delegates to British Columbia.
Hon. S. Hammell: I would like to introduce a friend of mine from Surrey, Dwaine Martin. He is visiting his family in Victoria and is here in the gallery to watch question period. Would the House please make him welcome.
I. Chong: Today in the House I would like to introduce Sidney councillors Jack Barker, Peter Wainwright and Tony Whittall. Along with them are North Saanich councillors Ken Eng and Alice Finall. They are also here today in support of the Save the Sidney Courthouse Coalition. Would the House please make them welcome.
T. Stevenson: I'd like to introduce a good friend of mine, Ian Roberts Taylor. He and his family lived across the street from me for a dozen years when I lived on the east side. He is over here today as one of our valued public servants to speak with his ministry, and then he'll go back to Vancouver. I hope we would make him welcome.
G. Abbott: I have two introductions to make today. First of all, I'm delighted to welcome to the House a constituent from the Shuswap, Della Faulkner from Enderby. She is a nursing student who is here doing a PhD in health policy. As well, I'd like to introduce today Mayor Andy Kormendy of Ashcroft who, in a remarkable coincidence, is herein support of the Save the Sidney Courthouse Coalition. Would the House please make them welcome.
E. Walsh: Twice in one afternoon, hon. Speaker -- this is wonderful.
I have today visiting the House 15 women from the Kootenay area who are graduate students, elders and staff of the Ktunaxa Independent School Society. They have either completed or are completing their native women's arts and crafts cooperative training program, which the hon. Minister of Small Business, Tourism and Culture is responsible for. This is the first visit for these women and these students to the city of Victoria and to the Legislature. I would hope that this House will welcome them with me. But, hon.Speaker, I would just like to welcome them. Ki?suk kyukyit. Husukilq?ukin kin wam. Welcome. I hope you enjoy your visit. Would the House please join me in welcoming them.
V. Anderson: I'd like the House to join me in welcoming some interested and concerned British Columbia citizens: Brenda Harfield, Audrey Mawby, Isabelle Connor, Alice Johnson, Bernie Johnson, Doug Wedman and Tybring
[ Page 4328 ]
Hemphill. They are also here from Saanich North and the Islands for the Save the Sidney Courthouse Coalition. Would the House please make them welcome.
[2:15]
H. Lali: I think these guys are trying to steal my punch line here. Hon. Speaker, I too would like to join my colleague the hon. member for Shuswap in welcoming my mayor, Andy Kormendy from Ashcroft, who I thought was here trying to save the Ashcroft courthouse. Would the House please make him welcome.
Hon. C. McGregor presented a message from His Honour the Lieutenant-Governor: a bill intituled Park Amendment Act, 1997.
Hon. C. McGregor: It is my great pleasure to announce today the introduction of this bill, which will help preserve the immense diversity of the natural and cultural heritage that is so special to British Columbia. This bill will permanently protect and establish more than 86,000 hectares of new parkland and will establish 15 new parks for all British Columbians to enjoy. In addition, we are providing permanent legislative protection to more than 70 existing parks and protected areas already established by order-in-council. The new parks represent the implementation of land use planning decisions in the Kispiox, lower mainland and Kamloops regions. Also of special note is the formal establishment of the Stawamus Chief Park, which was announced as part of the lower mainland park legacy.
In addition to its important biodiversity protection and conservation aspects, our provincial park system plays a major role in the lives of ordinary British Columbians. Almost 90 percent of our provincial population has used parks, and 60 percent use them on a yearly basis. These numbers are truly impressive and indicative of the importance of parks to British Columbians and of the role they play in satisfying the public need for relaxation, camping, outdoor recreation or just spending time with family and friends.
By taking this step in the introduction of this bill, we are showing once again our international leadership in the establishment of protected areas. The creation of these parks is critical, as the government continues to work towards its goal to set aside 12percent of the provincial land base in protected areas. I am pleased to announce that this bill will move us closer to our goal and that now more than 9.4 percent of our province is in protected areas. By taking this next step in the designation process, we are ensuring that these natural areas are set aside forever for us and for future generations.
Bill 29 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.
SEXUAL ASSAULT CONVICTION APPEAL
G. Plant: On March 27, 1996, a former Mayne Island school teacher named Ian Cocker was convicted of the sexual assault of three minors and was sentenced to 14 months imprisonment. The defendant decided to appeal on the basis that he had not received a fair and speedy trial. In late April the Court of Appeal allowed his appeal and threw out the charges against him because the case had taken too long to get to trial.
My question is for the Attorney General: will he today assure the victims and families on Mayne Island that he will seek leave to appeal this decision to set Mr. Cocker free?
Hon. U. Dosanjh: Obviously this is a very important and serious matter. My ministry is reviewing the matter, and I await the recommendations of the criminal justice branch to determine what course of action they tell me to take.
G. Plant: Regrettably, this has happened before. In the 1993 Armstrong case, sexual assault charges against a teacher were thrown out after a 23-month delay between the laying of the charges and the trial. In the Cocker case the delay was 17 months. The issue is not how often this is happening, because the fact is that one case like this thrown out for delay is one case too many.
My question for the Attorney General is: will he explain to the victims on Mayne Island why, after losing the Armstrong case, he has allowed this to happen again?
Hon. U. Dosanjh: The hon. member well knows the traditions of our system of justice. When the matter has been before the courts and the appeal issue is being reviewed by the criminal justice branch, he knows that it is inappropriate to comment, even indirectly, on the issue. I can assure the House and I can assure British Columbians that the criminal justice branch is looking at the matter, and it will be dealt with.
COURTHOUSE CLOSURES
M. Coell: The Attorney General is pressing ahead with plans to close the Sidney courthouse
-- this despite the fact that according to an impact analysis prepared by his own
ministry, criminal cases will begin backing up in the Victoria courthouse. Mr. Speaker, justice must not be delayed
Interjections.
The Speaker: Order, members, please. Let's hear the question. Sorry, member.
M. Coell:
Will the Attorney General agree that this is not the time to be closing courthouses anywhere in British Columbia?
Hon. U. Dosanjh: The issues around court closures are extremely difficult. Those are not easy decisions. We have to move towards regional justice centres across British Columbia, and we're doing so.
The issue around the Sidney courthouse, with which the hon. member is concerned, is a very important one. We have looked at the issue. In fact, just by way of my own welcome to the political leaders of the community, I welcome them, as well. It's important that they are showing concern for what they see to be a very important issue. I can tell you that I consider this issue to be very important.
The cases from the Sidney and Victoria family courts would be consolidated in Victoria. Renovations would be done,
[ Page 4329 ]
and you would have a court that serves the needs. You would have the same number of judges, the same number of court workers. During peak hours, rush hours, you have 30-minute service from Sidney for a couple of hours around rush hour in the morning and in the evening. During non-rush hours, you have 15-minute service from Sidney to Victoria. People in the other regions of British Columbia, in the outlying areas in the north and in the interior, travel much longer distances under much more difficult conditions.
We in British Columbia all have to make sacrifices to make the system of justice work. Applause.]
M. Coell: It's interesting that the government would applaud the closing of courthouses throughout British Columbia. It's shameful!
The minister's own documents say that they will be saving little money by closing the Sidney courthouse when you add the million dollar-plus renovation to the Victoria courthouse and the extra costs of commuting for police officers. In fact, the province is going to end up paying money to keep an empty building in Sidney, because Sidney's bylaws will not allow the courthouse to be used for anything else.
With examples of more crime in our communities every day, will the Attorney General tell us how justice will be served by closing courthouses in British Columbia?
Hon. U. Dosanjh: Obviously the opposition is focusing on the wrong issues for crime prevention. Crime is prevented before it happens; courts come into play once the crime happens. This government is committed to crime prevention. We have poured more money into crime prevention than ever before in the history of British Columbia.
Let me also advise hon. members that the matter of rezoning the courthouse building in Sidney is a matter between the city and B.C. Buildings Corporation. The Ministry of Attorney General administers the courts. We have decided -- and the decision is final --that that courthouse and all of its functions will be moved to Victoria.
IMPACT OF SIGN FEE ON
SMALL BUSINESS
J. Weisgerber: My question is to the Minister of Transportation and Highways. When the mandatory sign program was introduced, small businesses were assured that there would be no charge for this service -- one they didn't want in the first place. It was bad enough that they lost their own signs, which were torn down and hauled away if they didn't remove them themselves, but at least they were assured that the money they had invested would be partially offset by new standardized road signs that gave everyone equal access to advertising on the highway.
Why has the minister broken the promise of the previous government and now imposed a$250 sign fee on small mom-and-pop businesses that simply can't afford more taxes from this government?
Hon. L. Boone: I wish you'd not only attend caucus meetings but also read
your mail, hon. member, because you would have found out that in fact we have put that on
hold for the time being while we consult with
Interjections.
Hon. L. Boone: Do you want to hear it?
But we are very concerned about the impact it's having on the small operations, in particular the campgrounds and the bed-and-breakfasts, etc. We are reviewing it, and we will be coming back with some other changes that will, hopefully, deal with those issues.
Interjections.
The Speaker: I caution both sides to please keep the level down so that I can hear what's going on.
J. Weisgerber: I'll certainly check my in-basket if the minister will check her out-basket.
A supplementary, Mr. Speaker. Will the minister then tell me whether or not she has written to businesses who were advised, even before the June implementation date, that they would be required to pay the installation fee for signs that had been knocked down by the highway contractor, even before the program was to be instituted? Businesses in Chetwynd were told that if they wanted the sign up, they would pay for the sign -- they would pay for the installation.
Has the minister checked her out-basket to see whether those people got a letter telling them of the change in the program?
Hon. L. Boone: It's interesting that
Interjections.
The Speaker: Members, please.
Hon. L. Boone:
Interjections.
The Speaker: Members, please. This is very entertaining, but it is impossible to hear what's being said.
Hon. L. Boone: We have written to all the people who received invoices and advised them that we are not expecting payment of those invoices until such time as we actually review the situation and find out how we can mitigate for some of the smaller businesses out there.
HYDRO COURT CHALLENGE
OF DFO ORDER
C. Clark: Last week B.C. Hydro filed notice that they would be fighting DFO's order to stop killing fish in the Cheakamus River. On the one hand, we have the Premier quite rightly complaining about American over fishing, while on the other hand, the government's own power company is fighting the only regulations that stop it from killing as many fish as they feel like.
[ Page 4330 ]
Will the minister responsible for B.C. Hydro go to the executives at B.C. Hydro and tell them they're making the Premier look like a hypocrite, and that they should withdraw this outrageous court action immediately?
[2:30]
Hon. D. Miller: In her zeal to appear to be effective, the member has overstated the
case with respect to B.C. Hydro. In fact, it is important to note that B.C. Hydro spends
$5 million annually for fisheries management and enhancement values. There is a report
-- the Ward report, which I'll be happy to send to the member
C. Clark: The reality is that the reason this government never asks B.C. Hydro to live up to its environmental responsibilities and protect fish habitat is because it affects B.C. Hydro's bottom line, and the government wants that money. That's the real reason they don't ask them to live up to their responsibilities. So the Premier is down in the United States complaining, and meanwhile this minister won't do anything to ask B.C. Hydro to live up to its responsibilities.
Will the minister order B.C. Hydro -- I'll ask him again -- to stop this outrageous court challenge which will lift all those regulations that are intended to protect fish habitat from B.C. Hydro's irresponsible practices?
Hon. D. Miller: On behalf of the management and the new board at B.C. Hydro, I really must take offence. I have appointed some outstanding British Columbians, including Mr. Jim Sinclair, a vice-president of the United Fishermen and Allied Workers, to the board of B.C. Hydro. I have personally met with the board. I have told them, hon. member, that I want B.C. Hydro to be a shining light -- a shining light -- in terms of a utility that manages for fisheries values.
We would be derelict in our duty if we did not seek clarity, so that we do not, as a result of an order that lacks clarity, do some unintended harm to fisheries values. We put fish foremost. When it comes to B.C. Hydro, we'll continue to do that, hon. member, and I think your remarks, quite frankly, are really out of line. [Applause.]
The Speaker: Thank you, minister. That ends the matter. Perhaps members now have that excess energy out of their systems.
Interjections.
The Speaker: Order, members! This is only Thursday, for heaven's sake.
M. Coell: I'd like to thank the government for that ovation, just for standing up. [Laughter].]
I have the honour to present a petition to the Legislature. This petition is signed by4,011 members of Saanich North and the Islands. It is to save the Sydney courthouse, as you might expect, Mr. Speaker.
The Speaker: Members, I have two duties to perform. The first is to table the ombudsman's special report No. 19, "An Investigation into the Instability and Recession of Willemar Bluffs."
The Speaker: I also wish to offer the ruling on the privilege motion raised the other day.
Hon. members, I have now had an opportunity to review the matter of privilege brought to the House yesterday by the hon. member for Okanagan-Penticton. It seems to me that the heart of the matter raised by the hon. member appears on page 2 of his statement, and the allegation is that the member's privileges were breached in two ways: (1) the Deputy Speaker should not have assumed the chair for the purpose of ruling on the original matters of privilege, because of a reasonable apprehension of bias; and (2) in the disposition of the hon. member's points of privilege she demonstrated actual bias.
Let me begin by emphasizing one point. It would be virtually impossible and quite improper for the Speaker, in this instance, to attempt to weigh the evidence which the member has tabled in support of the allegation of bias, or the counter-evidence presented by the Government House Leader. This is because it is axiomatic in the law of parliament that any such charge should be brought forward by way of a substantive motion under notice and not clothed in the guise of a matter of privilege. As all hon. members are aware, any charges of impropriety or bias directed at a presiding officer are treated by parliament with the utmost seriousness, and must not, then, arise as incidental to another proceeding.
Our standing orders and our practice since 1985 make it abundantly clear that no appeal lies from the decision of the Speaker, the Deputy Speaker or the Chair of Committees. Infact, in 1986 an all-party committee of this House, after extensive deliberations, recommended inter alia that appeals of the Speaker's decisions should be abolished. The House then unanimously adopted new standing orders, including standing order 9 as amended.
I would also refer all members to the following commentary which occurs in MacMinn's Parliamentary Practice in British Columbia, second and third editions. I quote:
"If one had to select a single amendment to the Standing Orders recommended to the House by the Select Standing Committee on Standing Orders and Private Bills in 1985 which, in the long run, will contribute most toward the enhancement of the dignity of the Legislative Assembly of British Columbia, the amendment to Standing Order 9, abolishing appeals from a ruling of the Chair, would be considered paramount."
It is quite clear from the hon. member's statement of privilege that he takes exception to the decision, when he suggests on page 2 that the apology as offered was conditional. The hon. member goes on to say, at the top of page 3: "Thus it is my contention that no person sitting in the Chair, acting reasonably or objectively, could have accepted the minister's statement as putting an end to the matter."
I want to emphasize, then, that while it is not in keeping with parliamentary practice for a Speaker to review decisions
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of a Deputy Speaker, or indeed of committee Chairs, in this particular instance it seems to me, as your Speaker, that a brief observation on that decision cannot be avoided, in order to determine whether there is any indication whatsoever that an element of bias, as alleged, could be extrapolated from the decision.
Erskine May's Parliamentary Practice, twenty-first edition, at pages 140, 141and 143, confirms the widely accepted proposition that an apology is a full answer to the type of offence alleged in this matter. Indeed, the authority quoted above goes further when it states that even after a finding that a member's conduct amounts to a breach of privilege or a contempt, an apology is a full answer and satisfies the House. In this case, I note the apology was made without any such finding.
The Deputy Speaker heard the apology as given by the minister and had only to decide whether or not, in her judgment, the words spoken constituted a genuine apology. The Deputy Speaker made that determination, which under our rules is not subject to an appeal to the House or the Speaker. That decision having been taken, the alleged offences which were the foundation for the earlier matters of privilege -- i.e., that the member misled the House -- were fully answered.
There is, however, one more principle which the Chair wishes to bring emphatically to the attention of hon. members, and that is that the actions of a presiding officer ought not to be criticized incidentally in debate upon any form of proceeding except a substantive motion. Indeed, it has been held that any reflection upon the character or the actions of the Speaker, other than by a substantive motion, may be punished as a breach of privilege in itself -- Erskine May's twenty-first edition, at pages 127, 180 and 325, for the information of members.
It is the Chair's view that the matter of privilege as stated contains a clear accusation of bias on the part of the Deputy Speaker and, in the form in which it was presented, might in itself be categorized as a breach of privilege in this House.
In summary, it must follow that the matter of privilege fails on two grounds: (1) in essence, it amounts to an appeal of the Deputy Speaker's decision, which is clearly contrary to standing orders 9 and 15; (2) it contains a charge of bias against the Deputy Speaker, which can only be brought forward by a distinct motion on notice.
Hon. J. MacPhail: In Committee A, I call Committee of Supply. For the information of the members, we'll be debating the estimates of the Ministry of Small Business, Tourism and Culture. In this chamber, I call Committee of Supply. For the information of the members, we'll be debating the estimates of the Ministry of Employment and Investment.
The Speaker: Before I call the committee Chairs, I see the member for Surrey-Cloverdale
B. McKinnon: I ask leave to make an introduction.
Leave granted.
B. McKinnon: I ask the House to welcome 43 grade 7 and 8 students who are herewith their teacher, Mr. Blaney, along with several adults from Diamond Elementary School in Cloverdale. They've come to learn a little bit about the history of government. I ask the House to bid them welcome.
[2:45]
The House in Committee of Supply B; G. Brewin in the chair.
ESTIMATES: MINISTRY OF EMPLOYMENT
AND INVESTMENT
(continued)
On vote 24: minister's office, $374,000 (continued).
G. Wilson: I am pleased to enter into these estimates debates and to put questions to the minister with respect to gaming.
My questions -- in order for the minister and for the staff to follow along -- are essentially going to try to focus on several key issues that I think need clarification with respect to how the Gaming Commission, the lottery advisory committee and the new regulations are now being brought about in the province; and secondly, to discuss what the impact of some of these regulations are likely to be, particularly with respect to revenue flow and the revenue stream to government.
I guess my first question is to try to sort out under what statutory authority Mr. Clark is operating. It's interesting to note that his committee, which has now become the driving committee, is called the lottery advisory committee -- yet clearly what Mr. Clark is talking about is a lot more than lotteries.
One would assume that the authority provided to a lottery advisory committee is provided under a statute which is the Lottery Act. It's also assumed that the Lottery Act provides, under section 3, for a committee to be struck. The terms of section 3 under the Lottery Act are very clear. It is a committee established by the Lieutenant-Governor-in-Council and called the lottery advisory committee, which I'm assuming Mr. Clark is chairing. Its role is to advise the minister respecting the administration of this act or regulations or any matter respecting the conduct of lotteries, or to assist the minister in administration of this act and the regulations, and perform other functions the Lieutenant-Governor-in-Council specifies. One would assume that the statutory authority that is provided for Mr. Clark is provided under section3(l)(c) of the Lottery Act -- that it is the other functions that council-Governor-in-Council has specified.
I wonder if the minister can confirm that this is the statutory authority for the actions of Mr. Clark and the activities of Mr. Clark and the lottery advisory committee. Or is there some other statutory authority that has been provided that gives the LAC --the lottery advisory committee -- the opportunity to be acting as it is with respect to the expansion of gaming regulations?
Hon. D. Miller: Yes, it is the Lottery Act.
G. Wilson: There are a number of people in the industry who are curious as
to why
[ Page 4332 ]
that essentially is now directing gaming expansion? Why did the government not select to do that through the Gaming Commission?
Hon. D. Miller: I do apologize. I was discussing with staff and perhaps may
have missed
The commission derives its authority, as I understand it, from a section of the Criminal Code; the advisory committee, as I've confirmed, from the Lottery Act. The federal statute, by the way, uses the term "lottery" to describe all gaming. That's why, I think, that appears.
With respect to the development of a separate act, that question has been raised, and my response is that the lottery advisory committee's other role is the development of a statute. I'm not sure what description you'd put on it, but it's a new statute governing gaming in the province.
G. Wilson: I'm not sure that I heard the rationale for not allowing the Gaming Commission to be the authority, the body, that would essentially be driving these expansions forward. Why do we need a lottery advisory committee when the commission is properly chartered and quite capable, under existing regulation, to do what it is that the LAC is now doing under Mr. Clark?
Hon. D. Miller: In terms of a general description, the commission's purpose,
if you like, was to ensure
The role of the commission was to ensure that nothing untoward happened, that the
rules were followed, and that when it came to any particular issues -- for example,
the distribution of revenues by charities, with so much to the operators and those kinds
of questions
There is to some degree, I guess in that sense, some overlap. I don't think it's
a particular problem. We have, for example, a commission that currently governs the charitable
casinos but with the Lottery Corporation ordering and being responsible for the slot
machines in those casinos. So there is a sense that where there may be some overlap
It's important that when you introduce new policy in this field which has an element of controversy, you take the time, first of all, to try to get all of the facts, as I've said, to make the right decisions, to move forward and, on the implementation side, to do it in the right way. So we think the way we've got it set up is the right way.
The acting chair of the Gaming Commission is one of the members of the lottery advisory committee. In addition to that, one of the other members of the lottery advisory committee is the former chair of the Gaming Commission. That was actually at my request. Mr. Macintosh had been there for about a decade and was very well versed in the field of work that the commission was engaged in. I thought that his advice and his knowledge would be extremely useful as we move forward. So there is an overlap in terms of the kind of personnel. I don't anticipate that there are any particular difficulties or issues that might arise as a result of this.
G. Wilson: I think the minister will know that it's not my style to either attack or impugn the integrity of the people on the commission. I'm not suggesting for a moment that these people don't have expertise and that there isn't good reason for the people who are on the LAC to be on the LAC. I'm not taking issue with that at all.
What I'm trying to do is to understand the rationale behind the movement that
the government has made from November 1996 to June 1997. Gaming essentially had two
masters prior to the beginning of this year: the Ministry of Attorney General had authority,
and the Ministry of Employment and Investment had authority. It would appear, as I go
back through the minutes of the commission, that it really dates as far back as November 1996.There was discussion about how complicated it was going to be to have gaming
expansion take place so rapidly if, in fact, the two-master model -- if I can use that term --continued. So it would appear that by December 2
So it would appear that what took place after that is that there was a movement to change that. That's where this minister entered into the picture, because on December 3and 4, and later on January 13, the minister attended meetings which changed that and essentially suspended work on the moderate expansion of the day, according to the minutes of the chairman's activities in that year.
That brings us to January 13, 1997. What it says at that point in the December 4minutes -- if the Chair would just oblige me, I'm coming to a question, but I need to set this background so the minister knows where I'm coming from -- is that there was a briefing to the chair on the government's decision to prepare options for expanding gambling in the province. This is December 4, 1996:
"The minister provided me with a letter requesting we" -- that is, the commission -- "suspend work on the moderate expansion
. . . . The minister appeared to accept that charitable organizations should not be adversely effected by the introduction of `government gambling.' I advised we would assist in providing information and advice to the staff. We're preparing options. . . . "
At that point, gaming gets moved into this minister's jurisdiction, and there is a quick movement to bring on Mr. Peter Clark, who was even in the picture as early as December 13, where he and Mr. MacKinnon were providing information on gambling expansion.
[P. Calendino in the chair.]
So clearly this was well underway in this minister's purview prior to the first of this year. Clearly the shift of bringing
[ Page 4333 ]
the gambling expansion regulations into play were well discussed within the minutes of the B.C. Gaming Commission prior to the beginning of this year. By January of this year Mr. Peter Clark was on board, because he was introduced and attended the commission meetings to speak about his study on gaming options for the government, which has been well canvassed, I think, by the member for Kamloops-North Thompson. I don't think we need to go back through that.
I guess my question to the minister is: what prompted the suspension of the work that was being done by the Gaming Commission? Why did you suspend that work which was already underway? Why was Mr. Clark brought in under the LAC, under the Lottery Act? Why was the normal process that would take place within the Gaming Commission no longer adhered to? Rather, Mr. Clark, it would appear, reports directly to the minister. Certainly these minutes would reflect that. Why was that the option that was taken with respect to putting this forward? Some would argue it was so that the minister could direct fast-tracking for gaming expansion without the Gaming Commission being an impediment to that potential coming along.
I'd like to hear from the minister on that, because it's an issue that's causing some concern to those in the industry who really are curious about the almost autonomous power that it would seem Mr. Clark and the LAC have now assumed.
[3:00]
B. Barisoff: I ask leave to make an introduction.
Leave granted.
B. Barisoff: I would like to thank the minister for allowing me to make this introduction at this time in between questions.
I'd like to introduce Gerry and Sandra Turchak from Penticton. Along with them are Heart and Jenine Demunck from Belgium. Would the House please make them welcome.
Hon. D. Miller: The commission is responsible for charitable gaming only, really. We were looking at the potential for expansion, and the government's view was that the Lottery Corporation and the lottery advisory committee were the vehicles to use. And that's what we did. I did have discussions. I can't recall the specific dates -- the member's mentioned some dates coming out of correspondence -- but I did talk to Mr. Macintosh and advised him of our intention to examine these questions. I think I wrote to him to put the work that the commission was engaged in on hold. There was no particular difficulty with that. It was simply the appropriate vehicle, in our view, to examine the question. Then finally, decisions were made to have a lottery advisory committee and the Lottery Corporation behind it as the implementation vehicle.
G. Wilson: What prompted the decision on January 27 to take gaming out of the AG and move it into the Ministry of Employment and Investment? Why would this gambling expansion not have been able to take place ordinarily through the Ministry of Attorney General? After all, it seems that that would be sensible, given the relationship to the Criminal Code and given the fact that there are regulations. It appears that on January 27the commission was told that there would be a move, and although the commission wouldn't suffer any budget cutbacks as a result of that move, but in fact at that point this minister takes control.
Hon. D. Miller: It may be a question to ask the Premier in his estimates. Those decisions are made by the Premier. As a minister, I'm delighted to accept any challenge that the Premier offers. One potential reason could be that the audit and investigation function resides with the Ministry of Attorney General. Some in other ministries have thought that there should be a separation, but regardless of that, that's only speculation on my part. You really would have to ask the Premier. He asked me to take the assignment, and I did it quite gladly.
G. Wilson: I'll make a note to ask the Premier that when we get to the Premier's estimates and see what we come up with.
One of the things that is required, then, under this lottery advisory committee and under the regulations is for the committee to set their terms of office. That is something that is required of them under the act. Have they set their terms of office? If so, what are they? Are those terms of office available for us to review?
Hon. D. Miller: I understand they are in the order-in-council. We don't have it with us; we can see if we can get that.
G. Wilson: I have that order-in-council. Maybe I've overlooked it; I'll have to check it out. But I didn't see it there.
I guess the other issue that needs to be addressed is: within the terms of office, presumably
there is also some understanding as to how long this committee intends to sit. I'm
assuming that the implementation of gaming regulations is going to be completed
Hon. D. Miller: No. I did indicate that the other function was the development of a new act. I would anticipate them being in place, but not with precision, until that event does occur -- until there is a new act developed and brought forward.
G. Wilson: I know I don't want to wade into the area of future policy, because I know the response that I'll get.
Let me move on, then, to the extent to which the LAC, the lottery advisory committee, has really driven the agenda for expanding gaming. The minister will know that one of my concerns -- and I think the concerns of a number of British Columbians -- is that this has happened in the absence of a lot of public scrutiny. I know the minister may not agree with that, but there are all kinds of documents that indicate that it certainly has been in the interest of the lottery advisory committee to move these new, expanded rules in as quickly and as quietly as possible. That theme comes through all of the legislation from February onward. In fact, with respect to bingo changes even as recently as a few weeks ago, they're still saying: "Please don't tell anybody about them, because we're about to bring them in." We'll get to that in a minute.
Why is it that these changes have to be done in the absence of public knowledge? I'm assuming there are some legitimate reasons, one of which, I suppose, would be around the operation of casinos. You have to be properly prepared and properly positioned to take on the request for expanded gaming.
[ Page 4334 ]
If it's out there in the public forum, I'm assuming that people are going to come in wanting to play games that may not be available yet. But generally speaking, I think there's an awful lot of suspicion out there that might be causing unnecessary anxiety that wouldn't be there if we were a little bit more open and a little bit more forthcoming with respect to what it is that the government has planned.
Hon. D. Miller: Really, there is no attempt at secrecy, if you like. There has been extensive debate on the topic, it's clear. Ultimately, I do believe that government's responsibility is, as I say, to get the facts, make a decision and listen to the public. We've done that; we've made a decision.
I also tend to think that no matter what the issue is or no matter what the level of controversy that surrounds that issue is, people do expect government to actually make a decision. Once that's done, you tend to see a bit of a levelling off of some of the debate. If you appreciate my thrust here, prior to a decision there's a great deal of debate -- pro, con, etc. After a decision, people generally accept that the government's made a decision. If they think that the government has responded or listened in a relative sense, then I think the anxiety level is substantively decreased, and that's my sense in this case. I mean, I'm not saying I'm absolutely right, but that is my sense in this case.
There is also a tour. There was a meeting of the lottery advisory committee here in Victoria last night, and they are touring around the province. There will be public discussions. There will be opportunities in terms of implementation for people to register their opinions. The committee has met with the charities. The issue there -- I think the member has raised it before -- is the issue of protection of revenue, revenue splits,etc., with the bingo operators and the casino operators.
There's no attempt to be absolutely secret. I know there were some memos written about it, but I can't claim responsibility for every memo that's ever written. The member knows that I'm not reluctant to engage in discussions on these kinds of questions. I think we've done things appropriately and are proceeding appropriately.
G. Wilson: There are lots of memos written, saying: "Keep it quiet. Don't tell anybody." I don't know why that would be. It would seem to me that a broad and full discussion is something that most people would welcome, frankly. Nevertheless, it does make interesting grist for the political mill -- you'll have to give me that.
Nevertheless, let's come down to some of the specifics with respect to what we are dealing with. I think that the new expanded rules for charity casinos are pretty well established now. Most people know what they are; they have now been made public. I think everybody knows when the implementations are going to be, but I do think that there are a number of areas where there are still some very serious concerns.
Some of those areas of concern, I think, rest on the bingo side of things. I understand, and I've been trying to fully understand and appreciate, that there a number of different types of bingo that are going to be licensed in the province as of September this year. Among those are electronic bingo, which is one form; stand-alone bingo; something called linked bingo, which is yet another form; as well as other types of games.
What I'm curious to know from the minister is: to what extent has the minister or
his staff or the LAC prepared documented reports with respect to the impact that these
new bingo games are likely to have on those charities that are heavily dependent on bingo as
a source of ongoing revenue? Many people will know that in many communities the bingo
hall is on every Tuesday, Thursday or Wednesday night, or whatever it is, and a number
of charities depend on that -- are absolutely dependent on that for the ability to
continue to do the good work that they do in the community. So can the minister tell me
what studies have been looked at with respect to the implementation of these new games,
in particular
Hon. D. Miller: I don't have information on the "studies," and there may be some we can forward. But really, there are three bingos: the traditional paper bingo; the electronic, which is in the one location; and linked, which obviously is one game linked to more than one area where they play.
I think what would provide some comfort for the charities is that there should not be or will not be any loss. Pooling has been underway for some time. Pooling is a simple concept but makes some fundamental sense, given that bingo playing times -- days, evenings, nights, etc. -- are random. There are some days or evenings that are better revenue generators than others. And by pooling the revenue and apportioning it, it seems to me it's a better system for all concerned.
We have also talked about the ability, through enhanced gaming, to
G. Wilson: I guess one of the difficulties that comes into it, and I wanted
to get the minister's feeling on this
The way the government has been able to sell it, according to the documentation I have here, is that the LAC -- this lottery advisory committee, which was part of my initial discussion -- has indicated that because the gross take, the gross pot of money made, is going to be greater because we now have $500 bet limits rather than $25 bet limits, there's going to be a bigger pool of money to play with. Therefore, yes, on a per-hour-worked basis, you may have to work longer hours to get revenue back. Your net take is still going to be greater. The difficulty with that is that there are lots of charities that don't have the foot soldiers out there to be able to work those hours. They may have to combine with others to be able to meet the new regulations. That's a concern. I'd like to hear about that from the minister before we come back to the bingo aspect, which is linked into it, as well.
[3:15]
Hon. D. Miller: You're right. With expanded hours, more volunteers are required. I suppose it's part of our system, whether you talk about the casinos, or even bingo. One of the issues that has arisen, particularly in the smaller communities, is that you get a variety of charitable organizations.
[ Page 4335 ]
And some of them, quite frankly, have a better capacity to organize volunteers to make sure the paperwork is done and all of those kinds of things, than others.
Going back to the issue of pooling, one of the advantages is that out of the pool, there can be one person hired on a full-time basis that can do that kind of bookkeeping and make sure that those records are all maintained correctly, as opposed to relying on the availability or non-availability of someone from the volunteer side in each particular organization doing that job.
So there are pros and cons there. There is a requirement for more volunteers. But as I say, the lottery advisory committee is meeting with charitable organizations to discuss the issues around the revenue split. We want to really provide some assurance that, number one, there won't be a decline in revenue as a result of the expansion. I think that's important. How that ultimately comes down -- and I'm not going to get into negotiations here -- is a subject of discussion between the lottery advisory committee and charitable organizations.
K. Krueger: I seek leave to make an introduction.
Leave granted.
K. Krueger: In the precincts today -- I think some of them are with us -- are 48students from Marion Schilling Elementary School in Kamloops. They are grades 6 and 7. No doubt they have some adult sponsors and chaperons with them, and their teacher, Mrs. M. Gallagher. I'll ask the House to please make them welcome.
G. Wilson: I'm aware that LAC is meeting with the members of both charitable casinos, as well as with some of the bingo operators. I'm fortunate in that some members are prepared to provide me with copies of the minutes of the meetings, so I'm able to keep up to date with what they're talking about.
What's interesting, just by way of a slight digression
Certainly, in the options that were provided -- and I'm assuming that this chamber
is not considered "the press," although some, though it's doubtful, may be monitoring
this estimate debate
I'd like the minister to comment on that. Because both the options that are provided inhere, in terms of the model 1 and model 2 options in the May meeting of this advisory group, show enormous revenue to government and limited revenue to charities for hours worked.
Hon. D. Miller: Look, we're really talking about how expanded gaming interacts with
the existing charitable gaming. And as the member is aware
The new revenue, as a result of these new initiatives
G. Wilson: What's proposed -- and the minister is absolutely correct; well,
not quite, but close
Let's not try and pretend that you're not getting much money. I mean, you aren't today, but this is becoming a government cash cow. For a $60 million increase to charities, the government gets $330 million. That doesn't sound like a great deal to me, somehow. If I was negotiating this, I'd say: "Hey, we aren't getting our fair share here. What's going on?" Maybe the minister might address that.
Hon. D. Miller: There's no sort of claim that anyone has. It was a government initiative to expand gaming in this modest way. I know that it has been characterized by some as sort of a cash grab, a revenue grab or a cash cow. Has anybody ever seen a cash cow? There's almost an inference there that somehow the government is taking this money, running away and hiding it somewhere. Governments only use revenue to provide programs for people. Governments are conduits for the public. If indeed additional revenues can be obtained, and those revenues can go to critical areas like health care, education and programs for people, what's wrong with that? It's not as though the government is robbing the bank and running away somewhere. The money goes back to the people.
In the case of the charitables, clearly they have had a significant revenue stream --$112 million -- to do the very good work they do, and I applaud the charitable organizations for that work they do. I applaud them, and there is potential for an upside. But the vast majority -- and we have not attempted to be deceptive or misleading -- will go to government, and government will use it.
In our estimates here, I was quite pleased to have both my critic for mining and the critic for the high-tech industries more or less say that they think my ministry could do with some more money.
[ Page 4336 ]
They'd like to see a bigger budget in some parts of my ministry. I appreciate that, because they're concerned about the areas they're the critics for. Quite frankly, I can't disagree, but we have to go to Treasury Board. We took a real beating this year, but we're standing up and doing our job. To the extent that additional resources can provide better services or provide the ability for government to expand the economy and those kinds of things, then I think it's worthwhile. I don't see anything wrong with it.
G. Wilson: I guess it depends on what the source of that revenue is. I don't want to digress into a long moral discussion about whether it's right to be funding government programs off the backs of losers, because that's where you make money in gaming. It's from the people who lose. The people who win take it home. The people who lose are the ones who are funding your programs. I don't mean that in any way to sort of take a shot at those who don't win. Goodness knows, sometimes it can be tough when the tables are stacked against you, or at least, the odds are against you.
Interjection.
G. Wilson: I'm not even going to get into the political analogy. Nevertheless, that's clear.
But there is something that's interesting in this agreement, and that is the guarantee the government has provided of a $118 million provision to revenue. In other words, the government is guaranteeing that there's a $118 million split to the charities. What's interesting about that is that it says that that guarantee is going to be there until there's a one-third, two-thirds split possible. Now, this hasn't been signed off. I think this is still in negotiation, but what's interesting is that the offer is out there.
With $118 million, that means that there's
Hon. D. Miller: Well, principally from slot machines, and it does provide a protection as well. But I guess, to state the obvious, if the government had not looked at the question of expansion and had made no decisions and said, "We're not going to allow expansion," then that revenue would have remained at $112 million. There would be no upside, except maybe growth and utilization. I think there is an upside, but look, as I said before, I'm not negotiating. Not here, anyway.
G. Wilson: Again, I'm just trying to work through this to understand it. I'm not here to negotiate either, and I'm not attempting to try and entrap the minister into saying something that I'll fire off to the committee and say: "Look see, we've just won another point." Frankly, I don't favour the expansion of gaming, and I think I'm on record as saying that I don't think governments should be living off the avails of gambling. I just don't think it's good, sound public policy. Unfortunately, I haven't been to convince the members opposite of that, and I'm going to have to deal with what comes forward.
[3:30]
But there's a line here that I think is important. The minister talks about slot machines, and the charitable casinos are now being pushed into a position where --
well, some
Municipalities do not have a consistent set of regulations, and that's talked about here. Some people who are in the business are going to find that the costs -- because there will be fees attached -- are going to be much higher, and they'll be much more onerous if they need building permits, new health permits, the new regulations with respect to parking and all those other kinds of things they're going to have to put in place. Those costs are going to have to be borne by the casino operators.
I'm curious to know whether the minister is taking that into account when we start
to look at the splits that are coming out of these new regulations, so that smaller
operators or operators who are faced with less accepting municipalities
Hon. D. Miller: Yes, there are provisions for leasehold improvement costs that might be required.
G. Wilson: Could the minister just tell us who pays for those? Or are they going to be built into the casino share -- that is, the operator's share?
Hon. D. Miller: In the share, from the revenue flow.
G. Wilson: I'm assuming, then, that for those leasehold costs -- those additional capital costs that may have to be put in place -- the casino operators are going to have some kind of signed agreement when their licence is in place that will allow them to have some kind of security to be able to take back that money from their shares. Is that the way it works?
Hon. D. Miller: My apologies, hon. Chair, I sometimes
G. Wilson: It's just simply this. How does the casino operator guarantee that they'll get that money back? Is that going to be a part of their licence, or is it going to be something they'll have to make application for and, if so, to whom do they make that application? How do they get that guarantee?
Hon. D. Miller: As to the precise form, we'll have to wait and see. But the issue will be resolved through discussions with the lottery advisory committee.
G. Wilson: So the lottery advisory committee is going to
[ Page 4337 ]
an agreement with an operator that says that if they have additional costs as a functional part of their particular operation, they can take a greater share. If that's the case -- and I'm assuming that that's what I'm hearing-- from what proportion of the total revenue does that share come? Does it come from the government's chunk, or does it come from the charity's chunk?
Hon. D. Miller: Well, the splits are based on net, I think. In other words, any expenditures are taken off and the remainder is divided.
G. Wilson: I'm not sure I understood that answer, because if those additional costs are there, presumably those costs are going to be covered, or recovered, over a reasonably short period of time. One doesn't assume that there are going to be ongoing costs. If there are capital costs associated with expansion, whatever those costs are, they're going to be recovered, paid for and ended. I'm assuming that at that point the casino will fall back to a standard arrangement. What I'm really driving at here is how do those people who are forced into those additional costs because of municipal regulations recover those costs from government? Does it just come out of the total share that that casino is allowed to keep?
Hon. D. Miller: I understand that there is, first of all, a ten-year guarantee in terms of the contract. The revenues are split. In other words, from the net revenues from the win you take off the casino share -- currently it's 40 percent -- the balance is two-thirds government, one-third charity. But essentially, there will be provision made; I may not be able to state it with absolute precision here, but there will be provision made.
The question is, if there has to be expansion into new facilities, maybe additions
to existing facilities because of lack of space
G. Wilson: If there's some detail of how that works, that would be useful to me, just so I have it clear in my own mind, at least. I'd like to know how that can work.
I come back to the last set of questions. Some weeks ago, there was a convention of sorts -- a day-long meeting, I suppose you'd say -- at the Simon Fraser downtown campus that dealt with the gaming regulations and gaming changes. I had an opportunity to attend it, to just listen and observe and hear Mr. Clark's commentary to a number of owners and operators. At that meeting he disclosed, to the great surprise of a number of people in the room, that the government intended to maintain some form of trust -- to withhold the increased dollars that are made by expansion until such time as there can be an agreement on how the split will take place. Because clearly, the new rules are in place: expanded gaming is already underway and there are new games that are now available for people. Therefore, additional revenue is coming forward and there is yet to be an agreement on how that split is going to take place.
The additional revenue -- that is, the increased revenue -- is apparently going into some form of trust that will then be allocated at some future date when this split is determined. Can the minister tell me what is anticipated in terms of dollars in that trust; who administers that trust; under what authority is that trust established; and what is anticipated with respect to the allocation of moneys? Is the government essentially going to pay it out all at once, or is there some kind of a pay-out scheme?
Hon. D. Miller: We have proposed to establish that. It's not established at this point, but it will be.
G. Wilson: Does that mean that under the expanded rules now operating, the same split that existed prior to the new rules is in place now in those charitable casinos that are running with those expanded hours, expanded rules? And are the revenues that are coming in the same now as they were then -- particularly under new games, which I understand are already up and running?
Hon. D. Miller: I'm advised that that's being held at the casino level in
their trust accounts. It's accounted for and, depending on the outcome of those discussions, will
possibly be a take back from
G. Wilson: Here's a concern, and it sort of underscores what people in the charity casino business have been telling me -- that is, people who are running outfits like the Cancer Society, the Heart and Stroke, and so on. What's happening at the moment is that they've got members who are working the longer hours in order to generate the increased revenue, but as long as there is a lack of agreement with respect to the split, they're not getting the benefit of those additional revenues. In fact, they've got people who are now working considerably longer hours and not getting revenue back for the hours worked.
According to the documentation of the minutes of the February meeting, and again out of the April meetings, the discussion around the split, in terms of negotiation, is that it's anticipated that it could take up to a year to negotiate. That seems to be an unacceptable situation, because you can't be having volunteers going out and volunteering their time to try to raise money for their preferred charity only to have the additional revenue sit in the casino in a trust fund so that they can't even access the additional dollars -- the dollars they would get over and above what they would have worked under the old rules. It's important that we get this thing nailed down pretty quickly. I would think the minister would agree, and I would like the minister's comment on that.
Hon. D. Miller: We have really only had since the beginning of this month in terms of the extended hours, so the member would appreciate that it does take some time to kind of figure some of those things out. And look -- we're not going to take forever to come to agreement. I don't anticipate a year; I anticipate this year, and not at its end. So I don't see it as a major problem. I think we'll come to agreement, and we'll resolve all that and get on with it.
[ Page 4338 ]
G. Wilson: Now I understand that the government has undertaken to suggest
that the splits will be negotiated. There will be review of the splits -- whatever
is negotiated this year, given that we can come up with some agreement. I guess there is
a concern, and I don't
It's more difficult for the charities, even though they're at the table, to have weight in those negotiations. Of course, they feel somewhat vulnerable as a result of that. There are anxieties that may be unfounded, and I guess time will tell whether they're unfounded or not. But I understand from the minutes of the last commission meeting that the government intends to review the split -- whatever is negotiated this year -- next year. What's the basis of that? We can't have an industry that doesn't understand from year to year what their proportion of the take is going to be.
[3:45]
Hon. D. Miller: Well, there is a charitable advisory committee, and we've given them $20,000 towards expenses to help them in their discussions with government. Really, I think it's reasonable. I mean, you make a lot of projections in terms of what you think the revenue might be, but until you actually get into business and have a good operating year -- or an operating year -- you don't really know. So I think it's reasonable to take that position: let's come to an agreement in terms of the splits, etc., and see what a year brings. It's not a threat. They could be better off -- who knows? I think things will be fine.
G. Wilson: You know, I sat as a negotiator in labour negotiations for a longtime, and I've heard employers use the same line: "Hey, don't worry about it.
Next year we'll get a good year, we'll come back and we'll revisit these wage scales.
No problem. Trust us." I can tell you that I'm not very comfortable with that. This
idea that we can negotiate and next year just open it all up and negotiate again
So I think that the people who are in the charities have every reason to be concerned about
this, because once the government gets an appetite for this money
I'm going to close my questions because I don't want to take up more time than I should. But I do want to talk about bingo because I think that this is an area that we haven't heard enough about. I'm going to do that right after I yield to the member for Langley, who wants to make an introduction.
L. Stephens: In the House today are 34 grade 4 students from Blacklock Elementary School in Langley, with their teacher Jan Maynes, nine parents and three beginning teachers.
The Chair: Excuse me, member. I think you need to ask for leave.
L. Stephens: I ask leave.
Leave granted.
L. Stephens: Would the House please make them welcome.
G. Wilson: I want to read to the minister comments from a May meeting -- I think it was around May 14; I can't be sure of the date. It comes from Mr. Vic Poleschuk, who is the vice-president of BCLC. It talks about bingo enhancement and says:
"Linked bingo is targeted to be implemented in late September this year. The BCLC discussed the possibility of introducing electronic bingo into several test markets to measure its impact over a four-to-six-month period. Prince George and Kamloops were suggested as representative of the province, but please realize no firm plans have been made to introduce electronic bingo into specific communities. The initial electronic bingo will be a Starship model. Phase 2 may involve the introduction of new technology."
In an interview that Mr. Clark gave to "Canadian Casino News," appearing in this month's issue, the final question was with respect to the linked bingo similar to Alberta's Satellite Bingo and Ontario's Superstar Bingo. He suggests that linked bingo would be introduced in the fall of this year and that they don't anticipate any impact on any forms of gaming, other an increase in the attendance at those bingo halls. That's basically his comment.
I'd like to know what the basis of that information is. Going back to the minutes
of the commission, as early as February and March of this year the discussion of linked
bingo was taken up by the commission, and they undertook with respect to the bingo revenue split
As these new technologies come into play, if somebody doesn't have to go down to the local bingo hall and sit there and play bingo for the local church or the local charity, or whatever, if they can just play it right on their television sets and pay their revenue to the cable company and to the bingo company that brings you this linked bingo -- for huge pots; the pots are going to be province wide, if not countrywide, if not continent-wide in some cases -- then we're going to have a problem. Because bingo has been one of the core methods by which churches, charities and others have raised money on anon going basis.
I really want to know: if we made the decision to introduce a Starship model into British Columbia in September, on what basis was that decision made? Where is the research that demonstrates that there is some level of protection against community bingo? And why was the Starship model chosen as the preferred method of this so-called electronic bingo?
Hon. D. Miller: We've had Starship in the province for a considerable period of time. It will be province wide, not beyond that. There are some small halls that don't have the same kind of play, in terms of the number of days, etc. They'll be examined on a case-by-case basis. Alberta has TV, but we're not looking at that. We're looking at the Ontario model, which is not television; it's a telephone-line link to the halls.
I thank the member for his questions -- oh, maybe he has more.
[ Page 4339 ]
G. Wilson: I have a couple more, although I take the hint. It does say, though: "Phase 2 may involve the introduction of new technology." What I'm hearing the minister say is that the minister is providing some level of guarantee that we're not going to go to televised satellite linked bingo in British Columbia; we're going to use telephone lines only. Is that correct?
Hon. D. Miller: No. I'm advised that we're not looking at TV.
G. Wilson: The last question I have, and I'll yield to the opposition critic on this. In the revenue model that was discussed in the meeting in May -- I think it was May14 -- with respect to charity splits, specifically with respect to bingo, they talk about four types of bingo. They talk about paper bingo, electronic bingo, stand-alone bingo and linked bingo.
I'm assuming that the number of licensed non-profits, whether they might be connected to
various churches or connected to a service organization
Hon. D. Miller: Yes, the stand-alone really goes with the electronic. In other words, where there's an interval between play, the individual customer can use the machine to play one game. Whether they're there or not is on a hall-by-hall basis: it's at their request. The hall has to request it. That's my understanding of the stand-alone. I think that answers your question.
G. Wilson: By way of a final question, then, do I understand that the bingos currently played in small community halls -- just the little community halls that have had bingo licences there for as long as the community has been around -- are what's referred to as paper bingo? Will those licences be unaffected by the introduction of stand-alone or linked bingo in the same communities? In other words, you're not going to say that if you've got linked bingos or stand-alone ones, or if you've got electronic bingo, those stand-alone licences will be affected because of the introduction of this new bingo technology. These people will not be forced either to move to the new technology or suffer the potential of losing their licence because of the introduction of the new games. Is that right?
Hon. D. Miller: Well, we don't want to impact on those very small halls. By nature, the small ones tend to be in very small communities and tend to be somewhat separate or distant from the large ones. I guess there is ultimately an element of competition, but there always will be, I presume. They will be allowed to maintain their position as paper-bingo stand-alone halls, unaffected.
G. Wilson: This is my last question to the minister, at least on this issue. I'm delighted to come back and talk about B.C. Ferries, which I look forward to with great anticipation.
But with respect to the gaming issue and by way of response to that last question, you know that the concern here is about small communities, especially isolated, rural communities. I'm not so worried about what's going on in the urban centres because those competitions are already there, and I think there's a broad variety of opportunity to play, but in small communities like the one I come from and the one I know the minister comes from -- and the relatively small and more isolated communities -- there have been long-established bingos that have provided necessary revenue for a lot of local operations that do a lot of work.
If the new electronic game comes in
A last question to the minister. Under the act in which this lottery advisory
committee is chartered, and given that Mr. Clark has been underway since December of last year
Hon. D. Miller: My understanding is that it's the normal lag time because of the date of the session starting.
Finally, with respect to those halls -- again, we come from communities that are relatively small. I would think Powell River is probably a bit smaller than Prince Rupert, but I'll just use Prince Rupert as one example in terms of the issue of small -- I mean, there's one bingo hall. It is owned by individuals. It's utilized by all the service organizations. There is no competing hall. In terms of the introduction of the electronic, if it is determined that they don't want that to happen there, then it won't happen, and life will continue.
The electronic can only go into a bingo hall, unless the commission determines that they would license another one. Given that there used to be two and they couldn't survive, and now there's only one, that appears to be doubtful. I don't know that we need to be overly concerned, nor do I suggest for a moment that we should simply dismiss any concerns and say: "Well, there's the free market. Too bad." That's not my approach at all.
[4:00]
G. Wilson: I wasn't quite clear on the minister's response with respect to the 15days, because the act doesn't say anything about lag times here. It says the minister must lay the report before the Legislature within 15 days after the commencement of the first session in the following year. Well, given that Mr. Clark was on board in December last year, that means that this is the first session in this year. The act says that
[ Page 4340 ]
within 15 days of the commencement of the session, you have to table the report. So, I mean,
lag times
Hon. D. Miller: The reports end at the end of the fiscal. Report year-end time is at the end of the fiscal, right? March 31? Yeah, I believe that's true. Therefore the report is delivered in the following year. What the member would suggest is that somehow15 days after March 31 you'd have an annual report. So it's the lag time.
G. Wilson: By way of final comment, that was a cute out. I thought if the minister
had come back and said, "well, because the actual
K. Krueger: I've been told that as an act of mercy, every now and then the minister should have an opportunity to have a little break from the chamber. I wonder if he'd like one at this time, or if we should carry on?
The Chair: Does the minister wish a break?
The House recessed from 4:03 p.m. to 4:08 p.m.
[J. Doyle in the chair.]
K. Krueger: Before we took our lunch break today, the minister and I were discussing the issue of allowing slot machines into racetracks in British Columbia, particularly the somewhat delicate question of whether they'll be allowed when municipalities don't want them. The question of whether a municipality holds the lease is one twist to the picture. Assuming that a municipality doesn't have that lever, I had asked the minister if the province would more or less force municipalities to allow slots in. Of course, the question of charitable casinos came up as well. The minister referred to the unfortunate precedent in Vancouver with Club Keno. The answer seemed to be without a direct yes-or-no whether the province would again use the same muscle that was used in that precedent.
I guess I would like to get down to a yes-or-no answer. I had made the point that I think the provincial government should try to be respectful of municipality bylaws. I think the minister's last answer, before we yielded to the Government House Leader, was that indeed this government respects the law. I hadn't meant to challenge that, but I did want to know -- and I asked the minister -- if the government intends to respect municipal bylaws, specifically on the question of slot machines in racetracks.
Hon. D. Miller: Well, the same principle applies to slot machines at racetracks that applies to Club Keno in bars or the slot machines at existing charitable casinos. The only difference is in the situation where the lease is held by the city, as has been described. Therefore they have the ability to exercise some influence through their lease, but that's the only difference.
K. Krueger: If I could just get this down to a yes-or-no answer. My understanding, then, is that the province, under this NDP government, will use its power to override municipal bylaws with regard to the installation of slot machines within the jurisdiction -- that is, the territorial jurisdiction of municipalities. Is that correct?
Hon. D. Miller: Really, under the laws of Canada, municipalities don't have jurisdiction over gaming.
K. Krueger: It looks like I'm not going to get a yes or no, but I think the answer is pretty clear.
I'd like to ask the minister: if municipalities refuse to allow the zoning changes necessary
for charitable casino expansion
Hon. D. Miller: No. As I've said, we certainly respect the law. Municipalities don't have jurisdiction or authority with respect to gaming. They do in terms of zoning. Those are issues that are worked out. We're not involved in zoning questions. That's between the proponent of a particular development and the municipality.
Really, I'm just trying to make that the point that with all due respect to the city of Vancouver, the decision to install Club Keno machines actually was made prior to my obtaining this part of my portfolio. They are around our province; they're in corner stores, etc. The decision was made to put those into bars and the city of Vancouver said, "We don't like it; we're not going to allow it," and they passed a bylaw prohibiting it. That bylaw was ultra vires; it had no power.
The Lottery Corporation, which does have the jurisdiction, said to the city of Vancouver: "Don't do this, because you don't have the authority." Vancouver proceeded to do it anyway. The Lottery Corporation advised them that they had no recourse but to go to the courts. The issue went to the courts; it's cleared. The decision clearly upheld the law, and that's the way it's been forever. It's not anything to do with the lack of respect for municipalities; it's the application of the law of the land.
[4:15]
K. Krueger: Going back for the moment to a couple of issues we dealt with earlier-- having looked at the minister's answers -- I just want to kind of clean up my questioning a little on a couple areas.
One of them is the issue of who the gaming review -- Mr. Clark and KPMG -- consulted during the brief process that was undertaken for the production of this report. The minister had quoted extensively from the list of interviewees for the other study that KPMG had done, the Windsor study, but we didn't really go into too much detail on who the sources or interviewees were for the British Columbia considerations.
Looking at them, it's pretty clear that a number of people who would be interested in promoting the expansion of gambling were interviewed and considered. There's a list on page 5 of appendix A, under item (c), of how the KPMG group went about selecting its interviewees. Notable absences on the list are church groups, groups like CAGE -- Citizens Against Gambling Expansion -- indeed, really anybody that a person would expect to oppose gambling expansion.
[ Page 4341 ]
The minister did refer to this as a "thorough and objective study." I have had complaints by church groups and very prominent, very senior church people in British Columbia that the minister simply wouldn't make an appointment with them until after the announcement had been made. It doesn't look as though much of an effort was made by this team, either.
Again, I think the minister was very frank about the fact that when he commissioned Mr. Clark's exercise, he was looking at options. He wasn't necessarily looking for public input. But was there a deliberate intent not to have these people listen to those who would be adversarial to gambling expansion?
Hon. D. Miller: No, no, it was as the member described: it was an attempt together the facts, not to consult with the public.
K. Krueger: Just to clarify what I'm trying to ask, the minister did refer to this as a "thorough and objective study." In consideration of the fact that the nay side was not at all consulted, I wonder if we could really refer to this as objective or thorough and whether the minister might like to withdraw that description or amend it?
Hon. D. Miller: No, I don't withdraw at all. Looking at the appendix G, the bibliography, the literature review, it's wide and extensive -- so no, not at all.
K. Krueger: The minister referred to Dr. John Millar earlier in his responses in these gambling estimates. Dr. John Millar is the provincial health officer. I believe the context was that the minister was expressing agreement in respect of Dr. Millar's opinion, specifically with regard to poverty and its tremendously negative effect on people in our province and indeed in most jurisdictions. But specifically, this doctor has responsibility for British Columbia, of course.
I have a letter that Dr. John Millar wrote January 30, 1997. The letter is written to Art Towgood. Art Towgood, by way of explanation, is a tremendously sincere, hard-working retired professional engineer who is convinced heart and soul that gambling expansion is a very, very negative development for British Columbia. He constantly researches, works, gathers material and lobbies everybody who will give him an ear who might be able to affect the outcome. So Art Towgood had asked Dr. John Millar for some opinions as provincial health officer. I won't read the whole letter in the interests of time, but I will read a couple of paragraphs:
"The Hon. Joy K. MacPhail, Minister of Health and Minister Responsible for Seniors, has asked me to respond to your letter of December 9, 1996, regarding the impact of legalized gambling in British Columbia. From a public health perspective, I do not know of any social or health benefit that would occur as a result of increasing the availability of gambling to the people of British Columbia."
I'll end the quote there just to speak to that for a moment, because fairly consistently in the government's news releases concerning gambling expansion, the suggestion has been made that in some way health care is being protected by gambling expansion. The logic is obviously that there'll be more money, but what I and many other opponents of gambling expansion have been saying is that there will also be greatly increased health and other costs. But that's what Dr. Millar said, who we both accept as an authority. He doesn't know of any social or health benefits. So to continue, I'll read another paragraph now:
"The evidence is that those who participate in gambling, whether it be video slot machines or casinos, initially are those who can least afford it. The result is that family income may not be available for education, food, clothing, transportation and housing. In addition, with the increase of legislated gambling in a population, there is an increased number of problem gamblers. For example, a 1993 survey showed that 3.5percent of the population of British Columbia suffered from problem gambling. In Alberta, where there is widespread legalization of gambling, it was estimated in 1996 that 8.6percent of the population were problem gamblers. Problem gambling is defined as behaviour patterns which compromise or disrupt personal, family or vocational pursuits and includes pathological gambling at the extreme end of the spectrum of gambling involvement.
"I have spoken with Mr. Peter Clark, who is carrying out the review for the government, on the issue of increased legalization of gambling in the province. I am pleased to report that he has been made aware of the negative social and health impacts of increasing the availability of legal gambling."
Again, I appreciate that the minister sent Mr. Clark out to explore the available options for gambling expansion. However, the report as it's prepared -- and especially the KPMG appendix -- does purport to deliver information on the social and economic costs and consequences of gambling. Curiously, it leaves this information out that Dr. John Millar, who we both respect, has documented that he delivered to Mr. Peter Clark. The report was produced for the media and British Columbians -- I saw boxes of these reports going out --as justification, certainly backup, for the government's decision on gambling expansion.
Given the minister's obvious respect for Dr. John Millar and the quotes that he gave us earlier of his views on poverty and Dr. John Millar's opinion -- clearly expressed here, including the fact that those who participate in gambling are those who can least afford it -- I wonder if the minister would just give us his comments on how he reconciles his view of Dr. John Millar's competence, integrity and reliability with what he says in this letter and what the minister has announced.
Hon. D. Miller: I don't know the good doctor. I have met with him in my office, and he has some interesting and, I think, actually good theories on general health issues. But really, the "Gaming Review" report on page 3 talks about problem gaming and goes through some of the literature, some of the percentages, in a chapter. It says: "International and Canadian experience does suggest, however, that problem gambling impacts can be minimized by providing a controlled environment for gaming" -- which we've done -- "and by introducing a program of prevention, treatment and ongoing research," -- which we've done. It seems to me that Mr. Clark did indeed listen to the advice that he obtained -- in part, perhaps, through Dr. Millar but perhaps from other sources as well.
K. Krueger: There are some remarkable statements made in this report. I'll go into them in some detail as we go along. The report seems to me to be pretty dismissive of the concerns that are widely held about social costs and consequences, and we'll go into some detail on that.
The minister was kind enough to provide me before lunch with a document, which I read over lunch. I'd asked for the terms of reference that the government gave to KPMG when they were commissioned to do the report, which turned into appendix A. I believe the minister thought he was sending me the terms of reference, but I meant those that the government delivered to KPMG -- the instructions. What this is, dated December 10, 1996,is KPMG's outline of what they say they're going to do. I think there probably is an actual
[ Page 4342 ]
government document where the government told KPMG what they wanted them to do. Is there another document, or is this all that exists?
Hon. D. Miller: I understand that Mr. Peter Clark and his group did meet withKPMG to outline the parameters of their needs. That letter is a response from KPMG, trying to list the parameters as a result of those discussions.
K. Krueger: With respect, then, I'll just point out a couple of things that
kind of jump out at me in what KPMG says. For one thing, the letter is written
I had asked also for the r�sum�s of the people on the KPMG team. There's some very limited information in the KPMG letter, which names the people, but I don't see much indication of any background with regard to expertise in health issues and criminal law issues. Perhaps it's there, but it doesn't really show. So if you have some more detailed resumes of those people, I would appreciate the minister having that provided to me.
The other thing that really jumps out at me is that the government obviously followed due diligence to some extent in asking them to put some parameters on what this work would cost, and the partner of KPMG deals with that in his last page on the estimated cost. "Based on our existing knowledge," he says, "we estimate our professional fees to be in the range of $65,000 to $75,000." In my questioning this morning, the minister responded and enlightened me that the cost of the KPMG report had been $150,000,which is double the top of the range, for less than a month's work -- largely a book review and report; nice work if you can get it. I wonder what the ministry did about the fact that the bill came in at double the top of the range. Was there any negotiation of that? Was there any trimming of the amount actually charged or billed?
Hon. D. Miller: I'm not certain on this question, but I do believe that as the work progressed and the cost firmed up, that was communicated to Mr. Clark and was authorized and okayed by him.
K. Krueger: Another in the brief series of what I referred to earlier as
cleanup questions for myself, because I thought of some things that I should have followed
up with, or didn't have time for because other people intervened
Perhaps the minister is right that current casinos haven't been a huge factor -- the charitable casinos, the 17 that we have in British Columbia. I don't know that for sure. There is some indication that casinos are much more likely to lead to gambling addiction, for example, than lotteries -- something like 20 times more likely. But in any event, having made the change from $25 betting limits to $500 betting limits, and thereby increasing the level of gambling that can go on in these charitable casinos by 2,000percent, does the minister not agree that that is likely to be a factor in whether or not charitable casino gambling generates crime?
[4:30]
Hon. D. Miller: No, I'm not certain that anybody has produced that correlation.
I'm not certain, again, because I don't have the specific information. But even though
bet limits have been increased, one would have to look to see whether or not the
bets themselves
K. Krueger: I'm going to move on, then, a little bit. This issue has been broached by the member for Powell River-Sunshine Coast, and I just want to flesh out a couple of things with regard to comprehensive gaming legislation. And I'm not trying to get ahead into contemplated legislation, but perhaps I could refer to it as "missing legislation." This government -- the NDP government -- has anticipated comprehensive gaming legislation for quite some time and, I believe, have drafted gaming legislation and haven't tabled it. I'll just read from the October 4, 1994, press release -- which I quoted at the beginning of this portion of estimates. On October 4, 1994, the New Democratic Party government said:
"Improvements will also be made to how gaming is regulated in British Columbia. The government will introduce B.C.'s first comprehensive gaming act to strengthen monitoring and enforcement powers. All new gaming will be limited to adult only facilities. We will work to ensure, through legal reform, that a crime-free gaming environment exists for those who enjoy it."
And then, from another explanatory page that followed, under the heading "Stronger Regulation and Enforcement," this is a direct quote:
"Gaming in the province requires a firm legal foundation. The government will introduce B.C.'s first ever comprehensive gaming act to help ensure crime-free gaming for those who enjoy it by strengthening monitoring and enforcement powers. [and] ensure greater accountability so that all gaming is properly conducted and all revenues used for authorized purposes."
Recently we had these unfortunate events where it was found that money was being stolen from one of our charitable casinos in British Columbia. Also, Peter Clark, on page 5 in his gaming review report, says with regard to other jurisdictions in Canada that have gone into gambling expansion: "In all cases, the creation of new casino corporations was enabled by new empowering legislation." So I'd like to know why the minister elected to proceed with gambling expansion prior to any new legislation -- any comprehensive gaming legislation.
Hon. D. Miller: New legislation wasn't required.
K. Krueger: I beg your pardon. Someone came and whispered in my ear, and
I completely missed the answer. If the minister would indulge me
Hon. D. Miller: That member from Penticton -- nothing but trouble.
Legislative change wasn't required. The authority existed. We have said that we are going to introduce or develop legislation in future legislative sittings.
[ Page 4343 ]
K. Krueger: That's not one of the more confidence-inspiring responses the minister
has given me thus far. Because when you read about the consequences of this type of
move, it makes you tremble for B.C. families -- for our whole social structure. Even looking
at this expensive report and the things that it does cover
I'll just read a couple of quotes here. One is on loan sharking. It's found on page 67of appendix A, again in the KPMG material. It says:
"Loan sharking is not unique to gaming. It can often be a consequence of both illegal and legitimate gaming when credit is extended by organized crime at usury rates of interest. International experience has shown that loan sharking can take place within the confines of a casino environment in the absence of proper regulation and enforcement within the casino. With appropriate regulation and surveillance, along with aggressive enforcement, loan sharking can be prevented within the confines of the casino area."
When the member for Peace River South was questioning him earlier on the issue of
grey machines -- the illegal machines that have been in British Columbia for some time --
I believe the minister dealt
The KPMG people say:
"Grey machines refer to the myriad of illegal electronic gaming devices that are on the market today. Notwithstanding that grey machines are considered gambling devices and are illegal in Canada, police sources estimate there may be as 5,000 grey machines operating illicitly throughout B.C. According to police sources, these illicit machines are operated by traditional organized crime, specifically motorcycle gangs and ethnic street gangs."
Those are the kind of people that beat up kids at high schools in Vancouver. There are burgeoning problems; the reputation of Vancouver, which we all prize, is under threat because of activities by groups like that. So surely we want to cut off their funding sources.
To continue reading the quote: "The machines are placed in bowling alleys, restaurants, corner stores and other small local establishments." Since the government has no intention to put slot machines -- I hope, and certainly not from anything we've heard -- in any of those types of locations, I don't think there's going to be any head-to-head competition with these crooks. It goes on to say:
"Profits are split between the gangs and the store owners, with the owners receiving from 20 percent to 50 percent. Enforcing the Criminal Code as it relates to grey machines is difficult. Courts are reluctant to make criminals out of corner store owners and gathering evidence for court purposes is extremely time consuming for the police.
I know that the minister made the point that the police resources are very limited, and of course the budget is very limited -- we have deficit problems in British Columbia. So essentially, it sounds as though the government has pretty much thrown up its hands on this issue to date.
The KPMG people go on to say: "Quebec found that legalizing VLTs and providing provincial regulations for the immediate on-site search, seizure, confiscation and prosecution of illegal grey machines was effective in not only controlling grey machines but also allowing for the resolution of consumer complaints."
So if we're looking at this huge, massive expansion of gambling in British Columbia --an 1,800 percent increase in projected revenues from this type of gaming; and we have5,000 grey machines, whose locations, I understand, the B.C. Lottery Corporation actually has a list of -- and Quebec is telling us that when they did their comprehensive gaming legislation and gave themselves power for on-site search, seizure, confiscation and prosecution of illegal grey machines, they had success, then I don't understand why the minister would say that the existing provisions seem to be adequate. Why wouldn't we, before we took all the risks associated with this gambling expansion, proceed with the legislation that apparently has been drafted and redrafted and promised since at least1994?
H. Lali: I request leave to make an introduction.
Leave granted.
H. Lali: Sorry, hon. minister. This will take a few seconds here.
With us today in the gallery is a group of almost 45 students from the C.E. Barry Intermediate School in Hope, which is in my riding. There are several adults accompanying these grade 7 students -- and there's also another group that is touring right now that I'll be introducing a little later -- and their teacher Ms. K. Warner. Would the House please give all of these students a great Victoria welcome.
Hon. D. Miller: I do understand that the Ministry of Attorney General did act to develop a committee, chaired by a Crown counsel rep and including representatives of police, CLEU, UBCM, the city of Vancouver, etc. They will develop a report, are working on devising a coordinated strategy to deal with the issue through discussions, and the Ministry of Attorney General is now coordinating this process.
K. Krueger: KPMG goes on to say, under the subheading "Corruption, "that corruption is not unique to gaming. Well, I'm sure we didn't need that from them. That's why I said it's a bit of a Pollyanna report, from my point of view, and why I referred to the three monkeys that my grandmother used to have: hear no evil; see no evil; speak no evil. I mean, I'm talking about KPMG not seeming to want to include anything that was negative to gambling expansion without at least saying: "Well, it's not unique to gambling." We all know corruption's not unique to gaming. They didn't really have to keep telling us that.
But in any event, it says:
"In business, a form of potential corruption is the co-opting of employees. Casino and gaming operations are no different because so much cash is involved. Licensed employees can be co-opted, which not only affects the safety of the public and staff, but is also detrimental to the fairness of the games and the financial return to investors and government.
"However, this has been mitigated in other jurisdictions (such as Ontario and Quebec) which have established policies governing such areas as the standards of conduct and character of the participants within the casino industry, security background investigations to ensure compliance with the standards, licensing of all participants, training standards, operational and surveillance procedures, as well as regulatory controls."
I want to say here that I know we have the gaming audit and investigation office --GAIO -- reporting to the Attorney General, and I believe they do their duty zealously. But again, when we expand something 1,800 percent, wouldn't it be wise to introduce legislation to make sure we've covered all the angles to safeguard against this sort of thing in British Columbia?
[ Page 4344 ]
Hon. D. Miller: Certainly the system that we have here in British Columbia
is exemplary, I believe, with respect to the kinds of standards, etc. But just following
the rationale presented by the member that because we're going to have expanded gaming
and there's going to be more cash lying around, people will be influenced to commit crimes --if I've generally taken the drift of the member's comments
The important thing is that you have very rigorous standards, training for employees and people covered by surveillance cameras. All of that is in place in British Columbia. There was an incident recently, it was discovered, and the audit and investigations branch took quick action. I don't really anticipate any significant problems in that regard.
K. Krueger: Well, that sounds like hear no evil, see no evil, speak no evil about any of the concerns, even within these hallowed walls. And far be it from me to suggest that the banks are above reproach, by the way, although I don't see much indication that anyone in the House thinks that there is any threat of criminal activity there -- especially not the kinds of criminal activity that always seem to come up in reports about gambling expansion.
[4:45]
Here again KPMG says, with what we come to expect as the constant disclaimer: "Prostitution and crimes of violence are not unique to gaming establishments. "We knew that. They happen in a lot of places. That's how they start off. But then they say: "These are common forms of criminal activity of traditional organized crime. Due to the greater number of visitors to any commercial entertainment operation, including large casino operations, there is a potential for these crimes to increase."
Once again, to me that's just an indication of why the government would want to have a very tight control over the consequences and ramifications of a move such as has been made with this massive gambling expansion.
I had someone ask me the other day to ask the minister whether he knows of any casino anywhere that doesn't have problems with prostitution and illegal drugs. I've never been to a casino, so I will ask the minister on behalf of the person who requested that I do so.
Hon. D. Miller: Neither have I.
K. Krueger: But I am just a lowly opposition MLA with very few resources --whatever crumbs fall from the government table -- so I don't have a large staff to do my research and investigate these matters. I wonder if, through the work that he has had his ministry do, the minister has ever heard of a casino operation that doesn't have problems with drugs and prostitution.
Hon. D. Miller: We're not aware of any reports that cover that particular topic.
K. Krueger: I'll turn for the moment, then, to the issue of charitable gaming. I've had a great deal of concern expressed to me, and I know the minister has as well, by the charitable gaming operations around the province that they are uncertain, of course, how these negotiations are going to proceed. They are uncertain and fearful about how destination resort casinos will draw business and income away from them that the charities have come to rely on.
There was some interaction between the minister and the member for Powell River-Sunshine Coast earlier on the negotiations for charities. Has there been any decision taken with regard to the government's share of the profits from contemplated destination resort casinos?
Hon. D. Miller: Well, given that we're sort of in the process, we haven't put the RFP out yet. It's very difficult to estimate the future, because it depends on so many variables that it wouldn't be worth the effort to try to quantify that at this point.
K. Krueger: Yet we have a projection of anticipated revenue from destination resort casinos, which I would think must have been based on some projection of what their gross would be and on what percentage the government would take. Can the minister tell me what those projections were, and what the percentage is expected to be, just on the basis of that forecast?
Hon. D. Miller: We have not booked anything in this fiscal year from destination
K. Krueger: The charities themselves are certainly concentrating on the projections for subsequent years and are fearful, as I said, of the competition from destination resort casinos. I've been hoping that the government may decide that destination resort casinos aren't such a good idea. Is there any current consideration of putting a moratorium on destination resort casinos and not proceeding with that aspect of gambling expansion?
Hon. D. Miller: No.
K. Krueger: Granted that the negotiation isn't complete with charitable
casinos as to the government's percentage from the new revenues with gambling expansion,
and considering that the split was relatively small as far as what the government
received from charitable casino gaming up until the expansion
[ Page 4345 ]
Hon. D. Miller: No, we have not taken anything. We did deal earlier with the question of the trust. Now, once some of these issues are clarified, there will be some retroactivity, but we're not there yet.
K. Krueger: I know that it has been a relatively brief time since those betting limits went up, but I wonder if the minister could give the House an indication of what experience British Columbia has seen thus far in the charitable casinos since then. How much has revenue increased in those operations since the day of the betting limit increase?
Hon. D. Miller: It's very early; the higher limits only happened at the beginning
of May. But I understand that there's a great deal of volatility and therefore one
can't really
K. Krueger: The change in hours is even more recent, if I'm remembering the sequence of dates correctly, than the change in betting limits, so I think it will be even more difficult to give an answer, and I respect that. I wonder if there has been any change observed that the minister could quantify, even as tentatively as the last number or even more tentatively, as to the increase in gross revenues from those operations with the extended hours.
Hon. D. Miller: No number, but from an anecdotal point of view, there appears to be an increase in the afternoon customers.
K. Krueger: There will be some obvious issues that would arise and probably others that aren't obvious to me or to the people who don't go to casinos, but with a larger amount of cash having to be handled in these operations, with more customers coming in and out and generally more activity, there will be more security concerns. I know that in Kamloops we've had problems with people ripping off employees, even from restaurants sometimes, who go to make their bank deposits. There would be a cash handling issue here. Could the minister enlighten the House as to how the charitable casino operations have responded to these changes and the way they have affected their business? What issues have they raised so far?
Hon. D. Miller: There has been an increase in the staff requirement and
an increase in security cameras. There has also been a change
K. Krueger: In the discussion about gambling expansion and in the statements and press releases from the government, there is frequently the assurance that the government will protect charitable gaming revenues. I wonder if the minister would just define that. Does that mean an assurance that charitable gaming revenues will never be less than they were up until the date of the gambling expansion?
As part of the same question, because it's certainly hand in glove, there is even an indication in some of the literature that the government has assured people -- or Peter Clark has -- that with regard to charitable revenues there will be provision for continued growth. I'd like to know from the minister whether the charities have an absolute guarantee that their revenues will not go down, and what those provisions for continued growth are.
Hon. D. Miller: Yes, on the basis of continued revenues, providing there's no decline, then the charities will be guaranteed.
K. Krueger: So if there is a decline
Hon. D. Miller: No.
K. Krueger: Perhaps the minister will feel that his answer should be obvious tome, but in any event, I'd like to ask this question. We did canvass at some length the position the province would take if municipalities were opposed to slot machines. If municipalities end up trying to hold the tide against slot machines, would the New Democratic Party government again support the B.C. Lottery Corporation in actually suing municipalities to oblige them to allow the installation of slot machines?
Hon. D. Miller: I really am a bit perplexed with the question.
H. Lali: I request leave to make an introduction.
Leave granted.
H. Lali: The second group of students from C.E. Barry Intermediate School is now up in the gallery. They are from the community of Hope, in my riding. The group has almost45 students in grade 7, accompanied by several adults and their teacher Ms. Judy Kawaguchi. Would the House please make the group welcome.
K. Krueger: I'm sorry if my question was confusing. I'm just following the precedent established in the dispute over having Club Keno in pubs and bars in Vancouver, where the government actually initiated legal proceedings against the city of Vancouver. Should a dispute arise over the installation of slot machines within a municipality, would the government take that sort of legal action again?
Hon. D. Miller: I believe any legal action was taken by the Lottery Corporation, and rightly so, since they have the authority in these matters. Municipal governments don't.
[5:00]
We really have canvassed that question. I've tried to be clear. The member asked me some questions earlier, wanting to be definitive. I'll repeat: the authority and responsibility for gaming rests with the provincial government and the authorized agencies-- no one else.
[T. Stevenson in the chair.]
We made it clear to the city of Vancouver that they had no authority to restrict the installation of Club Keno machines in bars.
[ Page 4346 ]
They did not have the legal authority to do it. It would have been as though this House passed or tried to pass legislation that covered, from a constitutional point of view, the federal government. It would be ultravires. We would not have the authority to do it. That's the law. They may not like the law, but that is the law. Therefore the law will be upheld. They know that; they know that full well. They knew exactly what they were doing.
It's a shame that the city of Vancouver wasted whatever amount of taxpayers' money in a court action that they knew fundamentally they would not win. Why they chose to do it, given that money is tight and you don't want to throw it away, you'll have to ask them. I don't know.
K. Krueger: I think I know why they did it. Even if they were as sure as the minister believes they were that they were going to lose the legal argument in the end, the reason they did it was that they honestly believed it was a really bad thing for the people who live in their municipality. I suppose the minister actually knows that, too.
That begs the question: what should the province do in these negotiations with regard to its obligation to the taxpayer, so the taxpayer doesn't see two levels of government wasting tax money and fighting one another in the courts to prove things that the governments arguably knew they were going to be able to prove in the first place? Shouldn't the provincial government, purely out of respect for the other levels of government -- leaving aside the question of respect for the law -- sit down and try to negotiate these things in such a way that nobody is uncomfortable with them, and perhaps back off from some of these initiatives if municipalities don't want to see them happen? Isn't that the sort of thing that goes on between governments all the time, within Canada and around the world? Isn't it true that when countries have failed to negotiate things between them in good faith, wars have resulted? All sorts of economic losses occur -- not even considering wars -- just in the foolish disputes that arise between nations.
There are other losses, too. For example, if we and the Americans both sally out into the open sea and try and catch the fish before the other guys catch them, in the end everybody loses, because too many of the fish get caught. In the same way, wouldn't it make a whole lot more sense, if the municipalities are opposed to the installation of slot machines, to sit down and try and work that out with them? Perhaps we'd reconsider slot machines rather than flex provincial muscle -- whether directly or through the B.C.Lottery Corporation again.
Hon. D. Miller: We certainly respect municipal governments. There will be no expansion unless they desire it. I think that's showing respect.
Where the municipal government attempted to exercise jurisdiction they didn't have, there's also a principle that ought to be defended, particularly when it comes to issues such as this. We did what we had to do. I didn't enjoy the prospect of a little tiff there, but the B.C. Lottery Corporation took the action that they were obliged to take. Since then things seem to have settled down; I haven't heard a lot of noise out of the city of Vancouver lately.
Hon. J. MacPhail: Aye.
K. Krueger: It's always a pleasure to welcome the Government House Leader to the chamber -- voting as she walks.
Just one follow-up question from our discussion earlier about the protection of charitable-casino revenue. The minister made it clear that there was no protection if, for whatever reason, the overall revenue dropped -- at least I think he meant to make that clear. That takes us back to this fear about destination resort casinos. If a destination resort casino is approved somewhere -- be it a neighbouring municipality or within a municipality -- using the format that the government has allowed, and if the revenue of the charitable casino drops, will the protection extend to ensuring that that charitable casino continues to have the profits it had before the destination resort casino opened?
Hon. D. Miller: Applications will have to consider any potential downside impacts on existing charitable casinos. That will have to be considered in terms of the decision-making process.
K. Krueger: Since we've gone into municipal considerations, I just have a little bit more about municipalities specifically. There was a quote that I was interested in, and it certainly follows the reading that I've done elsewhere in this area. You hear people within municipalities talking about the potential for somewhat depressed economic areas to experience something of a jump-start by allowing gambling expansion activities.
Hon. Chair, I notice that the minister is obviously feeling distracted by the conversation behind him. That's all right? All right. Suddenly perceiving that one of my own is involved, I'll lay my hand upon my mouth and go back to my questioning, in any event.
We're talking about areas that see themselves as depressed and think there may be salvation in opening a casino or having gambling expansion of some kind. On page 51 of appendix A of the KPMG report, we find this quote:
"A negative impact on other businesses is certainly possible where the new gaming activities are being used to 'jump start' a relatively depressed location. In such a situation, gaming may draw customers away from other businesses and may severely aggravate an already difficult situation for those businesses."
My question is: will there be a warning by the provincial government to municipalities that may be considered depressed areas -- they're probably well identified by the provincial government -- that this is potentially a really bad idea?
Hon. D. Miller: The municipal governments obviously have a better understanding of their own jurisdictions than we do in terms of what's depressed and what's not. In addition to that, page 51 really talks about the experience of the very large casinos, not the type we're proposing. Then again, the evaluation will be done on any applications that come forward for destination casinos. It appears from the KPMG analysis on the Windsor side that in fact businesses in the downtown core have flourished as a result of that operation being in place.
K. Krueger: Again, though, both the minister and I have discussed how the Windsor experience really isn't all that relevant to any experience that we would expect any municipality in the province to have. The minister said that that isn't likely, because we aren't going into that size of casino. I said it isn't likely, because we don't have any Detroit next door as a market. Granted, municipalities have their own means of assessing costs and benefits and so on, but not all the jurisdictions and local venues that will be considering this gambling expansion have that. The minister has referred to
[ Page 4347 ]
unemployment issues and poverty issues with regard to aboriginal populations, and yet aboriginal populations are certainly considering gambling expansion venues.
There are other warnings in this KPMG report, as well, about things like emergency preparedness -- that certain emergencies may arise in a big -- or any size -- casino operation. Also, the report goes into detail about how very important police input is prior to a venue being approved. I'll just read a quote, if I might, on that subject. This is page 65 of the KPMG appendix. It says:
"Street crime and other criminal activity is not unique to casinos and gaming operations. However, gaming operations like large sporting events do attract large crowds, some of whom may be undesirable, and street crime may increase in the area surrounding the casino. Traffic movement and street offences in the area surrounding any expanded gaming operation (such as a casino) would typically be monitored by a combination of police and casino security personnel.
"An increased visible police or security presence in the area is seen as a crime prevention tool. Ontario, for example, has increased policing resources at each of the three casino sites by 25 personnel (total of 75) funded by casino revenues. Manitoba, on the other hand, does not have additional officers assigned to provide for added police responsibilities at the casinos and entertainment centres. Internal security for the casinos and centres patrol the parking lots and if police assistance is required, then they are called. Policies of crime prevention through environmental design in the area surrounding the establishment of a casino are currently being considered to assist in ensuring a setting for safer streets
. . . . "Although it is difficult to measure, prevention is seen as the key to minimizing criminal activity. From the perspective of casino security and safety, it is important that casino operations and the police cooperate to minimize the possibility of criminal activity within casino operations. Although law enforcement priorities are not necessarily the same as casino priorities, police in Quebec, Ontario and Manitoba have found it beneficial to have access to casino intelligence and surveillance in cases where there are ongoing police investigations. Protection of the police and the casino is achieved by pursuing the proper legal channels for the collection of evidence."
In the Attorney General's estimates, I asked the Attorney General of this government what preparations he had made for the predictable negative criminal consequences of gambling expansion. To paraphrase his answer and boil it down -- I don't think it's unfairly put -- I think his answer essentially was: "We'll deal with those problems if and when they arise, but we don't necessarily believe they'll arise." This report makes it very clear that prevention is considered to be the key and that other jurisdictions have gone well into prevention expenditures before problems ever arose.
Certainly in my own career in a different area, dealing with automobile crashes and soon, I spent 18 years handling the claims that flowed from car crashes and the last three years dealing with loss prevention. I felt that I was spending my time much more wisely and productively in loss prevention than I ever spent it in handling claims.
From my own experience, I have to say that I really believe in prevention, in having our eyes wide open when we make a decision and in going into any new venture with the maximum possible effort to ward off criminal activity, problems or things that will bring grief to people. So at the very least, I would hope that the provincial government, which had $150,000 to spend on this study, would forewarn local governments -- whether they be municipalities, aboriginal governments or regional district governments -- that these are the sorts of considerations they should have in mind when they contemplate allowing a new casino to locate within their borders. Will the provincial government be doing that?
Hon. D. Miller: The section that the member dealt with clearly pertained to the impact of very large casinos. We're not allowing those; that's the main point. We are in touch with the police, and there's no evidence to suggest that there's going to be any untoward impacts. Finally, the cost of the report is not charged against the government; rather, it will come out of the Lottery Corporation.
[5:15]
K. Krueger: Essentially, though, either the proceeds of the Lottery Corporation are provincial government revenue, in fact, or in the near future the profits are turned over to the provincial government, with 50 percent of them earmarked for health care. Is that not correct?
Hon. D. Miller: Yes. The way the system works
K. Krueger: That does keep coming up, doesn't it?
The point is that we wouldn't want to see local governments repeating an expenditure to do studies and evaluations that the provincial government has already paid for. When the minister says these cautions were there for much larger casinos, I don't think it necessarily follows that the same cautions aren't worth repeating for the size of casino that has been authorized in this expansion.
In any event, the money has been spent. It would be a shame for other governments funded
by the same taxpayers to spend it again. All I was really looking for was an assurance
that the provincial government
Hon. D. Miller: The decision to allow destination casinos is one that will be made by local government. They are well versed in the processes of looking at applications for developments, whether those developments be factories, new bars, new restaurants --you name it. They're quite capable of making up their own mind about those things.
K. Krueger: Sometimes it puzzles me that a question that seems so neutral and that merely, from my point of view, seeks an assurance that the province is going to protect the taxpayers by not seeing their money spent doing the same thing twice, seems to be a question that the minister just doesn't want to answer. So we'll go to a new question.
There's presently a process underway, as I understand it, where the UBCM has been invited to come forward with some sort of a plan as to how consultation will occur between neighbouring municipalities when one of them is contemplating a new gambling venue. I'd like to know the status of that negotiation.
Hon. D. Miller: We did ask for their advice. We have not heard back from them.
[ Page 4348 ]
K. Krueger: I'm not sure that the UBCM isn't waiting to hear from the provincial government, so maybe a little consultation could take place there.
One of the issues municipalities are interested in is: is there any prospect at all that the provincial government intends to share some of the revenue it enjoys from gambling expansion with local governments where new venues are located and, indeed, local governments where revenues to the current charitable casinos are increasing substantially?
Hon. D. Miller: There is the possibility, for destination casinos only.
K. Krueger: I take the answer to be yes, that the provincial government would be willing to consider sharing its portion of revenue from destination resort casinos with the host municipalities.
Hon. D. Miller: Yes. It's not an exact determination, but there is that potential.
K. Krueger: On the congruent question about charitable casinos -- which are probably going to be increasing their size, improving their facilities and so on to accommodate up to 300 slot machines and handling a great deal more revenue with the $500betting limits -- the 2,000 percent increase in betting limits -- is there any intent on the part of the provincial government to share any of its new revenue from charitable casinos with local governments?
Hon. D. Miller: No.
K. Krueger: I know that the provincial government has stated that it will be up to local municipalities to decide for themselves how to determine whether there is local support for an expansion project -- a new venue. Does the minister or the government consider it essential that a local government hold a referendum of any kind in order to determine that?
Hon. D. Miller: No.
K. Krueger: I've already mentioned that I think the government has been pretty clear on its commitment to not oblige municipalities to accept a new venue when they don't want one. But for the purposes of this estimates debate, I would like to have the minister's answer on record. Is my understanding correct that the government will not oblige any local government to accept the opening of a new venue if they don't want to?
Hon. D. Miller: With respect to destination casinos, correct.
K. Krueger: I hear the distinction very clearly. What about with respect to new charity casinos?
Hon. D. Miller: The same answer applies.
K. Krueger: If local governments, having seen an expansion within their borders, can quantify actual social costs that they are encountering -- be it increased policing costs or other social costs -- will the provincial government reimburse them?
Hon. D. Miller: I don't know that that's the case. Clearly any proposed development at the municipal level could conceivably have an impact on costs that municipalities have to bear, whether those be transportation costs, education costs --shared, obviously. All kinds of costs are associated with development, and there's no obligation on the part of the province to simply reimburse the municipality every time there's a cost associated with a development. They are in the position of making a decision about whether or not that development is something that they think is of benefit to their municipality. If the answer is yes, there is the potential to work out some revenue-sharing, but that's something that will be worked out once we get applications coming forward and are closer to the kinds of decisions we need to make.
K. Krueger: In a situation where a local government went ahead and allowed a new venue to be licensed and built -- it thought it had approval from its citizenry or whatever -- and then there was a negative public reaction or whatever, and the municipality decided that a mistake had been made and moved to shut down that casino or that gambling operation, what would the provincial government's response be? Could the minister tell us that? Would municipalities be allowed to reverse that decision if they wanted to?
Hon. D. Miller: I'm not well versed in municipal law, although I briefly was the Minister of Municipal Affairs. But that's ridiculous; it's preposterous, I think. Municipal governments are legal entities, and if they make decisions and then renege on those decisions where people have spent money and made commitments, then I would think they'd be in a bit of a box. It's a bit like: let's think of any theoretical possibility that might ever happen -- and what's the answer to it? We can dance around this one for along time, my friend, but I'm not sure that it's particularly productive.
K. Krueger: Well, it really isn't all that preposterous, and there's lots of precedent in Alberta right next to us. I'm thinking of the video lottery terminal issue there. These things were installed in communities throughout Alberta, and municipalities realized that they shouldn't have done it -- that it was a very negative thing with tremendous consequences. The minister is shaking his head, and perhaps it isn't the same, but it is a similar precedent where local governments come to the realization that they don't want an activity within their borders that's already there. There has been some action around the province with regard to massage parlours, for example. There are various ways that municipalities are moving to eliminate those.
But it's entirely conceivable that a municipality will decide that it made a mistake in allowing a casino to be opened within its borders. Perhaps even a newly elected government would decide that the previous government had made a mistake. Granted, there might be a price to pay in civil litigation, but my question is whether the provincial government would interfere with a municipal government changing its mind.
Hon. D. Miller: These questions clearly fall under the purview of the Minister of Municipal Affairs. It really is ridiculous; the hypothesis that is being proposed is absolutely ridiculous. The member has lived in Kamloops -- I think for some time. Has the municipal council ever said: "We don't like a particular business in town; we zoned that area for these types of businesses some years ago, but now we don't like them, and we're going to change the zoning and kick them out"? The member clearly understands that it would be illegal. But I don't want to get into debating the Municipal Act.
[ Page 4349 ]
I just think that, with all due respect, we can hypothesize about almost anything, and I think we're there now. So maybe we could get on to gaming.
K. Krueger: We are in gaming, and I don't think that the hypothesis is all that preposterous at all. Regardless, there is no point in arguing that with the minister. I can say that the extensive reading I have done on this subject indicates that there are jurisdictions all around North America that deeply regret that they've gone into gambling expansion, and there are various initiatives to curtail and even attempt to turn back the hands of time somewhat on gambling that's been allowed in various jurisdictions.
But I've already conceded, a number of times, that it's very difficult to ever close the gates once they've been widened for various forms of gambling expansion, which is one of the reasons that I would have liked to have seen the minister be a whole lot more cautious when he considered the question of gambling expansion in the first place.
In a Mark trend survey in 1995, according to the KPMG study -- and this information is on page 23 of appendix A -- a determination was made that 50 percent of B.C.'s charity casino customers had incomes of less than $40,000 per year. Given that fact -- if it's still a fact in 1997 -- does the minister have any concern that the $500 bets are going to have a debilitating effect on families of that not low-income group, but probably low middle-income group?
Hon. D. Miller: No, we don't anticipate too many difficulties.
[5:30]
K. Krueger: On page 31 of the same report, there is a discussion of the so-called black hole effect, which is a concern that chambers of commerce are voicing all around British Columbia and that small business has voiced in many jurisdictions where gambling has expanded. Simply stated, that just means the money that used to be spent in their businesses gets swallowed up in casinos instead -- in casinos, slot machines, various forms of gambling expansion. There's a further reference to this problem on page 42 of appendix A, and I'll just read that one. It's entitled "Incremental impacts."
"In many situations, the direct and indirect impacts may overstate the benefit to the economy because some of the impact will be a reallocation of spending from other sectors. For example, as new gaming opportunities are provided, consumers may increase their total spending on gaming but may reduce their spending on other recreational activities. In that situation, the increased economic activity in the new enterprises would be partly offset by a reduction in activity in other sectors. Therefore, the incremental economic impact of new gaming activity is likely to be somewhat less than the direct and indirect impacts."
Perhaps to the government, which expects to enjoy larger revenues as a result, that isn't such an issue. But to the small businesses this section is talking about, it's a major issue. So what has this government done with regard to safeguarding small business in British Columbia against the black hole effect?
Hon. D. Miller: There's nothing you can do. But perhaps some of those people might do less drinking. It might be beneficial.
P. Reitsma: I rise to present a petition on behalf of 88 members and friends
of the congregation
The Chair: I'm sorry, member. That's out of order. We can't do that in committee.
K. Krueger: Earlier, the minister touched very lightly on horse racing and the B.C.. Racing Commission. There is some discussion to date in the publications -- with regard to the gambling expansion -- of the potential negative effect on the horse-racing industry. Certainly throughout British Columbia, the horse breeders, the horse farms and the employees who work at them, those who work at racetracks, and so on, have some very real concerns about how gambling expansion will affect their business.
I know that some representatives of horse racing in British Columbia talked with government MLAs and with opposition MLAs, and expressed their concerns. They had some very hard and disturbing numbers as to the way their industry is likely to be affected by gambling expansion in B.C.
I think that the minister referred to the activity -- and I hope this is an accurate quote -- as relatively small in British Columbia, but from what I have gathered over my time in this role, it is a pretty substantial contributor to the economy. Arguably up to about 8,000 jobs are driven by horse racing in B.C., including the people working on the farms and raising the horses. About 50,000 acres of B.C. agricultural land is dedicated to raising horses. Without the actual horse-racing industry, it's questionable whether there would be a reason for those farms to remain in operation.
These people tell me that many of their employees would have a great deal of difficulty moving into some other field of employment. Certainly the minister has made it clear he believes that one of the ways to ameliorate the effect with regard to horse racing is to allow slot machines at racetracks. Does the government plan any other ways to protect the horse-racing industry from problems that may arise because of this gambling expansion?
Hon. D. Miller: Earlier, I believe I described that industry as relatively small-- not in any disrespectful way -- but very important. I also believe I said that it's capable, in my view, of expansion, and I believe that. We've made provision for protection. I guess we'll have to wait and see whether there are applications or whether there's a desire at the track to have the slot machines and, if so, whether or not municipal councils would take the position that they're not prepared to support that and possibly take a position that it might have some harm for the two tracks. But I can't anticipate what those actions might be until they happen.
K. Krueger: One of the comments in the KPMG analysis that kind of gave rise to my negative view of the overall thrust of the report was this comment on page 41: "No impact has been included for the costs of increased regulation, programs related to problem gambling or policing and infrastructure, but the economic impacts are not considered significant." It seems so dismissive to me, because I think they are going to be significant. I receive lots of material that suggests that they will indeed be significant. How does the minister answer that? Does he share the view that the economic impacts will not be significant?
Hon. D. Miller: Yes.
[G. Brewin in the chair.]
K. Krueger: Assuming that the minister is wrong -- I know he doesn't think that's likely, but I do, the opposition does and communities may well -- I want to return to this question of what a community could do if it realized it had
[ Page 4350 ]
made a mistake in allowing a casino to be built and opened. In the minister's mind, once a casino is established, if a community feels over time that the effects are too negative, that there is no net gain, that they don't want it anymore, what could they do about that?
Hon. D. Miller: I simply can't answer that. We have been around this sensibly. It's hypothetical; it's not in any way connected with what we're discussing, so I don't know.
K. Krueger: With respect, would you please indulge me and just tell me, if
it did happen? Unlikely as you obviously think it is, if it did happen that a community wanted
to change its mind, but a destination casino had already been built and opened
Hon. D. Miller: Madam Chair, I'm prepared to be indulgent. I just wonder -- how long?
K. Krueger: I certainly don't want to waste any of the minister's time, nor the valuable time of the people who are with him. I'd just like him to indulge me long enough to give me an answer. If that happened, and this minister was still minister responsible for gaming in the province of British Columbia, would he intercede at all, or would he leave municipalities with the authority to make their own decision in that regard?
Hon. D. Miller: My last question was actually serious. I am prepared to indulge in some discussion that's clearly way outside the rules, in questions I can't possibly answer because they're so hypothetical and theoretical. I don't mind doing that, but I don't want to do it too long. If we're headed for 6 o'clock and we're out of here on this file, then fair enough. Perhaps we can have a little theoretical debate in closing. I hope the member appreciates what I'm trying to say here.
K. Krueger: I put it to the minister that he has an obligation. He is the minister that all the other ministers tell me is the guy to talk to about these questions. He's the man, and the other ministers all bow and give way, at least when it comes to questions of gambling expansion. Some of them have obviously had to run to catch up to the parade on occasion. I think particularly of the day when the gambling expansion announcement was made, when, as I understand it, the NDP caucus thought they were going to be debating the issue. There was the minister and there was the critic with a large contingent of media people, and the announcement was made. Ever since then, as I try to get answers from various ministers about what they did to prepare people they work with and areas they're responsible for regarding the effects of gambling expansion -- what input they had -- the answer basically boils down to: talk to the Minister of Employment and Investment, because he's the man.
I think that as the minister contemplated the decision he made, he had an obligation in doing his due diligence to think about this question. It's not at all unforeseeable, and it wasn't then. If he thinks it's a dumb question from a lowly opposition MLA, I can accept that. That's why I ask him to indulge me. Perhaps it seems quite hypothetical at this stage, but I don't think it is. I think it's entirely conceivable that local governments will want to change their minds. I want to know -- at least, from this minister's point of view right now, recognizing that things change over time: is it his position that once a municipal government or local government of any kind has allowed a casino to be built within its jurisdiction, that destination resort casino or new charitable casino is there for all time, come hell or high water?
Hon. D. Miller: I was having a little fun there; I tried to do it with
some humour. Really, the point I was trying to make was that the estimates debates are
really to ask questions about policy. With all due respect, it is possible to theorize
endlessly about the possibilities of what might or might not happen. I was just trying to make
the point that I cannot
But I will say this. There are 17 casinos in this province. To the best of my knowledge, there has not been any decision, any particular problems around those. There has never been a municipality that has said: "We regret doing this." There are seven in the city of Vancouver. I don't believe the city of Vancouver has ever once tried to say: "We've got to get rid of these." So our real-life experience with 17casinos in the province has not led to any fear or concern about municipal governments regretting decisions they've made.
Secondly, on the general topic, zoning is not something that can be specific.
You cannot target-zone. You cannot pick on one business. Hence the member referred earlier
to discussion about some of the struggles relative to zoning that municipal governments
have had with businesses they don't particularly like. The whole issue of how you
prevent massage parlours or whatever, businesses that are considered offensive
But fundamentally, I believe the law says this: "You have to live with the consequences of your decision." So if a municipal government, through their actions, zoning, etc., allowed a destination casino to proceed to be developed in their community, I think they have to live with the consequences of that decision. They cannot turn around a year later and say: "Well, gee, sorry; we've changed our minds. Regardless of the fact that you, the owner, may have invested millions of dollars, we don't like it anymore, and we're going to do something to shut you down." I think they would clearly be liable under law. Similarly, if they invited a development that was not a casino but some other kind of development -- a factory that produced widgets -- and then after a year, they said, "Well, gee, we've changed our minds; we don't like this widget factory anymore," and they moved to try to shut it down, they would be liable under law. The answers are really very self-evident.
Perhaps I shouldn't have joked too much, but I hope the member appreciates my answer. We should try as much as possible to deal with issues that are within the domain of my ministry. And I'll try to answer them.
[5:45]
K. Krueger: This entire process, I think, can fairly be characterized as a process that's dealing with policy, because it's very much evolving.
[ Page 4351 ]
The minister has had to make decisions initially, I think, almost on a daily basis, after the expansion announcement, because there are so many details to be fleshed out. This hasn't been done before in British Columbia. Charitable casinos have been done before, but not nearly with this level of money changing hands. So the whole discussion of gambling expansion in British Columbia, I think, is a policy discussion. And from my perspective, it's not at all unreasonable to canvass this.
I accept that the minister is probably using pretty sound logic when he says that there would be liability -- civil liability, at least -- if a municipality did make a move like that. And I hear what he said about the investment and the consequences and all of that. But I just want to know if the minister himself would take any action to oppose a municipal government making a move like that. Or would he leave the municipal government, within its own mandate, the autonomy to make that decision and face the consequences without any provincial interference?
Hon. D. Miller: I would have no authority.
K. Krueger: The KPMG report talks about incremental figures, and the "Gaming Review" doesn't actually provide those figures. The minister, no doubt, has projections of his own. What proportion of the forecast revenue from gambling expansion legitimately qualifies as new revenue? What proportion would the minister say is simply a diversion from other sources of revenue?
Hon. D. Miller: It's all new revenue.
K. Krueger: When the "Gaming Review" talks about the number of jobs to be created, it makes certain projections about the number of new jobs, recognizing that there is quite a body of opinion that says other jobs disappear as a result of gambling expansion. For example, the jobs in the horse-racing industry that we talked about may be negatively impacted, or jobs in small business may be subject to the black hole effect.
I don't think the minister would probably dispute that there will be some loss of jobs in other areas of the economy, corresponding to the jobs that are created with gambling expansion. Even Mr. Clark's projections throughout this report, except for the destination resort casinos, are that 90 percent of the revenue projected will come from B.C. sources.
The minister has spoken a number of times about poverty. He's on the record in the pastas well about the fact that a lot of British Columbians are finding things pretty tight financially. There's not a whole lot of disposable income to go around. If these projections are right, if this amount of activity takes place in the new facilities through gambling expansion and if 90 percent of that comes from British Columbians, then they are presumably not spending that money elsewhere.
Given all that, when the minister subtracts the jobs that will likely disappear in the economy from the jobs that his people project will be created with gambling expansion, what percentage of the jobs are actually new? What will the net effect be, in the minister's mind?
Hon. D. Miller: I'm absolutely convinced that the very modest expansion that we are allowing in this province will create a net contribution to the provincial economy and a net contribution to jobs in British Columbia. I'm absolutely convinced of that.
Madam Chair, I move that the committee rise, report progress and ask leave to sit again.
Motion approved.
The House resumed; the Speaker in the chair.
Committee of Supply B, having reported progress, was granted leave to sit again.
Committee of Supply A, having reported progress, was granted leave to sit again.
Hon. D. Miller: I move that the House at its rising stand recessed until 6:30p.m.
Motion approved.
The House recessed at 5:53 p.m.
The House in Committee of Supply A; W. Hartley in the chair.
The committee met at 2:49 p.m.
ESTIMATES: MINISTRY OF SMALL BUSINESS,
TOURISM AND CULTURE
(continued)
On vote 51: minister's office, $370,000 (continued).
I. Chong: We concluded just before the lunch hour. The minister at that time
was making some rather strong comments, and I didn't know whether she wanted to
Hon. J. Pullinger: I would never do that!
I. Chong: Well, they were a little strong. And I didn't know whether the minister wanted to continue, but seeing that she's not continuing, I want to respond to some of the minister's comments that were made earlier today.
I want to say that the minister made comments about the opposition -- that the B.C.Liberals have complained about reductions. Again, I want to say -- I want to reiterate
for the record -- that that's just not true. What the members on this side of the House
have been trying to do is obtain clarifications on how decisions are made to ensure that
they are made in the interests of the community and of those who are affected by
such decisions. We were just asking
Our objective, of course, is just to get to the heart of the matter. In cases where business plan is available, then once again we are looking for having copies of those business plans in advance, That's as I think it should be. Shared information with all members would make the spending estimates debate a little bit more timely, and certainly much more productive.
[ Page 4352 ]
I want to say that the concerns surrounding some of the decisions about reductions
made in any ministry, whether it be in this one, Transportation and Highways or Municipal Affairs
I know they would like us to accept their responses at face value, but given the political climate of the public, there's very little, I guess, trust in what all politicians are saying; they are cynical. Surely I it's understandable I think, that we would be getting those kinds of concerns and complaints from the general public. They expect us to hold this government to account, and that is all that we are trying to do here.
I know that on occasion we do go on a tangent, and we do make note of other remarks, but it is all with the view that we are, in fact, representing our constituents. We are the voice of the people who elected us. We must do so with the intention that we will be finding answers. Recognizing that there are fiscal restraints -- that there are responsibilities that each and every one of us have -- we will ask those concerns and those questions in the most effective way to achieve what we hope are answers as to why certain programs were either eliminated or reduced.
I want to make another comment about what the minister had stated earlier regarding comments about members on this side of the House requesting more spending. I've been hearing that a fair bit, whether it be in these spending estimates or in other estimates, and, again, I want to state that I wish that the minister -- not necessarily this minister, but other ministers as well -- would simply listen to what we're saying. Our comments are not suggestions from member after member for more spending. In fact, we're wanting to ensure that the spending is done in the most wise and prudent way and that where efficiencies are available, that they are taken advantage of. We want to be assured that we can provide input so that we can assist government wherever we can and offer concrete solutions.
Therefore we have to raise these issues. And even if there is a difference of opinion, philosophically or a differing view, the minister should understand that without us raising that -- without us having a good healthy debate in these estimates -- how can we know whether or not we are able to proceed?
So I want to state very clearly that members on this side of the House, when we
are asking for dollars to be spent, aren't necessarily asking for more spending, just
wise spending. We want to be certain that the promises that were made
A program spending review was undertaken, and I accept that. I applaud that. I think it was a good idea. But I think the spending review should actually have occurred before the election so that the government had a plan and had a basis before it went to the electorate, before it made those promises.
But now we're faced with having to speak to those constituents that we now represent, which we didn't represent before, explaining to them why things are not happening in their ridings -- and we trust that it is not for partisan reasons but because of inefficiency. So I would expect and hope that the minister understands that this is where we're headed.
I know that the minister has been very helpful in the last few days, especially in on every large part of her ministry, Tourism, in providing us with information as clearly as possible. I know it's been a well-canvassed area, but we do know that some areas deserve more attention than others in this ministry -- and Tourism does at this particular time because of new legislation.
What's occurred here is that the information we're receiving from our constituencies clearly
shows, I guess, confusion on their part. It would almost seem that this government, having been re-elected -- which perhaps was a surprise to them, as it was
to us
With that context, I want to assure the minister that my questions and those of
my colleagues really are asked in an effort to determine just how and where government spending
is happening. It is the accountability of our tax dollars, the public purse
So with that, I am comforted in knowing and hoping that the minister accepts that the lines of questioning we have here are in the best interests of all our constituents, and I'm sure she understands that.
The purpose of this ministry is to encourage, promote and assist small business. We all acknowledge that small business is the engine of our provincial economy, whether it is in the tourism business or whether it is in other service industries or other industries that provide goods and retails products. This ministry will assist those small businesses. Those small businesses provide the revenue, through taxation, by which this government can function, and with which this government is dedicated -- as are we in the opposition -- to preserving health care and education.
With that, I do have some questions that I would like to ask regarding the direction that
this government has in terms of small business. The first question I would like task
the minister
Hon. J. Pullinger: Before I address the comments and questions of the member opposite, I would like to speak to a point of order. In her comments, the member said that she should not be expected to take my responses at face value. As the member fully knows, that flies in the face of the longstanding tradition and convention of this House, and I would therefore ask her to withdraw that comment.
The Chair: The Chair would ask the member for Oak Bay-Gordon Head whether she was casting any aspersions towards the minister. If so, would she withdraw them?
I. Chong: Hon. Chair, I did not intend to direct those directly to the minister, and I will withdraw that. I just meant to state that sometimes some answers and responses require additional follow-up questions.
The Chair: The Chair would like to remind members that we are dealing with the estimates of the Ministry of Small
[ Page 4353 ]
Business, Tourism and Culture for this year. I would urge members to direct their comments -- questions and answers -- to those estimates.
Hon. J. Pullinger: We don't keep the statistics the member is asking for.
I. Chong: The reason I asked that question -- and this is where I come into some of these problems -- is that the minister said earlier today that the tax freeze and the tax holiday offered by this government are going to assist 2,000 businesses. I'm wondering how the minister came up with that number.
Hon. J. Pullinger: That was an estimate provided by the taxation branch of the Ministry of Finance.
[3:00]
I. Chong: I suppose I can canvass this in the Ministry of Finance, but I want
to state, again: the reason for the question was because the announcement was clearly made
to come into effect for July 1, 1996, based on new incorporations as at that date. Given
that new incorporations as of that date would be the only ones eligible for the two-year
tax holiday -- which affects small business, because it clearly is the rate for small business
Hon. J. Pullinger: That information is tracked by the Ministry of Finance.
I. Chong: Then I will pursue this very important issue and initiative when we canvass the Ministry of Finance.
The other area I'd like to speak to at this time -- again, dealing strictly with small business -- is in the area of bankruptcies.
To give the minister a little background: last year I did speak with the minister, and at that time there was some question as to whether or not bankruptcies were up or down in this province. Of course, clearly we disagreed. The minister of the day suggested that bankruptcies were down as a result of the number of policies that this ministry was putting forth for small business. When I was able to indicate that I had a number of articles that stated that businesses were in fact failing, that there were a number of bankruptcies that were occurring because of small business government red tape and regulations, we came to agree to disagree.
I am wondering at this time whether this ministry is tracking those kinds of things, because clearly that's where this information is most useful: to determine whether businesses in this province are in fact succeeding or failing.
Hon. J. Pullinger: Last year's bankruptcies for small business were down 3percent.
I. Chong: Can the minister advise where she receives that information?
Hon. J. Pullinger: B.C. Stats.
I. Chong: Are those statistics on an average annual basis, or are they just for a particular month or quarter?
Hon. J. Pullinger: Those are hard numbers from the Ministry of Finance, year over year. We'd be happy to provide the graph that we have to the member, if she would like it.
I. Chong: I would appreciate copies of whatever statistics the minister has. I too have been tracking them, and I believe my staff has been gathering information as well from B.C. Stats. All indicators that I have indicate that bankruptcies actually have gone up as opposed to down. That's what I would be curious about.
So, in fact, could the minister advise whether or not these bankruptcies are business bankruptcies, or do they include consumer bankruptcies?
Hon. J. Pullinger: The stats that we have obtained and keep track of from B.C.Stats are the small business stats. And the rest of the detail, I'm sure the member can get in the Ministry of Finance estimates. I don't have the broader detail.
I. Chong: I ask those questions simply because we are moving into an era of home-based businesses and self-employment to such a great extent. With corporate and government downsizing, many people have started their own businesses and have not incorporated. So under the auspices of self-employment, their lines of credit, their bank loans, everything that they do to lever their business, is sometimes tracked as a consumer loan versus a business loan. For those reasons, I think it's important that consumer and business bankruptcies be reviewed and tracked in some way so that comparisons can be made and so that comparisons are much more reliable.
I'm looking forward to whatever information the minister's office is able to provide. But at the same time, I would have to again disagree with this minister -- and, as I have with the previous minister, agree to disagree -- that, in fact, from all the statistics that I have been able to gather, bankruptcies, unfortunately, are going up. Businesses are failing, and it's because of government regulations and red tape.
Can the minister advise if there are policies of her ministry to specifically target government regulations and red tape? And if so, what are those specific programs and policies?
Hon. J. Pullinger: To provide the hard numbers, there were 26 fewer bankruptcies for small business in 1996 over 1995, which are the most recent statistics. If the member has trouble believing the Ministry of Finance statistics, I would direct her to the Ministry of Finance estimates and the people in B.C. Stats.
I would offer to the member that self-employment is rising faster in British Columbia that in any other province in Canada. There were 312,000 self-employed in British Columbia in 1996, which is a 73 percent increase from 1984. The next-fastest growth rates were for Ontario, New Brunswick and Quebec. For Canada as a whole, growth was 48 percent. We have clearly outstripped all the rest of the provinces in this country by a considerable margin.
Other than that, I would simply direct the member
I. Chong: I appreciate the figure of 312,000 self-employment businesses for1996. Would the minister have the 1997 figures at this time?
[ Page 4354 ]
Hon. J. Pullinger: Not yet. And I failed to answer the second question the member asked, which I certainly apologize for. The member wanted to know what we're doing to cut red tape. Although we have canvassed this, I'd be happy to put it on the record once again.
We have cooperated with the federal government and the Canada-B.C. Business Service Centre, which provides extremely fast business information service to people around
the province by phone, by fax and on-line. We have developed the one-stop business registration
centres, which cuts the time it takes to incorporate a business from two months to two weeks, with considerably less running around on the part of the
individual or group seeking to incorporate. We have assisted business by putting together
the Interactive Business Planner. We have, through other ministries
We have clearly responded to the request and high priority, and legitimately so, of small business to begin cutting the red tape and the paperwork. We have taken some significant steps forward by putting the province and the federal government on-line in a variety of ways and by making the process simpler to access anywhere -- and thereby much faster. That is a work in progress; it's a high priority of mine and of my ministry, and we will certainly be, over the year, putting a great deal of energy to that end.
R. Thorpe: I'm sorry. Apparently the minister said that removing regulation and cutting red tape had been canvassed earlier in her estimates. I wasn't aware of that, and I don't think my colleague was.
But the minister just made a statement -- and I want to focus just on the things within your ministry, not on the things outside your ministry -- that they've made significant steps. I wonder if the minister could highlight three or four of those significant steps made within the ministry to cut red tape and regulation for small business in British Columbia.
Hon. J. Pullinger: We have thus far installed nine, I believe, one-stop business registration centres around the province. Some 500 businesses have accessed and taken advantage of that since July 1996. We have worked hard over the last year to pull together the Ministry of Finance, the Workers Compensation Board and Revenue Canada to put their forms on-line. We are currently looking to expand additional locations and moving to add municipal partners -- which is clearly a very complex addition, given that there's not a uniform set of services and we've got a whole lot of different municipal governments.
So we have done a great deal of work that has been extremely well received. There's ongoing work to expand the service to include more forms. Ultimately, if we can overcome-- and I assume we will be able to -- the privacy and security issues of dealing with tax and business issues on-line, then we will lift the entire service up on-line. That may take some time and some significant effort, with a number of bodies. That is one major project that is ongoing.
We have also worked through the Canada-B.C. Business Service Centre, which is managed by an individual from my ministry, to provide a wide range of business services and information. Actually, I would encourage the members opposite to go and visit the Canada-B.C. Business Service Centre, and I would be more than happy to set that up for you while you're in Vancouver looking at the 1-800 number service.
Interjection.
Hon. J. Pullinger: That's right. We are -- exactly. But it really is a remarkable step forward. I know that you will be impressed with the service that that centre provides. They have won an award for their web site at the Canada-B.C. Business Service Centre. They have had hundreds of thousands of web site kits. They have a significant amount of info faxes -- in the neighbourhood of 50,000 -- with a 24-hourfax-back service for inquiries. They have people that walk in. They have 130,000-plustelephone calls a year for information. They have staff, they have resources. It is a remarkable step forward in terms of simplifying processes for small business.
We will continue with that effort. It is an outstanding success and has been so applauded
by the small business community. We provide on-line small business workshops through
the one-stop business centre, which is obviously very positive. We have workshops such
as: Exploring Business Opportunities, 40 Concepts for a Small Business, Evaluating Your
Ideas, Protecting Your Idea, Marketing Basics, Marketing Primer, Researching Your Market, Sales Forecasting, Business Promotion Idea List, Financing Your Business,
Equity Financing, Long-Term Debt Financing, Short-Term Debt Financing, etc. I have a long
list that I could read, but I'm sure
[3:15]
So there's an enormous amount of work going on to simplify processes for small business. That work remains a high priority of putting publications and information on-line, having a very fast fax-back telephone service for small business and ensuring that the information that we put together, which we have prioritized in consultation with the B.C. Chamber of Commerce, is available as widely as possible across the province.
Those are the kinds of services that we are providing to make it easier for small business to deal with government -- and all of the issues surrounding incorporating, running and growing a small business in British Columbia.
R. Thorpe: Thanks to the minister for that comprehensive answer. Could
you briefly explain the Canada-British Columbia Business Service Centre
Hon. J. Pullinger: It's roughly 50-50.
R. Thorpe: It's nice to see that we have a 50-50 partnership so that the federal government isn't always the big bad wolf and we seem to have some cooperation. With the excitement and the commitment that the minister spoke of with these programs, obviously the provincial and federal governments are working hand in hand, and that's certainly encouraging.
With respect to the fax-back services and those kinds of programs, does each one of those individual programs have service benchmarks that have been established so that we can monitor the success of this organization -- which we all want to be successful? How can we increase the efficiency and the reach of the organization?
Hon. J. Pullinger: There are benchmarks and targets in place. For instance, we want to increase the interaction with
[ Page 4355 ]
the regions by 15 percent. I'm sure that the business centre will more than meet that target. We do have a private sector advisory board that works with that centre, and things such as the interactive business planner have flowed from that ongoing solid consultation process.
Just for the sake of time and for the members, I would be more than happy to arrange a full briefing -- either here or over at the Canada-B.C. Business Service Centre -- on all of the details around how that particular centre works. But I do assure the member that it's a remarkable success, and it is indeed one of the ways that we cooperate very well with the federal government.
R. Thorpe: I heard earlier today that things weren't going that well in here. I'm so glad that we have a positive tone here this afternoon. It's really encouraging.
Hon. J. Pullinger: It's been marvellous.
R. Thorpe: "Simply marvellous," she says.
I certainly would like very much to have a detailed briefing on this. I know that we want to move the questioning along, so I'll agree to that.
Is there a business plan component within the ministry? Does the ministry have business plan for this component that we would be able to get to review in advance of such a tour so that we would be better able to understand?
Hon. J. Pullinger: I'm advised that we're a little bit behind due to the large amount of reorganization in my ministry and the renegotiation of the federal contract, but I'd be happy to provide that information to the member's office as soon as it's available.
R. Thorpe: With respect to the Canada-British Columbia Business Service Centre, what is the financial commitment in that part of your budget, and how many FTEs are allocated to that?
Hon. J. Pullinger: The province provides $372,000 and ten provincial FTEs to the partnership. The federal government provides $235,000 and nine FTEs. We're the big guys in the partnership, but I do understand that the federal government, because it would never want to shortchange British Columbia, has indeed made up other funding with project funding. So it is roughly a 50-50 partnership.
R. Thorpe: I don't want to get into too much political rhetoric. The minister and I could probably do that for a long time, and that might encourage other members on this side to get into it. I'm sure the minister doesn't want that, hon. Chair.
Okay, that's good. So we're going to get the business plan. The one thing I'm a little concerned about is when it's available. In reviewing some other ministries, we reassured last year, and it took 11 months. In the interest of cutting this estimate short-- or shorter -- I would ask that we don't have to wait till we get the final copy. If there is, as the minister said, a work in progress on this, they must be working off some kind of a plan. Could we get the work-in-progress plan and then get the final plan later? Or could we have some kind of strong indication what the time frame may be, rather than 11months down the road?
Hon. J. Pullinger: I don't believe 11 months is the time it has taken you to get information from this ministry.
R. Thorpe: No, I didn't say your ministry.
Hon. J. Pullinger: I know the member didn't, but I just want to be really clear. There's no reason to believe that we will be that long in this ministry.
I agree with the member; we should be as fast as possible with these things. But I do want to say that service to the public and having a cautious but speedy reorganization needed to happen as promptly as possible. That has, in fact, delayed things that otherwise might be ready at this time -- or shortly. We will get them to the members as quickly as we have them.
R. Thorpe: I appreciate that commitment from the minister, and we do look forward to receiving that. We look forward to reviewing it and then coordinating the tour to Vancouver, when we go to see the 1-800 service.
I would just like to know: is the one-stop business registration program another financial commitment within the ministry? If so, how much is that, and how many FTEs are committed to that?
Hon. J. Pullinger: This ministry spends an additional $215,000, with 0.9 FTEs.
R. Thorpe: Well, I know that in British Columbia we want everyone treated equally. We talk about a commitment and an expansion of one-stop business registrations, and $215,000 is a lot of money to me. A 0.9 FTE doesn't seem to be a significant human resource commitment to the program, yet it's my understanding that we want to grow this program.
I'm just wondering if the minister could explain how we're going to grow this program, as the minister said in her opening comments. Also, some comparison of what the budget was last year, this year. I guess we'll just deal with the financial budget.
Hon. J. Pullinger: The blue book this year over last has increased. It was$115,000 last year and $215,000 this. Part of that is because some of the money was out in the regions last year, and the regional offices are gone, so it's back in the central account.
The other reason is that as with any system, there are startup costs. The program has been developed. The per-unit cost will decrease dramatically, especially in the high-tech industries. Anyone who bought a computer 15 years ago and would buy one today knows that as they develop, that kind of technology becomes less expensive. That's indeed happening.
R. Thorpe: If my memory is correct, the minister said there were nine locations throughout the province. How many do we anticipate at the end of the year? Secondly, how are the locations selected -- on what basis? How are we picking the different locations around British Columbia where we're establishing these offices?
Hon. J. Pullinger: We have nine in place. For the information of the member, they're in Dawson Creek, Kamloops, Nanaimo, Nelson, Prince George, Terrace, Vancouver, Vernon and Victoria. The project rolled out this year on a pilot basis, and staff makes the decision. It was made this year -- because it was a pilot -- by putting it into a variety of different places with different circumstances so that they could get feedback on how it worked, for instance, in a very small community as compared to a larger community.
[ Page 4356 ]
We expect 15 by the end of this year. We're also moving, as I said previously, to add new partners, such as municipal business licensing to the program, and we expect to participate in the development of a national system of integrated business registration --those who are incorporating nationally, I would assume. To move British Columbia farther down the road of paper relief, we're cutting red tape. So those are all of the goals that we're proposing to reach during this fiscal year.
R. Thorpe: I assume that when you did your pilot, you established benchmarks where you could measure success or failure -- or not quite as much success -- or whatever. Can you confirm that that's in fact what you did do? Do you have a model for measuring success as you move forward? What time frame do you give for the development of these centres and measuring their success or failure?
[3:30]
Hon. J. Pullinger: The program was initially a pilot program. It has therefore not been highly advertised, and it has also therefore been introduced very cautiously and on a bit of an exploratory basis. We took the best information we had from the Canada-B.C.Business Service Centre, the private sector advisory board, and have moved ahead with that. As I say, it has been an outstanding success so far. As of March of this year, 536clients have completed 329 declarations for proprietorship or partnership forms, 262applications for registration as a vendor forms, 154 WCB employer registration application forms, 80 WCB personal option protection application forms and 372 Revenue Canada business number application forms.
This is clearly good news for the business community. The pilot has been a smashing success. Because it has been, we have seen what the reaction is and how it functions indifferent communities. We are now in the process of setting benchmarks as we establish the program more firmly and move to expand it.
R. Thorpe: Would it be fair for me to think that this area might also have business plan for development that is similar to the one that's in progress for British-British Columbia Business Service Centre? If so, if it's completed, would it be possible to have a complete briefing on this and receive that business plan also?
Hon. J. Pullinger: We'll even give you a demonstration, and let you play with this wonderful, consumer-friendly piece of software. Sure, we'll be happy to provide whatever information we have.
R. Thorpe: Thank you. I appreciate the offer and the commitment.
Overall, within your ministry and within your objectives to free business up from bureaucracy and red tape, have you established any internal benchmark -- whether it be 5percent, 10 percent, 15 percent -- or any quantifiable objective that you're measuring yourself against in cutting red tape for small business?
Hon. J. Pullinger: I'm not sure how you quantify red tape, and we haven't figured out how to do that. Obviously the efforts here are being directed in lockstep with the business community. We're attempting to deal with what their biggest problems are. There's a lot of work ongoing. There have, for instance, been suggestions made to me at meetings with the B.C. Chamber of Commerce that while some of what we loosely call red tape or bureaucracy, which are necessary rules and regulations and the forms, may be very appropriate for some kinds of businesses and some sizes of businesses, but may not be appropriate for other kinds or sizes of businesses. Therefore it may be appropriate to, for instance, have a different, simpler kind of paperwork for some businesses -- small businesses particularly.
We certainly haven't tried to count up all the forms and figure out how many we should change or how to do things faster in that way. Rather, we have just worked with the business community, asked them what their top concerns are and dealt with it from that perspective. We'll continue to do that.
R. Thorpe: First of all, thank you. I want to assure the minister that these
are not trick questions. So if they were going to be trick questions, we could get
trick questions out. I really just wanted to know
Interjection.
R. Thorpe: To how you would cut red tape and regulation, whether it's 10 percent or 5 percent or whatever -- whatever the business plan calls for.
Interjection.
R. Thorpe: It doesn't matter how you measure, it's the objective. Every item
is not going to be measured in the same way. And I was just hopeful, because I don't know
how you monitor your progress -- even with the chamber of commerce or the independent federation
of small business or whatever group you're working with -- without setting a benchmark. I would just encourage the government and the minister and staff, because I
do wish them well, to establish
Interjection.
R. Thorpe: Whatever the figures, I don't want to say what it is or should be. But the government of British Columbia did a paper in 1996 on cutting red tape across Canada.
Interjection.
R. Thorpe: Yes, there is lots of work being done across Canada and North America. I would suggest that there are benchmarks out there and that there are ways to measure it, so I would just encourage the ministry to consider that.
Hon. J. Pullinger: We are working with Employment and Investment, which does coordinate the across government efforts.
[ Page 4357 ]
Our particular bailiwick is Small Business and Tourism, which is primarily a small business area, and cooperatives, of course, and we are moving ahead with that, in consultation and in concert with small business and other ministries of government.
R. Thorpe: I thought I was going to be finished, but I just want to ask one other question. In your interface with the variety of groups out there you would deal with, is there a structured advisory group? Or are there structured regular meetings with the chamber or independent business or the cooperatives association, whatever they are? Do you have a regular ongoing calendar to keep each other informed and to meet regularly, exchange ideas, etc.?
Hon. J. Pullinger: Yes, I meet on a regular basis -- with an interruption from the proceedings of the House -- with the chamber of commerce, the B.C. sector of the Canadian Cooperative Association, the tourism industry, COTA and, of course, all the advisory boards and government boards, such as the current SOA board of Tourism, which is soon to be a Crown agency board, and the private sector advisory board of the Canada-B.C.Business Service Centre. So yes, there's an ongoing dialogue, and this fall I will be undertaking other forms of consultation, as well, about which I will be informing the House, the members and the public at some later date.
R. Thorpe: I would like to thank the minister and staff for their answers and cooperation in investigating this area. I appreciate it.
I. Chong: Following on the lines that my hon. colleague from Okanagan-Penticton started, I see from a past Hansard, prior to my election, that when Mr. Bill Barlee was the minister, he had stated that had been working on a committee or a task force dealing with regulatory reform for small business. I'm wondering if the minister can advise on that. I'll be more specific, so that she has that. The answer that Mr. Barlee gave was as follows:
"We're also leading a government wide team on small business issues; we have a number of other ministries involved. I think there are three or four other ministries. Lands and Parks would be one of the ministries. WCB would come under this issue as well. So what we want to do is get the various opinions of those ministries on issues that directly affect our clients, and that work is going on fairly well."
And he went on to say:
"
. . . the ministry informs other ministries of concerns that do affect small business. We have received a number of complaints in different areas."
For those reasons I'm wondering whether there was something in the works, because what my colleague asked about came out of Employment and Investment, and this clearly, as Mr.Barlee had mentioned, had to do with small business and was leading some sort of initiative that other ministries were involved in -- obviously very good ones. I'm wondering what's happened in that case -- whether that's fallen by the wayside, whether there's any intention to pick that up again and where we might go with that.
Hon. J. Pullinger: I can't comment on another minister's comments from another government. I can say that we have formalized the process of cutting red tape and put it very high on the priority list, as is evidenced, I think, by the comments I have made.
I. Chong: The comment that the minister had also made earlier was that there
was a commitment to workshops being planned. I wonder whether she could advise in what regions
Interjection.
I. Chong: Well, hon. Chair, in the past there have been certain target
groups and certain regions that workshops were provided for within the ministry. One of
the mandates that was provided for the business plan in 1996-97 says that the ministry has
six strategic priorities, one of which is "promoting job development and training initiatives; encouraging innovation, leadership and excellence; developing
strategic alliances and partnerships with communities, organizations, industry, government and
other agencies
All these kinds of things lead to the fact that as I understand it -- and I asked
the minister last year -- there were workshops, and a number of them had declined
Hon. J. Pullinger: This question reflects back to some earlier discussion about regional economic development. As well as moving to put a higher priority and a more integrated approach than we've seen before in this province into cutting red tape across government, we're also taking a regional approach to economic development rather than a one-off workshop approach. So we announced, in the last budget, I believe, that there would be regional conferences and a regional approach to economic development -- across the north, for instance, as we were speaking about earlier.
I. Chong: That is precisely what I am trying to determine and establish: just how many of these regional conferences may be planned and may be contained within your corporate planning budget. There's one in the north; is that the only one? If so, can we have the minister advise as to the amount that has been allocated to that? If there are others in other regions, I would certainly like to hear about them, and I would hope that the minister could share that with us.
Hon. J. Pullinger: As that's future policy, we don't have any specific budgets for those yet. The lead is in the Employment and Investment ministry. We will be participating in the small business cooperative side and tourism, of course. But because it is future policy and plans are not finalized and announcements haven't been made, we don't have any final earmarked budget. It will come out of the ministry budget.
I. Chong: I'm not trying to paraphrase, but is the minister saying that in
the spending estimates in her budget for 1997-98
[3:45]
Hon. J. Pullinger: Again, the lead is from Employment and Investment, so the conferences will be set up by that ministry. We will be playing some kind of a role; what exactly we're going to be doing,
[ Page 4358 ]
how exactly we're going to be doing it and where are not yet determined precisely. So until we have determined the answers to all of those questions and others, we won't have earmarked specific amounts of dollars; they'll just come out of the general ministry budget.
I. Chong: I appreciate the minister's efforts to answer that. I know it may be difficult, but I hope the minister can understand my confusion on that. Generally, when a budget is prepared, you have your dollars targeted and earmarked for certain specific projects. And even though the lead is Employment and Investment, if you're asked to provide support and you haven't budgeted for it, where do you squeeze to get the dollars? Because they're just not there. The idea of developing a budget, of course, which is what we're debating, is that you have some sort of set targets.
What I'm getting at is that in the past this ministry has done, for example, workshops for
women's groups, workshops for aboriginal groups, workshops for those who clearly
are disadvantaged, shall we say. I know there are commitments in Education, Skills
and Training for the youth groups, and that's very clear. But within this Ministry of
Small Business, the entrepreneurial spirit that this government wants to advance
Hon. J. Pullinger: The programs that the member is speaking to have been eliminated in favour of a different approach on a regional basis, where those interests will be part of the broader issue. For any available detail on what will be happening, I would propose that the member could get those answers best from me now.
I. Chong: I am concerned, then, if those programs have been eliminated -- as I'm sure the minister will be -- if we find that we've lost a large portion of the population of those specific groups who have depended upon these. The calls will probably start to come in, and I'm hoping that the ministry will in fact monitor any of those and complaints. And if there is a need to revisit that, then I hope that we can depend upon the minister to reinstate them where necessary in her budget for the following years.
Again, I realize that may be future policy, but given that some changes sometimes take a year or two to kick in, if we find that it has been the wrong move, the minister, as the advocate for small business and for certain small businesses which have more difficulty establishing themselves, can and may look at those if in two years' time we see that we've in fact gone in the wrong direction.
Certainly, in the issue of small businesses, home-based businesses, more and more are being started by the women's groups. We're trying to encourage first nations people to get involved, and if they're lost in the bigger picture, that would certainly be a very poor day for all of them -- to have to be faced with that issue. I'll leave that at this moment, unless the minister wishes to comment.
Hon. J. Pullinger: Just a brief comment. I understand and appreciate the member's concern. I would say, however, that because of the very intense focus on equity throughout this government for the last six years, we've seen some remarkable differences and remarkable success. Women, visible minorities, first nations and people with disabilities are very much part of government and any branch of government in a way that they never have been before. Women in business, specifically, are creating businesses at afar faster rate than men. Statistically, women actually succeed better than their male counterparts in business. Women are doing very, very well in British Columbia.
The mandate of the Ministry of Women's Equality is to reach across government, and over the last six years that ministry has been amazingly effective in ensuring that women's issues are fully integrated in every part of government, including this part. If in the future we see a need to have another program with specific supports for women, we'll certainly do that. At this time, we do consider women and women's issues in making-making process.
Also, I would mention the cooperative program. The cooperative development branch has been around for a couple of years, but it's been expanded this year. Women, first nations and youth, particularly, frequently prefer to do business cooperatively rather than individually. That is certainly one approach that, while not targeted to those groups, is beneficial to them. There's also a federal program for people with disabilities to form cooperatives to get into business, as well. We will certainly work with any of those programs.
I. Chong: I appreciate the minister's comments on that, and I'm sure that our critic for Women's Equality will be very pleased with her response, as well.
I'd like to ask the minister whether she can advise us if there are plans within this year's spending estimates -- an amount allocated -- to increase private-public partnerships? I know there are a number of initiatives that are available. But are there any new programs that we should be aware of at this time so that we can have an opportunity to follow along and watch for their outcomes next year?
Hon. J. Pullinger: Private-public partnerships are pretty much the way this ministry operates on every front. For instance, throughout Tourism, all of the marketing programs and so on tend to be, in one way or another, private-public partnerships. Private sector boards, private sector advisory groups and so on are common throughout the ministry.
I. Chong: What I'd like to do now is move along to some of the actual dollars. Every now and then I will go back to actual dollars. That's what we're here for --spending estimates. The operating costs of the ministry have gone down by some $10million. Yesterday, when I asked about the salaries, the minister was kind enough to relate to us the FTEs and what not. In this case, operating costs have gone down $10million. Can the minister also advise where those are? Again, I recognize that some of those operations had to do with the Tourism division.
Interjection.
I. Chong: It's just ministry operations. If you look at the total expenditure by group account classification, last year was $40 million and this year is $29 million, so$10.76 million is the magic number, I believe. I'm just curious about which of the areas that we're looking at have had decreases. I know we've probably canvassed all of those in a very generic way in
[ Page 4359 ]
our discussions this morning. But if the minister would be able to provide us with a bit more detail, I think that would be very helpful.
Hon. J. Pullinger: The cooperative and Small Business side has been reduced by$3.1 million, Tourism has been reduced by $7.8 million and Culture and heritage has been reduced by $0.14 million. The Culture side actually had some significant reductions the year before, so it wasn't affected as deeply as other parts of the ministry.
I. Chong: The next area of significant reduction is in the grants and contributions -- the decrease of $22 million. I recognize that perhaps most of that would in fact be Tourism. Is there anything else within that if it is not entirely Tourism? Is there any other reduction in that $22 million that we should be aware of?
Hon. J. Pullinger: In Small Business, Tourism and Culture there was a reduction of $3.983 million in grants and contributions. That's the Small Business division.
[W. Hartley in the chair.]
I. Chong: The $3.983 million reduction in grants and contributions to the
Small Business side
Hon. J. Pullinger: I believe the global reductions which I provided an answer or two ago were across the ministry, so that would include all parts of my ministry.
I. Chong: I'm not trying to be redundant here, but when I take a look at the grants and contributions amounts, in 1996-97 at $57.231 million and this year reduced to$35.077 million, this is where I saw the difference of $22.154 million. The minister just advised of a $3.983 million reduction in grants and contributions to small business. I recognize those as being in regional development and various things that we mentioned earlier. What I was trying to say, then, is: would the other $18 million be the Tourism side? Is that correct? Or where would they be, then, if it is not the Tourism side?
Hon. J. Pullinger: The numbers we have are not broken down the way the member wants them, so these may not be exactly accurate, but they're pretty close. The Cooperative-cooperative side is $3.983 million, Tourism is $4.842 million, Culture is $10.53million, the Royal B.C. Museum is $336,000 and B.C. Pavilion Corporation is $1.8 million.
I. Chong: There still is a discrepancy. But I'll leave it at the moment and see if I can't perhaps determine where the difference is. Perhaps if the minister allows, I'll contact her deputy minister after the estimates and look into that.
The next area that I'd like to canvass -- I have some members who are rather interested to discuss it -- is the community grants program through B.C. 21. As the minister must be aware, there have been some concerns raised about this. I do recognize that this is a determination-of-allocations branch. A number of constituents have had some inquiries about this. I realize it's an administrative process, but nonetheless we need to canvass this area. Last year we weren't able to get much information on this, and I'm hoping the minister can provide that at this time. Does the minister have staff here who are able to answer those questions?
Hon. J. Pullinger: I would like to ask the member if we're finished with Small Business -- for staffing reasons.
I. Chong: For the most part, I believe I have sufficient areas canvassed, and what I can probably do for the few other questions that I have, rather than take up the time of your staff, is to approach your deputy minister and consult with her. They're very minor items, and I'd probably be deferred to other ministries anyway. I am prepared to leave the Small Business sector and would like to move on to the B.C. 21 program.
[4:00]
Hon. J. Pullinger: With the indulgence of the member, if we could do something else for about ten minutes, we'll get staff here for B.C. 21. We'll allow the Small Business staff to carry on with their work and lives. I thank them very much.
I. Chong: Would the minister prefer to do a quick ten-minute recess now? That way we don't have to have a recess before the dinner break.
The Chair: If all members are in agreement, we will have a ten-minutes recess.
The committee recessed from 4:02 p.m. to 4:18 p.m.
[W. Hartley in the chair.]
R. Thorpe: With respect to B.C. 21 and the community projects program, it is my understanding that your ministry looks after the administration. I'm just wondering if you could, first of all, tell us how many FTEs work on this program and what the annual budget is, from an administrative point of view, for this program.
Hon. J. Pullinger: We have six FTEs working in that department. The administrative costs are $665,000.
R. Thorpe: We have six FTEs and an administration cost of $665,000. Could you highlight for us, then, the major cost components of that $665,000?
Hon. J. Pullinger: That is the cost for the entire branch, so it includes all of the overhead, from rent to systems costs, office expenses, salaries and benefits.
R. Thorpe: Would it be possible, then, to get a detailed breakdown of that$665,000 within a week or so, please?
Hon. J. Pullinger: I'd be pleased to.
R. Thorpe: It's my understanding that this program functions through a committee at the top of it making some kind of decision. Could the minister advise us when the last time that committee met was?
Hon. J. Pullinger: Those questions should be directed to the Minister of Employment and Investment.
R. Thorpe: I just want to make sure that I understand here. That committee is chaired by Employment and Investment. They just pass the decisions they've made back down to you, and then you administer from there -- is that how it works?
[ Page 4360 ]
Hon. J. Pullinger: No. There is a committee, and I usually have a staff person who goes to it. But for the detail of that, it's more closely connected with E&I, and the member would get better information from E&I. I don't have a lot of that detail here. We tend to simply administer the program. The budget is in E&I, and therefore most of the responsibility is there, as well.
R. Thorpe: In a recent letter signed by the minister, there is a sentence which says that the B.C. 21 community programs program is currently under review. Could the hon. minister please explain what they're reviewing and when they expect that review to be completed?
Hon. J. Pullinger: Again, those questions should more properly go to E&I. The member would get better answers there.
R. Thorpe: Again, I just want clarification; I don't want to be difficult. I don't want to go to E&I and then have E&I tell me that I should have been back here. Do you know what's going to happen by then? You're going to be gone -- from the meetings. The estimates are going to be over is what I meant -- sorry.
Hon. J. Pullinger: I thought I was going to get fired or dead or
R. Thorpe: No, none of those. The estimates will be concluded.
So your ministry, then, and your program: are you not involved in this review that's ongoing?
Hon. J. Pullinger: There is some involvement, but the primary responsibility
is under E&I. Rather than play ping-pong, it would be better to
R. Thorpe: Could the minister advise: from an administrative point of view, how many applications are currently on file on which decisions have not been made?
Hon. J. Pullinger: Roughly 380.
R. Thorpe: Can the minister advise when the last time a decision was made by the committee? When did some actual administration of a new project take place in the ministry?
Hon. J. Pullinger: Only four grants have gone out so far this fiscal year.
R. Thorpe: Could the minister advise, then, how that output of four, so far this year, compares to the output for the previous fiscal year?
Hon. J. Pullinger: I believe there was only one grant last year.
R. Thorpe: So a 400 percent increase in the process of administration
Again, I will ask detailed questions on E&I, if we have that opportunity. I do have a specific example. The Okanagan-Similkameen Neurological Society has had an application in for some time. I think it goes back to the last fiscal year, prior to the election. Can the minister give any indication when some of these long outstanding applications will hear an answer? And when I ask that question, I want to make sure that the minister knows that my question is not just about spending money. It's about providing meaningful, timely answers to people, so that they can plan their own lives or their societies can plan their lives. Can we have any indication for constituents out there, across British Columbia, when they can expect to hear?
Hon. J. Pullinger: I have no hesitation in saying that I share the sense of urgency to clarify for groups, and people, just what the status is and where we're going next. I believe the committee will be meeting soon. I am as anxious as the member to deal with that. Obviously it is timely to respond to those applicants and advise them of the status of the program, and also the status of their individual applications.
[4:30]
G. Abbott: Could the minister explore, for my information and edification, the structural relationship between the B.C. 21 community grants program and the larger B.C.21 responsibilities of E&I? I'm just curious. Obviously we came in today expecting to address a range of issues surrounding the community grants branch. Could you just explain if there is an autonomous element to B.C. 21 community grants? Or is it something that should, for the sake of administrative convenience, be transferred entirely to E&I?
Hon. J. Pullinger: The arrangement that's in place is there for the sake
of efficiency, quite frankly. The funding and the responsibility is primarily --
although there is participation from me, primarily, or my staff and the ministry -- on
the committee
We still have the in-province travel grants, which take a great deal of effort to administer. There are a lot of grants that go out into all of our ridings to various groups that travel in the province. And we have a small annual granting program to Timmy's Telethon -- that kind of thing. It's very small.
So in effect our ministry has historically had an excellent system that delivers those kinds of grants. So rather than create another parallel system, we're simply using the same one. That's the reason for this rather anomalous system that we have.
G. Abbott: I think I understand that. I guess the concern that would be raised, of course, would be the concern that was just raised by the member from Okanagan-Penticton: that, in fact, the B.C. 21 community grants branch is able, through that committee structure, to fulfil its goals and its mandate. And obviously -- and I think the minister agrees, based on her comments previously, as well -- in the last year or two we haven't seen that. So whether that's a consequence of the committee structure or whether it's a consequence of the capital review, perhaps the minister can comment on that. I can see how, conceptually, the thing could fit together. But obviously we haven't yet seen the evidence that in fact the system can work. Can the minister comment?
Hon. J. Pullinger: The member is correct in saying that it's about the freeze on capital spending and the budget cuts.
[ Page 4361 ]
There was one grant that went out. Actually, it went out in the last fiscal year; it was supposed to go out in this fiscal year. So there we've got this anomaly of one grant that went out last year. That was just a technical error, if you like. And there's a very small amount of money, I believe, this year -- $465,000 or something, just a tiny amount.
I know that all members of this House, in past governments and this one, appreciate very much the community grants program. My personal view is that, rather than kill that program, I would put it on hold until such time as the province is in a situation where we can move it back to where it was rather than end it. And I suspect the members across the way would agree with that decision. But at this point it is under review. It was frozen last year. For this fiscal, it's right now under review. I expect a decision; but exactly what happens will be not too far off.
G. Abbott: I agree with the minister with respect to B.C. 21 community grants. I think this is a very important program, and I think it has been an important program for British Columbia, I suppose, about as long as there have been lottery ticket proceeds to distribute. GO B.C., at least one of the programs under the former Social Credit government, I think, was one where we saw a large number of community projects that provided recreation and cultural facilities across the province. And that's very good. I'm sure the minister intended to say that there had been some abuse of that, and I think historically that's probably the case, as well.
I want to go to the heart of the thing and talk about the purpose of the program, the mandate. I appreciate that the purpose or mandate has been disrupted to some extent in the past year by the capital review. Could the minister review for me briefly what the mandate or purpose of community grants is from her perspective?
Hon. J. Pullinger: Although we just did the administration part of it, I will hop over the line for one moment and simply say that our purpose in the program is to create jobs in partnership with local communities, to promote economic development and to build the infrastructure of the province for those kinds of things that don't fall under other programs. They are generally smaller projects -- not always, but they're generally better funded through the community grants program.
G. Abbott: The reason I'm asking these questions is that over the course of the last 12 months since my election, I think I've probably written six or eight letters to the community grants branch supporting playgrounds, cultural projects, recreational and sporting projects, and those kinds of things. I would like the minister to confirm very briefly that those kinds of projects are still precisely the kinds that are still within the scope of the mandate of B.C. 21.
Hon. J. Pullinger: We haven't changed the program yet. We simply froze it last year, and there's a minuscule amount of funding this year. But there has been no change to the program since we cancelled GO B.C. and created this one. And the member is correct: GOB.C. was outside of government. It didn't seem to have too many rules, and it was criticized annually by the auditor general. That's why this one is fully accountable through you and me.
G. Abbott: The term "minuscule" has been used a couple of times now. Could the minister advise what kind of scope that would be? And what kinds of dollars are we talking about when we use the term "minuscule"?
Hon. J. Pullinger: I believe there is $486,000 this year, which obviously is a minuscule amount. The Ministry of Employment and Investment has also negotiated an arrangement with the federal government whereby there will be some funds available for infrastructure kinds of programs through this process. But it's a different envelope of money, of course, because it is shared with the federal government. So the final decisions around how that money is to be utilized and disbursed have not been made. Because that is a small amount of money too, I would assume that the upper limits on individual grants would be small. But that's a decision that has not been made yet.
G. Abbott: The $486,000, which I presume the committee will make some decisions on and the community grants branch will distribute, was determined as a consequence of a decision of the committee under Employment and Investment, which was referred to earlier. Is that correct?
Hon. J. Pullinger: That was the budget allotted under the budgeting process.
G. Abbott: Would that be the budgeting process of the committee or of the E&I ministry?
Hon. J. Pullinger: Government.
G. Abbott: I presume that the $665,000 required to operate the branch is funded through the normal budgetary process from consolidated revenue. Is that correct?
Hon. J. Pullinger: The member's getting into the details around the budget. I would advise, with respect, that the budget is in E&I, and I think the member would get clearer answers from that ministry. I would suggest that he ask those questions to the minister responsible.
G. Abbott: I don't want to be quarrelsome, because I never am. It's just that the community grants branch is under this ministry, and I don't think it's a huge stretch to ask how the budget is obtained. I'll ask it somewhere else if you insist, but it seems fairly straightforward and basic.
Hon. J. Pullinger: I just want to clarify the member's question to ensure
that I'm answering it as I ought. Is the member asking about the budget within my ministry
or the budget within E&I? I have the administrative budget, but I don't have the
G. Abbott: The administrative budget.
Hon. J. Pullinger: Oh, I'm sorry. I beg your pardon, then. Hang on.
Our ministry budget is created and approved by Treasury Board and cabinet in the budgeting process, and all of the funds come from consolidated revenue as is appropriate. I actually have a note here, so I can give the members a better breakdown of the overall budget. I think I wasn't quite accurate before, although that was an inadvertent error.
The community grants branch has a combined administrative unit that serves a number of granting programs, including administration of B.C. 21. The allocation of branch costs is roughly: B.C. 21 administration, $665,000; in-province
[ Page 4362 ]
travel admin, $150,000; in-province grant fund, $860,000. The total branch budget is $1.675 million. That's a clarification, and I apologize for the confusion. The program admin costs include salaries, benefits, operating costs, systems costs and rent, as I said previously.
G. Abbott: Again, I guess, going straight to the heart of the matter here -- and it's fortunate that my colleague from Okanagan-Penticton isn't here, because he tends to get very emotional at times like this -- the $1.675 million for the operation of the total branch, when it has $486,000 to administer, does seem to me strikingly disproportionate. I assume that the minister would agree, but I'll give her an opportunity to indicate whether that's the case.
[4:45]
Hon. J. Pullinger: The branch has a number of programs that it administers. That's why we do the community grants, as well. We do the in-province funds, which are a huge number of cheque -- it's very labour-intensive. We will be administering the federal-provincial community-level infrastructure programs, which I expect will be on the same basis as community grants: one third, two-thirds. We have the annual grants program, etc. So while the budget is very low this year, certainly we still have a huge amount of work that is done through that amount.
I would remind the member too that the branch deals not only with outgoing cheque, which is fairly straightforward, but with incoming applications, which is an enormous amount of work. It sometimes involves numerous calls to our constituents and fielding information and faxing back and forth. For eight or ten people to do that work is fairly remarkable, and I wonder sometimes how they actually manage to do it. That's why the costs appear to be high. They are actually within the range of normal administrative costs. It does appear to be high when you think only of the outgoing, but there's an enormous amount of work that happens there.
G. Abbott: In fact, I agree with the minister that what we've got here is a kind of funnel, where there are still lots of applications coming in -- 380-some, the minister mentioned. Undoubtedly, it takes a good deal of time to assess those, and I don't question that. The folks in the branch are, I'm sure, doing a very good job of that.
The problem that I'm having -- and I hope that I can explain it here -- is that
while there are lots of applications coming in that have to be assessed, at the end of
the funnel there's only a very small amount coming out. If we're only going to produce$486,000 worth of awards, and it's going to cost us
I may be addressing this sentiment to the wrong location. Perhaps it's government, broadly speaking, or perhaps it's the committee under E&I. But hopefully, in the very near future we will see amounts for the community grants grow from $486,000 to some more reasonable level. If the prospect of getting a community grant for a community group in the Shuswap is 1 in 380, I would have to be realistic with them and say that their chances of getting a grant are not good. Hopefully, the amount we'll be seeing will be much larger in the years ahead.
To back up a little bit, at least when I was in local government, I had a clear understanding of how community grants -- whether the program was called GO B.C. at the time, or whatever permutation -- were funded, and that was through lottery ticket sales. Is that still the case? Is that the dominant or sole source of income for this branch?
Hon. J. Pullinger: I can't speak for the former Socred government. If the moneys went directly there, that was how it was outside government and that would probably be the criticism. But the member would have to read the old public accounts reports of the auditor general to determine just what the problem was. Quite frankly, I've forgotten. The appropriate way to deal with this kind of thing -- and what we have done since 1991-92 --is to put the lottery moneys into the consolidated revenue fund and then go through the proper budgetary and apportionment process from there.
I also want to ensure that the member is aware that of that $1.675 million, there is nearly $1 million in the grants that goes to our school kids to travel around -- $860,000.There's also the $486,000 -- which is, as I say, a minuscule amount -- for the community grants program. There will be several million this year for the federal-provincial programs that would be administered here, plus there is the smaller number of cheque. But nevertheless, there is roughly $1 million for the one-time annual grants program. There's more here than meets the eye, and certainly enough to keep ten people very busy.
G. Abbott: That pretty much canvasses the issues, and I thank the minister for her responses. I now have a clear idea of where the money is coming from, how things are being decided, where it's going to and so on. The conclusion I've drawn is that things are out proportion with respect to this branch. I don't think they're out of proportion in the sense that the branch is too large, because there are still lots of applications coming in. What is out of proportion here is the amount that has been made available to the community grants: $486,000 is way out of proportion in relation to the infrastructure, if we can call it that, necessary to process all of the applications that come in. I'm sure she has vigorously argued the same point at the committee table, as well, and she may have some parting comments for me. But I do want to leave with that sentiment.
Hon. J. Pullinger: I don't necessarily disagree with the member at all. However, given we're keeping the program, and given that there are three other programs being administered through that same system, there's certainly no one who hasn't got lots of work to do. There was a freeze last year with just a small amount through that community grants program, but there will be several million dollars coming through the federal program that will, in essence, be for recreation and culture -- culture, primarily.
The funds are flowing through there. They are not as much as I would like to see and I know not as much as the member opposite would like to see. But we all know that to protect health and education we have to squeeze everything else, because health and education take such up an enormous part of the budget.
I thank the member very much for his comments.
I. Chong: I hope I didn't miss anything when I stepped out of the room briefly. I heard earlier that there is the processing of the three programs. One was the in-province travel program, which I'm very familiar with; the other is this current community projects program. The minister also said she administers an annual grants program. Can she elaborate on that a little bit more, please?
[ Page 4363 ]
Hon. J. Pullinger: That was a historical program from the Social Credit years, where there were annual grants to things such as Timmy's Telethon, Girl Guides, Boy Scouts and so on. For the most part, that program also is in limbo at the moment, pending a decision.
I. Chong: If the program is in limbo, can the minister advise: are any applications at all being received, processed or anything? It's just completely shut down-- is that what the minister is telling us?
Hon. J. Pullinger: This small program has historically not been application-driven. It's a program we inherited, and it's just one of those programs
that was deemed worthwhile -- the members would agree that those charities are. However,
for government to expand the programs indefinitely would not be possible. In fact, because
we are reviewing all programs at this point, the decision around whether that one
will continue or not has yet to be made. So it's not an application-driven program; it is
a program that was instituted
I. Chong: Then we're both in a bit of a mystery. Maybe someone will clarify
that for us. If it was not application-driven and right now it's in limbo, nothing is
being allocated out, would the minister not
Is there consideration in another ministry? Can the minister share that with us? Is it something that Human Resources -- the old Social Services ministry -- should have been looking into and that didn't rightfully belong here? Or is it a different kind of program, not to do with social services but specifically geared to some sort of community project? Is that what this is all about?
Hon. J. Pullinger: I apologize for not having detail. I don't expect anybody
in government does, because it's approximately 15 different organizations that historically got
a grant. They would write every year and get a grant every year for things like Timmy's
Telethon. As I say, it's a historical program. They're all very worthwhile causes, as
I know the member would agree -- you know, Boy Scouts, Girl Guides, Boys and Girls Clubs
and things like that, as well as the telethon. It is a bit of an anomaly within government, but to simply cut them off at the pass
I. Chong: So I take it from the minister that it exists -- I suppose in
name only -- because it's in a limbo state. Can the minister advise, then
Hon. J. Pullinger: As I said, the program is under review. There's not a specific allocation. Certainly I want to accommodate any of those worthwhile causes that I can. I apologize to the member -- I'm not obfuscating deliberately. It is one of those decisions that's pending. I hope there will be a decision in the near future about whether we will continue and with what. But they are very worthwhile causes, and if it's possible to do so, there certainly is the will to do so.
I. Chong: I certainly do appreciate what the minister is advising here. I'm not trying to make her provide a commitment, because I know it's very difficult. As I said earlier, we recognize the financial state of the province, and certainly appreciate that those worthwhile causes do get attention. I'm just trying to determine what point -- what fiscal year, I suppose -- was the last time this program was funded through this ministry, so that as I'm looking at comparisons of the budgets, I can get a better idea as to when the last time any pay-out under this annual grants program was. Was it '95-96, '96-97,definitely not '97-98? At what point did this come to a conclusion?
Hon. J. Pullinger: Last year, '96-97, I believe 11 received a grant. There has been one grant provided, I believe, to the Children's Hospital this year -- that was provided because of timing. There was a timing issue, and we wanted to not unduly penalize anyone. So we are pending a decision on the full program and have yet to determine how we will deal with it.
I. Chong: I'm glad to hear that the organizations received funding up to the last fiscal. It's just been three months since then that they've probably been scrambling to fill that void. I'm sure all of us in our communities will hear from them in due course and offer them some sort of support -- moral, if nothing else.
[5:00]
The other thing I heard the minister say earlier was
Hon. J. Pullinger: I understand that this program has been reduced from last year by only about $40,000, which is a small cut. Our government, as members opposite know, has very much focused on young people; this is a young person's program. We have simply targeted the program to young people this year, and the difference in the funding reflects the difference in the clientele. In other words, there was about $40,000 that went to adults; all of it now goes to youth.
I. Chong: I was aware that the adult portion had been removed. Not knowing the comparative amounts, I was not sure. That $40,000 is certainly an amount that can be eliminated for that.
I understand that the target is the youth groups. I wonder if the minister can
advise the
[ Page 4364 ]
But what we're finding is that there are youths who are still in secondary school and have reached 19 or 20because of having to repeat grades and those kinds of things.
Is there flexibility in this in-province travel program, or is it clearly identified that for a person to qualify they must be under 19, and if so, at a certain date? I apologize; I don't have a copy of the application with me to establish that. But given that our environment is changing, and our education system and those who use it are changing, has there been any consideration given to the kind of flexibility that may be required?
Hon. J. Pullinger: I'm advised that in determining eligibility, staff accept all applications from secondary schools. But if it is an application from post-secondary, then there needs to be some determination of the ages of those involved.
I. Chong: So for the record and for clarification, if somebody was 20, 21 or even 22 years old and attending a secondary school -- because that can occur -- and as part of an athletic program required the in-province travel program, they would not be denied. They would be able to travel, as well.
Hon. J. Pullinger: Certainly the ministry doesn't single anyone out. The grants are generally applied for on a group basis -- for a team or a group to go somewhere. There is no request from the ministry if the group is from a secondary school, so any separating out would be done at the school. I can't speak for them, but I would doubt that they would do that, given that the program is available simply to a high school group.
I. Chong: I'm satisfied with these two of the three programs, the in-province travel program and the annual grants program.
I'd like to get back very quickly to the B.C. 21 program. I know it's been said by
my colleagues the member for Okanagan-Penticton and the member for Shuswap, but I too
have received a number of concerns, and a number of other members have contacted me and
asked me to canvass this area a little bit more, as well. I guess the concern they have is
the fact that, as the minister stated earlier, the administration of this program is
still required and the staff are still required not only because of the outgoing
cheque in some cases but to process the incoming applications. Given that this program is currently in
a very
Hon. J. Pullinger: As I said earlier, I certainly appreciate the member's concern. It's unfortunate but it's unavoidable, because we didn't want to outright cancel the program, because it is a program that all members feel is very worthwhile. What we're grappling with right now is the small amount of money we have. We need to have some final decisions around the B.C. 21 community grants and final decisions around the federal infrastructure program. Those decisions will be coming in the very near future -- as fast as I can make them happen, for sure. At that time we will advise all involved of the status and of their individual status.
So I certainly have no problem making a commitment to the member that I will have those responses as early as I can. I share her concern, and we will be doing everything possible to clarify that for all of those involved.
I. Chong: I'm encouraged by the minister's comments that she certainly will do everything possible to speed up that process and to speak on behalf of all those concerned with all these applications that are coming in.
But my concern still is that
If that's the wrong impression, then clearly we have to do something to correct that. And if that's not happening, I wonder whether the minister can advise what steps can betaken to prevent that kind of anxiety.
Hon. J. Pullinger: The branch advises applicants that all is on hold at the moment and that the infrastructure program is on the way and, again, that decisions will be forthcoming very soon.
I. Chong: I would like to speak specifically, if I might, on one project in my riding. It's a project that's been going on for quite some time. It has to do -- I'm sure the staff is aware of this because I know that the people involved have been very vigilant in pursuing this matter -- with the Gordon Head Lions Club constructing a youth activity park. It was headed up by a group forum called "I Support Saanich Parks for Youth" -- it's the IS SPY group. A woman by the name of Lynne Maple got involved in this a couple of years ago, I believe, and went out and got the support of the private sector. Some $165,000 was anticipated to be the cost of this project, and she was able to more or less secure $55,000, which is one-third of the project cost, from the private sector.
They then came to the municipality, the local government of the district of Saanich, at which time I and my colleague from Saanich North and the Islands were both on council. All members on council were supportive of it and committed to this project of $55,000. They were just left with the balance of the $55,000. They were told, and perhaps it could have been miscommunicated or misunderstood, that once they'd procured their two-thirds --one-third from the private sector, which is fundraising as well; one-third from the district -- that the other one-third would be coming from the province.
I see the minister nodding -- and again, as I stated earlier, if it was miscommunication, then I can appreciate that. But if this is the kind of miscommunication that's occurring, that's one of the reasons why we're getting some of these calls. I think it's really important that people realize that there is certainly no deemed commitment to their project. This group has been, as I say, very proactive in trying to have this project come to fruition,
[ Page 4365 ]
and they were told that there was a federal-provincial project recently, because the shovels literally went into the ground a few weeks ago.
Because of the private sector coming forward, they then contacted the community projects
program and were told about the federal-provincial infrastructure works program. They
said: "If you call for information
"If you call for information, you get the offices of B.C. 21, the community projects program that was placed in a freeze last spring and continues to linger there with 381 applications waiting in line. Nearly 200 of these hopeful community groups submitted their applications this year, as the offices remained fully staffed, and they continued to encourage groups to apply for B.C. 21 grants. The rest have been waiting for years. If you ask about the new program, you are told that priority will be given to projects that can start immediately and finish by 1998."
I am aware of that, and I did get that information from staff. What I'm curious about is that the federal-provincial infrastructure works program is supposedly something that these groups are directed to, yet from my understanding from this letter, they're still contacting the B.C. 21 community projects program. Is there any way we can make it easier for these groups?
Hon. J. Pullinger: I think I've explained in detail how this delivery system works, and for which programs. I would simply like to add that what the member has read into the record makes it clear that applicants are aware that there's a freeze and that it continues. I believe that was the language she used.
I would further like to advise that approval for any community grant is given only in writing. People receive a letter saying that the grant has been approved. Until such time as that letter is received, people are not told that their grant is approved, and certainly it should not be taken that way. It's certainly unfortunate if there's been any misunderstanding, but that's the way the branch functions. It's very clear, and with the huge number of grants that have been given out in other years when there has been a full budget, we have had relatively few problems of that nature.
I. Chong: Earlier in our discussion the minister advised -- and she can correct me if I'm wrong; I scribbled it down very quickly -- that there had been one grant application last year and four this year. Can the minister advise the details of which ones those were?
[5:15]
Hon. J. Pullinger: I don't have that on record. I know there were two or three -- a couple to opposition ridings, I believe, and a couple to government ridings. I don't have that detail here, but I would be happy to provide it to the member. I'll get someone to give the member a call.
I. Chong: I would like that information. It would be helpful. I'm not suggesting where
the grants were provided
Hon. J. Pullinger: This year is '97-98.
I. Chong: I look forward to that documentation from the minister's office. But I must say that when I do receive it, it will perhaps cause more questions and require an answer to my constituents -- particularly this group, because I know at that point they'll ask why something was granted within the '97-98 year when this particular application has been in the works, I think, for two years. That will make it very difficult. If the minister is able to help me at all in providing an explanation as to why these four were granted something from the B.C. 21 community grants program, it would make it that much easier to explain that there's been no bias in the offering of these programs, because it will be very difficult to explain.
Hon. J. Pullinger: I am sure that the member is aware that all of the freezes have been difficult. But the fact is that if we don't want to accrue debt, we don't build schools. If we want to cut the cost and size of government, we don't spend money. It is very frustrating, but that's the reality of stopping capital spending and cutting budgets. I don't think anybody is delighted with the freeze. It is a fact of life and necessary. Obviously, if there's under $500,000 this year, it's going to be exceedingly difficult. I will do everything I can, and I know my colleague on the committee who's responsible for the funding side will ensure that there's as much balance as possible. But with that small amount -- all of which, I would assume, is older applications -- we'll simply do the best we can and refer others to where the money is going to be this year, which is the cultural-recreational money from the federal-provincial program.
I. Chong: I just want to respond to the minister's comments. I was not suggesting
that these decisions aren't difficult and that the amount we're looking at here
My concerns were that once given the list of those four that were approved, if my constituents call and ask me why theirs weren't, I will be hard pressed to find an answer, apart from saying: "Well, it was a difficult decision." I would like to offer more than that, if I can. If there are other reasons as to why those four got approval, it would be extremely helpful. What I'm looking for from the minister is to provide that clarification to my constituents, anyway. I know that other members may say: "We have the same thing. Why would four get processed and theirs not get processed? "Especially when you compare them to the other ministries, they're all equal in nature and are important that way. So that's all I'm requesting that the minister provide assistance on.
Hon. J. Pullinger: I think it's a self-evident fact, albeit unfortunate, that with 380 applications and $500,000, we just simply can't fund them all. Other than trying to balance as best we can proportionately between the caucuses -- the sides of the House, if you like -- it's simply not possible to provide a rationale to all of those that won't get funded, other than to say that there isn't enough money. That simply is the rationale. It's simply not possible to do any better with the limited funds. That's a fact of life. The cuts are regrettable, but there's nothing that can be done about that. I can't offer anything else to the member, except that there are simply far more applications than funds. People are aware, as the member has indicated through a letter she read, that the fund has been frozen. There will be a handful funded under the old program, because that's the amount of money we have, and the rest will come through the federal-provincial program.
[ Page 4366 ]
I. Chong: I appreciate the minister's comments. I know she was distracted,
as was I momentarily. But my question to the minister is whether or not she would be able
to provide me, when I'm able to get this list of the four applications
Hon. J. Pullinger: No, it's just a very difficult process. There will be a number of others funded up to the $486,000, and we'll simply do the best we can.
I. Chong: With that, I think I've canvassed enough of the B.C. 21 amounts. I know we're anxious to move back to some of the Small Business issues. I appreciate the minister allowing us to quickly canvass this area for the members who are here who needed to do so.
The areas that we're going to just quickly ask some questions on are the Working Opportunity Fund and the employee share ownership program. I'll start off with the employee share ownership program. I know there will be some changes that have been introduced in Bill 22, a lot of which are housekeeping. I'm trying to get an idea of where we're headed here and the effectiveness of the program to date. Can the minister advise the length of time that is currently required to process an ESOP application?
Hon. J. Pullinger: One week to one month, depending on the complexity.
I. Chong: I guess I find that kind of amazing or confusing, because the response that I'm getting from employers is that it's taking a lot longer to process. I'm not sure what they're referring to, but they're saying as long as six months to a year. I'm not sure if they're referring to the application itself going through or the success of it. Can the minister advise whether her ministry staff talks with those employers who are requesting application assistance? What kind of costs are involved? Does the ministry staff talk with the employers who come to seek assistance, essentially, and go through the costs involved? I understand there is a substantial cost.
[5:30]
Hon. J. Pullinger: In order to make the processes as easy as possible, we have boilerplate legal and accounting forms. We also provide up to $5,000 for professional fees. I'm advised that while the formulation of the plan can sometimes take several months, as the member indicates, the earlier question was about the registration of the plan, which takes one week to one month. It's a bit of a development process before you get to the registration. That's likely what the member is alluding to.
I. Chong: The up to $5,000 that's provided, is that what the ministry provides for these applications? Can the minister advise what the total budget is for this year --the expected amount?
Hon. J. Pullinger: The professional fees are cost-shared on a 50-50 basis, up to a maximum of $5,000. Last fiscal, that was $10,000. As part of our cost-cutting, we have reduced that amount. The total budget is $150,000.
I. Chong: Can the minister advise how many people signed up for this program in the last fiscal -- 1996-97?
Hon. J. Pullinger: There have been 60 companies that have registered since the inception of the program. We believe there were ten last year.
I. Chong: I guess it's a bit surprising that there were only ten last year, with a budget of $150,000 this year. I presume that last year it was higher for the fee. So clearly that is not being fully utilized. Is that what I'm understanding?
Hon. J. Pullinger: The cost-sharing provision has never been fully utilized.
I. Chong: Then I guess the question I have is: by their targets that the ministry
looks at as to what they hope to achieve in the numbers of applications they're hoping
to receive every year
Hon. J. Pullinger: I understand that there are other ESOP plans that are
not registered. The ones registered under the act
I. Chong: Just for my benefit, how long has this been in place? Is it a five-year or a ten-year program? I do recall it coming in, I think, in the late eighties or nineties. I'm just not clear. Can the minister advise?
Hon. J. Pullinger: The program commenced in September 1989, but it was roughly a year before there was any activity under it in 1990.
I. Chong: So based on that, I suspect that on average -- if 60 applications have been received to date, ten in the last year, and the target for 1997-98 is to register six to eight firms -- that is what this program is designed to do: deal with only six to eight applications a year. Or is it designed to handle a little more? I'd just like an idea of what the objective is.
Hon. J. Pullinger: I'm advised that this is the only program of its kind in Canada, and the tax credits are $1 million annually. There's still room for the program to grow, but the exact amount of benefit to any given company depends on the number of employees and the amount of money raised. But this is the only legislation of its kind in Canada.
I. Chong: I do have just a few questions on the Working Opportunity Fund. But at this time, can I just quickly yield to the member for Peace River North to ask a few other questions on Small Business? I know he has some as well, and if he can just ask those, I can come back and very quickly do the Working Opportunity Fund questions. That should finish it.
[ Page 4367 ]
Hon. J. Pullinger: I thought we agreed we'd finish Small Business.
I. Chong: Well, he's got some
Interjection.
The Chair: Through the Chair, please, members.
I. Chong: The Small Business portion will be concluded by 6 o'clock.
Hon. J. Pullinger: And WOF?
I. Chong: And WOF, yes.
R. Neufeld: I apologize to the minister if there was an agreement made with the official opposition about Small Business. I have been in the House, attempting to try and get into it but not wanting to disturb anyone's line of questioning. I haven't risen, and possibly I should have. But I basically just have a few questions. It's to get maybe the minister's opinion, mostly. It's not technical in nature, more philosophical, about small business and how we deal with it in communities that border Alberta.
The minister will know that in my community there's great difficulty trying to level the playing field and having a competitive marketplace to work in for small business in the cities of Fort St. John and Dawson Creek -- all the cities that border Alberta. Most of them are not small businesses you would walk down a street in a community and find but are more related to the oil and gas industry, in competition.
I've entered into debates with the Minister of Labour on some issues that your government is bringing in that are going to continue to tilt the playing field further in favour of Alberta companies. I just wonder if the minister has been made aware -- through any businesses in northeastern British Columbia -- about some of the difficulties that some of these small businesses are having in trying to compete with Alberta.
These are businesses that -- by the way, I listened to the minister earlier -- pay the type of wages in the $60,000-to-$70,000 range. They're good-paying jobs, but we're slowly losing them to Alberta, and we're not able to work on anything where we can gain some of them back. I think once you lose a job to Alberta it's twice as hard to get it back. I would rather that we keep them or try to encourage those companies to operate out of British Columbia, rather than Grand Prairie, Hythe or Beaver lodge right along the border because they have some tax advantages.
Could I just maybe get a philosophical viewpoint from the minister on these issues?
Hon. J. Pullinger: I'm certainly aware of the problem all the way along the border. When one province decides to cut services and have a low-wage policy and cut taxes as well, that is obviously a political decision and not one that we're prepared to make in the same way. It might be a good place to do business, but it's becoming an increasingly difficult place to live.
I do recognize the problem. As I say, I've travelled the border pretty well in the north and in the Kootenays, as well. There is certainly some awareness. Other than the problems that are certainly not within the bailiwick of this ministry to fix, I simply can say that I will work with other ministries to do what we reasonably can, without going to a low-wage, low-value economy and gutting services. I would like to mention, however, that although I do recognize the problem and don't minimize it, there is not a significant problem of companies moving to Alberta per se. I know there's a competition problem on the border, but I see no evidence in the numbers we have that there is a problem of a lot of businesses actually moving to Alberta, generally, from British Columbia.
R. Neufeld: I appreciate the minister's comments. There is evidence -- it may not have hit your statistics yet -- of whole companies moving their business assets out of the province of British Columbia to Alberta, for a number of reasons.
It's interesting that the minister talks about gutting services and cutting services, and I assume she is referring to Alberta and the low-wage and the low-value issues. I challenge the minister to go to Grand Prairie and find out whether those folks that work in the oil and gas industry are making low wages: they're not. I guess they probably have cut back on services, there's no doubt about it. To be perfectly frank, so has your government cut back services dramatically. Some of those services are affecting my constituency. So it's happening all over.
But just so you know, when you talk about gutting services -- one of the main ones
that I'm sure the minister's referring to is health -- and you make those statements
What I'm getting at is the level playing field between British Columbia and Alberta. There is no level playing field. I don't know whether the minister is aware of it or not, but her own government, through the member for Malahat-Juan de Fuca, has done a study. He has made some dramatic statements about what happens in British Columbia in comparison to Alberta, why companies are moving to Alberta and why we're having a difficult time maintaining them or encouraging them in British Columbia. He states that the comparative advantage is 15 percent, Alberta to British Columbia. It's 15 percent cheaper to operate out of Alberta than it is in British Columbia in exactly the same industry.
[5:45]
Those things relate to a number of things: fuel taxes, provincial sales tax, insurance rates and those kinds of things. He listed it out in a report that he put forward to the Minister of Transportation and Highways. Your government has acknowledged that there is a difficulty in trying to keep businesses in British Columbia. The latest move to take away the oil field variance that was in the labour standards is going to add substantially more on top of that 15 percent. I guess I understand that it's not in her ministry's control to control these things.
What I am asking of the minister is that, within her cabinet, she speak up for those small businesses that employ men and women in the northeast to try and level the playing field somewhat between British Columbia and Alberta, so that we can continue to encourage those good-paying jobs
[ Page 4368 ]
-- by the way, the jobs that are there for British Columbians are$60,000 to $70,000 or $100,000 per year -- and keep them in British Columbia, along with the businesses that employ those people.
I think there's a great opportunity for us to encourage more business to settle in the North and South Peace to do that kind of work. Obviously, when you look at the statistics for the oil and gas industry and the drilling and the land purchases, that's all on the scale that's going up. Unfortunately, we're not doing as well as we should be doing on the service end of it, and that's simply because there is an unlevel playing field.
So I just wonder if the minister could be an advocate in cabinet to work with those ministers -- the minister of energy, the Minister of Labour and the Minister of Transportation and Highways -- to try and alleviate some of these problems that people are facing in the northeast.
Hon. J. Pullinger: I'll provide a brief response before I move the appropriate motion.
I am aware of the problem. One of the first things I did after being appointed to this ministry was go on a trip, starting in the Peace. I spent considerable time talking to people there, so I am aware of the problem.
However, we do have a philosophical difference about how to resolve it. This government is not prepared to drive down minimum wages or move from the position of being the highest funders of health care in the country, with a 15 percent gap between the funding level we have per capita and the next province.
I would simply like to close my comments by pointing out that 96 corporations came into B.C.. last year; 145 transferred out. That's out of 247,000 in British Columbia and more than 20,000 new ones created in the province. The number of small businesses in B.C. has grown 61 percent -- almost twice the national rate of 35 percent over the decade.
So while there are certainly problems along the border because of the differences in ideology, funding, taxes and wage levels, those will no doubt be addressed in the northern forum as well. I do recognize the problems; however, I think that we are generally doing very, very well in B.C.
With that, hon. Chair, I move the committee rise, report progress and ask leave to sit again.
Motion approved.
The committee rose at 5:49 p.m.
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