(Hansard)
TUESDAY, JUNE 17, 1997
Morning
Volume 5, Number 25
[ Page 4503 ]
The House met at 10:05 a.m.
Prayers.
The House in Committee of Supply B; G. Brewin in the chair.
ESTIMATES: MINISTRY OF FINANCE AND
CORPORATE RELATIONS AND
MINISTRY RESPONSIBLE FOR
INTERGOVERNMENTAL RELATIONS
(continued)
Hon. A. Petter: I am simply going to introduce, for the benefit of the House, Doug Hyndman, here to my left, who is chair of the B.C. Securities Commission. I am very pleased to have him join us today.
F. Gingell: It's most helpful to have this very well-put-together report for the year ended March 31, 1996. I had the opportunity to speak to Mr. Hyndman just as we were coming in, and I asked him when the annual report for the fiscal year ended March 31, 1997, will be ready. I understand it will be in a couple of weeks. If it is, you will probably be the first past the post. Maybe there should be a blue ribbon awarded to the government ministry, government agency or Crown corporation that gets its report out first every year. I would encourage that; in fact, that would be quite a good idea.
I would also like to suggest to the hon. Chair, to the minister and, through the minister, to the Government House Leader that if they were to think a little more carefully about the timing of various estimates and the way the processes went through, and if, instead of doing it in the somewhat -- as seen by the opposition at the moment -- haphazard determination of who comes up when, we had the 1996-97 report to discuss the issues surrounding the B.C. Securities Commission, we would have had a much more meaningful discussion. It would have been better for the government; it would have been better for us.
I would suggest to you, Madam Chair, to the minister and to the Government House Leader, that if you want this House to work better and want us to make the estimates debate a little more focused
At any rate, with the information that's available for us from the '95-96 report
Hon. A. Petter: First of all, I very much appreciate the member's remarks. It's been noted, obviously, that the commission has tried to get its reports out in as quick and as timely a way as possible. I appreciate the member's comments that that only assists in this discussion, so we'll try to take that to heart.
In respect of areas that the commission views as priority areas or areas of particular importance, I would point to three beyond those referred to by the member. One is the obvious area of enforcement -- beefing up enforcement capability.
Another is the area of policy, particularly the adoption of policy to meet changing market conditions and the need for the regulatory environment to keep up with some of those changes.
Third, but certainly not least, are initiatives towards cooperation with other regulators. This, of course, is true of regulators across the country, but in particular I would reference what has really been a major step forward by the commission in a relationship it has reached with the Alberta Securities Commission, in terms of having a relationship in which there is a streamlining and a coordinated approach. Those who, for example, go through registration procedures in Alberta or British Columbia can be assured that the requirements in one jurisdiction will also serve the other jurisdiction.
This initiative between Alberta and B.C. to work cooperatively, to try to establish a common playing field, as it were, and to eliminate some of the barriers that exist to those who want to operate in both jurisdictions is, I think, being viewed across the country as an initiative that might well assist in breaking down some of the barriers that exist amongst securities commissions generally. It will facilitate a more consistent approach to securities regulation and will facilitate investment in a way that meets the needs of investors, while at the same time ensuring effective regulation.
[10:15]
F. Gingell: I didn't appreciate that an arrangement had been made with Alberta. If the minister sees that as a forerunner for further cooperation between securities regulators across the country, perhaps we should start off this morning with that area, seeing that it is the long-term view.Madam Chair, you will remember that at this time last year, when we were discussing this issue, B.C. was somewhat sitting out and away from and not entering into ongoing negotiations on the issue of the Canadianization or federalization of securities regulation but was keeping a strong watching brief on the issue and leaving its options open. One of the issues that I felt was going to cause problems in bringing resolution to this was the issue of the largest province, Ontario, and the Toronto Stock Exchange seeing their securities regulation process as a business and making a fairly substantial profit from it, and then suggesting to the federal government that if they were to get out of securities regulation and we were to have a federal commission across the country, they needed to be compensated. Has that fiscal issue moved along at all since this time last year, or is that still an issue that has to be resolved?
Hon. A. Petter: There has been a troubling set of discussions that have taken place around the possibility of a national
[ Page 4504 ]
securities commission or agency, in the sense that the resolution of one issue tends to have been accompanied by the irresolution of another.
Just to review the history a little bit, B.C. has not been uninterested in this initiative, by any means. We have followed it and been participants in the sense that we've had staff present in the room for much of the discussions that have taken place. Throughout the early part of last year there was a proposal that was put together, again through the cooperation of B.C. and Alberta, that sought to try to strike a balance between a national model for securities with sufficient decentralization and local regulatory control to ensure that the dynamic nature of venture capital markets in Alberta and B.C., for example, was maintained.
I don't think anyone wants to see a national security regulatory model -- certainly from B.C.'s point of view -- become a model that stultifies investment in B.C. and the unique nature of our venture capital market. I think the model was one that had a good degree of support, certainly in British Columbia. Amongst those who favoured a national securities model within B.C., it was seen as a bit of a model. At the time that model was put forward, it seemed that a major stumbling block was the one the member has referred to -- namely, the insistence of Ontario and, I believe, Newfoundland that there be compensation for their loss of revenue.
What happened in the intervening period was that during the course of negotiations and discussions with the federal government back and forth, Ontario eventually did back off from that position of compensation. But at the same time, they moved to essentially reject a model that would facilitate the kind of interplay of local regulatory oversight with national oversight of the kind that provided B.C. investors with some comfort that the B.C. market would not be stultified or that Ontario would not, in a sense, overly direct activities in B.C. So what we gained on one side was lost on the other.
I must say that having attended the Investment Dealers Association annual convention just yesterday and having talked to various people, there's a sense in B.C. of tremendous frustration amongst many of the local dealers. They were initially divided on this issue. Some were prepared to consider the possibility of a national model with sufficient decentralization and regional presence. They felt that if there could be progress made on the compensation front, we might well move in that direction. They now feel frustrated, because while Ontario has removed that objection, I think other provinces still want to seek compensation. Ontario seems to have made some movement in that direction. It's been offset by Ontario's insistence that the national model be one that is far more centralized, with power over securities regulation emanating from Ontario to a much greater extent than B.C. investors consider desirable.
It's at a point now where the kinds of initiatives that I've already referred to
F. Gingell: Do I take it, then, from what the minister has said, that any cooperation between securities regulators is going to happen in the smaller provinces -- i.e., probably with Ontario and Quebec outside? One has to recognize -- and I appreciate the conundrum -- that the problem is that the important organization is the Ontario Securities Commission in the issue of getting cooperation that works and that means something. Without the TSE
Hon. A. Petter: I think it's fair to say that obviously B.C. and Alberta do have a certain relationship geographically and a certain community of interest, in the sense that there are some similarities in the markets. So it's not surprising that the specific cooperation I've referenced would have taken place there, although I want to give full credit to the Securities Commissions of both provinces for having taken this initiative and pushed it forward.
I'm informed that in fact there is some appetite now, an impetus, to extend this kind of cooperative work through the Canadian Securities Administrators and through initiatives such as mutual reliance, which is an attempt to identify requirements that can be relied upon by all securities regulators so certain requirements, when met in one area or in one securities regulation framework, will then suffice to meet similar requirements in others. There is work in that regard. I understand that work involves both Ontario and Quebec.
There may be some advantage in working in that way, frankly. The member will recall, I think, that all the talk that took place around a national securities commission clearly saw Quebec as not being part of that model. But Quebec, it appears, is perhaps willing to work with a different model: the one I've referred to of mutual cooperation amongst provincial jurisdictions. Therefore, while we may not get the benefit of a single national securities commission, at least in the short term we may get the benefit of cooperation that extends more uniformly across the country and includes the province of Quebec.
F. Gingell: I think that covers that subject. The focus has moved off nationalization and has moved on to rationalization and cooperation. That's often the easier way to go. When you don't have a major change, you make haste slowly, as it were.
One of the other portions of the business plan that's important to the commission is ensuring that they have sufficient resources to be able to fulfil their mandate. It is true to say that at the moment they are certainly in a strong position. The commission in the year 1996 -- that's the year ended some 15 months ago -- had a surplus for the year of some $3.5 million on revenues of $15 million. It now being the middle of June, can the minister inform the committee what the financial results were for 1996-97?
Hon. A. Petter: The revenues, as I understand it, for the past year have been $18.9 million; expenditures were $13.1 million. Therefore the surplus to year-end is in the range of $5.8 million.
F. Gingell: Is the result of that that the bank account has gone up to $15 million?
Hon. A. Petter: Yes, it has.
[ Page 4505 ]
F. Gingell: I know that the chairman of the commission spent an earlier part of his career in the British Columbia bureaucracy in the Ministry of Finance. Perhaps you need him back there, particularly if he brings this money with him.
Well, that's an interesting question, and it is a question that I had noted -- not at the point, though
[10:30]
Hon. A. Petter: There hadn't been any consideration until the member raised the matter in the House. If he has some suggestions, we'd be happy to take them under advisement.Clearly the legislation was established with the notion that the commission was to be self-financing and to not provide a revenue stream for government. I think the revenues here have to be put in the context of the fact that we have been into, as the chair informs me, certainly the longest bull market in recent history. As a result, revenues have been very strong. Obviously the commission wants to plan against the possibility that revenues might not be as strong in the future, even though we hope that they will be. At this time, I can simply say that there has been no consideration given, certainly by me or by government, to in any way siphoning off these revenues.
F. Gingell: Has there been any consideration given by the Securities Commission to reducing the level of fees and charges that they levy against people filing reports and seeking licences?
Hon. A. Petter: I'm informed that within the Canadian Securities Administrators there is a review, generally, of fees and the issues of self-financing versus non-self-financing securities regulation. In relation to that, as well as in relation to the surpluses that have been built up, I think the commission will be reviewing its own fee structures and considering where it goes with these structures over the course of the next year. But there hasn't been any specific consideration given to date to reducing fees.
F. Gingell: Do you have any sense of how British Columbia's fee structure compares to that in other provinces -- Ontario, Alberta, etc. -- and whether we are known to be high, low or right in the median?
Hon. A. Petter: The information I have is that, overall, the fees would be roughly comparable to those of Ontario and Quebec -- perhaps a little higher than Alberta, which I understand reduced its fees from comparable levels sometime last year.
F. Gingell: I'll move on to one of the other issues identified in the business plan: the issue of customer service. I see all kinds of information relative to the number of filings. I see that your goals include reducing processing times for filings and applications. Have you set turnaround times?
I seem to remember that there is some information in here about what turnaround times you are presently delivering, but I wonder what your targets are and whether you feel that the current level of service can be improved without in any way jeopardizing the responsibility that you have to bring due diligence to your responsibilities.
Hon. A. Petter: The commission has been working to try to improve performance and in that effort has been establishing performance-measured targets to achieve that within its business plan. For example, I understand that the commission has a target of trying to provide decisions within 90 days of hearing -- making sure decisions are provided no later than within 90 days of the hearing to which the decisions apply. That's a shorter time frame than has sometimes occurred in the past. Similar targets are being set for other turnaround times that affect the activities of the commission.
F. Gingell: One of the other roles that's part of the mandate of the commission is a whole series of issues that come under the heading of protection of the public. I appreciate that it's in this area that the commission receives the greatest amount of criticism in the press. People only seem to talk about the Securities Commission when they feel that something has gone wrong with some investment, and they turn around and look for someone to blame.
Does the commission keep track of criticisms of your operation that appear in the media? Do you keep track of them by all subjects regurgitated for the zillionth time and those that are in fact truly recent? And if you do that, what has there been in the past year that you have taken note of?
Hon. A. Petter: The commission, as I understand it, does not monitor for media criticism of the commission, but it does monitor the media for market issues that arise from time to time so that it can make sure that it is aware of concerns within the market and can be ready to take action at the appropriate time. That would obviously include both specific issues that arise in the market in respect of specific transactions and also general concerns concerning investor confidence in sectors, etc., that would be of interest to the commission or that might require the commission to take account of changes within the market. So there is media monitoring, but not of criticism directed at the commission. I'm sure commission members read the newspapers, but I don't think there is a formal monitoring process in respect of that.
F. Gingell: During 1995 or 1996, the commission commissioned a study by KPMG, I believe, on issues surrounding the regulatory activities of the Vancouver Stock Exchange. That report should have been long ready and should have been presented to the commission. Can the minister advise the committee if in fact it is finished? What did it say?
Hon. A. Petter: As the member indicates, the report was received some time ago. The commission has been using the report and its recommendations as the basis for discussions with the Vancouver Stock Exchange to ensure that the concerns raised in the report have been or are being fully addressed. I take it that that process is near completion. We're within a month or so of full resolution. What then happens with the report is a little uncertain, but if the member would like a briefing, even now, on the status of that process, the commission chair tells me he would be happy to facilitate
[ Page 4506 ]
such a briefing -- and certainly, again, once the process is completed. But the report is being used to ensure that concerns that are addressed in the report are also then addressed by the VSE.
F. Gingell: I will take up the offer of the briefing on the report.
Since the changes that arose as a result of the Matkin report, the Securities Commission has wider responsibilities in regulating and overseeing enforcement issues in the VSE. I appreciate that when the report work first started, there may well not have been a very long gap from the time of the change in the legislation reacting to the Matkin report. Does the report recognize and deal with the increased role of the Securities Commission and whether or not the Securities Commission is meeting its responsibilities?
Hon. A. Petter: Maybe I could ask the member just to clarify that. I'm not sure I understood the point of the question exactly. Was it -- and if not, he'll tell me, I'm sure -- the extent to which the commission is now performing its functions in a manner that's consistent with the recommendations or concerns of the Matkin report? Or is it something different from that?
F. Gingell: Yes and no. I'm not sure whether it was really as a result of the Matkin report, but the responsibilities of the B.C. Securities Commission in overseeing and doing some audits related to the VSE were brought in a couple of years ago. Does the report
Hon. A. Petter: That does help to explain it. In fact, the KPMG report does not focus on the commission's role relative to the exchange or solely on the role of the exchange itself.
F. Gingell: Did the report focus, though, on the issues for which, from my memory
Hon. A. Petter: It's a wonderfully circular answer, but the answer is that it was that additional jurisdiction that empowered the commission to commission the report.
[10:45]
F. Gingell: It is strange how with every little bit of legislation that that changes and with all these changes in responsibilities, KPMG always seems to be in there, getting some kind of work out of it. I think I left the accounting profession a little early.One appreciates that the issues surrounding freedom of information and protection of privacy are issues that will be important to the Securities Commission. I'm sure their world has changed since that legislation was brought in. Can the minister give the committee some feel for the additional workload? Does the commission see the processes and the procedures that they have to follow as being reasonable, and are they in fact accomplishing both access to information that should be freely available and the protection of privacy?
Hon. A. Petter: I'm informed that in this area, in the area of the commission, the freedom-of-information requirements have had less of an effect, perhaps, than they have had elsewhere, because the commission is disclosure-oriented to begin with. It's had some impact in terms of the resources required of the commission, but it has not had a huge impact on its activities or on the way in which it conducts its business.
F. Gingell: The commission, I take it, is making use of new technologies through web sites and the Internet to ensure people can get ready access, 24 hours a day, without bothering to phone the office.
Hon. A. Petter: Indeed, the commission does have a web site -- www.bcsc.bc.ca -- and that web site provides information. It also has an interactive element where people can make inquiries and get information back. I understand that there is a national system, SEDAR, through which companies are required to file their prospectus in electronic form, as well. Clearly the commission is moving into the electronic age both in its operations and as part of national developments.
F. Gingell: Thank you for the answer. As to the briefing which I was offered earlier, perhaps we could do it in such a fashion that we could have a little education on access to your web site. Perhaps it would be of interest to all members of the Legislature. Perhaps when the House rises we could arrange that. It's so useful for members of the Legislature to understand some of the things that are happening.
I dealt with the freedom-of-information issues earlier and got on to the KPMG study and report. Subsequent to the KPMG report, there's an IDA report being done -- a similar regulatory review being done by the Pacific district of the IDA. Perhaps the minister could inform us of the focus of that report and its current status.
Hon. A. Petter: I understand that there is a report in draft that has been prepared, in this case by staff. The KPMG report was put out to consultants through a competitive process, in which KPMG was the successful competitor. In this case, the report is being done by staff of the commission. As I said, it's in draft form right now and will form the basis for discussions with the IDA.
F. Gingell: I misread this. It's a similar regulatory review of the investment dealers. It's not by the investment dealers; it's of the investment dealers. So does that focus on the issue of the regulation of licensed salespersons, the role that you'd been pushing for the IDA to take a more active role in? Can the minister inform the committee exactly what the focus of this report is?
Hon. A. Petter: The focus is looking at the effectiveness of the IDA in its regulatory functions with respect to its member firms and employees, similar to the VSE review in the sense of looking at how well those regulatory functions are performed and how they can be improved. The report should provide a basis for the commission interacting with the IDA to see whether some improvements that have been identified as a result of the report can then be proceeded with.
F. Gingell: Going back to the issues surrounding the Matkin commission and their findings, the issue of self-regulation of member firms and employees was one that was left up in the air, hoping that some national body would move in, perhaps as a division of the IDA, to take a more active and responsible role. Is this process that is going on now the conclusion that started with the point: who should be doing
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this? Is the IDA the right organization? Are they capable, and do they have the resources to discipline their own members? Discipline becomes an important and integral part of this whole process.
Hon. A. Petter: As I understand it, the Matkin commission recommended the possibility of the VSE transferring to the IDA some of the regulatory powers it holds with respect to members. At this time, there has not been an inclination to force that issue. It's a matter that it's felt can be left for the members to resolve. Some other jurisdictions have seen some transfers but others, frankly, have been reluctant to do so.
At this time, I think the commission's focus is to try to work to improve regulation of both forums and to work with both the VSE and the IDA, not to force the issue but to allow improved regulation to emerge through its efforts in respect of both fronts.
F. Gingell: The joint council of Canadian Securities Administrators is a fairly active organization, as I take it. Have they produced a business plan determining the direction they should be going and the issues they should be taking an interest in? And if they have, what are they?
Hon. A. Petter: The Canadian Securities Administrators is an informal organization, but it is an organization that has become more active of late. I think I mentioned that earlier in connection with some of the efforts to develop relationships amongst various security regulators -- the principle of mutuality. It's also, as I understand it, undertaking some work in respect of mutual fund regulation, for example, and streamlining. I've already referred to streamlining. It's an informal organization but one that's becoming more activated in response to issues that are of national concern, where regulators in combination can work cooperatively to improve their respective regulatory environments and the way in which those regulatory environments work in conjunction with each other.
F. Gingell: The 1995-96 initiatives included one that I keep going on about, which is underwriting conflicts of interest. The concern that I have is that it's always difficult for man -- that's gender-neutral -- to serve two masters, or mistresses, if that's better. Underwriting is, I think, with the mix of businesses that are presently within corporate organizations, as they are organized in the North American market
[11:00]
It's interesting, because five or six years ago, when I first got elected and spoke about this, people looked at me in horror. "What do you mean, there's a conflict of interest?" -- with underwriters who are in the business of also being brokers, and people who are registered brokers or registered salesmen for companies being allowed to buy in the market. One has all these issues. It's interesting that others are now seeingCould the minister advise the committee where we're at? Is there any likelihood of some legislated reorganization that will separate these responsibilities and allow the market to work in, I think, a more hands-off, arm's-length manner?
Hon. A. Petter: As I understand it, the trends, perhaps regrettably, are going in the opposite way, in the sense that the nature of the market and those who participate in it are giving rise to more potential for conflict of interest, not less; hence the need for increased regulation to deal with it. While I might wish for a different approach in the face of that potential, obviously the necessity is to ensure an adequate regulatory environment to guard against conflicts of interest, real or apparent, impeding the effectiveness of the market. I share the sentiments of the member, but I guess the realities of the marketplace are the realities, and one has to respond to those emerging realities.
F. Gingell: I appreciate that the CSA have no jurisdiction, but they are a very influential group. Have they come up with any recommendations to either the province of Ontario or the province of British Columbia that would assist in the separation and division of roles, responsibilities and business arrangements that the British Columbia Securities Commission feels would be advantageous and worthwhile in dealing with this conflict issue?
S. Orcherton: I seek leave to make an introduction.
Leave granted.
S. Orcherton: Joining us today in the gallery is a grade 5 class from a school in my constituency, Oaklands Elementary School. They are touring the buildings today, learning about the history and the operation of this place. It is always a pleasure to introduce students who come to the legislative buildings to learn some of our history in British Columbia, and today it is a particular pleasure. I know many of these students personally, and I know the teacher, Mrs. Lauder, personally. That's due to the fact that my son Mackenzie Orcherton is a student in this class. I bid the House make them welcome.
Hon. A. Petter: I'm sure the member will have observed, as I have whenever I meet with representatives of banks, that they no longer talk just about banking. They talk about insurance and they talk about securities, and we're seeing increased integration of activities amongst financial institutions. I understand the member's desire to better delineate, to break down roles and responsibilities, but that is being done more in respect of the regulation than in terms of trying to start to move back towards more discrete functions.
I think the member referred to some of the concerns about brokerage firms and potential conflicts within brokerage firms. I understand there's an industry committee that has been working to provide recommendations concerning regulation. There seems to be a paucity of work around the notion of, as it were, delineating and narrowing the scope of functions amongst various players within the regulatory environment.
F. Gingell: May I also seek leave to make an introduction?
Leave granted.
F. Gingell: I must admit that I was kind of surprised when the member for Victoria-Hillside stood up and introduced a grade 5 class from a school in his constituency, because I thought it was a grade 6 class from Beach Grove Elementary School in my constituency. So perhaps we could find out if they're from Victoria or from Tsawwassen.
Interjection.
[ Page 4508 ]
F. Gingell: They're from Victoria.
Interjection.
F. Gingell: They were here earlier. Oh dear, I was supposed to have met them on the front steps, but my duties came first.
In a delayed way, could I ask the House to please welcome the grade 6 class from Beach Grove Elementary School, which includes Jamie Lamb's son Max and people that live right in the area where I've lived for 37 or so years. If they're not in the gallery now, I'm sure they're still in the building, so I ask all members to join me in making them welcome.
Perhaps this is an appropriate opportunity for the minister to introduce to the members of the House the names of the new commissioners appointed to the B.C. Securities Commission.
Hon. A. Petter: Well, that was a nice introduction, and then suddenly the member comes at me with a trick question.
There has been a process, as the member will be aware, to solicit names from people who would be interested in serving on the commission. I'm happy to say that process has resulted in a fairly extensive candidate pool. Initially it didn't. I think we did it at the wrong time of the year, and too short of a time frame was extended. There's been a very extensive candidate pool, and I anticipate that will result in appointments coming forward in the very near future.
F. Gingell: I rise in a state of shock. This has been going on for eight months. It's my understanding
Hon. A. Petter: I agree with the member that it's certainly desirable to have a sufficient number of members to conduct the business of the commission. Right now I think there are six commissioners and another five positions that could be filled. I also believe, however, it's important to make sure that we have a commission that is experienced and capable of carrying out the function with the public's confidence. I think the problem was that we initially advertised just in the pre-Christmas period, and it was felt that perhaps people didn't have an adequate opportunity. We then readvertised, or extended the period, to my recollection. It has taken some time, and I regret that it hasn't happened sooner. I agree with the member and will get on with the task of making the appointments as soon as the new commissioners are determined.
F. Gingell: But the status is that we're currently missing half of the commissioners. I appreciate that some of the six are full-time and some of the five are only part-time, so that makes a difference. But it seems to me that it wouldn't have been difficult to pick out some stars from that group and at least get some of them appointed. I understand that some ofthe commissioners whose terms have expired are not being considered for reappointment -- and one always needs to have an ongoing turnover -- but that some of the ones who have maybe served shorter periods of time are being considered for reappointment. Is this issue totally in the minister's hands? Or is there some other body in the provincial government that needs to be involved in this exercise, other than the administrative and service functions that are performed for you by Sheryl Kozyniak in the coordination of appointments? Is there any other organization that's involved in any way in this exercise?
Hon. A. Petter: In this case the commission itself is directly involved in the process. The Ministry of Finance does the advertisements and then passes along the names to the commission. The commission then conducts interviews, with input from Ministry of Finance staff. It's a fairly intensive process, but it has taken longer than I would like, and I bear responsibility for that. I certainly think we're close to a position where we can make some new commission appointments and beef up the complement of commissioners.
F. Gingell: Maybe I didn't make it quite as clear as I should have, but the question that I actually tried to ask is: other than the coordination-of-appointments process with Sheryl Kozyniak, did that office have any role in this exercise? Or did it all go to the Securities Commission?
Hon. A. Petter: There may have been some consultation with Appointments -- I'm guessing here -- around issues of geographic representation, gender and those kinds of issues, to ensure that the composition being sought met with general government expectations. The way these appointments are done is much more directly involving the commission
I think it should produce, when we finally get through it, a set of commissioners who will be well qualified and will be seen to be well equipped to carry out these functions in what is a sensitive area.
[11:15]
F. Gingell: There is no way I would want to encourage the minister to make the appointments quickly, without doing the kind of due diligence that's important in the quasi-judicial administrative role that this is. But five vacanciesHon. A. Petter: Four expired in October and one in January.
F. Gingell: So we're getting close to four of them being vacant for almost one year. I have heard a rumour, as one does -- they're going around -- that the holdup was in the cabinet policy and communications secretariat. Now, they get blamed for a lot of things, but I was led to understand that the appointments were held up there. I wonder if the minister would confirm if that was true or, as with so many rumours, without foundation.
Hon. A. Petter: The member says he can't ask a question about rumours. I don't know what we'd talk about in this House if we didn't talk about rumours. To my knowledge, there is absolutely no truth to that rumour whatsoever, and I think I would know if it were the case.
F. Gingell: As you have the commission chair here, perhaps you or the commission chair could give the committee
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some feel for how this has delayed the many important projects that the commission has. Has it delayed any hearings -- i.e., have you had a shortage of commissioners and therefore not been able to proceed with hearings that should have been scheduled and dealt with up to now?
Hon. A. Petter: The vacancies have all been of part-time commissioners. I'm informed that while it's been a bit more challenging for the commission to schedule hearings, and it probably put a bit more of a burden on the full-time commissioners than is optimal, it has not resulted in any inordinate delays.
F. Gingell: Can you advise me what the remuneration arrangements have been for part-time commissioners in the first six months of this year -- the last six months -- with this additional duty, as it were, of having to sub in? What average monthly per diem or remuneration would part-time commissioners be entitled to?
Hon. A. Petter: One makes guesstimates here. The per diem is $250. On average, with a full complement of commissioners, a part-time commissioner might work five days, so that would be $1,250 per commissioner per month by my digital calculation.
F. Gingell: I wonder if the minister would like to assure us that you don't have any automobiles for the part-time commissioners.
Hon. A. Petter: I'd be happy to provide that assurance.
F. Gingell: I presume that the majority of the functions of the commission are carried on in Vancouver from their offices on Hornby Street. Does that make the issue of regional representation amongst the makeup of commissioners difficult? When the minister spoke of assuring themselves that the makeup of the commission met government guidelines but still recognized the need for unusual experience and skills, I got the feeling that the issue about makeup perhaps dealt more with gender balance than with the issue of multicultural diversity or regional representation. Could the minister speak to those issues and to whether regional representation is, or is not, a function of these appointments?
Hon. A. Petter: I may have used an example which wasn't as pertinent here. The point I was trying to make is that in the course of making appointments within government, one generally touches base with the officer in charge of appointments, just to ensure that the appointments are, where necessary, reflective of the community to which they respond. In this case, given that the bulk of securities transactions takes place in the Vancouver area, there probably hasn't been as much concern around geographic representation as might be the case, for example, with a commission or a body whose functions are regulated activities that are more broadly spread out across the province. I was just providing that as an example of the kind of issue in which Agencies, Boards and Commissions might have been interested.
As I understand it, there have been two commissioners from Victoria and one, up until recently, from the Okanagan, so there has been some geographic representation. But I think the concern here is to try to balance the need for people who have an interest and some expertise in the area with a sufficiently disinterested stance -- that they are able to perform the functions free of any conflicts -- and, hopefully, people who can also be reflective of the general views of constituencies and the community. Certainly gender would be an element of that, but so would background and experience.
It's always challenging in this kind of environment to find people who have (a) an interest and (b) some knowledge or expertise in the area, but who are not so directly involved in securities matters as to be in a conflict situation. I think that some people who would otherwise have served the commission very well did not or would not put their names forward for those kinds of reasons, and legitimately so. Obviously, part of the screening process is to look at that as well. I would say the concern is to try to find people who are representative, balancing that against the demands of interest, expertise and capability.
F. Gingell: I'm sorry to jump back again, but one appreciates that when one reads this one identifies issues that we wish to discuss. I want to go back to an issue that I didn't canvass as well as I should have, and that was the issue of customer service. How do you measure it, how do you value it, and what is the B.C. Securities Commission doing about the issue? My question is: do you have any process in place for measuring the customer satisfaction level of people who are required to file applications and exemptions, etc., from the commission?
Hon. A. Petter: To date, there hasn't been a formal feedback mechanism. The commission is obviously interested in informal feedback and is very attentive to informal feedback that it receives. I mentioned earlier the generation of performance targets. The commission monitors itself against the performance targets, which presumably correspond in some way to customer satisfaction if they're met. I'm informed that the commission is contemplating some survey of customers to try to determine what the level of satisfaction is and perhaps establish a baseline for measurement for the future.
F. Gingell: The response of the minister makes it sound as though the service quality standards were determined by the commission. That's always easier to do and is understandable. I wonder, though, if there had been any public input or input from the industry that the commission deals with in determining appropriate standards for service.
Perhaps to save time, the next question is: are they published? Are they known? We touched this briefly before, but do the customers know what they should expect? Thirdly, to complete the loop, are the results published?
Hon. A. Petter: Coming to the last point first, no, the commission hasn't published the standards but probably will consider doing so.
To this point, there is not a formal feedback mechanism with those who make use of the commission, but I understand the commission does consult on these kinds of matters with various advisory bodies: SPAC; the Securities Law Advisory Committee, SLAC -- I must say that's an unfortunate acronym, in my view, but there you go; and the VSE and IDA are fairly vocal voices on behalf of their members in respect of the performance of the commission. But as I say, I think the commission is thinking now, particularly as it has established some performance standards, of reaching out a bit more through survey work and perhaps trying to get more direct feedback from those who interact with it in order to evaluate not only how well it performs but whether the standards it set for that performance are adequate and meet the needs of its client base.
[ Page 4510 ]
F. Gingell: When the changes to the Securities Act were brought in and we were looking at forfeiture applications, one was interested in what was going to result. Reading the annual report for the year '95-96, I see that no forfeiture applications have been made to that point.
My first question is: is the fact that no forfeiture applications were made to the end of that fiscal year the result of no circumstances in which the Securities Commission felt forfeiture application would be appropriate? Or was it the result that you didn't want your first exercise, which could finish up in judicial review and in the courts, to be a slam-dunk? Or what was the reason for nothing happening up to the end of March '96?
Hon. A. Petter: There has not been any use of this forfeiture application procedure to date, as the member indicates. There are a couple of potential situations in which it might be used, and I think it's a combination of the commission wanting to make sure that the circumstances warrant this and that the use of power is one that is truly justified in its first instance, and to establish its use in an appropriate way. So I dare say it's a combination of the two concerns that the member has indicated.
[11:30]
F. Gingell: I had only actually dealt with the subject up to the end of March 1996, and my next question was going to be: what happened in the year ending March 31, 1997, and in the two and a half months that's passed since? From the minister's response, I take it that the answer is nothing -- that there have not been any applications since.Does the commission have any concern, and have they sought opinions on the validity of those provisions? Do they believe they'll be subject to any challenge, not on the basis of whether or not it fits the circumstances but whether the process is valid? From memory, you have to go to the courts anyway, don't you, to have that happen?
Hon. A. Petter: The answer is yes, one does have to engage the courts. Everything in this world these days seems to be litigated, so I think it fair to say that the commission does anticipate that there may be litigation around this. But it is not the fear that the provision won't stand up; it's the concern to make sure that its use is appropriate and justifiable. It's not because there's some flaw in the provision that it's not being exercised; it's simply the commission's judicious approach to the use of this power for the first time.
F. Gingell: In reading the newspapers, there have been some cases that one would have thought that this might have applied to. I'm not sure that they were necessarily cases that would have been appropriate for the B.C. Securities Commission to deal with; it may well have been other securities regulators. A couple of the more well-known securities frauds have left the B.C. Securities Commission unscathed. They were not in any way involved with our organization, which is good.
In this area of enforcement and retribution, we deal with the issue of the securities fraud office and the disappointment I have that this has not moved along. Why is this so slow? It's true that I'm dealing with a report that is 15 months old, but perhaps the minister could bring the committee up to date on what the status is of the joint project on the securities fraud office.
Hon. A. Petter: I'll share with the member the most current briefing note I have with respect to the securities fraud office pilot project. As the member is aware, this is a three-year pilot made up of the commercial crime section of Crown counsel in Vancouver plus the addition of officers from the market manipulation group of the RCMP from the Vancouver commercial crime section, as well as commission investigators. In fact, this project is now completing its second year of operation. A first interim evaluation report has indicated some modest success, but there have been problems with staffing that subsequently arose. I understand that the semi-annual report has been received and that there are additional efforts to foster more effective working relationships, through shared meeting and work space, to further the objectives of the office. Certainly the project has been underway and will be continuing.
F. Gingell: When you say it's in its second year of operation, I presume that means it has just started its second year. The opinion I had from reading the '95-96 report was that although the funding had been set aside, had been provided for, nothing much in fact had happened to that point. When did it really get started -- shortly after this period?
Hon. A. Petter: As I understand it, the official startup was October of '95. There would have been some period of time for the project to build capacity, so it was probably not until early '96 that it was really functioning. In terms of the official startup, it was October '95. So from that point of view, we're a year and three-quarters into the second year.
F. Gingell: Now that the pilot project is a year and a bit into its operation, does the minister believe that the funding commitment, the funding arrangement is, first of all, sufficient to look after the project? Was it $5 million over three years or was it $3 million over three years?
Interjection.
F. Gingell: Three and three. Okay.
Is that sufficient money -- $1 million a year? That sounds like an awful lot when the money is going to be spent on salaries, but money isn't something the B.C. Securities Commission is short of. I hope you won't take offence at this, but -- how do I put it in the right terms? -- anything that the Securities Commission can do to ensure that its reputation is held in the highest regard, I believe, will be money well spent. I know the commission works hard in that area. Are you comfortable about the way this securities fraud office is moving along, or has it been particularly slow and a disappointment to you?
Hon. A. Petter: Yeah, it has been a bit slower getting fully underway than we probably would have liked, but there have been convictions secured recently. There have been problems in securing staff with the appropriate skills, but I'm informed that that is not a problem of financial resources. While the question of resources will certainly be reviewed as part of the evaluation process, to date it does not appear that the $1 million a year commitment is providing an inadequate resource base for this project. It's a matter of making sure that there is the adequate skills and training and that the operation proceeds according to its plans. It seems that that is now starting to happen to a greater extent than perhaps was initially the case.
F. Gingell: I appreciate that the Bre-X exercise was a NASDAQ listing and that it started in Alberta. Has there been
[ Page 4511 ]
any action within the B.C. Securities Commission office in any way that they felt was appropriate for them to take with respect to the Bre-X fraud?
Hon. A. Petter: I have to be delicate, too, in what I say in response to this. Obviously, when the Bre-X situation came to a head recently, I asked for an oral briefing on how such cases were handled within the Vancouver Stock Exchange and the Securities Commission here. At the time, the indication was pretty strong that we perhaps have a somewhat more vigilant or tighter environment around these kinds of high-risk mining and venture capital-type operations than perhaps was in place with respect to the Toronto Stock Exchange. Perhaps some of the warning signals that weren't registered as quickly as they could have been elsewhere would have been here, simply because of the experience that this market has developed and the capacity we have developed here in B.C. to deal with these situations.
I suppose I might cheekily say that it's perhaps a shame that some of those who were responsible for regulation with respect to this case didn't pick up some of the signals from B.C. It's nice to be able to say that. So often in the past our securities environment has been the one that has been challenged, somewhat smugly, by those outside this jurisdiction. It seems that in this case, our capacity to anticipate and deal with some of these concerns may have assisted here to a greater extent than was the case.
Having said that, a working group has been established under the CSA to look at policy changes generally within the regulatory environments in Canada, to see how those regulatory regimes can be improved. The lessons of the Bre-X fiasco, misadventure -- whatever you want to call it -- can lead to some better regulatory responses than perhaps were in place in respect to that particular venture.
F. Gingell: I hope Hansard got all that down. Probably we should send it around to some other parts of the world. Perhaps we should also encourage the B.C. Securities Commission to keep open communications with the chief investment officer of the province so that he might be warned that even though they're in index funds, they can pull something out of the index fund that would have been helpful. But we'll get to that later in the day.
In the financial statements we have a bunch of information that deals with the issue of compliance and enforcement revenue. My quick calculation is that we received cash of $492,000. There are accounts receivable of $47,000, which gives a total of $539,000. Then there's another almost million dollars -- a million dollars, all but $6,000 -- that are accounts receivable but not recorded because of questions about them.
First of all, can the minister advise the committee how much of this $1.5 million is the result of 1995-96 activity and how much of it is carryovers from previous years, just so we can get a feel for what the 1995-96 activities would have resulted in in compliance and enforcement revenue?
Hon. A. Petter: The number the member referred to -- the $993,000 -- was with respect to activities in just the one year, 1996, as we understand it.
[11:45]
F. Gingell: You may or may not have this information available, but the $492,000 that is recorded as incomeHon. A. Petter: What page are you on?
F. Gingell: If you go to page 51, the compliance and enforcement revenue is $539,000. Then my memory is that there is a note in the notes
Hon. A. Petter: It's possible that some of it would be carried over, but I'm informed that certainly the vast majority of it would have been collected in respect of this year.
I would also just volunteer to the member a figure that I find disturbing and interesting, and it probably will be of interest to him, too. That is, of the $993,000 that was uncollected, only $17,000 of that has been collected this fiscal, which suggests that a large amount of those outstanding penalties have simply proved to be not collectible because people are no longer within the jurisdiction, or what have you.
It shows that the commission and Finance were right not to include those revenues within last year's. It also suggests that there's a high amount of fine revenue that is going uncollected because of the difficulties in collecting it.
F. Gingell: Perhaps the minister could arrange for the commission to send me a little briefing note on what belongs to what year, what has been collected since and what's in in 1996-97, just so one can get a feel for the gross amount of fines and assessments being levied, how much is being collected and how much isn't being collected.
Watching the time, could the minister briefly respond on what action the commission is taking to improve the collection rates? Are we using outside collectors, finding other means or hiring collectors from other parts of the world to come and help with this problem?
Hon. A. Petter: I'm informed that as recently
F. Gingell: I hope that we will finish the Securities Commission by lunchtime, to allow them to get on with their work, so I'm going to pass the floor over to the member for Okanagan-Penticton. I do have some further questions in relation to payments by the Securities Commission to the Ministry of Finance. If we have time, we will get to them now; if we don't, perhaps I can arrange to get that information privately.
R. Thorpe: I'm wondering if the minister can advise what role the commission plays in the Waverly Group. A
[ Page 4512 ]
number of investors in British Columbia lost substantial funds, and they happen to be mostly seniors and elders from rural British Columbia. I wonder what role the commission played in the loss of these individuals' funds. The name of the company, or the group, was the Waverly Group.
Hon. A. Petter: As I understand it, the transaction in question was an exempt transaction under legislation and therefore did not require the prior approval or oversight of the commission. But obviously the commission has since been brought in to investigate the circumstances and review the circumstances, and that is continuing.
R. Thorpe: I'm not sure that I heard the minister correctly, and I'd just like to ask the minister to clarify. Did he say that it was oversight on the part of the commission? Could you just repeat that part, please?
Hon. A. Petter: I referred to it as an exempt transaction. Under legislation, certain transactions do not require the prior approval of the commission, and I take it that this transaction
R. Thorpe: As I understand it, the commission had had some history with this group of companies. In fact, in 1993 it issued a cease-trade order against the Waverly Group. Subsequent to that, I'm led to believe and understand that the commission lifted the order after the principals admitted to infractions and agreed to pay $25,000 to the commission. So I guess, first of all, in view of the questioning of my colleague from Delta South, I wonder if we ever got paid that money and, secondly, offered full refunds to all investors. Could the minister comment on that?
In the interest of time, where I'm going to go from that is: what comfort can the elderly investors in rural British Columbia who have lost money in this most recent fiasco
Hon. A. Petter: As I understand this -- and I'm just trying to pick up on the information as we go along here, because I'm not familiar with the transactions the member is talking about -- the transaction in question, the one that has led to the recent concerns the member is referring to, resulted from a private placement with what are referred to as "sophisticated investors." So the investment would have been in excess of $25,000, and the people investing would have done so on the basis that they held themselves out as sophisticated investors. Therefore the same measure of protection -- the filing of prospectuses and the like -- is not required.
The other matter the member refers to, the prior dealings of the commission with the Waverly Group
R. Thorpe: I appreciate the undertaking of the minister, and I will pursue that. Hopefully, the commission staff will get back to me on that.
I think I have a concern here, a serious concern, and I wonder if it doesn't link somehow to the apparent delays in the fraud section moving forward. The commission may have been sold on the idea that these securities were going to be sold to sophisticated investors; the fact of the matter is that they weren't. It appears, from the information that I have, that the individuals were almost targeted as seniors in rural communities who, for the most part, would not have sophisticated investment capabilities. I'm just wondering what role the commission has in safeguarding our seniors and investors who lack sophistication from sophisticated sellers of such securities.
Hon. A. Petter: I think the member's concern is well-taken. The provision that allows private placements with sophisticated investors does not require the involvement of the commission, but obviously the commission has an interest in ensuring that it's not abused by treating unsophisticated investors as though they were sophisticated. With that in mind, I'm informed that rule changes were made last year -- perhaps too late for this particular instance. But those rule changes, as I understand it, set certain thresholds of net worth and income for investors to qualify as sophisticated investors, so as to avoid the possibility of companies using private placements in respect of investors who are less sophisticated than was intended and less able to then protect their interests. So rule changes have come about in the last year that, I think, do respond in some considerable measure to this concern.
The only other thing I want to say is that there's been no delay in the creation of the fraud unit. There have been some difficulties in getting qualified personnel, but the activity has been ramping up, as was originally announced.
R. Thorpe: Can the minister confirm that the commission, through its fraud group, is actively pursuing an investigation now into this Waverly Group on behalf of the seniors who have, quite frankly, been ripped off?
Hon. A. Petter: Normally, of course, the commission would not confirm a particular investigation. But, in this case, I think it's been pretty broadly known, and certainly requested by the investors concerned and the commission's response has indicated it -- that it's the commission itself that has undertaken and is undertaking an investigation review of this matter. So that is underway, and I think it has been reported in the media and is known to those who have brought complaints before the commission.
With the clock in mind, 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.
[ Page 4513 ]
Hon. A. Petter moved adjournment of the House.
Motion approved.
The House adjourned at 12 noon.
The committee met at 10:10 a.m.
ESTIMATES: MINISTRY OF
HUMAN RESOURCES
(continued)
M. Coell: I'd like to take off where we left off last evening, and that was looking at repayments to the ministry of outstanding debts. I'll possibly rephrase a question for the minister. How much debt as of today is owed to the ministry by existing and former clients? Does he have that total?
Hon. D. Streifel: As of March 30, 1997, there was $43.85 million in open cases and $50.97 million in closed cases.
M. Coell: I wonder if the minister could describe closed cases for me. Are they former clients or cases that we've given up on collecting?
Hon. D. Streifel: A closed case would be a case where someone has left income assistance but they still have outstanding debts.
M. Coell: Would this $93 million be cumulative of all former years, some of which could be much older than one year?
Hon. D. Streifel: The answer is yes, it's cumulative.
M. Coell: Does the minister have a number or a projection that the ministry uses to estimate how much debt would come on every year?
[10:15]
Hon. D. Streifel: No, we don't project what new debt would accrue each year. It's a somewhat flexible number. It's dropping recently due to tighter eligibility rules and a little bit more of a restrictive intake into the system.M. Coell: A debt owed to the ministry of $93 million is a large sum of money. I was pleased to hear last night about some of the programs that the government has put in place to try and recover that amount of money so it can be used to help those who need the money.
Last night we talked about the 16 pilot projects that were in the ministry, with some 27 staff members. The minister said that the early results were good. They have now developed 40 pilot projects. I would guess that these are not pilot projects anymore but are probably part of the ministry. I wonder if the minister could comment on the results of the 16 initial pilot projects -- obviously they were positive, or they wouldn't have increased them to 40 -- that they found from their investigations.
Hon. D. Streifel: Based on the results of the pilot projects, there is an estimated $13.8 million in savings in the '97-98 budget.
M. Coell: I wonder if you know what regions those 16 pilot projects were in.
Hon. D. Streifel: Every region had at least one pilot project around this issue, and some regions had more than one. We can get exactly how many were in each region, but we ran them across the province.
M. Coell: Would the minister comment on the results of the 16? Were the results uniform in all parts of the province, or were there more localized results detecting fraud in any one or two or three regions?
Hon. D. Streifel: We don't have the regional breakdown, but I can supply that information for the hon. member. We'll put it together.
Possibly what the member is looking for is if problems are more concentrated in one area than in others around these issues. I will certainly try to get the information on which regions had more than one pilot as quickly as possible for the member. I'll try to get a bit of information on what the pilots were and what the results were on a region-by-region breakdown.
M. Coell: The early results showed about a 52 percent reduction in benefits from investigations of initial claimants. I just wonder how people were identified for investigation. Were they identified when they came in the door? Did everyone have an initial screening or identification, or was it just people suspected of fraud?
Hon. D. Streifel: It wasn't every applicant who was investigated in this manner. It happened when more verification was needed of the information that was supplied. For instance, addresses or past histories resulted in positive results -- or negative results, depending upon your point of view -- in the pilots, which then gave us enough information to extend the pilots from 16 into the 40 programs that exist now.
M. Coell: The pilots had a savings -- and the minister can correct me if I'm wrong -- of $13.9 million. Is that the savings for those pilot projects in the year '97, or is that the estimate for this year?
Hon. D. Streifel: It's the estimate for this year, based on the results of the pilot programs.
M. Coell: With the pilots now being expanded into 40 regional offices, is there an estimate for savings through the expansion of the project?
Hon. D. Streifel: The savings this year -- the $13.8 million based on the pilots -- will allow us to view what the
[ Page 4514 ]
40 produce, from which we'll be able to take a run at estimating what the results of the 40 will be for next year's budget. So I guess a simple answer is no -- if I remembered the question.
M. Coell: I was wondering whether they had an estimate in the budget for savings because of the project. I suspect it could be as high as $30 million, if you just extrapolate 16 to 40 and the savings made out of the 16.
I would be interested that this is really
Hon. D. Streifel: Just to clarify, the $13.8 million in this year's budget is based on the 16 pilots that produced the 40 programs. Basing this activity on 16 extrapolated to 40 gives us the $13.8 million. That's how it works out. In this year's budget is the estimated savings of $13.8 million. I think it would be a bit invalid to extend that equation -- the 16 as it relates to 40 as it relates to what may be produced off the 40. The $13.8 million is the estimated savings in this budget.
M. Coell: I thank the minister for that clarification. That is the number I was looking for: what we could expect to save with the 40 programs now up and running.
I'm not sure whether the minister has answered this question. If he has, just let me know that he has. With the 40 projects, what is the increase in FTEs? There were 27 people involved in the 16 projects.
Hon. D. Streifel: I think we touched on this briefly last night. We're going from 27 verification officers to 62 through this process. I'd say on this issue that I had the opportunity this past year to meet with my counterparts across the country from virtually every province and territory. We all face similar problems within the system. In fact, we exchanged information on what works and what doesn't work. British Columbia has a much higher than normal recovery rate around these files. For instance, other provinces and territories have a fairly tight intake system and very diligent, well-trained staff, and they have verification crews and detection crews. It's working for us.
M. Coell: With the verification officers now at 60 and a debt of $93 million, I'm seeing the minister taking a two-pronged approach, as I think they've mentioned in reports before, in trying to stop fraud from happening and at the same time going back and recovering moneys that have been overpaid for a variety of reasons -- some of which are fraud, as the minister knows.
I would like to talk just briefly about the collection agencies that work for the ministry -- how they're chosen and how many people are involved in the collection and the systems that the ministry uses. We might start by talking about the types of collection agencies and how they're appointed or how they assume their jobs.
Hon. D. Streifel: The two collection agencies that we're currently using are Equifax and Total Credit Recovery. These were chosen through a request for proposals, a tendering process on the pilot projects. Their tenders were the ones we chose to use, and they're still with us.
M. Coell: I would be interested in knowing how many people are involved and how many contacts they have made since the beginning of the pilot project.
Hon. D. Streifel: As of April 30, 1997, there were 11,003 active files in collection.
[10:30]
M. Coell: I wonder if the minister could outline again the number of people employed by those companies and the number of people who have made those 11,000 calls.Hon. D. Streifel: We have six people in the Vancouver office. We don't know the employee rolls of the collection agencies -- how many they employ or
M. Coell: I would imagine that these are the toughest cases to collect on, that the ministry has probably already sent a number of letters or made phone calls requesting repayment before these cases are turned over to the collection agency. I quite understand how the ministry might not know how many employees at those agencies would be involved, but I would think it's a fairly large number if they have 11,000 cases to work on.
I wonder if the minister could inform me what percentage of the collected amount of money the agency gets to keep as its fee.
Hon. D. Streifel: The agency deducts a fee of about 25 percent of the cash recovered.
M. Coell: If I'm correct, if the collection agency were able to collect all of the $93 million for the ministry, they would keep approximately $20 million of that themselves -- 25 percent.
Hon. D. Streifel: It's a pretty broad theory, but I would suppose, based on the contracts we have with them, that approximately 25 percent recovery
M. Coell: That is a significant amount of money. I gather that the ministry would have had to write off that debt if they were unable to collect it, and it doesn't appear that the ministry had staff able to do that type of collection work.
At the end of this year, is the ministry going to be publicizing that collection in its year-end report as to what moneys were collected?
Hon. D. Streifel: We don't publish the amount that we collect back, because it doesn't all go out to collection agencies. We make the first contact, sometimes the second contact and then some, and we do much of the collecting ourselves within, through repayment agreements and what not. So the amount that the collection agencies have -- the 11,003 files -- is $9,120,365, which is out there. If the collection agencies collect all of that, then the equation would fit where they would maybe get 25 percent of that which is collected. But we do the bulk of the work ourselves. It's just the very, very difficult cases that go out there.
What we did with the pilot project to see if there was some value in it proved out, and we're quite diligent in trying to recapture the funds that are ours, which rightfully belong to the other clients.
M. Coell: I thank the minister for that clarification of the money actually under the direction of the collection agencies.
[ Page 4515 ]
In the last few hours we've looked at a change in direction for the ministry -- multifaceted, I would say -- in that your investigations of applicants has changed. It's reviewing cases, checking on finances that are owed, and there's an increase in the amount of time put into collecting the accumulated debt that's owed the ministry. Those are very different changes from the late eighties, early nineties, when none of this was taking place. I suspect it wasn't taking place in most parts of Canada, as well. It's not anything new to British Columbia.
I'd like to spend some time talking about the change in corporate culture inside the ministry offices now, in that with these new roles there is potentially a change in attitude of employees to applicants and also a change of attitude from government, as seen by the individuals in how they access income assistance. I understand that it is a very difficult challenge to remain, as we started off with, viewing people with dignity and value when you have a bunch of systems set up that question that honesty and that value. So if we could spend a little bit of time talking about that potential corporate change and the attitudes that government and staff have to the people that they're serving, we have some questions on that. I believe the member for Vancouver-Langara is going to lead that off.
V. Anderson: On the attitudes and understanding of the public with the major changes that have come in creating, on one hand, the Children and Families ministry and, on the other hand, the Human Resources ministry, could the minister explain, for the general public
On the other hand, there is the feeling out there that the concerns of the Human Resources ministry have not followed that same pattern. Before I go any further, perhaps the minister might explain to me the overall pattern or philosophy of the culture of the Human Resources ministry in meeting the needs of the people that come to it now, as compared to the people who used to come to it when all of these others were part of its purview under Social Services.
Hon. D. Streifel: There has really been no change in the approach of our front-line workers to the clients as they come in to apply for assistance. It's a very difficult time in an individual's life. Our FAWs -- our staff -- are well-trained, well-educated, caring individuals. They treat their clients as they come in looking for assistance with dignity and respect, with the same, I suppose, attitude towards the community. Their attitude towards their responsibility to the community is the one under the Social Services ministry.
V. Anderson: At this point we're not questioning the attitude of the front-line workers, because I agree with the minister. Their concerns are ongoing from what they were used to before, and their concerns are dealing with the people. We're talking about the kind of corporate image that has developed or is developing. Let me just give an illustration of that in an article by End Legislated Poverty. It says the "NDP Resolutions Condemn B.C. Benefits."
"Members of the B.C. NDP don't like B.C. Benefits. Of nine resolutions submitted to the NDP provincial convention to be held at the end of February, seven condemn B.C. Benefits. The resolutions call on the government to restore income assistance rates, combat poor-bashing, increase welfare rates, increase asset levels, set up to a simpler and fairer appeal process, reinstate the flat earnings exemptions, increase the child age limit from seven to 12 years and when defining 'employable adult', stop deducting pension income from persons with HIV and end the residency requirement, among other things."What I'm asking about, in this concern, is that the corporate image of the Human Resources has gone one direction, in the view of the people that I talked to -- even as I talked to a number of people in the services this morning in Vancouver -- and the corporate image of Children and Families, at this point, has gone in a totally different direction.
The services that are trying to cope with the changes that are coming in Human Resources
As the minister explained yesterday, because of the extra help which was beneficial to them, probably 25 or 30 percent of the people have been able get back to work. The other 70 to 75 percent of the people are worse off now than they were before, and there's less hope and less possibility. So it's that corporate image which is out there in the community that I'm talking about at the moment, that the Human Resources ministry, corporately, has become a dollar-crunching process which helps some people get back to work. But if you aren't fortunate enough to be in the category of being able to get back to work, then you're kind of out of luck. You're left on the street, and there's no hope or prospects for you. It's that corporate image that I'm sharing with the minister, because it's certainly out there. It's a concern, because I think the credibility of the program, for all its good intentions, is being threatened by that image. I would like to see that not have the image it has at the moment.
Hon. D. Streifel: I listened very carefully for a question; I didn't detect one. The member treads into a very rigid political debate in this issue. I really have an interest in examining current policy and current views under B.C. Benefits as it relates to the Liberal platform in the spring election of 1996. I don't think it would be of any value to extend the estimates of the Ministry of Human Resources, so I'm going to refuse the bait. I'm not going to take the bait to get into the reduction of rates to $470, the reduction of rates to the average of other Canadian provinces when somebody comes here. As I pointed out in yesterday's debate, that would have individuals in some cases in British Columbia living on under $400 a month income assistance if they happened to come here from Newfoundland.
If we want to get into a platform-versus-platform debate and a deliverables-versus-theory debate based on the May election of last year, we could do that. More appropriately, maybe we should do it outside the estimates of the ministry. My interest here is to promote and move through the estimates of the Ministry of Human Resources; to expose the very good work that we're doing; to add support to the system through this process; to explain how we relate to other provinces and how we relate within our own communities;
[ Page 4516 ]
the assists to move through the welfare system -- the income support system and on into work, because you know, in British Columbia we believe strongly that work has to be a better deal than welfare -- and all of those relevant factors that affect that, from the highest minimum wage in Canada to the job creation record consistently over the last number of years. Those are the assists that are there. The attention we've paid to child care when the federal government bailed out, the attention we've paid to child poverty under the B.C. family bonus, when the federal Liberal government refused to answer the call this year -- those are areas that are there for legitimate debate.
[10:45]
The member talks about how bad it is within the system, in some respects. It's not a great life on income assistance. We have scarce resources, as all provinces have. We steward those resources very carefully under the direction of multiple agencies, from the Finance minister to the auditor general, and the opposition critics like to keep us on the mark about where the money is going. The first half-hour of debate is about moneys that went to the wrong place for some reason or other and the efforts we extend to collect those moneys, so we can pass those benefits on to those in our society that truly need the help.This is a ministry that helps those that need help. I hear the hon. member coming forward with a request in general terms to vary from that. With our Disability Benefits Program Act, we have the broadest definition of disability in the country and virtually the highest rate within the country, as I understand it -- at least in the highest categories. There is the recognition of episodic illness, so individuals with that can have a little bit of dignity in their lives, where they're not
If that's the kind of debate the hon. members wants -- to extend and compare that to reducing the rates to $470 a month and to cutting back the overall budget by 28 percent -- I would ask the member to come forward with an explanation of how that would benefit the system.
The Chair: The Chair appreciates that members have very important information to give on a number of subjects. But we are dealing with the estimates, and I would ask all members to make sure that their comments are relevant to this debate.
V. Anderson: I agree with the minister that we're not here on a political discussion; we're here on a discussion about the life opportunities of people who live in our communities. It's on behalf of some of these people that I would speak and report at this particular juncture.
I quote again, hon. Chair, from a report by those who met with the minister. Having met with him, an article which was printed said: "Streifel Still Proud of B.C. Benefits." He is, and we're very much aware of it. There are many things with B.C. Benefits that I think we're all proud of. I was one who spoke very strongly in favour of the principles of B.C. Benefits. But there's a difference between the principles of an undertaking and the actual product, which comes out in the way it's implemented.
Again, I will quote briefly from that article, because it's relevant. I'm asking these questions on behalf of the people of the community. I spoke to the writer of this article just this morning. Let me give it in context:
"Seven people from six anti-poverty groups met with [the] Human Resources ministerI would ask the minister, on behalf of these people: what are the six options which he promised them for restoring the earnings exemption?. . . on March 11. [He] told us that he is trying to remove children from the welfare system, and he thinks his government has taken the lead on child poverty. He seemed proud that his ministry has provided glasses and dental care for kids living on low incomes. The ministry is looking at Pharmacare coverage as well."Our group spoke mainly about the lack of jobs, the inadequacy of welfare rates to allow people to get bus fares, hair cuts, telephones and the other necessities for finding a job. Maureen Birk of the Downtown Eastside Women's Centre told the minister that a bus pass was crucial. Michael Goldberg of the Social Planning and Research Council asked that a public process be put in place to establish minimum requirements for welfare rates so they could be raised. 'Would you people be happy if we doubled the rate or tripled it?' the minister responded. We told him even reinstating the $46 cut to people without children and raising the rates by 2 percent every so often would help. [The minister] said he was considering six options for restoring the earnings exemption."
Hon. D. Streifel: I have no idea what the member is referring to. I don't have a copy of the document. I don't know if he is referring to quotes. Really, it's some kind of third-party anecdotal future philosophy, or whatever.
V. Anderson: I'll be glad to report back, and we can get the people the Hansard in response to their question.
Might I ask the minister: in the corporate undertaking, what is the nature of staff training at this point? Some of these items that are listed under central program management indicate the budget for
Hon. D. Streifel: The cost to deliver core training for FAWs is $925,000.
V. Anderson: Does that include in-service training, plus the training that takes place during the year? Is that the total cost for training?
Hon. D. Streifel: It is all the training. It includes admin staff and supervisory staff, as well.
V. Anderson: I wonder if the minister could describe to us the standing of emergency social services, which comes under his ministry. What is the nature of the program at this point? How many people are involved in putting it forward, and what is the cost of that program?
Hon. D. Streifel: The emergency social services program budget is $700,000, and that's to train and support emergency social services volunteers -- and four FTEs.
I've met with the emergency social services folks a couple of times. I've been through debriefings with them. They participate on an international basis. At least, the meeting after the debriefing in Nanaimo
[ Page 4517 ]
just a hug, or whether
V. Anderson: A year or two ago there was a development within the emergency social services system of a ham radio kind of network. Some of the volunteers were interested in developing that as part of this service. They had put forward proposals to the ministry in that regard. Can the minister tell me if those proposals were taken forward and incorporated as part of emergency social services?
Hon. D. Streifel: We gave an $11,250 grant to this program. Some of my neighbours, actually, are involved as ham operators, information passers, through this process. I remember that the group in Mission acquired an old hydro tower of some sort or other and erected it on a high site in order to carry out their communication work. It was kind of fun to visit that site and talk to the folks who are involved with their radio equipment.
V. Anderson: Could the minister tell me whether that support is ongoing in extending that radio service, other than the initial grant? How do emergency social services tie into the overall emergency services of the province?
Hon. D. Streifel: This ministry and emergency social services, through our workers and trained volunteers, participate with the province under the Attorney General ministry and with PEP. We're coordinated with the Ministries of Forests, Environment, and the AG, and other ministries that are involved and on the ground. Highways, as well, is involved in this overall emergency planning and response to disasters. We play our assigned roles. In these meetings we offer advice and cooperation with the other groups.
As to the question on the grant, we have a long, ongoing relationship with emergency social services. The ministry is particularly interested in the value of emergency social services. For the small amount that we pay each year, we get a huge return and a huge benefit to the province. This is the message I carry when I meet with these folks who do the good work. As I understand it, this particular grant was a one-time grant. If I get a correction on that, I'll pass it on.
V. Anderson: You mentioned the volunteers. Could you indicate approximately how many volunteers are part of the program at the moment? Do these volunteers have a course or an orientation program before they get in? How do people become part of that process?
Hon. D. Streifel: There are currently 5,500 volunteers in 120 communities. The training is fairly extensive and is delivered, as I understand it, through the Justice Institute. To give an example to those who may be interested in reading this, our emergency social services volunteers and staff respond virtually around the world when the time comes. We were in Manitoba for the floods. We were in the Fraser Valley. We've been in Nicaragua and in a few other places where world disasters have happened. We have high levels of training and expertise within this field, and we're well respected. We receive kudos from folks like the American Red Cross, for instance, when we go in to help organize what has to be organized at a time of disaster. The most important thing to get on the ground is some form of organized communication, where we
[11:00]
V. Anderson: I appreciate the answer. I know that as volunteers they wouldn't be getting paid, but do they get their expenses paid when they travel to these other places to help out in disasters, even outside the province? Are they paid expenses in those undertakings?Hon. D. Streifel: Yes, the expenses are paid.
V. Anderson: I will move, then, to another area. Perhaps the minister might explain and indicate how the performance measurement is undertaken and how much is expended on it. It's one of the items listed here, so I was wondering what the process of performance measurement is and what are the funds that are expended on it.
Hon. D. Streifel: Just to get clarification from the member, have we left emergency social services, and are we on to another topic? Because we are not measuring the performance of emergency social services
Interjection.
Hon. D. Streifel: Okay, thank you for that clarification.
For the information of the member, under the planning performance measurement division, the planning branch has five FTEs, the performance measurement and management information branch has 12 FTEs, and, of course, there's emergency social services with four FTEs -- if that helps. It will probably extend to a variety of questions after that, I would expect.
V. Anderson: Yes. Could you explain to me the nature of the measurement processes and what the overall process of measurement and evaluation is? How does it operate as a measurement, and what is the result of that?
Hon. D. Streifel: The main purpose is to develop and coordinate ministry legislation and regulations; to provide professional planning, policy, research and analysis services to the ministry; and to coordinate emergency social services. That's the overall scope of what the planning and performance measurement division does.
M. Coell: Just to go back a bit with regard to the corporate face of the ministry, which we were discussing earlier. Since the mid-nineties, there has been an emphasis on reducing fraud, waste, abuse and on keeping caseloads down, possibly responding to the huge increase in caseloads from '90 to '94-95. I think what we were trying to emphasize previously was that there is an opportunity to change how the ministry's corporate structure is viewed by the public, and I wouldn't want to see the ministry become seen, as was described by the member for Vancouver-Langara, as hard, cold and only interested in money.
It's a ministry that is important to a lot of people in the province at some point in their lives, and I think it's important that the ministry try to maintain that corporate face of being
[ Page 4518 ]
kind and treating people with dignity and value in their lives. It is difficult to do that, to have your staff doing one thing while trying to portray another
Hon. D. Streifel: As we move through the debate here, we seem to be focusing around some form of corporate philosophy that may have changed in the minds and the eyes of the opposition. In fact, we haven't had a change at all. We have a responsibility to serve our clients with respect and dignity, and we do that. We have a responsibility in the overall structure of the province to deliver a service on behalf of British Columbians to those folks who truly need it, and we do that very well. We have a responsibility, I believe, to respond to the needs of our clients. The member would know, being employed in this field, that the highest caseloads we have are singles and childless couples; the bulk of them are employable. Their need, their desire, their want is to go to work. They want a job, and that is why we have taken moves outside this ministry to support those needs.
British Columbians as a whole would like to see, in some respects, the welfare caseload reduced. We are doing that. British Columbians don't want us to do what other provinces have done -- just holus-bolus rate cuts for everybody, the disqualification of thousands of individuals from the system completely, the attitude that says: "It's not my fault, and go some place else." We watched an experiment in Ontario start to crumble and now get rekindled, whereby all of the responsibility for welfare and social services support for the poor is going onto the backs of the municipalities.
British Columbians don't want that. They want us to treat those individuals who come to us for assistance with respect and dignity. At the same time they want to be assured, as a British Columbian and as a resident here, that the resources are going to those folks who truly need them. They also want us as a government -- not this ministry in isolation, but this government as a whole -- to pay attention to the overall needs of the province and the requirements of our clients.
These folks tell us, in large numbers, that they want to go to work. We have participated in programs; our clients are participating in programs. So I guess if you suggest that the corporate image has changed or is changing or is in danger of changing, I would agree that to a degree, yes, we are changing -- the corporation being the whole government. You know, we look at some of the programs where our clients, the clients of the Ministry of Human Resources, benefit, and it's the movement into the workforce. I make no apologies, nor do I blush, when I talk about folks wanting to go to work. It's our responsibility as a government, and in this ministry, to apply the assist -- to come in with the programs that assist this transition.
One of the programs administered by the Ministry of Education, Skills and Training that serves our clients is a work placement program. We have folks that have been for years on income support with no way out. There was nobody there to say, "We've got some help for you; we've got some assist," other than the temporary, six-week federal training programs that replace the regular worker somewhere down the line.
The member nods his head. I'm sure the member is aware of this in his past. This may be a very interesting conversation for the two of us some night over a cup of coffee or something with fizz on the top. But, in fact, we are changing in a certain way.
When an individual goes to work, and we get a report back or comments from the employer
The success rate is phenomenal. In that respect, I agree with the member that our overall corporate attitude in this government has changed when it comes to facing up to our responsibility to make work a better deal than welfare and then fulfil the other side of that commitment -- not just go out holus-bolus and cut off a big corner of our caseload, but to work over time to make sure that the transition is in place, to assess what's missing or what's needed in this transition and be prepared to respond to that in order to help this process and this change.
M. Coell: I agree with the minister that the vast majority of people who are on income assistance wish to get off -- wish to make a heck of a lot more money by working. I think that in the last legislative session you found that the opposition supported many of the projects put forward to do just that. So I think there's a fair amount of agreement on the idea of helping people to find employment.
What I may be showing some concern about for this particular ministry is that all of those programs are delivered outside the ministry. In many instances the staff working in this ministry don't get the benefit of seeing someone get involved in a work project and move on and get the positive benefits from that. They may just become insulated from some of those good projects that were approved last year.
I wonder whether that has had an effect on your staff. You are now limited to a resource support staff and financial aid workers. A lot of those other programs -- and I support those other programs -- are being delivered outside the ministry. What effect does that have on your staff when they're dealing just with the dollars and cents?
The other comment was downloading to municipalities. I would disagree with the minister, having seen the downloading of $200 million to municipalities this year from the government. Whether it was for roads or welfare, the municipalities still don't like it -- whatever it is that's downloaded.
I would be interested in the minister's comments on the effects on staff, and if there aren't any effects, I'd be pleased to hear that, too. But if there is, what sorts of things would the ministry do to combat the feeling that it's just a money job and the isolation from the projects that he mentioned, which I support?
[11:15]
Hon. D. Streifel: We'll get the obligatory political shot, the comment on the off-load, out of the way -- and then the opposition party platform that ran in May that was going to[ Page 4519 ]
double or triple that off-load. Now that that's out of the way, slang versus slang, let's get on with real business and do something on behalf of the folks.
I much appreciate the debate with the member opposite -- his demeanour and seriousness and the sincerity in the way he brings forward these circumstances. I've talked with a great number of our FAWs in social circumstances, quite a number of them right on my own front lawn one afternoon at a barbecue. I'm interested in this, as well, from the member's perspective and from the workers' perspective. When we work, we have to have job fulfilment. My ministry participates with other ministries.
Yes, the member is correct when he says that I may have heard from some of these folks who say they would like to see some completion to the work they do, the completion being: "We have a client. The client comes to us for help and for a better way of life -- not always just money. They come to us because they are looking for help and for a better way of life. Our responsibility, then, is to move them over into the program, to do the referrals, to move them on through." Once that happens, I think we can help fulfil that job satisfaction requirement by including our staff in the success stories, quite frankly, in the conclusion, in the 85 percent of job retention for some of these folks. Some of the programs are absolutely phenomenal.
We carry that information back to our front-line staff, and in that way this permits them to know, or facilitates the knowledge, that they've done really good work. They're very highly trained, well-motivated professional folks out there helping their clients. They move them over to the training programs. If the member has information where we're not getting the info back to our staff in that light, then I'm always looking for ideas on how that can be
M. Coell: I thank the minister for those comments. I'm pleased to see that the ministry is thinking about the possible effects of the changes on staff.
My line of questioning is about the effect that staff have on the people they're serving. I wonder if we could spend a moment or so talking about the relationship between Human Resources and the new Ministry for Children and Families, specifically for children and for people with children who are on income assistance. What is the relationship and what are the agreements the ministry has between the Ministry for Children and Families for families with a child -- single-parent families it would be mostly, I suspect -- who aren't receiving services from the Ministry for Children and Families but who are receiving income assistance at this point? How could that relationship work for the benefit of a family's future, as well as for jobs and quality of life?
Hon. D. Streifel: In the beginning, staff talked to staff at the local level, MCF and MHR staff. In response to the Gove report, our staff were trained in recognizing abusive and violent situations. When that's recognized, it's reported to MCF, and action is then taken.
M. Coell: Has the ministry had an increase in the number of children on income assistance over the last year? I just wonder what that increase is and, if there has been more of an increase of the number of children on income assistance, what effects that has on the relationship between the two ministries.
Hon. D. Streifel: As a matter of fact, some of the very good news out of the B.C. Benefits initiative is
M. Coell: The decrease in the number of children and families on income assistance is positive. Has the ministry tracked where those families have gone? Have they gone to employment? Have they moved out of the province? Have they just found other means of support, whether that be moving back home with families or
Hon. D. Streifel: I'm going to try this. I remember that last year during the estimates and even in some of the questions earlier yesterday, we said that we don't generally track when folks leave the system. But curiosity gets a hold of us from time to time, as it does for the opposition, so we did do some tracking as a result of the B.C. family bonus and some of the other initiatives. I guess if I could pull these stats out of here
Based on a survey of cases that started in January and February of 1996, 68 percent were no longer receiving income assistance by November 1996. Of those who left, 72 percent were employed; two-thirds of those were full-time. That's a B.C. Benefits longitudinal panel research project in conjunction with MOEST. A very high percentage were in fact employed. Others -- who knows what happens? They might find other sources of income, there may be a partner relationship that happens or there may be a move to another province. But certainly, within the province, a very large percentage
It really flies in the face of the general anecdotal comments that there are no jobs, nobody goes to work, and they live under bridges, for instance. In fact, this is good evidence that families do go to work.
V. Anderson: I think it's probably completed just recently, but there was a federal-provincial program which gave a top-up to single parents for three years. I think they were getting something like a $35,000 salary during that program as a test case to see if they were able to live at that level, if that gave them enough self-respect and encouragement to move on. Could the minister indicate to us what the result of that program was and whether its lessons have been implemented, or whether it's still ongoing?
Hon. D. Streifel: The program is not complete yet.
V. Anderson: The program is not complete, but does the minister have any tentative feelings about whether it has been successful or useful, and does it fit in with what's happening in the ministry at the moment with the same tenure and direction?
Hon. D. Streifel: With respect to the hon. member, it's a little too early to say what the full results of the program are
[ Page 4520 ]
going to be. At the risk of extending debate on something that is not completed, I will share with the member that much like what we found within our own caseload, single parents are the ones who want to go to work. They are very highly motivated to go to work. That's why many of our focuses have been to support that process. But those are just the early indicators, and I would beg the indulgence of the member that without a final report, I think it would be too dangerous to get into too many conclusions about what might be found.
V. Anderson: I respect the sincerity of the minister and the concerns he has, but I think it's necessary that we also reflect on some of the negative concerns which are in the community. Unless we can hear these and know about them, we don't understand that there is more than one perspective out there. I think it goes without saying that there is a good deal of support for the work that's being done to help those who are able to take advantage of the opportunity to get the extra support and to get out into the workplace. Those families and those individuals will be ever grateful for that support, and their children will benefit from it, as well.
But there are a significant number of people within the community who, for a variety of reasons -- health, lack of skills, family upbringing, a whole host of circumstances -- are not yet able to find where they fit within the present kind of work-oriented focus. For many of them, full-time work will never be a possibility. For a variety of personal characteristics and backgrounds, part-time may be a possibility for many of them. But the focus at the moment is really on full-time, independent living. Those who have disabilities that are recognized and accepted are in a category of disability benefits, so they have security within that system.
Between the ones who are on disability, who have the security in that system -- which they are pleased and delighted to have -- and the ones who are able to have the prospect of getting support back to work, there is a very significant portion of people who are in between those two groups. These are the ones that are really finding that the appearance, to them, is that they are being left out and are being ignored. They are either not sick enough or disabled enough to be in a secure category, or they are not clever enough or skilled enough, or whatever it is, to be in the work category. These are the ones that are sandwiched in between which I'm raising the questions about at the moment, because they are the ones that are really feeling the pressure, and it is the community agencies that are also feeling the pressure. I'll put that in context: they are the ones that are on the streets in Vancouver, Victoria, Prince George and Prince Rupert. All around, an increasing number of persons who have mental, physical or social disabilities are the ones who are on the streets, and these are the ones that are feeling that they're not being heard.
Can the minister say what is being done or what will be done -- what the focus is for these people who fall between these two very successful programs? I shouldn't say very, but at least they're quite successful.
[11:30]
Hon. D. Streifel: I will accept the "very," with thanks. Recognizing the hon. member's sincerity in bringing forward these issues and as much as we may banter from time to time about political philosophies and whose election platform said what, I would stress again that other than the odd knock back and forth, it would be in my best interest -- and for all of us -- to leave this aside, recognizing the positioning from the hon. member on the need to fill in the cracks, so to speak.It's true that we have approached our work within Social Services and then Human Resources, and under B.C. Benefits, very seriously. We have worked with other ministries and with other jurisdictions to provide programs to move individuals off the system. For employable individuals there's training available; for youth there are education and training spaces available; in the case of families, there are multiple supports that I have outlined many times.
It's true that we have tightened up the eligibility under direction and request from the auditor general, from the Ministry of Finance and from just plain folk. We've tightened up some of the eligibility to ensure that our resources, as scarce as they are, are allocated to those that really need them.
The member identifies a group in the middle, the ones that fall through the cracks. Through these work placement programs there is a requirement that the individuals pay attention to the placement of those who have disabilities, that they pay attention to the job placement of individuals who don't fit the full criteria of our community. That's all part of that program. Along with that, this minister extended the pilot project that was the community services fund of last year -- the projects that were piloted in Vancouver, Surrey and southern Vancouver Island: the pre-employment training processing of programs for individuals who need to get into the system somehow, who don't fit anywhere else. It was a crack-filler. This minister liked that program in the early results. We extended it to regions across the whole province, recognizing that those voids that exist in Vancouver, although broad and deep, exist in Kamloops, Prince George, Cranbrook, Prince Rupert, Dawson Creek and all other regions. No matter where it is, they exist as well; they're just as deep but not quite as broad. So that's almost a crack-filler program.
We paid attention to our needs in shelters and hostels last winter, and we're now in the process of doing a bit of a review, so we have some stopgap measures again.
Some of the initiatives that we've undertaken
We've done a lot. I'll accept the "very," and I would expect the member to carry on to pressure us to do more in this line, because we have that responsibility. We take it very seriously that we have to do more to fill in these cracks. That's one of the aspects of this ministry that I try to pay attention to on a day-by-day basis.
V. Anderson: Thank you for mentioning the community services program. Could you tell us a little more about the kinds of programs that are there? I understand that $4 million was put into this program. Could you outline that a little more? If it's for filling in the cracks and it's not the same emphasis on preparation for work but more preparation for life, is the focus on social skills, adapting skills and community life skills that are needed prior to being able to get to work? Could the minister say what that is and if that is a proper description of it, and give us more details about the variety within the program and how it functions and who undertakes it?
[ Page 4521 ]
Hon. D. Streifel: To answer the question, yes -- all of the above. We moved the community services fund, as I said, to areas like Prince George, Kamloops, Kelowna and to areas in the Fraser Valley.
I'll give a description of some of the applicants for the fund. The Association of Neighbourhood Houses, for instance, put on a pre-employment program for immigrant women on income assistance, which included counselling, workshops, volunteer placement and supervision. So that fits in as pre-employment -- almost the preparation to become prepared to work. Family Services of Greater Vancouver works "to facilitate and develop healthy coping mechanisms and life skills training for 19-to-24-year-olds and to provide individual service plans, referrals in community, peer-professional support, job readiness and communication skills development." There's the Hey-way'-noqu' Healing Circle for Addictions. There's a casual-job bank for street youth aged 16 to 24. For a pool of casual labour, there's Street Youth Job Action.
There is a broad variety of community needs. The applications, the proposals, come in, and they're assessed. The project, as I said, was very successful. That's the reason for the expansion to the rest of the province.
V. Anderson: I appreciate that, and I think those are very important programs. In the past, when persons who came for assistance met with social workers, social workers tended to deal with their personal needs and gave them personal support as well as financial support that they got from the financial system worker. Am I hearing the minister say that it's the practice of the ministry now that instead of having those sorts of resources within the ministry, the ministry is providing those resources through community agencies that people would be referred to for that kind of support?
Hon. D. Streifel: The member's question requires some clarification. Prior to the formation of the Ministry for Children and Families and the Ministry of Human Resources, the social worker's primary role was child protection and those functions. Our clients, when applying for income assistance, met with an FAW through the application process. It's not, in general terms, that a general applicant coming into the system would meet with a social worker under the old system. We don't have social workers now, so it wouldn't be under this system.
I think what I'm trying to say is that there's not really much change in that kind of intake system. Our workers are trained to recognize child abuse and violence, and when that recognition happens, there's a referral to Children and Families. That's really not much different from the way the system was before.
V. Anderson: I have to say that from my experience, those kinds of resources were available. Whether that was formally or informally may be the issue in question. I know many people that I dealt with and worked with on a regular basis through my ministry in the church and in the community, who had that kind of support. Whether it was supposed to be there or not may be in question, but it nevertheless was there and it was available. It was even available through financial aid workers, who could discuss that with the social workers. So there was a whole system of support that was available.
As I was talking to people in DERA this morning, they indicated the same thing. There used to be an opportunity to go back and talk to people and get support and deal with individual cases. That's no longer available. So there is quite a difference out there on the street, in actual fact. I think one needs to be aware of that. It's that kind of service.
I'm still trying to recognize or ask
I thought the minister was saying, in talking about community services, that this was one way of meeting that need. But I heard the minister say that's not the intent of it, so perhaps he could explain to me what the intent of it is.
Hon. D. Streifel: I would correct the member's statement that the whole system is geared solely to promote employment or move individuals to employment. We have many aspects of the system in place. For instance, there can be an application for special needs. There can be an application for disability benefits. Certainly that's all part of the intake system.
Our FAWs meet with the clients as they come in and apply for assistance. They meet and discuss their circumstances in a compassionate and dignified manner. There can be many avenues to follow through. If an individual is employable, then they certainly would be encouraged to work and to move in that area. If the applicants are in a Youth Works category, there would be movement in that direction. But the whole system, the entire system, is not geared solely to employment initiatives.
V. Anderson: I have one last comment on this at the moment; there may be others. When he talks about Youth Works not being geared to that program, it's my understanding that when a person comes in, they're in a job search for the first nine months. There's some ability to give them help at that point. It's only after that that they get into the training part of the program. Am I correct in that regard?
Hon. D. Streifel: To offer some clarification, the Youth Works aspect of these programs, which we cooperate on with other ministries, is geared towards focusing on employment and the needs for training and/or employment or pre-employment training. The answer to the member's question is simply yes.
In view of the hour, I move the committee rise, report progress and seek leave to sit again.
Motion approved.
The committee rose at 11:44 a.m.