(Hansard)
WEDNESDAY, JUNE 18, 1997
Afternoon
Volume 6, Number 2
[ Page 4587 ]
The House met at 2:06 p.m.
Prayers.
Hon. D. Zirnhelt: From the town of Williams Lake, we have 17 grades 6 and 7 students from Marie Sharpe Elementary School, with their teacher Laurence Greeff, and accompanied by parents Lorna Newcomb and Rahkee Pooni. Please make them welcome.
G. Farrell-Collins: I'd like the House to welcome two members of the Saskatchewan Legislature. They were here earlier, but today they are joining us on the floor. Behind me are June Draude for Kelvington-Wadena and Rod Gantefoer for Melfort-Tisdale. I'd ask the House to make them welcome.
Hon. L. Boone: Unlike the member for Peace River North, I really don't have to stand up very often and introduce guests. But I am today very pleased to introduce in the Legislature my constituency assistant Irma Van Helvoirt, her spouse Ray Trudel and their wonderful son Matt. Would the House please make them welcome.
T. Nebbeling: Today we have in the gallery a young aspiring politician. She has met the Premier in the past, and today I had the opportunity of introducing her to the Leader of the Opposition. Her father brought her today to celebrate her eleventh birthday in order for her to get to know the rest of the bunch. I would ask the House to make Claire Woodbridge welcome. She is in the gallery.
J. Sawicki: In the galleries today I have guests from my constituency: Mr. Denny Ramsbotham and his new wife, Marina. They are here to visit their daughter Jane Ramsbotham, who is currently one of this year's interns. I just want to say that she is with the government caucus. Denny, your daughter is doing a great job, as you knew she was going to. Would the House make all of them welcome.
G. Plant: Seated in the gallery today is a friend and constituent, David Jang, who is a trustee of the Richmond school board, and his friend Heather Watkins. I ask the House to please make them welcome.
Hon. P. Ramsey: Joining us in the gallery today are two representatives of the Francophone Education Authority of British Columbia: Nicole Hennessey, the president of the authority, and Dr. Nick Ardanaz, who is the CEO of the authority. They are here to witness a very important day for francophone education in British Columbia. Will the House please make them welcome.
I. Chong: Today I am pleased to introduce some very good friends of mine who reside in the Western Communities: Dr. James Portelance and his wife Letitia Portelance. Dr. Portelance has been an active member of the community, having served on a number of boards relating to health care and education. In 1950, Dr. Portelance represented Canada in New Zealand at the Commonwealth Games, where his efforts in swimming paid off with a silver medal. Would the House please make them welcome.
T. Stevenson: In the House today I'd like to introduce Eric Kay. Eric is a part-time CA in my office and fills in at vacation time, and so on. Would the House please make him welcome.
F. Randall: In the gallery today we have some good friends and some constituents from Burnaby-Edmonds. I would like to introduce them also, on behalf of the members for Esquimalt-Metchosin and Vancouver-Kensington. There is Rajinder Pandher and his wife Raj Pandher. They are here visiting Amanjit Pandher, their daughter, who is working as a legislative intern. Would the House please make them welcome.
J. van Dongen: I am pleased to introduce today a group of grades 6 and 7 students from Margaret Stenersen Elementary. They are here with a number of parents and their teachers, Frank Bowley and Shelley Young. I'd ask the House to please make them welcome.
MISCELLANEOUS STATUTES
AMENDMENT ACT (No. 2), 1997
Hon. U. Dosanjh: This bill amends a number of statutes. They are: British Columbia Buildings Corporation Act, Court Rules Act, Health Authorities Act, Hospital District Act, Motor Fuel Tax Act, Offence Act and Supreme Court Act. I will, of course, be elaborating on these during second reading of this bill.
Bill 42 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.
[2:15]
LOCAL GOVERNMENT STATUTES
AMENDMENT ACT (No. 2), 1997
Hon. M. Farnworth: This bill is the start of a multi-year renewal of the Municipal Act, which reflects the changing relationship between the provincial and local governments.
Interjections.
Hon. M. Farnworth: This one's been done through consultation. [Laughter.]
It will ensure better local government by cutting red tape, increasing local autonomy and providing a clear division of responsibilities between the province and local governments. It will eliminate many outdated requirements in the Municipal Act and will ensure that local governments have the flexibility and authority to take care of the things they do best. It has been developed in consultation with the Union of British Columbia Municipalities through the joint council process and has their support.
[ Page 4588 ]
Bill 46 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.
Hon. P. Ramsey presented a message from His Honour the Lieutenant-Governor: a bill intituled School Amendment Act, 1997.Interjections.
The Speaker: Order, members. First reading is essentially pro forma. You shouldn't be heckling.
Hon. P. Ramsey: This bill will enable francophones living in British Columbia to have management and control of their children's francophone educational program, as provided for in Canada's Charter of Rights and Freedoms. Courts have interpreted section 23 of the Charter as requiring that francophone parents have management and control of francophone education, and this legislation is designed to provide that management and control through the Francophone Education Authority.
The authority is a body with rights and responsibilities similar to a school board. It was first established by regulation in November of 1995, and that regulation is replaced by this act. The act establishes the Francophone Education Authority by legislation, in accordance with the ruling of the Supreme Court of British Columbia. The legislation is designed to meet the requirements laid out in section 23 of the Charter.
It states that children who live within the territorial jurisdiction of the authority have the right to enrol in a school operated by the authority if one of their parents is a Canadian citizen whose first language learned and still understood is French or who received primary school instruction in Canada in French or who has a child who was educated or is being educated in Canada with French as the language of instruction.
This legislation specifies the rights and responsibilities of the authority, such as setting up, operating, administering and managing francophone schools, setting local policy for those schools, and providing educational programs in French to eligible students.
Bill 45 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.
Hon. D. Miller presented a message from His Honour the Lieutenant-Governor: a bill intituled Builders Lien Act.Hon. D. Miller: More good government. If I could use one word to describe the bill, it would be: deregulation and cutting red tape.
Interjections.
Hon. D. Miller: Mr. Speaker, why use one word when more than one will do? I thought the members opposite would greet that with some enthusiasm, however
The Builders Lien Act has been part of British Columbia law for almost 120 years. Revising the act to better reflect the needs of today has been a priority for the construction industry for a long time. Today we are acting to meet those needs.
The new act embodies the efforts of both government and industry to reduce red tape and streamline a piece of legislation that is critical to the long-term viability of this important sector. Like the old act, the new Builders Lien Act provides some security to those working in the industry that they will be paid for what they have done.
But it does go further. The new act provides a more equitable distribution of risk among those in the construction chain and clarifies important milestones in the construction process. It provides increased consumer protection and streamlines procedural requirements. By speeding up the flow of money within the construction chain, it improves the overall operating climate for all contractors. I am pleased to say that it accomplishes all of these things in a way that is sensitive to the needs and interests of all stakeholders.
Bill 38 illustrates this government's continued efforts to protect and advance the interests of all British Columbians. Whether they be working on a construction project, doing a renovation or purchasing a house, this act provides for fair and equitable treatment for everyone. It also demonstrates the government's ongoing commitment to the health and well-being of the construction sector -- a sector that accounts for 15 percent of the province's GDP and employs 7 percent of British Columbia's workforce.
Bill 38 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.
FOREST SECTOR JOBS
G. Campbell: We all know that the Premier tried to explain away his two fake balanced budgets by asking for wriggle room. Wriggle room will not be acceptable to forest families who have lost their jobs and are worried about their mortgages and their futures. So today I want to ask some specific questions to the Minister of Forests, so that there will be no wriggle room tomorrow. According to the Ministry of Forests web site, there were 106,000 people directly employed in the forest sector in 1995. On March 21, 1996, the Premier promised to create 21,000 net new, direct forest industry jobs. Could the Minister of Forests tell us today how many workers were directly employed in the forest sector when the Premier first made his promise of 21,000 net new, direct forest industry jobs?Hon. D. Zirnhelt: The opposition choose statistics selectively. When they talk
Interjections.
Hon. D. Zirnhelt: The figures they're referring to are the labour force survey, which has all kinds of inaccuracies in it. The figures we use are actual surveys of payroll -- actual jobs -- and the baseline will be actual jobs.
G. Campbell: It's incredible to me that the Minister of Forests stands up and tells this side of the House and the people of British Columbia that the 106,000 that his Forests
[ Page 4589 ]
ministry told people were employed in the forest industry is in fact not a correct number. Would the minister please tell us
Will the minister please tell us and the 5,500 forest sector families who have lost their jobs in the last year what the baseline number is? How many people were directly employed in the forest industry in 1996 when the Premier made his promise? His minister told us there were 106,000 people employed in the forest industry in 1995. How many were employed in 1996?
Hon. D. Zirnhelt: The opposition had an opportunity to support Forest Renewal, and they didn't support it.
Interjections.
Hon. D. Zirnhelt: This opposition has an opportunity tomorrow to support a visionary future for the forest industry in British Columbia
G. Campbell: I am assuming -- and I will take the government at its word -- that it is going to try and do something constructive to repair the damage it's done to the forest industry in the last few years. All I am asking the minister today -- who is asking for us to join him in trying to encourage a new and prosperous forest industry to repair that damage -- is to please tell this side of this House and the people of the province what the baseline number was that the Premier decided to build his promise around. There were 106,000 jobs in the forest industry in 1995. In 1996 the Premier promised 21,000 net new, direct jobs in the forest industry. What was the baseline number of jobs when the Premier made that promise?
Hon. D. Zirnhelt: The baseline was the statistics of the time -- March 1996. The baseline that we have agreed on with the forest industry is a common set of data that we all have confidence in, and it will be the measuring line
Interjections.
Hon. D. Zirnhelt: We'll tell you tomorrow.
Some Hon. Members: Now!
Hon. D. Zirnhelt: This opposition gets its statistics from the Vancouver Sun. We will be using Statistics Canada figures when we explain the baseline and explain the target and the way in which we'll measure employment. This opposition equivocates. When there was an attack from Greenpeace, they had to be challenged in this House before they came out and supported us
The Speaker: Thank you, minister.
Hon. D. Zirnhelt: Because they want to argue about statistics, they will not get on board and support a brave initiative on behalf of the communities and forest workers in this province. They hesitate, hon. Speaker.
T. Nebbeling: Now that the minister speaks of stats, can he provide us with the information? Which one of the three Statistics Canada-provided surveys has been used? We have the annual survey of manufacturers; we have the monthly survey on employment, payroll and hours; we have the labour force survey. Can the minister tell us which of these surveys has been used to determine the baseline number to create the jobs and timber accord?
Hon. D. Zirnhelt: I wouldn't want to confuse and cloud probably the greatest announcement in Canada in years with petty arguments over statistics. These people yesterday in the debates
Interjections.
The Speaker: Members, order, please.
Hon. D. Zirnhelt: What did they say in the debates last night? The member for Shuswap said he believed that job creation, government-industry cooperation, government vision and job targets -- all this wonderful stuff -- are "completely out of step with the realities that pervade the world today." That opposition, by quibbling over statistics, is out of step with the people in the communities. Tomorrow we will tell them how we're going to achieve the goal of 21,000 jobs.
T. Nebbeling: To have a vision, you have to have your eyes open. I don't think that's happening here. Can we have a commitment from the Premier that under the accord, every one of the 26,500 jobs will be new, direct forest sector jobs and that these jobs indeed will be full-time and year-round?
[2:30]
Hon. D. Zirnhelt: That side should know that the commitments will be unveiled tomorrow, and they'll see it all in the good light of day.Interjections.
Hon. D. Zirnhelt: Yeah, they should come along. I challenge those members to get out into the forest communities and celebrate the jobs and timber accord -- the greatest announcement in this decade.
C. Hansen: I was astounded to hear this Minister of Forests talk about using a payroll survey as baseline. The StatsCan payroll survey? Is that what you're talking about? That has been discredited as a tool for use in labour force analysis in this country as recently as three months ago. You know, it reminds me of the Premier talking about wriggle room last year. That's what they're doing -- bringing in wriggle room in the kind of baseline that they're planning to use.
Yesterday the Premier talked about counting in "saved jobs" -- not new jobs but jobs that were being saved -- in this
[ Page 4590 ]
tally towards meeting the target of 26,500 new jobs. I would like to ask the minister a very specific question, because I know you like specific questions -- to which we expect specific answers. What is this minister's definition of a saved forestry job?
Interjections.
The Speaker: Members, we're waiting.
Hon. D. Miller: Well, I would hope that everyone here would acknowledge that occasionally the market, which the opposition relies upon so heavily to shape the future of this province, occasionally has failures. When that happens, thank goodness we have a vehicle like Forest Renewal -- which this opposition voted against, did not support -- whose resources can be brought to bear, as we did in the community of Golden, where we saved the jobs at Evans Forest Products. That's the kind of commitment this side of the House has made to forest communities. Isn't it amusing to watch the opposition now? They have no plan for forest communities -- absolutely none. With this nitpicking
C. Hansen: People in forest-dependent communities around this province, those who have jobs in the forest industry today, are looking to have their jobs saved. They want their jobs saved from NDP forest policies in this province.
I will ask the Minister of Forests another question, a specific question: will the jobs in this province that are still there today but are at risk because of these NDP policies in forests
Hon. D. Zirnhelt: What is protecting jobs today in forest-dependent communities are forward-looking land use policies, an ability to negotiate land claims, a Forest Practices Code that protects our markets, and the jobs and timber accord that we're going to announce tomorrow. Tell that opposition to stay tuned.
J. Wilson: Will the Minister of Forests tell British Columbians how many full-time, value-added forestry jobs existed in the province as of March 21, 1996? And will the Minister of Forests tell British Columbians how many new, full-time value-added jobs he is counting on creating between March 21 and the year 2001?
Hon. D. Zirnhelt: What naïvety, after I said three or four times "wait until tomorrow," that he'd get up and ask such a specific question. At least he's admitting that we intend to create jobs in the value-added sector.
J. Wilson: Mr. Speaker, it would be nice to get one answer, anyway. So we'll try again.
Will the Minister of Forests tell British Columbians how many silviculture jobs existed in the province as of March 21, 1996? And will the Minister of Forests tell British Columbians how many new, full-time silviculture jobs he is counting on creating between March 21, 1996, and the year 2001?
Hon. D. Zirnhelt: I don't believe it. I just said: "We'll give the details tomorrow."
An Hon. Member: Come along. Come along.
Hon. D. Zirnhelt: Come along and help celebrate it. We intend to make the announcement in a forest-dependent community, not in the seat of bureaucracy. Come along. Celebrate it. Don't try to rain on the parade. Get in the parade.
R. Coleman: All this rhetoric from the Minister of Forests reminds me of a fairy tale about a puppet made by a woodworker named Geppetto.
Will the minister tell British Columbians how many full-time forestry jobs Forest Renewal B.C. saved up to March 21, 1996? And will the minister tell British Columbians how many full-time forestry jobs he's counting on Forest Renewal B.C. to save between March 21, 1996, and the year 2001?
Hon. D. Zirnhelt: When the investment plan of Forest Renewal is made known, they'll be very pleased with the amount of money we're spending on creating new jobs in the forest-dependent communities. I can just say again that they should wait until the announcement tomorrow, and they should save their energy to help celebrate this magnificent announcement. If they don't and if they stay on as naysayers, the people won't forget; they won't forgive. But they will remember a government that had the vision to say: "We will target 21,000 more jobs by the year 2001."
Interjections.
The Speaker: Order, members, please. I realize the end of the week is looming.
Hon. P. Priddy: I ask leave to make an introduction.
Leave granted.
Hon. P. Priddy: In the gallery today there is a group of students who are here from Ray Shepherd Elementary School in Surrey. Ray Shepherd is a school that has a superb reputation for its performing arts program that they offer for all students in the school, from kindergarten to grade 7. In point of fact, the students, staff and parents just wrote the original music for a performance called Schoolhouse Rock.
The students who are here today are the senior choir from grades 4 to 7. They were performing at Cloverdale Elementary School here in Victoria today, as well as on the lawns on the Legislature. This is an unauditioned choir. I wish it had been available when I was in elementary school, because I was never permitted to be in the choir. I think that's quite wonderful. Some of these students perform with the CBC Orchestra and the Vancouver Symphony Orchestra and meet twice weekly to practise all year long.
They are here accompanied by the principal of their school, Mr. David Price; Angus Stuart, who is a fine music teacher from Surrey; Marguerite Sawatsky; Brent Dunsford; and Cody Triggs. I would say that this is also an example of the fact that there are so many committed adults in our education system, committed to making a positive difference in the lives of the students that we see here today. Would the House please make them welcome.
G. Abbott: I also ask leave to make an introduction.
Leave granted.
[ Page 4591 ]
G. Abbott: I just noticed that we have in the gallery today His Worship Wayne McGrath, the mayor of Vernon. I'd like the House to make him welcome.
D. Symons: Just a quick greeting, also, to the students from Ray Shepherd. My wife happens to teach at that particular school. I recognize all the names of the teachers there as friends and colleagues of hers, and I'm sure these students are a fine group. Could you give them another welcome.
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)
On vote 31: minister's office, $348,000 (continued).
Hon. A. Petter: I understand that through mutual agreement we've agreed to deal with some of the issues concerning ICBC, which is one of the responsibilities that I have and enjoy. Therefore let me introduce some of the staff who are with me today to assist in this: seated to my left is Thom Thompson, the president and CEO of ICBC; behind me is Greg Basham, who is a government and corporate relations executive with ICBC; and to my right is Lawrie McFarlane, who is the deputy minister in charge of the Crown corporations secretariat.
[2:45]
D. Jarvis: It's a pleasure to rise, as always, to discuss ICBC estimates this year. I appreciate what the minister says -- that we will be asking some of the questions. We probably have enough questions here to last 32 hours or more, but it's doubtful that we'll take that long, providing the minister's always prepared to give us the answers that he usually does give us.It's obvious that our current system of auto insurance in British Columbia is not perfect. Although the current system may be imperfect, there are certain things that we can accomplish, probably with some minor changes. Although the minister appeared to all of us to be in the mode of making some drastic changes to ICBC, it is good to see that he has finally yielded, possibly, to public opinion -- it's hard to say.
The problem, as we know in the insurance industry, is the drivers. It's their inattention and their ignorance, in that sense, and their idiotic actions sometimes -- perhaps in the majority of cases. But in the majority of cases they do lead to bigger problems that are affecting our driving community. Up to this point we have had an apparent intolerance in this province for the death and horror the automobile has caused over these years, with the numerous deaths and thousands of injuries that we have every year. One would hope that death and injury from car crashes is preventable, but we all know that that is a rather more difficult situation or event than we could possibly hope to shoot for. But human error is also inevitable. Hence we not only owe the people of British Columbia an affordable insurance but we are also looked upon to provide a proper system which will provide them with proper coverage and compensation, if we are to continue with this government-controlled monopoly.
The question of privatization always comes in, and even our Premier -- around this time, July of last year -- suggested that if he could not find an equitable way of solving the problem with ICBC, he was prepared to get rid of the whole thing. I assume that even the Premier's last, or possibly second, choice in this case would be privatization. It's hard to say whether privatization would be of value in this province after all these years with a government monopoly. But it certainly gives rise by many people that
It's the escalating cost of auto insurance which has caused people to consider that there are other means of affordable coverage. We in the opposition can only be pleased that at this point the government has decided not to proceed with a form of no-fault insurance. This was an alternative to the present tort system, and experience in other jurisdictions -- as we have said many times -- shows that this was so very questionable as to what any final results would be that it was more of an ideology than a practicality.
Our current system may be imperfect, but it can accomplish some of the goals if everyone gets behind the proposals, for example, that are recommended by the minister at this time. As I have said before, no-fault is not a solution, and there are ample examples to show that this does not work. It's taken our society thousands of years to devise the present tort system, which offers some measure of protection from kings and tyrants. We do not have any more reason today to trust those kings and tyrants -- if you can use that euphemism -- who are the politicians and bureaucrats who are running ICBC today.
As we have noted, the minister has agreed to a bigger problem, rather than trading off our cherished rights by denying the injured an opportunity to have their day in court. As we know or as to what was proposed, it was suggested that as many as 90 percent of the people driving out there who were victims of an accident could have lost their rights had we proceeded on another premise -- that is, no-fault.
So it is obvious that we must set up provisions for prevention of accidents first, before we try to focus on the saving of dollars and cents. They work together hand in hand. It's really difficult to say how this will be accomplished. It is apparent that the significant contributing factors to accidents are youth, alcohol, aggressive driving, inattention, bad judgment, speed and the inexperience of specific drivers -- all of which can be attributed to human error, although it is often associated with other factors. It is therefore quite welcome to see the proposed changes in the latest press release by the minister, and we will get into some specific details on those points later on the estimates.
One aspect of concern is that since 1987, I think, we have seen ICBC used almost as a revenue generator for the government. In 1987 the government brought in a premium tax, and in that year I think it was $7 million. By 1995 -- the only records I have at the moment -- the annual revenue on this
[ Page 4592 ]
tax item was up around $91 million. Then about four years ago, this present government imposed a provincial sales tax on work done in body shops, and on lawyers. I understand that is close to $40 million or $50 million annually. None of this goes to ICBC. So ICBC, although it's essentially the collector, is being used as a cash generator or a revenue generator for the government.
ICBC also subsidized the government for close to $200 million annually, mostly by way of highways improvements -- lights, left-turn lanes, road services, etc. That's not all bad; we're aware of that. But at the same time, it is taking it off the line ministry, Highways, through the people that pay insurance in this province, and that is adding to their premium cost. It remains to be proven whether this form of using money that would more or less be the responsibility of the line ministry
Then there's the question of the way the government has used ICBC lately. It has had the Allen review. There's a great question of whether these items -- the Allen review, the KPMG reports
Advertising. ICBC spent over $330 million that we know of on advertising alone, up until probably early April. Palmer Jarvis, we're told -- that's a good outfit, Palmer Jarvis; I wish I had some of their money -- was given $4.1 million for an advertising campaign. That advertising campaign, from what I can imagine, was to do CounterAttack, Road Sense, etc. We'd like to get some specifics on that, eventually.
Really, ICBC has been sort of a quasi-ministry as far as the government is concerned. Since 1988, ICBC has collected hundreds of millions of dollars on behalf of the government through Motor Vehicles, just in licence plates alone. Now that has all been joined together, so I guess there is going to have to be some kind of adjustment on that aspect.
The bigger the ICBC monopoly grows, I would say, the easier it will be for the government to shuffle tax burdens back and forth. I'm quite sure that the government would like to see ICBC become an even larger monopoly.
It is hoped, as I said earlier, that we can have a fairly open and free dialogue on how we can not only prevent accidents, but serious injuries, and also discuss the costing of these methods. It is hoped that we can have an amicable discussion over the next few hours or days or months, with the hopes that everyone has a good understanding of what is going on. I think it is really necessary to understand what the intent of this government is, what the intent of ICBC is, and to understand the changes towards ICBC, with hopes that the changes can be effected. ICBC clearly needs a change in its way of operation.
The first change in its operation should be in the public interest. I was going to say that we have no economic policy with ICBC, just ideology, as far as the government's concerned. But with all the moneys that are going back and forth, there's certainly an economic policy there somewhere along the line.
It is well known that true cost saving can only be achieved through a reduction in injuries and the severity of motor vehicle accidents in this province. Significant cost saving is available through better management of the claims paid, perhaps, but not through a system that ostensibly takes away your rights.
I keep sort of hammering on, coming back to the no-fault question, but it was quite a traumatic time in this province when it was suggested by the government that we bring in a no-fault system. Now I've heard, and I will discuss it later, that that originally came out of ICBC as early as 1983. Nevertheless, savings can be achieved in other ways than taking away your rights. So we'd like to look at the business plan and the strategic plan of ICBC to find out whether the minister intends to bring in enabling legislation. Will this just be part of ICBC's full plan, or are additional reforms needed to keep its costs under control?
At the same time, Madam Chair
The Chair: Member, I was just drawing your attention to the green light; your 15 minutes is nearly up.
[J. Doyle in the chair.]
D. Jarvis: I know we're going to be here for a few hours, but on a point on humour -- and perhaps it's not a point of humour, but I'll conclude on this point -- back in England in February of '87, a British-based accident management company did a frequency-of-insurance-claims survey and found out that it was the zodiac that contributed to accidents. So maybe we could throw everything out and just stick your birthday on your licence when you make out your application. I would be more than pleased to go along with that one, because the best drivers in the world, as far as the British survey went, are Scorpios. I happen to be a Scorpio, so I would have the cheapest insurance of all.
Anyway, I guess to start the ball rolling, as the green light has just gone off, I will ask my first question of the minister: when the budget estimates were drawn up, did ICBC take this latest announcement into account? These announcements certainly are going to make a dramatic impact on the budget. I wonder if the minister could answer that.
[3:00]
Hon. A. Petter: I appreciate the member's overarching introductory comments, in particular his strong words of support for the direction the government is taking in terms of tackling costs in ICBC through a very aggressive program of road safety. The member is, of course, absolutely right that the rate of accidents in this province, which is 25 percent above the national average, is the major problem that we are trying to tackle. It was my judgment, and that of the government, that that should be the first priority. Certainly, given the measure of support for that initiative, we did not want to undertake other steps that could distract from what is a very strong public view among stakeholder groups and others, which has really come together over the consultation period, regarding cost saving over the past year -- a consensus in favour of the kind of aggressive road safety package that I announced recently.I would say that we're going to have ample opportunity in this House to debate the specifics of that package, at least in terms of the legislation that's necessary to facilitate it. I tabled legislation yesterday, as the member will know. The rules of
[ Page 4593 ]
this House provide that where matters are before the House for debate as part of legislation, it is not appropriate to debate that legislation in the context of estimates.
So I guess what I'm asking the member to do is to avoid duplication -- not in any way to deny an opportunity to explore these issues, but to try to apportion them. If we can use the estimates debate to talk about issues within estimates -- remembering that there will be plenty of chances to talk about the specifics of the road safety package -- then that will enable us to cover as much as we possibly can within the course of these estimates without in any way detracting from the ability of the opposition to explore specifics around the road safety package that they may wish to explore in the context of the legislative package in both second reading and committee stage.
I won't respond specifically to all the points the member raised; I'm sure he'll come back to them. But a few of the general points that he made are worth responding to. One is that he says there's no economic policy in respect of the government's approach to ICBC. Clearly I don't agree with that. I think there is an economic policy and a social policy. I would say it's a stool with three legs. The first leg of the stool is safety, to use ICBC as an instrument to encourage traffic safety. That, of course, is very much the thrust of the initiatives we've announced in recent days.
The second is to ensure that premiums paid for ICBC remain affordable. I think the government's record over the last three years and into this year has been, historically, a very successful one in terms of keeping rates down. In 1994 rates went up 3.5 percent; in 1995, 1.75 percent; and, of course, last year and now this year we have zero percent rate increases. Today I noticed a statement from, I think, Statistics Canada, talking about how inflation was being kept down in B.C., and they attributed that reduction in inflation to the fact that our automobile insurance rates in B.C. are low.
The third leg of that stool is to take advantage of the fact that we do have a Crown agency for insurance to maximize savings and to ensure that we provide insurance coverage in the most effective and efficient way possible. By moving road safety into ICBC
So there are certain advantages that exist within a public insurer. I want to point out for the member that about 40 percent of the ICBC premium dollar is subject to competition, so it isn't a monopoly insurer in all respects. But it is a public insurer, and part of our economic policy is to take advantage of the fact that we have a public insurer -- to keep costs down, to promote safety, and to ensure it's done in the most comprehensive way possible.
Now, the member's final question was: were the estimates -- I take it he means the estimates that were released with the budget concerning ICBC's estimated deficits for this year -- predicated upon these road safety initiatives? The answer is no, they weren't. They were predicated upon status quo assumptions. So any savings we can make in this calendar year, which is ICBC's fiscal year, as a result of these initiatives or other initiatives that ICBC may have undertaken since the release of the budget -- vehicle impoundment and the like -- would assist us in reducing that estimated deficit.
D. Jarvis: I looked at the claims aspect of the reports. It showed that the bodily injury claims have only gone up 2 percent and that property damage claims have gone up about 17 percent. I wonder if the minister would care to comment on that.
Hon. A. Petter: Well, I understand how the member might have got that impression from the annual report, but perhaps I can answer two questions in one. He asked or questioned whether there was a third report from KPMG, and in fact there is. I think that third report, which in particular looks at 1996 in more detail and projects some of the earlier analysis forward, helps to answer that question. In fact, by my recollection, the increase in bodily injury in 1996 continued to be a major contributing factor to ICBC's costs -- in the range of 13 percent.
What happened was that in 1996 there was a prior-year adjustment that occurred as a result of previous claims that had been charged against ICBC. The experience of those claims turned out to be less onerous than ICBC had previously forecast, and therefore there was a benefit that was carried forward into '96 that allowed for an adjustment that made it look like the claims costs were going up something like 2 percent. But, in fact, once that adjustment is taken out of the equation, the actual bodily injury experience in 1996 continues to be a major contributing factor -- as do certain elements of material damage and comprehensive claim, like theft -- but more in the range of 13 percent. The third report from KPMG, which has been released and which I'd be happy to provide to the member, I think helps to explain those trends in more detail than the annual report endeavoured to do.
D. Jarvis: I would appreciate it if we could get a couple of copies of that report sometime today. Either they can be delivered to our opposition offices or we can run down there.
It's going to be pretty hard at this point to try to stay away from these road safety programs and discuss them later without asking dollars and cents. But regarding the rate of return on investments
Hon. A. Petter: We will check for the precise numbers. The number, I believe, is in excess of 7 percent -- in excess of benchmarks that were established for ICBC. Again, I'd be happy, if we want to get into excruciating detail in these matters, to make sure that the member is provided with this information in written form.
To anticipate, perhaps, where the member is going with this, what I would say is that there was a benefit in this past year from some pretty good markets that produced an extra capital gain from investments. I know there have been some suggestions made concerning the accounting treatment of that. The accounting treatment of that was that the benefit was amortized over a number of years. And the reason for that is that it is consistent with standard accounting practices. ICBC, of course, is obliged to follow those practices in ensuring that that gain is adequately provided for in its books, which led to some -- I don't want to inflame things -- distorted assertions concerning ICBC's financial picture, in my view.
D. Jarvis: Well, if I'm correct, it's over a five-year, or 60-month, period of time, and I really do wonder why it is for this. Is it to make it a smoother exercise, or
Hon. A. Petter: I asked for information on this because it became an issue some months ago. The answer is that the reason that it is standard accounting practice to amortize this
[ Page 4594 ]
benefit over a number of years is because, in an operation like ICBC, one wants to provide for a smooth flow of unexpected revenues and unexpected losses so as to enable the corporation not to have to radically ramp up or ramp down its rates or its benefits from year to year.
Therefore, in an operation like ICBC, the standard accounting treatment for these kinds of gains beyond expectations is to amortize them over a period of time in order to ensure that those benefits are treated in a responsible way over the years, and don't result in huge, radical incentives to suddenly slash rates or whatever it may be that can't be sustained over time.
D. Jarvis: Well, then, basically it is a smoothing exercise, in that sense.
Although we haven't recognized the income from investment sales, I assume that you have the cash available to
Hon. A. Petter: Yes, and the money goes into reserves, and then the accounting treatment is to accrue that over the period of time.
I just would point out to the member that it is smoothing, and it's done on the loss side, too, to provide for a more stable form of accounting so an operation like ICBC can plan for the future more adequately. That's why ICBC's accountants and those who reviewed the matter felt that this was the appropriate accounting treatment.
D. Jarvis: The funding for the road safety program and the traffic safety initiatives is approximately $50 million. My question is: to what extent do these expenditures result in reducing claim costs? Can you go into some detail on that aspect?
[3:15]
Hon. A. Petter: Again, I'd be happy to provide the member with ICBC's five-year plan, which sets out the use of road safety initiatives to try to achieve savings. Obviously we're at the front end of some investments that have not yet reaped the benefits that ICBC expects.In those areas where ICBC has made actual investments in, say, intersection improvements and road improvements
D. Jarvis: Some $38 million was spent on software. I guess that was the start of the NGIS program. That was the development cost on that project. I assume it had some benefits, but it appears that it's gotten into a little more
Hon. A. Petter: The member is correct. There has been a substantial investment in software development in the range of $38 million. I don't know of any amount beyond that to this point. Of course, software development, particularly in this area, is costly and sometimes difficult to project. The investment has, as I understand it, produced some major benefits, but there is some further work that needs to be done. I understand that ICBC hopes there will be some application of the software to date in the very near future. Then there may be
So there has been a substantial investment. It hasn't achieved all of the objectives that ICBC set out for software upgrading. There is a bit more work to be done to get it to the point of application, but they're very close to the first phase of application. Beyond that there is further investment that ICBC is looking at to then build on and enhance that software development to date -- but to do so in a way that ICBC believes can be incrementally less costly than the formative development that's taken place to date.
D. Jarvis: On page 4 of the financial report, I note that the costs of the software development increased from $13.4 million in '95 to $4.8 million in '96. I wonder if the minister could specifically give me the reason for that.
Hon. A. Petter: Maybe the member could just tell me which page of which document he's referring to.
D. Jarvis: Page 4.
Hon. A. Petter: Page 4 of what?
D. Jarvis: The annual report.
Hon. A. Petter: The member has a different annual report than I have, hon. Chair.
Interjection.
The Chair: If the member would address the Chair, please.
D. Jarvis: I don't know where it is, but I will come back to it to direct you to it properly.
As I said, ICBC spent $38 million. But there's a question on employee salaries and benefits. There was an increase of $25 million in 1996. I wonder if he could explain what that is.
Hon. A. Petter: The increased costs, I guess, would be attributed to three things. First of all, there was a higher than desirable or anticipated claims volume during parts of last year, so temporary staff were utilized to some extent to deal with that claims volume. There was a pay equity adjustment, as I understand it, within the contracts provided for between ICBC and its employees. Also, there would have been some small additional cost into the year for the additional staff transfer to ICBC. That occurred through the transfer of some Motor Vehicle functions to ICBC.
[ Page 4595 ]
D. Jarvis: I have a question here on why payments to policyholders for premium refunds more than doubled in 1996, from $85 million to $200 million approximately
Hon. A. Petter: The member will recall that there was some confusion in the year in question concerning the interpretation of the rate freeze. As a result of that confusion, members -- I think on all sides of the House -- expressed concern that people whose premiums were going up in the face of the rate freeze perhaps didn't understand that ICBC's interpretation of the rate freeze had been to keep the overall premiums frozen but to adjust rates within that overall umbrella.
Because of that confusion, the government requested that in fact the rate freeze be interpreted as a freeze on individual rates. There were therefore refunds. In fact, we discussed this a little bit last year in the House. I think the opposition suggested dollar cheques going back, and things. The member may remember. So as a result, there were some rebates -- more than the usual number of rebates -- provided to people who had paid premiums that had gone up, contrary to the interpretation the government took of the rate freeze. ICBC then made adjustments.
In terms of the impact of that on the rate stabilization fund, obviously the rate stabilization fund is there to guard against losses that ICBC incurs. Those losses can be due to either failure to increase premiums or to increased payments. But at the end of the day, then, the rate stabilization fund is affected by the net position of ICBC at the end of the year. If ICBC incurs a deficit, subject to whatever adjustments take place from year to year in accounting, by and large that deficit then draws down the rate stabilization fund.
D. Jarvis: With regard to the pension fund, we're always interested in that. The pension fund shows a surplus of approximately $40 million. I was just wondering why there was such a large surplus. Did it result from, say, overfunding?
Hon. A. Petter: Yes, it's obviously good news when a pension fund is in balance or surplus. ICBC's fund has been, as I am informed, in a balance situation. As a result of very strong markets and the returns on investment to the fund, it has been in the fortunate situation, in the last year, of accumulating a significant surplus -- perhaps not hugely significant in relation to the total fund but significant enough. That, of course, helps guard against bear markets and downturns in the future.
D. Jarvis: That's a fairly large surplus, $40 million. Is there any argument there to say we could reduce the employer's contribution?
Hon. A. Petter: In this area -- and the same is true in other areas of ICBC, its general reserves and the like -- part of the actuarial review of ICBC that is undertaken is to review the extent to which the various funds it maintains are adequate to meet their purposes. If indeed they are more than adequate to meet their purposes, then sometimes prior-year adjustments are made. In this case, I guess the actuarial assessment was that this surplus at this time was such that there were no adjustments made to take account of this.
I don't think the extent to which an employer might contemplate reducing contributions and the like has been contemplated. But clearly, if there was an actuarial assessment that the surplus had reached the point that it was no longer necessary in order to maintain stability or guard against downturns in the fund, and to the extent that the arrangements governing the fund allow the employer to reduce contributions, that would then be an option.
All of these things are assessed from an actuarial point of view, and adjustments made. Indeed there was an adjustment made, as I already indicated to the member, based on prior years' claims experience not being as onerous on the corporation as had been expected. For that reason, some of that benefit was applied against the increase that would otherwise have occurred in personal injury pay-outs. As a result, the appearance of only a 2 percent increase occurred, against what was really a 13 percent claims increase on the bodily injury side. But we've already covered the territory.
[3:30]
D. Jarvis: It's rather interesting sometimes how you use an actuary on one hand, yet in running ICBC you don't use an actuary. I think you probably should do so, to be in competition with the private sectorNevertheless, I found out where I was. It was not page 4, it was page 23. There was a significant drop in the development of the software from '95 to '96. What specifically is that reason, please?
Hon. A. Petter: I love estimates debates; one learns so much -- on both sides of the House.
As I understand it, the entry that the member is referring to refers to software outside of the NGIS system that's being developed. Because of the efforts going into NGIS in developing new software within that system, there has not been the same investment that would have otherwise occurred in the other software. There's a very high depreciation on bond software. Because of its relatively short shelf life unless it's constantly upgraded, the depreciation here is considerable within this component of the software.
D. Jarvis: A question has arisen
I wanted to ask you if you
I wonder if the minister would care to make a comment on the $630 million asset at that time versus the time that they made out their report showing they had a $136 million deficit.
Hon. A. Petter: Unless I'm misunderstanding the member, I think this relates to the same matter we discussed earlier
[ Page 4596 ]
-- that there were, through investments, some additional gains made because of a very strong market for those who invest. Some in the coalition tried to argue that that gain could all be brought into a single year, and as I said earlier, I asked for advice as to why that had not been done. I was told in the strongest terms that it was because the appropriate accounting treatment was to amortize it. And I've already explained why that is.
In respect of the $135 million loss, that got charged against the rate stabilization fund, and that fund then got drawn down. That fund continues to provide a buffer for the corporation against anticipated losses this year and gives us a bit of breathing room to try to get these traffic safety initiatives and others -- which are part and parcel of the announcement I made the other day -- underway.
D. Jarvis: Could the minister maybe explain how that investment has progressed? Where do we stand today, for example? I know you can't give me a specific dollar figure for it today, but is there a continual improvement on that?
Hon. A. Petter: Ah, investments. I'm trying to get the member as full an answer as I possibly can. As I understand it, the rate of return this year is down a little bit from last year but is ahead of what was projected in the budget for this year. In large measure, it's ahead because there was a return or sale of equity in the neighbourhood of $20 million -- somewhat above $20 million. The good news, I guess, is
K. Krueger: When the ICBC annual report for the period ending December 31, '96, was published, it came out with a press release with the header: "Record Claims Lead to $135 Million Loss for ICBC." If the premiums had not been frozen in early 1996, if they had been collected at the rates that ICBC had previously planned and which it had determined through its actuarial experts
Hon. A. Petter: As I understand it, had the rate increase that was previously contemplated -- 1.5 percent, I think it was -- gone ahead, the loss in the last year would have reduced by something in the order of $60 million. I don't have to point this out for the member, but I'm going to, anyway: that would have been $60 million that would have come out of the pockets of British Columbians and was $60 million that was saved in the pockets of British Columbians due to the actions of the Premier and this government.
K. Krueger: In the current year, 1997, if the corporation had not only the rates that it planned for in 1996 but also any increases it had contemplated for 1997, what's the additional number that ICBC would have had as revenue?
Hon. A. Petter: It's difficult to answer the member's question, because in fact there was no rate increase proposed or contemplated by ICBC against which I can measure the member's question. The member's question is wholly hypothetical. Again, thanks to the efforts of this government, rates were frozen. As a result, taxpayers were not asked to pay that $60 million figure a second time, nor were they asked to pay a further amount that the member is now suggesting might have been requested but for the very progressive actions of this government.
[3:45]
K. Krueger: ICBC has always, I believe, represented itself as essentially a wholesale automobile insurance company -- that is, no profit motive exists. The company intends to charge its premium-payers what it expects to have to pay out in the coming year, while factoring in things like administrative costs, investment income and so on. Even if we had an absolutely perfect forecast of what claims costs were going to be for 1997, would the minister concede, then -- and this is assuming that the very surprising wouldn't have happened and we would have a lower claims-incurred number in 1997 than in 1996 -- that ICBC would have had at least that additional $60 million income for 1997 that it lost for 1996, based on its original premium numbers? Is that valid?Hon. A. Petter: Unless I misunderstand the question, it seems completely tautological. I mean, yes, if we had not frozen rates to avoid a cost of $60 million that would have otherwise occurred, then a cost of $60 million would have otherwise occurred -- yes.
K. Krueger: What I was trying to confirm is whether the minister agrees that the premium freeze has cost the corporation probably at least $120 million in its overall financial picture for the two years affected by the freeze.
Hon. A. Petter: It's true; if we had stuck British Columbians with a $60 million rate hit last year and this year, my addition tells me that that would have cost British Columbians an additional $120 million over two years.
K. Krueger: Well, I submit to the minister that somebody has been stuck with the $120 million, because the claims have plainly been there regardless, and a $135 million loss for 1996 alone is reported.
Over the years just prior to the premium freeze, ICBC had finally moved toward a regional rating system where people were assessed premiums according to the loss experience of the policies within their geographic area. As I understand it, the premium freeze put a stop to any further movements in the appropriate directions under a regional rating philosophy. That is, areas such as the one that I represent already have a lower premium than areas such as Vancouver, where the loss experience is far worse. But areas where the loss experience was better than the amount being collected in premiums were enjoying a discount in premiums year after year, albeit relatively small. And areas that were experiencing a higher loss and expense ratio than the premiums they were actually taking in were experiencing some fairly substantial premium increases. So as I understand it, the freeze meant that everyone stayed at the same levels they were at.
I'd like to know the intent of the Insurance Corporation and the government with regard to rating according to regional loss experience when the freeze ends.
Hon. A. Petter: It's true that the effect of the rate freeze was to freeze rates; and because rates were frozen, it meant that additional increases in rates due to geography -- or decreases, for that matter -- that might have otherwise been undertaken did not occur.
As we move forward through the second year of the rate freeze, I think that one of the issues ICBC and the government
[ Page 4597 ]
will have to consider is whether there are, in making sure we continue to keep rates affordable, any adjustments that can be made within the overall rate structure to apportion the cost in a way that's more efficient and effective -- adjustments that perhaps make those who cause greater costs pay a fairer share. And that could be a function of geography; it could be a function of the expense of fixing particular cars; it could be a function of a number of variables.
Again, it's hypothetical, but as we move forward through and out of the rate freeze period, yes, there may be some opportunity to consider adjustments in rates that track these various factors -- of which geography is one.
K. Krueger: I assure the minister that we will be getting to other variables, as well, but I specifically want to talk about this one. People agitated for rating according to regional loss experience for years before it finally became a reality. In many people's minds it wasn't moving quickly enough, but it was at least moving. Areas that had always subsidized, specifically, Vancouver by paying higher premiums than their own regional loss experience would justify were finally seeing reductions, and the lower mainland was seeing increases. While that's not necessarily pleasant for people in the lower mainland, it does put pressures on motoring traffic in Vancouver and in the lower mainland so that potentially you wouldn't have as many vehicles on the road, you wouldn't have as much need for more infrastructure, you'd have greater use of public transit, and you'd have less automobile emission pollution. There are a lot of reasons why it makes sense, not the least of which is that people in the interior and on Vancouver Island were beginning to escape from the burden of subsidizing people in the city to drive on roadways.
What I'm asking, on behalf of all of those constituents of mine, of other interior MLAs and of Vancouver Island, is whether or not the corporation and the government intend to resume moving toward genuine rating on the basis of regional loss experience when this so-called freeze is lifted.
Hon. A. Petter: This is a matter of future policy and a matter that will have to be given full consideration as we move forward. Really, I don't have a position beyond that to share at this time, but I'll be happy to share with all of my colleagues in Vancouver, as I'm sure the member will with all of his colleagues in Vancouver, his urging that we increase rates substantially in the greater Vancouver area.
K. Krueger: Of course, my position is that it's not a matter of future policy so much as a matter of past and temporarily frozen policy. I'd certainly like the minister to be applying his mind to these questions. I don't think that most of our constituents would consider it fundamentally fair that people outside the city, who already have substantial motoring expenses that people inside the city don't have, should have to subsidize city driving. Regional rating according to loss experience is something that I would like the minister to apply to his considerable intellect, too. I'll look forward to further discussions with him on it in future.
In 1996, according to ICBC's annual report, the number of claims reported during the year rose exactly 100,000 over the 1995 experience. Is there any different system of counting claims in place at ICBC, or was there in 1996 over 1995?
Hon. A. Petter: I'm informed that there was no difference.
K. Krueger: For the minister's information, in the past as new mandarins rose to power and faded away, they changed policy from time to time. One, for example, who had control of the claims division for a while, instituted a policy where he wanted a claim file opened for every car involved in an accident regardless of who was at fault -- or whether, for example, one particular motorist was responsible for damages to five other cars. I'm sure the minister can see how a change like that would dramatically change the numbers that ICBC reports to him. Changes like that should probably be highlighted and flagged for the minister's consideration when they're made.
Moving to the matter of the no-fault issue, which was finally put to bed last week -- and many of us are profoundly pleased about that -- I would like to know if the minister could quantify for us how much was spent on media -- advertising and so on -- during the advance work that was done on the no-fault initiative.
Hon. A. Petter: The amount spent in respect of advertising relating to the cost containment strategy was $735,000, I think. Just to give the member some sense of the proportion that ICBC spends on its Road Sense program, for example, it's about 15 percent of the total, so Road Sense billed $5.2 million in terms of expenditure.
What I draw to the member's attention is that that campaign went a long way to raising public consciousness around the kinds of cost pressures that ICBC has been under -- the major contributions to those pressures -- and has contributed directly, in my view, to the success of the consultation process and the package that we were able to announce last week. If the member looks at some of the advertising -- I have some in front of me -- it talks about a number of possible initiatives that could be taken to improve the car insurance system: get tougher with bad drivers, invest more in road safety, make the injured victim the priority, focus on helping people recover faster, reduce fraud abuse and auto theft and keep rates stable and affordable. Those are the six steps that are outlined, at least in the ad I have. I think the member will see that many of those steps that were put forward were adopted and endorsed by numerous groups and have now become key components in the road safety initiative that I was able to announce last week.
K. Krueger: I understand the minister to say that the advertising that he would attribute to the advance work for no-fault approximated 15 percent of the total advertising of those issues and the Road Sense program.
ICBC has always had some expenses explaining its product, as well -- product advertisement. I wonder what the global expense for advertising at ICBC was for all those things in 1996.
Hon. A. Petter: The total advertising budget for the corporation is $8.3 million. I was just relating it to the Road Sense component. As a component of the total advertising budget, it's less than 10 percent.
But I certainly do not want to yield to the member's argumentative suggestion as to the purpose of this advertising. As I've indicated, the advertising was there to draw the public's attention to a range of pressures that ICBC faces that contribute to increased costs and would result in increased premiums if steps weren't taken, and then to a range of possible steps that might be contemplated in order to address those costs. I think the evidence that this was money well spent was the degree of interest that was stimulated in the cost containment issue around a range of initiatives, some of which
[ Page 4598 ]
were endorsed with an enthusiasm and unanimity that I think was impressive, perhaps unprecedented, as well as some proposals that clearly caused controversy and perhaps assisted people in endorsing others with more enthusiasm than they otherwise would have. So in my view, it's money well spent and money that had a direct relationship in producing the package of road safety initiatives that I was able to announce with a high measure of stakeholder support just last week.
[4:00]
K. Krueger: So we have a total advertising expenditure in 1996, then, of $8.3 million -- $735,000 on cost containment; $5 million or so, I take it, on the Road Sense program; and surely some on actual explanations of the corporation's existing insurance products. Are there any other areas of advertising that ICBC spent money on in 1996?Hon. A. Petter: No. I think the member has summarized it very nicely.
K. Krueger: Surely there were considerable resources at ICBC devoted to ramping up, as the lingo goes, for no-fault. There obviously were staff committed; there was a sort of war room arrangement that was discussed in the weeks previous to the decision not to proceed with no-fault. There was a great deal of emphasis within the corporation on that option for quite some time over the last two years. Can the minister give us a global number? I'm not talking about advertising now, but about actual devotion of resources, travel expenses, studies and other expenses. Can the minister tell us what was spent in the consideration of no-fault as an option?
[T. Stevenson in the chair.]
Hon. A. Petter: Again, I guess I could be obstreperous here and take issue with the member's characterization, but I like to be helpful, because I think it saves everybody time and aggravation.
The amount that ICBC has spent on trying to gather information to assist in a cost-containment strategy, including initiatives such as an improved claims system that will both save costs and better serve customers, including consultants' reports concerning cost pressures and including the drawing-up of a five-year safety plan
Actually, I'll go beyond that and say that it isn't just the program; it is the degree of public awareness and support that has grown over the last year around this set of initiatives, which I think has the potential to effect the same kind of cultural change around safety that we have seen previously around drinking driving in particular -- although there's more we should do in that regard -- and around smoking -- although there's more we are doing in that regard. It's that kind of cultural change.
If we can get drivers in B.C. to see that this 25 percent difference in bad driving is a problem -- their accident rate is 25 percent higher than in other jurisdictions -- and to take responsibility for that, then I think we will have done much better than simply what we would do through a government-driven program.
So these initiatives which were devoted toward gathering the information, drawing up a five-year safety plan and other associated stuff are dollars that will prove to have been remarkably well spent.
R. Coleman: I'd like to ask leave to make an introduction.
Leave granted.
R. Coleman: One of the best elementary schools in the province of British Columbia is Betty Gilbert Elementary School in Aldergrove, and one of the best-behaved and most intelligent grade 4 classes in the province of British Columbia is Ms. Friedenstab's grade 4 class from Betty Gilbert Elementary School. Ms. Friedenstab and her class and some parents are in the gallery today. Would the House please make them welcome.
K. Krueger: Referring again to the annual report for 1996, on page 2 is a letter from Miriam Olney, chair of the ICBC board of directors, and on the facing page is a letter from Thom Thompson, president and CEO. What really seemed to me to jump out when I read the two letters was that they didn't appear to be saying the same thing. Of course, they were published prior to the decision about no-fault, but Ms. Olney makes a very valid point that Road Sense was pioneered by ICBC in 1994 and is only now coming into its own. I think we're seeing that, in that photo radar was the first program that the government actually delivered, with a little bit of a shaky start -- and shaky since, actually. A number of other programs were only very recently brought on, and of course, more programs were announced last week.
In Mr. Thompson's letter, the thrust almost seems to me to be that things just aren't working, the way they are, and that we're going to have to have product change. I took it, at the time, as a very strong indication that no-fault was coming down the pike.
I wonder if there has been a conflict going on within ICBC, as to whether or not no-fault was the way to go.
Hon. A. Petter: In fact, I read the two letters as complementary and consistent with the direction the government has taken. Yes, there has been considerable progress made by ICBC: through its Road Sense program, through the introduction of photo radar, through some of the investments ICBC makes in intersection improvement and the like. But yes, it's also true that further changes to increase road safety and to modify the insurance product are required.
That's reflected in the package we announced last week, in which there were further efforts and changes to really undertake a very aggressive program on road safety. But there were also changes such as moving to a net income rather than gross, such as the material damage deductible and such as encouraging mediation rather than litigation, which we and stakeholders believe are good public policy, merit support and will assist in meeting future cost pressures. We'll have a chance, of course, to debate those in some detail when we get to the legislation. But I think these two messages, while they reflect the distinctive views and personalities of their authors, are nonetheless complementary.
K. Krueger: I'm not attempting to be confrontational here. I've already said that I'm very pleased about the decision to abandon no-fault and also about the announced programs to attack the source of the problems and the expenditures.
But with respect, a lot of the advertising I was referring to earlier was clearly targeted at the tort system -- at lawyers.
[ Page 4599 ]
Lawyers were mentioned a lot. The sort of song and dance that we read on page 6 is clearly, I think, an attack on the tort system. Yet, when you flip over one page to page 8 and look at the little table involving auto plan claims incurred, you see that bodily injury claims expenditures went up $16 million in '96 over '95. That's a lot of money to most of us, but compared to premium revenues of $2.276 billion, it's a relatively small increase. In fact, the percentage of bodily injury claims as a portion of the entire claims expenditure actually dropped by 4 percent in 1996 over 1995.
So reading that, it seemed to me at the time -- and still does -- that the emphasis on lawyers and bodily injury expenses and so on perhaps was somewhat misplaced, particularly when you look at the fact that the cost of fraudulent and exaggerated claims -- itemized at the bottom of page 5, on the right -- was estimated at $150 million, and auto crime and auto theft was $160 million of the 1996 claims costs. It seems to me that clearly we should be focusing on those areas, rather than attacking other stakeholders in the system.
In any event, now that the decision has been made
Hon. A. Petter: I don't know if the member wasn't in the House earlier or simply missed the debate if he was here, but I explained that the numbers in the annual report did not reflect the accident rate increases year over year, because of prior-year adjustments. The real increase in claims costs for bodily injury claims from '95 to '96 was 13.2 percent.
I think it's unfortunate that some groups seized on numbers in an annual report that are financial numbers and didn't look behind them to the actual accident rates. I don't really want to get back into that debate, because we had it earlier. I'd be happy to provide the member with some of the work KPMG has done on the '96 year that looks at the accident experience year over year. I just want the member to be aware that bodily injury claims continue to be a major cost pressure -- in fact, a greater cost pressure than other areas, such as material damage, which is also of serious concern.
In terms of concerns regarding court costs and legal costs, that concern is not only a concern of KPMG, which is quoted in the annual report, but it has been a concern of the Canadian Bar Association, which recommended that we undertake aggressive alternative dispute resolution, including mediation. That indeed has found its way into the package of reforms that were announced.
Legal costs do contribute substantially -- they are estimated at over $200 million -- to ICBC's costs. That's not an attack on the legal system; it's a fact. As I say, the Canadian Bar Association itself has indicated it's of concern and has agreed to work with government in addressing that concern through mediation efforts, for example. So I think there were a lot of knee-jerk and, in some cases, exaggerated reactions from stakeholders, who perhaps put self-interest ahead of a more considered set of views.
Fortunately, the process, I think, has worked remarkably well. We end up with a very strong consensus on the package that was introduced, and for that I am grateful. I think we now need to work hard to make it succeed. We'll continue to hold stakeholders accountable. I'm sure that we will be held accountable for our part in doing so.
In respect of the timetable, really I think it's more appropriate to address that when we get to the legislation. There are a range of provisions within the legislation. Once the legislation is passed, I'm hopeful that some of those can proceed almost immediately; others will take time.
The shift to net income, for example, is one that should take place almost immediately under the legislation. The move to graduated licensing will take longer, because it requires a system to be established -- I hope some time next year. Other initiatives fall somewhere in between those two time frames. There may be a few that will take longer still. Obviously some of the benefits from things like intersection cameras will take longer, because we're going to proceed with pilot projects. But I'd be happy to address that when we get to the legislation in a more specific way.
[4:15]
K. Krueger: The premium income shown on the first page of the annual report, at $2,276,566,000, is substantially larger than the claims-incurred cost, at $2,125,476,000. ICBC for years has been proud to say that it substantially runs the company on its investment income, which was $348.5 million in 1996.If ICBC lost $135 million in 1996, there seem to be a number of factors that add up to that. One of them is the NGIS expenditure that was discussed earlier. I think the minister quantified that at $38 million. It's my understanding that this software expense has been incurred through an open-ended contract. Actually, the system is far from meeting the needs that it was planned to meet. I'd like a more detailed explanation from the minister of the status of that. If he's been given to understand that it's fairly close to being up and running, I wonder if he's been given a target date and, if not, if he would ask for one and advise this House later and also confirm whether or not the suppliers were actually allowed to go ahead and run up that kind of a bill for our public insurance company in an open-ended contract.
Hon. A. Petter: Again, I'd be happy to try to provide the member with fuller details in another forum, because it is a very complex matter. But by and large, I'll try my best in the circumstances that are available to give at least an outline of what has transpired to date.
There was a partnership arrangement reached with IBM initially. It was not an open-ended contract -- far from it. It was a partnership arrangement. That partnership arrangement proved more costly than ICBC had originally anticipated. So I believe it was in January or thereabouts of this year that the partnership was brought to an end. ICBC took over the management of the work and continued with IBM on a fee-for-service basis but managed, with its own management, to reduce the cost substantially.
The development has reached the point where it is anticipated that the first application is likely to proceed in September. If that first application proves successful -- or once it proves successful, hopefully -- then the expansion of that application can be undertaken throughout the system. That expansion will be undertaken, again, with ICBC acting as the manager, through various contracts with software providers on the most cost-effective basis.
K. Krueger: There was some discussion of a fairly dramatic reduction in the number of brokers serving ICBC.
[ Page 4600 ]
I understand that those discussions have been put on hold until the fall. Does the fact that -- as I understand it -- ICBC wants to reduce it to 600 brokers have a direct relation to the capacity of NGIS?
Hon. A. Petter: No. The question of brokers and the tentative agreement that did not proceed, which the member is referring to, had nothing to do with NGIS whatsoever. It was an attempt to find cost savings on a cooperative basis with brokers through an arrangement. The initial tentative agreement proved to be one that was not fully supported throughout the industry.
Now ICBC is undertaking further consultations. The idea here is to find a most cost-effective way of delivering services in conjunction with brokers and a more efficient way to improve service and other elements of the relationship between brokers and credit unions who act on behalf of ICBC.
K. Krueger: The expense ratio that ICBC reports on page 1 of its annual report rose to 17 percent from 16 percent in '95 and 15 percent in '94. Indeed, it hasn't been at the 17 percent level since 1992. On premium income of almost $2.3 billion
Hon. A. Petter: As I read it, the range has been pretty consistent over the past number of years: 17 and 16 percent, dipping to 15 percent in 1994. I think what has to be recognized and put in context is that, as I understand it and as I'm informed, that expense ratio compares very favourably not only with other jurisdictions in Canada but right across North America as one of the most efficient expense ratios. Therefore maintaining that kind of ratio -- while it will go up and down a notch here or there from 16 up to 17 or down to 15 -- is part of ICBC's success story, and it's the continuation of that range of expense ratios that allows ICBC to deliver service on a very efficient basis.
K. Krueger: As I said at the end of my remarks on that question, ICBC has always been very proud of its expense ratio. Nevertheless, a 1 percent increase, when you're talking about a $2.3 billion-a-year income, is a very substantial number. ICBC has a relatively new chief executive officer. The chief executive officer before him worked in the 15 percent and 16 percent range. Surely he's concerned about an increase in the expense ratio, which costs out at about $23 million a year. I would just like to have -- especially since he's in the House with the minister -- an explanation of how the $23 million was spent in doing things differently from 1995.
Hon. A. Petter: Well, we're having an interesting seminar over here on this side of the room. I'm not sure we're going to get down to the bottom of it, but let me undertake to get back to the member with an explanation. There is some thought that it
K. Krueger: I do accept that, and I would like that detail when the minister is able to provide it.
Goofy things happen sometimes in large organizations, and I'll give the minister a quick example. One of the mandarins that rose to power in the claims division a few years ago decided that the way to save the world at ICBC was to launch what he called a claims standardization program. He seemed to be a throwback to the Industrial Revolution. He published a chart of what every adjuster's desk should look like, where they should keep their mail buckets and where they should keep their diary buckets, and another chart of when they should do their diary and when they should do their mail.
He presumed to get involved in just about every detail of an adjuster's or a clerk's life in an ICBC claims office, and he took his best technical people -- people who were there to train bodily injury claims adjusters and material damage estimaters -- and sent them on travelling road shows around the province to literally inspect people's desks and make sure that the buckets were where he said they should be, the pens and pencils were where he said they should be, the diary was pulled on the day he said it should be and the mail was handled on the morning he said it should be.
Everybody -- all the adjusters and clerks and managers and supervisors -- did little ticky sheets for him to prove that they were checking these things constantly. To no one's surprise but his the world didn't unfold as he thought that it would, and ICBC's claims costs began to rise significantly because no one was minding the store and everybody was checking the buckets, trays, pencils and diaries.
So things like that happen, and sure, 1 percent looks small. But $23 million isn't small, and this is the sort of thing that can quickly spiral out of control.
Another significant cost at ICBC, of course, is the salary of the employees. The number of employees has been rising, and certainly the motor vehicle branch transfers are involved in the overall number of employees. Do the minister and the people advising him foresee any increase in staff at ICBC in '97 over '96, excluding the transfers from the motor vehicle department?
[4:30]
Hon. A. Petter: Well, one hears all sorts of stories about ICBC. I even hear about safety managers putting their pictures in advertisements, for God's sake, so you never know what stories you will hear about ICBC.But if I can come to the question that was at the end of that long introduction from the member, the advice that I receive is that there has been no net increase in permanent staff from the transfer of the motor vehicle branch. There are some temporary increases from time to time in dealing with either increased claims volumes or particular initiatives that require staff complements to move them forward. But there has not been a significant increase in staff, other than the transfer that the member alludes to.
K. Krueger: The minister referred to a pay equity change in 1996, which I'm certainly also aware of. When that pay equity adjustment was made, a number of employees received very significant retroactive pay and very significant pay increases. I wonder if the minister could quantify for us what the total cost of the pay equity changes were.
Hon. A. Petter: As I understand it, the cost last year would have been in the range of $6 million to $7 million.
K. Krueger: Just to bring that down to practical terms for the minister, the pay scales that I saw after that was done
[ Page 4601 ]
indicated that an entry-level position in the claims centre -- a mailroom clerical position -- was paid almost the same salary as the base MLA salary last year. That is, the base MLA salary was just over $32,000, and those entry-level employees were starting around $29,000.
It's those sorts of decisions that add up to a 1 percent expense ratio increase and more, of course, and whether or not that's fair to the motoring public -- who pay their ICBC premiums on the understanding that it's wholesale insurance coverage -- is a question I'd like the minister to put his mind to. We all know who ends up paying the bills.
A lot of those people were astonished at the size of the pay increases and the retro pay that they got. There is quite a discrepancy between those salaries and what's paid for similar work done outside the corporation by people who work for private enterprise. The union itself expressed astonishment to me at how easily ICBC capitulated on those pay equity matters, and people speculate that the arrangement was made as a forerunner to doing the same sort of thing at the BCGEU. I wonder if the minister is aware of that suggestion and if there's any basis to it.
Hon. A. Petter: As I understand it, the pay equity adjustment was done following an independent evaluation involving Deloitte and Touche consultants, with cooperation from management and the union, in an effort to identify inequities in the pay structure that were harming women, particularly, and others who weren't receiving pay that was appropriate -- or, to put it differently, who were receiving less than others because they were in pay categories that were dominated by women. I hope the member isn't suggesting that ICBC should save costs by moving towards inequitable pay levels for women. I take it that's not his suggestion.
K. Krueger: With respect, I suggest that nobody was being harmed at ICBC. There was always a lineup at the door of people anxious to take those entry-level jobs when they came available -- in the experience that I know of, at least. People were paid quite handsomely. The fact that one gender or another dominates a pay category doesn't necessarily mean that anybody is being underprivileged or overlooked. It's that sort of logic -- that just because, for example, women dominate a particular type of job, people think it must follow that there's a pink ghetto and there's some harm being done -- that leads to careless decisions.
Once again I would ask the minister to have a second look at whether or not he thinks that pay equity change made sense, was appropriate and was a good expenditure of the public's premium dollar.
Speaking of that, beginning on page 7 and moving over to page 8 under "Financial Highlights," ICBC reports: "Additionally, we have retroactively accrued a $19 million cost of a past liability relating to post-retirement benefits for our employees." I wonder if the minister would explain that to this House, please.
Hon. A. Petter: The member's interest in this, I hope, isn't occasioned by his own previous position with ICBC and his interest in these post-retirement benefits.
This is not a change in benefits; this is a change in accounting policy that tracks a general change in the way accounting is done around these benefits in the United States. ICBC was advised to follow that change, through which health and other benefits that are available to employees upon retirement are costed and accounted for, not at the time they are incurred -- after retirement -- but as part of the expense the corporation incurs in providing pay to employees during the course of their employment. In a sense, those costs are accrued and costed against the employment period of the employee's time with ICBC, not deferred until subsequently. That was the accounting treatment that ICBC's accountants urged the corporation to adopt to bring it into conformity with others.
K. Krueger: What we're slowly getting to here -- and this is just on a very cursory examination of one annual report -- is that ICBC reported a $135 million loss for 1996. The minister came perilously close to, it looked like, expropriating the rights of British Columbians through a no-fault insurance system based on his expressed alarm over this type of loss -- and made it clear during his announcement last week that no-fault is still an option if he deems that the other measures taken don't work. I certainly hope they work, for the sake of all the people who won't be hurt and won't be killed as a result. Those measures should have been in place long ago. We're going to talk a little bit about why some of them weren't.
Looking at the numbers we've just canvassed, if ICBC lost $60 million in '96 because of the premium freeze that it would have had according to its plan, $38 million on NGIS, $23 million on a 1 percent administrative expense increase, $7 million in pay equity and had a $19 million adjustment on post-retirement benefits, those total $147 million, which is substantially more than the loss that ICBC is reporting.
I make those points to caution the minister against ever again contemplating such a major change in the social fabric of British Columbia on the basis of this type of evidence. It hasn't been clear to us whether the tail's been wagging the dog or vice versa in all of these considerations, but no-fault was a bad idea, and we hope it's dead and buried.
There was a vice-president in the insurance corporation who was responsible for human resources, and he departed the corporation, as I understood it, in a relatively unexpected way, about the time of the pay equity increases -- just after, actually. I wonder if the minister could tell us whether the vice-president retired voluntarily or whether there were some problems with these post-retirement benefits -- and the way they had been dealt with up until then -- and/or the pay equity manoeuvres, and whether in any way those or other performance issues precipitated the vice-president's departure.
Hon. A. Petter: The member is throwing a whole bunch of things into a hopper and calling it fruit salad, or something. It's quite incredible. The fact is that a number of the matters he refers to deal with changes in accounting treatment that are required of ICBC through the advice it receives from its actuaries and accountants. The member neglects to mention that there was a $100 million adjustment to the benefit of ICBC last year, which depressed the extent to which losses would have otherwise occurred because, happily, of the claims experience.
The member goes back to the point that yes, if premiums had been increased substantially in the previous two years, that would have taken pressure off of ICBC. It's true, but of course this government has understood what apparently the member and his party cannot understand, and that is that British Columbians are not prepared to tolerate the experience of the last ten years, which saw a 140 percent increase in claims costs and related premium increases to go along with it. This government is determined to do something about it. All of the evidence that was produced through the independent
[ Page 4602 ]
financial statements done by KPMG and verified by Coopers and Lybrand, the auditor for ICBC, indicate that KPMG's numbers are correct and that without substantial changes, substantial increases in premiums would be necessary.
We are making substantial changes, and I hope those changes will be enough to avert premium increases. But if they are not, and if the increases required are not reasonable and not affordable, then I have said that this government will take additional steps to protect premium payers. I guess that is the difference between this government and that opposition. This government is determined to protect the consumer -- to ensure that the consumer does not simply become an ongoing source of money to increase the coffers of ICBC. We've seen how ICBC costs have increased in relation to GDP in recent years, in a way that is simply not sustainable.
So we're taking action, and we will take more action if necessary. But as I've said time and again, my preoccupation now is on trying to make the changes that everyone agrees should be our priority work, and I don't think distorting the numbers or playing with the numbers in the way the member does is particularly helpful in that exercise.
On the vice-president issue, the simple answer is that there is no correlation between the vice-president leaving and the treatment of post-retirement benefits or pay equity.
K. Krueger: One of the points that has been made to this government frequently in the past -- and I'll make it again now -- is that the official opposition is all too eager to assist in bringing problem drivers to heel in dealing with the aggressive driving behaviours and attitudes that a very small percentage of the driving population exhibit.
Indeed, when ICBC did a scan a couple of years ago to determine whether it could afford to allow another step on its claim-rated scale to claim-free drivers, the corporation learned that well over a million drivers would qualify for such a reduction. As I understand it, they didn't feel they could afford that step at the time -- an $80 million expenditure -- which I think makes it obvious that there is a very large number of drivers in British Columbia who are not creating the problems, and a relatively small number who are.
Considering what the minister just said and this government's self-perceived commitment to bring down the loss experience and deal with the problem people, why does the chair of the ICBC board of directors have to say, at the beginning of her letter in the annual report, that the Road Sense programs introduced in 1994 are only now coming on stream? Why has it taken so long to introduce administrative driving prohibition and vehicle impoundment and graduated driver's licensing? A number of the plans announced last week are reannouncements, because these things have been in the hopper for at least two years. Perhaps the minister could explain to British Columbians -- certainly to this House -- why it has taken so long to bring these programs into action.
[4:45]
Hon. A. Petter: The Road Sense program was initiated in 1994, I believe, and it hasn't been underway that long. These kinds of behavioral changes -- and photo radar is another example -- take time. We know there was a strong amount of resistance to photo radar from certain members of the opposition, for example. There had been resistance in other provinces. It takes time for the public to become educated and to start to move towards supporting these kinds of initiatives. Given the time that was available prior to my being the minister responsible -- or the current president being the CEO and the chair being the chair of ICBC -- there were substantial changes made. It does take time to get these kinds of initiatives underway, and from 1994 to now is not a lot of time.Photo radar is just starting to have a positive impact in terms of accident rates and is starting to gain a high measure of public acceptance, which I think is good news. Frankly, I'm not sure we would have reached the degree of public acceptance for this package of initiatives if the government had not gone out and shared, in a very open way, the problems that ICBC faces, the consequences of not dealing with those problems and some of the alternatives that exist in terms of dealing with those problems, and if the government had not taken the action of freezing premiums as a way of getting not only ICBC's attention but also the public's attention, and driving -- pardon the pun -- these kinds of solutions.
From the opposition benches it may be easy to say: "Gee, you should have done it all faster." But I think what is impressive is how far we have come in a relatively short period of time and how much more is now being contemplated with what is essential: a high measure of public support. Standing up and saying, "Government's going to do this," without having public support is not much use. Being able to move forward with the measure of public support we now have, has the potential of creating a real cultural change that can produce major savings of lives and major savings of dollars, and that's the position we're now in. I take considerable pride in the fact that we're now in that position, because I think the exercise over the last year has helped to bring us to that position today.
K. Krueger: Once again, the opposition has certainly been supportive in dealing with problem drivers. I respectfully remind the minister that this government has been in power since 1991, and I have heard public outcry -- certainly since then and probably before -- that people are tired of paying the freight for bad drivers. So I think the public support was there long before the minister realized it. It certainly wasn't there for no-fault, as the minister has now come to understand. But it has been there.
I raise these points in order to spur the minister on in his announcements of last week and in the hope that these programs will indeed be brought on swiftly and not reannounced two years hence, with little happening in between.
Another issue that the Insurance Corporation of British Columbia has spoken of for years and which we haven't seen too much action on is rating people's vehicle premiums on the basis of damageability -- how easily a vehicle is damaged -- and repairability -- how difficult and how expensive it is to fix it. I remember people shaking their heads in chagrin years ago over a Subaru headlight costing $250, for example, and various vehicles that are put on the market with atrociously expensive parts -- windshields with particular curves in them that cost an exorbitant sum. There has been discussion for a long time about rating people's damage premiums according to what it's going to cost to fix a vehicle and how easy it is to damage it in the first place. Could we have an update on what the Insurance Corporation's progress has been on damageability ratings and repairability ratings?
Hon. A. Petter: This relates to a matter that we dealt with earlier, and that is the potential, as the rate freeze period comes to an end and within the context of ensuring that rates stay at a reasonable level overall -- which is a commitment and determination of this government -- for looking within the rate structure for ways in which that rate structure can be
[ Page 4603 ]
altered to better track costs and claims experiences. One of the ways in which that might be done is to have a system that is more sensitive to the costs inherent in certain vehicles, in accordance -- as the member suggests -- with their damageability, costs of repair and the like. That is a matter of future policy, but one which I'm sure ICBC and the government will be looking at as part of any changes in rates that may take place once the freeze comes to an end.
K. Krueger: Yet again I'll tell the minister -- and I know he hasn't had this portfolio all that long -- that at ICBC that has been a matter of so-called future policy for at least ten years, I believe. American insurance companies have gone into that practice, and it's only fair that it should be done in British Columbia as well.
Touching once again on the matter of rating according to regional loss experience, if this is a user-pay system, if it is wholesale insurance coverage and if the government does allow the corporation to move back in that direction when its so-called freeze is lifted, I would like the minister's advisers' numbers as to what percentage change we would have to expect in the various regions of British Columbia. That is, if we went to a true regional loss-experience rating system at the end of the freeze, it's my understanding that Vancouver premiums would rise substantially and premiums elsewhere in the province would drop substantially. I wonder if we could be given the actuarial percentages -- which should not be a matter of future policy. I believe the corporation keeps very accurate track of where its claims are coming from and how much it's spending. I hope the minister can give us an idea of what percentage increase the lower mainland and other areas might experience, and what percentage decrease my area and others would experience.
Hon. A. Petter: I don't have that information at hand, hon. member. I think last year another member raised the issue of rates in Peace River being higher than the claims experienced, and my recollection is that the member referenced this member in saying that. We went on a huge hunting expedition with ICBC to look at the actuarial experience and found out that that in fact was not the case. The claims experience in Peace River showed that the rates were set in a way that the premiums tended to correspond with the claims experience.
Obviously these issues of geographic costs and other indicators are ones that ICBC will look at as we move forward and as we consider possible rate structures in conjunction with the freeze coming to an end. But I want to say, and I want to caution the member, that this government remains determined to ensure that rates do not rise unduly, that rates remain affordable. We are not prepared to see the same kind of experience that has occurred at times in the past, where British Columbians have been asked to pay inordinate increases year after year to fund ICBC.
K. Krueger: Again, with respect, it should not have taken a huge hunting expedition. ICBC should be able to give you those numbers -- like that. They did flush $38 million down what has been described to me as a rathole on this NGIS, and long before that they were spending millions of dollars on their computer system. They can sort claims by postal code, so ICBC should be able to tell the minister in a heartbeat what the claims experience is for a given area, how many vehicles are insured there and what their premium would be if they were only paying for their own loss experience.
I urge the minister not to accept that answer. I ask for his commitment to give me, within a month, a region-by-region breakdown of what the premium change would be if within those regions people paid premiums according to the regional loss experience.
[G. Brewin in the chair.]
Hon. A. Petter: I'm now reminded that in fact we went further last year and made some premium comparisons with Alberta to correct the misapprehension that somehow Alberta rates were preferable to B.C. rates when one takes the accident ratios and claims experience into account. I will certainly ask ICBC to provide the member with what information it can concerning the claims experience, and have ICBC communicate the information that it's able to, to the member in due course.
K. Krueger: My thanks to the minister for that commitment.
ICBC went into a new mode of windshield claims handling in the not too distant past. Perhaps the minister could ask his advisers for the effective date. As I understand it, in this new scheme of things the shops that replace and repair the windshields handle the claims themselves rather than ICBC's staff handling them in the claims offices. There are always questions that arise as to whether that's appropriate; certainly a great deal of good faith is involved when an arrangement like that is made. Can the minister tell the House whether the number of windshield claims went up dramatically after that change, compared to what it was before?
Hon. A. Petter: As I understand it, this is a pilot initiative, not dependent upon goodwill but based upon a certain protocol or arrangement that ensures there are checks and balances in the way this is administered. The claims experience within the pilot indicates that there has been no increase in claims in windshield repair as a result of this arrangement. The pilot provides a basis to control that against other claims experience, and the indication was that the claims experience within the pilot did not indicate that this change in arrangement resulted in any increase in claims over the conventional or traditional arrangement that had been in place.
K. Krueger: Then could we know the scope of the pilot; that is, what area is included and what date it began?
Hon. A. Petter: I understand the pilot is being expanded. I would again offer to give the member more details as to how it has unfolded, but initially, I think, it's been within the Vancouver area that the pilot was undertaken.
K. Krueger: If he has this information with him, I'd appreciate it from the minister; otherwise, perhaps it could be procured at the same time.
In the experience before and during that project, I'd like to know whether the average cost of windshield claims handled in that area rose, and by how much. Some windshields are much more expensive than others, and some profit margins are much higher than others. I'd also like to know whether the repair percentage changed at all. I'll explain what I mean by that. If a windshield receives stone bruises, and they haven't cracked the glass -- the cracks haven't begun to run -- repairers can inject a little solution, or through various techniques, repair that mark so that it doesn't run. This is much less expensive than replacing an entire windshield and is a substantial saving to the corporation. So could the minister
[ Page 4604 ]
tell me, or will he commit to tell me later, of any change in severities in the area where this pilot has been run and any change in repair percentages?
[5:00]
Hon. A. Petter: Well, the pilot was designed to take advantage of these kinds of cost-saving alternatives. If the member wants more details, indeed I'd be happy to arrange a briefing for him on these kinds of issues so that he can get into the kind of nitty-gritty that he is obviously interested in getting into. I don't have the details at hand right now, but I'd be happy to arrange a briefing or provide that information in some other way.K. Krueger: Referring back to the table on page 1 of the annual report, we note that the unpaid claims number went up by almost $300 million in '96 over '95. I wonder if the minister could account to the House for that.
Hon. A. Petter: This is an actuarial reflection of the increase in accident rates. If the member looks at the table, he will see that there have been similar increases in previous years in exactly the same range, which is part of the problem.
K. Krueger: I agree it's part of the problem, but I wonder if the minister really wants to accept that the trend should continue. When he sees premium income rising by $23 million year over year and he sees unpaid claims rising by $300 million, obviously those graphs are not charting in the right directions. I would like to suggest to the minister that he have a hard look at that and the whole issue of claims incurred and why the corporation increases its reserves for claims arising out of incidents that sometimes happened years before.
What the minister should be aware of is that ICBC ought to reserve to the ultimate probable cost of claims. They ought to have a pretty good idea of what that is -- certainly by two years after the loss. I don't raise these issues to annoy him but rather to say that these are numbers that the opposition is watching. We think British Columbians would be well served if the minister had a really good handle on them, so we will be raising them in future, as well.
Investments are up by $345 million; assets are up by $343 million. People wonder if there really is a loss or if this is a shell game with numbers. There will be a lot more canvassing of these numbers in future estimates, and this is fair warning.
The premiums actually fell, on average, according to this chart, from $917 each in 1995 to $890 in 1996. Could the minister account for that?
Hon. A. Petter: I must say that I am astounded by the first comment the member made with respect to unpaid claims. This member has spent a good amount of time in this House using a bunch of unrelated numbers -- numbers that were used somewhat provocatively in the newspaper -- to try to suggest that there isn't a claims problem. Then he turns around in the last question and notes, at the end of all that, quite correctly, that the experience year over year of unpaid claims is of serious concern, and he hopes the government is going to do something about it.
Well, welcome to reality. That's exactly the concern that the government is doing something about, and that's the message I have been taking to the public for the past year: that if we don't do something, we're not going to be able to sustain affordable rates. So I'm glad the member, after his tortuous -- and I am tempted to say tedious -- line of questioning earlier to try to disprove that there was any claims-rating problem
In respect of the reduction in the average premium, it's a direct consequence of the rate freeze. The rate freeze has meant that premiums have not gone up. In some cases, they have come down marginally. As a result, British Columbians are paying less per premium. It's a happy consequence for those who pay premiums that they are paying less in 1996 than in 1995. As I commented earlier, it's one of the reasons why rates of inflation in this province are below those of other provinces and Canada; it's because of this containment of costs in auto insurance premiums.
K. Krueger: I'll continue to manfully resist responding in kind to cheap shots by the minister.
The point I've been trying to make is that the answer is not to just continue to charge people more money every year as their claims costs escalate. I know he understands that and accepts it. It's part of the answer to implement road safety programs and actually get them up and running, instead of just talking about them and reannouncing them year over year and never actually delivering them.
Respectfully, part of the problem is also management issues. Some of the bizarre management decisions at ICBC I have talked about in this House today and on other occasions: people with very little proven ability and far too much authority being allowed to make major changes to the way the corporation is run and does its business, with disastrous financial consequences.
I'll give the minister another example. He has a vice-president responsible for public affairs and road safety, who was hired out of Calgary and, as far as I know, knew nothing about road safety -- or insurance, for that matter -- when she came to British Columbia. She promptly made a decision to eliminate ICBC's road safety programs in elementary schools. Her expressed rationale at the time was that those children don't drive. Well, very soon now those children will be driving, and they won't have had the benefit of really valuable programs that had been in place and had been serving their purpose long before her arrival.
Once again, I'll resist the temptation to respond in kind and just make the point to the minister that there are management issues that we are discussing, here, as well as dollars-and-cents issues and driver behaviour issues and highway engineering issues. It's all part of the package. If he only addresses some of the issues and not the management issue, he won't have resolved it. Claims reserves should not have to dramatically increase many months after the claim was first reported. We'll get to ICBC's key measures, probably on Monday, I think.
I'd like to ask the minister: in addition to the initiatives that were announced last week, are there any other major initiatives planned or being developed at ICBC with regard to saving the public these funds and forestalling future premium increases?
Hon. A. Petter: I think the announcement was sufficiently comprehensive that it captured all of the elements of what ICBC is contemplating. The announcement referred, for example, to administrative savings, educational programs and the like. Not all of what is being contemplated is captured in legislation, because not all of it requires new legislation. But
[ Page 4605 ]
I think the announcement was structured in a way that it captured the full range of initiatives that ICBC is planning to undertake to ensure that we have a very aggressive and comprehensive road safety program in this province.
K. Krueger: Were there any initiatives or programs recommended by staff or management at ICBC with regard to product changes or loss reduction that the government has not decided to include in its package of reforms?
Hon. A. Petter: I'm not sure what recommendations the member is referring to. The process that has given rise to all of this has been one in which various options have been put forward by the corporation, by consultants and by others. Those have become the subject of public discussion. Certainly there are things that have been suggested by the public and others -- some that have been adopted and some that haven't been adopted, depending on which group it was or whatever. I think that's already well known to the member.
K. Krueger: The staff and the managers at ICBC, just like employees of every company, have a wealth of good ideas. Many of the programs that the minister announced last week could have been brought on by his government since 1991 or by previous governments if they had listened to the staff and if ICBC senior management had funnelled staff input to willing ears in government. I've never been clear which it is that doesn't happen -- senior management referring the ideas or government having a listening ear.
One of the ways that ICBC and probably all Crown corporations could encourage that sort of thing is to have an incentive program for staff. They could have some form of performance reward for staff who go above and beyond the humdrum of their day-to-day job and actually engage their minds -- fuelled by their experience on the job site -- with ways to improve the performance of the employer. Has ICBC developed any performance-rewarding programs for managers or staff?
Hon. A. Petter: I'm not aware of any specific incentive programs that exist at this time. I understand there was an employee suggestion program, but that has been expanded in a sense so that it's now a part of every employee's job description in ICBC to make suggestions that can help the corporation save money and improve service and performance.
K. Krueger: I can advise the minister that the employee suggestion program often led to the suggesting employees being regarded as nuisances. That was an experience that many employees at ICBC recounted. Again, for these programs to have effect -- and they certainly can be productive -- it's important that government and senior managers take the appropriate steps to make sure they are set up in such a way that they will work and that people will feel welcome to use them with safety and security -- and a reward, let alone safety and security, when they provide good suggestions.
Can the minister tell us what the unplanned absenteeism rate at ICBC was in 1996?
Hon. A. Petter: It was 0.38 percent.
K. Krueger: Can the minister quantify for us the number of short-term illness leaves, rather than long-term disability, that ICBC experienced in 1996?
Hon. A. Petter: I apologize to the member. The 0.38 percent figure, it turns out, is the rate of increase year over year in absenteeism, not the absolute rate. I do not have that to hand, but we'll try to get that for the member. I don't have the short-term rate, either, but the figure I gave was an increase, an increment figure.
[5:15]
K. Krueger: I was so astonished by the 0.38 percent absenteeism figure that I thought I should look at it for a while before I decided what to ask next, because the goal was 2 percent for quite some years. Perhaps the minister could have that number for us when we continue on Monday. Depending on what the answer is, some further questions will flow. I'm going to yield the floor now to the official critic for ICBC, and I'll come back on Monday.D. Jarvis: Maybe I can ask a few questions again. Going back to that KPMG report, I understand that the first two reports cost $1.4 million. Could the minister confirm that and then possibly tell me what the cost is for KPMG 3 that we just heard about?
Hon. A. Petter: Yes, I can confirm that that is the cost of the first two, and the third report is an additional $180,000, I believe.
D. Jarvis: Well, $180,000 -- we got off cheap there, when you consider the cost of the other two, in that they were $700,000 apiece.
Would the minister be able to tell me what the cost of the Allen review would be?
Hon. A. Petter: The cost of the Allen review was not paid by ICBC, but it was in the range of $200,000.
D. Jarvis: I'm sorry that there is some repetition with regard to the questions from the member for Kamloops-North Thompson, but what I did want to know is on the advertising end of it. I understand -- correct me if I'm wrong -- that $333,000 was the original cost for a series of ads for the no-fault through ICBC and that the total advertising amounted to $735,000 on that, where your global cost of advertising was $8.3 million. Was that for all advertising that ICBC has done this year? So the advertising costs for no-fault were about three-quarters of a million -- $735,000, plus or minus, including that original $333,000.
Hon. A. Petter: The advertising that ICBC undertook with respect to cost containment -- and I won't argue with the member's mischaracterization of it, but it was with respect to cost containment
D. Jarvis: Okay, I won't go into that any further.
I was concerned
[ Page 4606 ]
initiatives -- up $49 million from $29 million the year before. So basically, we've got a $21 million saving in that instance. Then we look at the motor vehicle branch costs coming over, and there's $40 million there. We look at the software costs; you've written off $38 million on that. You take the cost of your physical damage or the property damage, and that's up $122 million. When you start adding all these up, you're pushing $200 million.
It's there; you can't say it's not. So what are we to expect, when you have said consistently from the start that the problem with ICBC -- why the rates are going up -- is the bodily injury claims? Well, clearly, the bodily injury claims are up and we appreciate that, but don't forget there are a lot of other costs that are being blamed unfairly on the rising costs of bodily injury that are
Hon. A. Petter: Well, the member has allowed himself to become confused. I will provide him with the KPMG study, the third study on last year, which was an update that I think helps clarify these matters. Let me just correct some of the misstatements. For example, there was no write-off on software. This was an expenditure on software in order to improve software service that will find its way to application this September.
In terms of safety, yes, ICBC is spending more on safety. I thought that was agreed by all members of this House -- unless I misunderstood comments made earlier -- to be a good investment in keeping costs down. Costs would have gone up much more and would continue to go up much more in the future if we didn't invest funds in safety. In fact, ICBC has, as I've indicated earlier, made a major return in savings of 3 to 1, or more, in terms of some of their safety investments.
The Motor Vehicle transfer was accompanied by a transfer to ICBC of the revenue stream that funds the Motor Vehicle transfer, so there was an additional cost but also additional revenue that went along with that cost to cover that. Yes, I acknowledged earlier that there was an increase -- I believe it was in the range of about 10 percent -- for material damage, but that cannot detract from the fact that there was an increase, in the range of 13 percent, related to bodily injury claims. Plus, as I mentioned earlier, the extent of loss was suppressed to some extent last year by the happy revelation by the accountants that there could be -- and should be -- a prior-year adjustment of $100 million or so because of previous estimates concerning costs of previous years' claims being greater, in fact, than was required.
But rather than debating this kind of detail, the member is simply picking up ads that misstate the true situation of ICBC and accepting that kind of misinformation. Perhaps he could review the analysis done by KPMG -- which I will make sure he gets before the debate is out -- and review what I've said in this House about four times now, I think, to try to correct some of these misstatements.
D. Jarvis: I must apologize to the minister. He did mention the bill and KPMG report No. 3, and I certainly will get a copy before we all fly off to the photo ops that the Premier is going to go on.
Also, I again apologize for the $38 million. I understand that, really, it wasn't a write-off. It's the other sort of $40-odd million of the NGIS or the computers that is the write-off.
Hon. A. Petter: There's no write-off.
D. Jarvis: The software costs for the NGIS program, I was told -- and I thought you confirmed it -- were pushing up around the $80 million mark.
Interjection.
D. Jarvis: It was $37 million? That's all the costs that there are there? Without question, I can be assured that it's under $40 million -- the software costs?
Hon. A. Petter: The costs incurred up to the end of last year on software development were
D. Jarvis: But the total cost -- the total cost, Madam Chair -- was in excess of the $38 million here. I've been informed that the cost of the NGIS program with IBM was closer to $80 million. So the minister could definitely confirm that it's not up in that area, then.
Hon. A. Petter: Sixth time lucky. No. The expenditure that ICBC incurred, I am informed, with respect to NGIS up until the end of the last fiscal year was, in total, $37.7 million. There was no write-off, because that expenditure was not a loss. It resulted in software development that is being enhanced now by ICBC to make it suitable for application by September. But the cost up to the end of the last fiscal year, as reflected in the accounts, is $37.7 million.
I don't know where the number the member is coming up with comes from. It might have to do with projections of what the cost might have been had the partnership arrangement continued, or whatever. But the cost that has in fact been incurred by ICBC -- and it appears in the books -- up until the end of ICBC's last fiscal year was $37.7 million. Period.
D. Jarvis: Okay, I hope I'm all cleared up. It's always nice to be able to let the government know that we on this side are not always perfect.
Hon. A. Petter: Gee, I hadn't known that before.
D. Jarvis: Well, you're never too young to learn.
I want to mention to the minister again that I feel very confident that they are going to follow through on one of their election promises, and that's to eventually lower the pre-miums. But without getting too philosophical about this, when he got into the discussion by saying that the public was
[ Page 4607 ]
consulted and it was feedback from the public and all the rest of it, I really do have to argue with him on some of those aspects.
First of all, the KPMG reports weren't available to the public. How many got them? Not very many, when you get down to it. The last report, this analysis
I think the minister has to admit that if it weren't for the no-fault coalition, most of the people in this province would not have had an opportunity to complain or write, and all the rest of it. It would be really interesting to know how many letters the minister got from the people of this province -- the four million that are in this province. How many of them wrote to him and complained about no-fault insurance? I'll bet it's minuscule compared to the phone calls that came in as a result of the program put forward by the no-fault coalition.
With the Allen review, they did not go out to have a general discussion with the public. They had it with the stakeholders that were involved: the claims people, independent adjusters, body shops and so forth. People who were in the industry were the ones that came out and discussed it in the Allen review. It wasn't open to the general public.
[5:30]
I want to ask the minister a few other questions. We've got lots of time; the whole day is ahead of us. You don't look too pleased over there. I am wondering if the minister could tell me what the overall costs are with respect to the amalgamation of the motor vehicle branch with ICBC?Hon. A. Petter: I'm really tempted to respond to the member's previous statement; but I won't, other than to say that last year, shortly after becoming minister responsible for ICBC -- which was about a year and a day ago -- I made it very clear that we would be undertaking a full and comprehensive consultation process. I find it extraordinary that the member complains that the government didn't do enough to make the public aware, while at the same time he is intimating that we perhaps shouldn't have spent so much on advertising this process. I mean, the hon. member can't have it both ways.
However, in answer to the member's question, the actual logistical costs of the transfer are minimal. In fact, the whole idea is to effect some savings through improved service and one-stop shopping for driver and vehicle services, finance and administration rationalization, etc. Over the course of time, the amalgamation should save, not cost, money.
D. Jarvis: I guess I was misinformed, but I thought that I had heard different figures -- around $16 million, and then someone said about $40 million was the actual cost for the amalgamation of the motor vehicle branch. Following that, maybe I can ask: could the minister just once more tell us how many full-time employees will be coming into ICBC as a result of this?
Hon. A. Petter: I thought the member was referring to incremental cost -- that is, the increased cost of MVB being run by ICBC as opposed to the Ministry of Transportation and Highways. In that respect, that was my answer. Last year, from November to March -- to the end of the government's fiscal year -- I believe the administrative cost of running the motor vehicle branch, which was transferred at that point to ICBC, was slightly in excess of $14 million, and an equivalent amount of revenue was then provided to ICBC from the revenue stream to cover that cost. So for ICBC, there was no increase in net cost, because revenue was transferred to match that cost. And from the taxpayer's point of view, there was no administrative cost increase of any substantial kind.
D. Jarvis: What I was wondering at the time was whether this was just perhaps another expenditure shuffle by the government into ICBC. There are benefits occurring from this transfer, and I am wondering if you could tell me how they are measured. Is it in terms of program or service delivery? Just how is it measured?
Hon. A. Petter: Some of the benefits are ones I've already alluded to: the convenience to the public of one-stop shopping, savings in rationalizing administrative costs, the effectiveness of ICBC being able to better collect fine revenues by relating the fine revenues to issues of licence or insurance renewal, and the integration of the Motor Vehicle function with ICBC's function to better achieve traffic safety objectives. Those would be four or five of the major benefits.
Yes, there are performance measures being generated; they are in the process of being generated and finalized. We'll ensure those performance measures are in place, to evaluate and assist the second stage of transfer and then the attainment of the various benefits that are designed to flow from this merger.
D. Jarvis: I asked earlier, but I guess we missed it somewhere along the line. The full-time employees -- are we on a net basis moving over, or is there an increase or a decrease?
Hon. A. Petter: As I understand it, the phase 1 transfer which has taken place to date entailed a transfer of about 400 or so employees. That is a reduction of about 50 from the number who were transferred, so there has in fact been a reduction in employee complements associated with the transfer. During the course of the transfer there has been a reduction in the number of employees.
The member will have a chance to discuss phase 2 in the context of some of the legislation that's before this House, with respect to further transfer of MVB functions to ICBC.
D. Jarvis: Perhaps one last question that the minister could answer before we retire for the evening. It's more philosophical on the part of
Hon. A. Petter: I don't have any magical answer. I think the answer lies in two areas.
One that is a contributing factor -- but I don't think we can let ourselves off the hook with it -- is geography and topography, the fact that we have a pretty mountainous province. Perhaps that makes driving a bit more dangerous. Certainly concentrations of population -- demographics -- and that kind of thing
[ Page 4608 ]
That's one of the reasons I was as pleased as I was to not only be able to make the announcement I did last week but to have that announcement be a cooperative announcement amongst stakeholders as various as the disabled community, BCAA, the Consumers Association, the police, groups representing lawyers and the others -- because that sends a signal to the public. It's also indicative of the range of support, but it sends a signal to the public of how important this is. Those groups and others are going to have to work very strongly with us -- and are committed to doing so -- to change those underlying attitudes.
I'm afraid there still exists in this province some kind of notion that getting out there on the road and letting 'er rip is some kind of function of being a member of society. Fortunately, it's not universally shared. Some people pay a big price for it, as the member for Kamloops-North Thompson indicated. We now have a measure of solidarity and support amongst a broad range of stakeholders and groups representing many others in this society to really take it head-on and try to change those attitudes and, where attitudes won't change, to take some pretty tough measures to get people off the road. If it's an impaired driver who's convicted for a third time or a driver whose driving record indicates that they should undertake remedial training or have their licence pulled
D. Jarvis: One last question to the minister, and then he can adjourn if he feels like it. We're used to staying late at night, and he's not.
I was wondering if the minister could tell us, with regards to his recent announcement of the changes in ICBC and those underlying attitudes, how they are going to be established in the House. Are they going to be through enabling legislation? I notice in one of the motor vehicle bills they put through -- Bill 40 or 41 -- that there was mention of the Lieutenant-Governor-in-Council being involved. Is it enabling legislation for all those items? Or is it going to be by order-in-council?
[5:45]
Hon. A. Petter: Enabling legislation is enabling because it enables us to pass orders-in-council. What we've tried to do is bring forward legislation that provides as much direction as we can and that also allows us to change, in areas where there has to be further consultation or where we may want change within defined parameters, the requirements as we go along. These are some new issues we're taking on here. There are enabling provisions in other areas -- the three-strikes-and-you're-out kind of provision, for example. It's set out pretty clearly, and we'll get to debate that as we get to the legislation.What we've tried to do is structure the legislation in a way that it sets a pretty clear direction. It is as prescriptive as we can be where we want to be. Where there's need for further consultation or flexibility to accommodate changes or things that we can't fully anticipate, we've tried to provide that. It's a combination of all those things. This is a shared learning experience that we're going to be going through in implementing what is really groundbreaking legislation in terms of trying to enable us to work with community groups in changing some pretty fundamental attitudes around driving in this province.
F. Gingell: Actually, I was afraid that ICBC would finish now. I have a question that I've arranged to get information about before Monday -- if we're not finished and we're going to be carrying on on Monday. It's more appropriate that I ask the question when I have more information.
Pending that, I move the committee rise, report progress and seek leave to sit again.
Motion approved.
The House resumed; the Speaker in the chair.
Committee of Supply B, having reported progress, was granted leave to sit again.
Committee of Supply A, having reported progress, was granted leave to sit again.
Hon. J. MacPhail: I move that this House at its rising stand adjourned until Monday at 2 p.m.
Motion approved.
The Speaker: Motion carried. The House stands adjourned till Monday at
Interjection.
The Speaker: I think in the past, House Leader, we have taken that as a comprehensive motion. However, we will accept it as two.
Hon. J. MacPhail moved adjournment of the House.
Motion approved.
The House adjourned at 5:49 p.m.
The committee met at 2:44 p.m.
ESTIMATES: MINISTRY OF
HUMAN RESOURCES
(continued)
M. Coell: I have a couple of things that I'd like to take care of before I get into any questions. There are a couple of calls that I've had in the last few days. A gentleman called the office here in the Legislature from Burnaby; he has a CPP disability and has applied for an electric wheelchair through Human Resources. I would just ask the minister: are people eligible, through Human Resources, to apply for an electric wheelchair?
[ Page 4609 ]
[2:45]
Hon. D. Streifel: It would depend entirely on circumstance; if the member would bring forward the information to us, we could certainly have a look. But specifically, anecdotally, it's very difficult to answer directly.M. Coell: One doesn't often get a chance to talk to a minister right after a citizen has phoned, so I'm going to take this opportunity. Could I have the information that would be necessary for a person to receive an electric wheelchair from the ministry -- the criteria that the person would have to meet?
Hon. D. Streifel: It really depends on the circumstances of individual cases -- a case-by-case analysis or circumstance, I guess. I'm not sure that we have the pigeonhole the member is looking for. It's an individual assessment.
M. Coell: I'm not really interested in the pigeonhole assessment; I'm interested in hearing how a person would go about applying, and what assessment process would take place to ensure that the person either did or didn't receive a wheelchair.
Hon. D. Streifel: In one manner or another, through the individual's caseworker -- maybe with help from an advocacy group or whatever the help may be -- an application may be made to the health services division for adjudication.
M. Coell: My understanding is that from Langley to Chilliwack, there is only one person in that division who is able to assess people who apply for such items as a wheelchair or other aids to living. I just wondered: is it the case that there is only one person in that district able to process applications?
Hon. D. Streifel: Was the member's question about from Langley to Chilliwack? This call was from Burnaby?
The decision is made centrally in Victoria; it's not a regional decision. It's in Victoria.
M. Coell: The decision may be made in Victoria, but isn't there someone assessing people? Are there not people in offices throughout the province able to assess people with needs for aids to living?
Hon. D. Streifel: The application would come in through the district office to Victoria, to the health services division. We have 36 FTEs who work in this capacity.
M. Coell: I would be interested to know what the caseload
Hon. D. Streifel: There are 36 FTEs in Victoria.
M. Coell: So a person would, through their worker, apply for an aid to living, and that request would go through to Victoria and be assessed in Victoria. Is that correct?
Hon. D. Streifel: Yes.
M. Coell: I thank the minister for that. Would the minister comment on the caseload in this division, and on the possible time to wait to receive aids to living, such as electric wheelchairs?
Hon. D. Streifel: For the information of the member, the circumstances
M. Coell: I thank the minister for that. I just have one more comment. The caller to my office in the Legislature suggested that he was told by staff that it would be an eight-month wait to be assessed, to be processed and to receive an aid to living such as an electric wheelchair. It might be worthwhile for the minister to look into that, and I would be more than anxious to have an answer to that question for this gentleman.
I have a number of topics that I wish to canvass this afternoon. The first, actually, was brought up in the Legislature today by the Minister of Health regarding services to francophone British Columbians. I have a series of questions on services offered in different languages within the ministry. If the minister could comment on services offered in French in district offices as well as in the 138 other offices.
Hon. D. Streifel: I didn't have the opportunity to respond to the member's last comments on the phone call he had from the individual in Burnaby, and I'd just like to run through that process again for the member. The client would identify a need -- in conjunction with a medical doctor. The district office submits a prescription that addresses the need, and a doctor's note on client eligibility, the health services division. If approved, the equipment order can happen within two to three weeks, somewhat dependent on availability; sometimes it's not available right away. So I would guess that information would be the best-case scenario. I would accept that, and I will accept the member's caution that this individual was given a response of an eight-month delay. I wouldn't mind having a look at that to see if there's something unusual, if the member could supply that for us.
Languages. Income assistance eligibility is on form HR81, human resources form 81, and translation of this key document is underway into Chinese, Czech, French, Punjabi, Spanish and Vietnamese. We also have a contract, I understand, with MOSAIC to supply interpretation services in multiple languages to ease the burden and the sometimes intimidating process of applying for assistance.
M. Coell: Are there brochures within the ministry in those languages at the present time, or are they contemplated?
Hon. D. Streifel: The applications happen in the language as it's required. Do we have brochures in all these languages? No, we do not, as I understand it. But we address the need when it arises, by paying attention to the need and with our contract with MOSAIC.
M. Coell: Are translation services available throughout the province in every office? Or is that limited to specialized offices in the lower mainland and Vancouver Island?
[ Page 4610 ]
Hon. D. Streifel: We offer the service around the province, wherever there's a need. I would guess that we would make arrangements for the service wherever the need arises, based on the scope and the depth of the need.
M. Coell: One of the areas for translation services that I think is important is for the hearing-impaired and people who are deaf. I wonder whether the ministry has any staff members who are trained in sign language for clients who would need that service.
Hon. D. Streifel: We make use of the Western Institute for the Deaf, who aid us in communicating with our applicants. Overall, with the translation and communication services with that initiative and the multiple language initiative, we spend somewhat over $700,000.
M. Coell: With regard to people who have visual impairment or are blind and use Braille, are there any services or brochures that use Braille within the ministry at this time?
[3:00]
Hon. D. Streifel: No, we don't have brochures in Braille. We would assist in the filling out or ensure that this happens in some manner. The minister's business cards are Brailled. I don't know how much of our other literature is, but my cards are in Braille and they're in multiple languages.M. Coell: I offer the following comment, and will follow up with a couple of questions. I think that one of the barriers people with hearing and sight impairments meet is in dealing with government. Even if the initial brochure was available in Braille, I think that would be of assistance; and for people with visual impairments, possibly a tape system that someone could listen to and understand how the system works. Sometimes it's embarrassing to sit down and have someone fill out a form for you when they'd really like the independence to be able to do it themselves or to do it with an advocate that they're comfortable with. I wonder whether the ministry has given any thought to initial brochures in Braille, and whether they have even costed something like that.
Hon. D. Streifel: The ministry has an interest in any forum or any activity that would assist us in communicating and in making that communication as easy as possible in order to reduce the factors the member spoke about. I thank the member for his comments, and we'll take it under advisement.
M. Coell: The last question I have on this topic would be about people who are illiterate. I know that from time to time a person would come in who was not able to read the brochures, not able to read the information necessary to fill out the forms and possibly have some difficulty with the forms themselves. How would a person with that disability be treated on entrance to the office and the requirement to fill out forms?
Hon. D. Streifel: Our workers are well trained, and they do a very good job with our clients in a very respectful and dignified way. If the client identifies literacy difficulties, we certainly have the capacity to ensure that the client is looked after, and we can refer them to advocacy groups where the forms and the intake procedure is walked through. We can also -- and do -- refer them to other groups in the community that could help the individuals become literate. That's a major process in many parts of our communities, not just with this ministry. One of the most common identifiers in some areas is barriers to employment, and we've paid a great deal of attention to that as a government, on the whole.
M. Coell: Just to follow up on that response from the minister, I know that if someone is enrolled in school or university or college, they're not eligible for income assistance. If the ministry finds that someone is illiterate or has a very low capability at reading and writing, are they able to be placed into an educational program while still collecting income assistance?
Hon. D. Streifel: For an extended response, the member's questions would be best put to the Ministry of Education, Skills and Training, because the adult basic education programs are delivered through that ministry. We could and do refer over to Education, Skills and Training, and clients could and do retain support under various circumstances. So it is somewhat dependent upon where the training is happening and on how and who and the individual circumstances. I can't exactly give a direct answer to this one as to a broad yes or a broad no. It varies somewhat.
M. Coell: Maybe I'll be a little bit more specific. Would someone be able to enrol in a daytime school course that would take them out of the job market? Or would they have to enrol in a night school where they would still be able to look for work during the day?
Hon. D. Streifel: The placement by Skills -- and we're getting into their territory -- could be daytime or evening. The purpose, of course, is to remove a barrier to unemployment, and we could offer the support side, but it depends on the circumstances. I'm sorry, hon. member. Whether I can be more specific or not really depends, because all these programs are delivered through Education, Skills and Training, as you know.
M. Coell: I guess the point I wish to make is that I think that would be a barrier that would inhibit someone from probably ever getting meaningful employment in most cases. If we came into contact with someone who needed income assistance, that might be the perfect time to direct them to an education program, and you could make the educational requirement a requirement of income assistance. I don't think that's the case today, but I think it might be something to consider.
There is a problem in the Vancouver area I wish to spend some time on this afternoon which is going to seriously impact people who are on income assistance in the Vancouver area -- that is, the closure of a great number of hotels and motels in the downtown Vancouver area. I can just give the minister an idea. In the last month the Dominion Hotel, the Roosevelt, the Niagara, the International Plaza and the North Star have all begun fairly large to total evictions. This is going to take a great deal of affordable housing
I wonder whether we could spend some time talking about the potential of the individuals, where they may end up and whether there are any processes in place that would assist these people in finding new accommodation. I suspect that most of their income assistance would go to either accommodation or food, and that would be all they would expect.
[ Page 4611 ]
The estimates are that there are close to 6,000 units in the downtown east side of Vancouver that could be vacated. I suspect that a great number of these units are the homes of people on income assistance. If the minister could comment on that, I know that both the member for Vancouver-Langara and I have a number of questions regarding programs for these people through the ministry.
Hon. D. Streifel: The easy answer, quite frankly, is that housing isn't in this ministry. The second easy answer, I suppose, is that these individuals are free to live wherever they like. Frankly, if I used that and sat down, I would expect the member to get up and beat on me a little bit, because this is a problem in our community. It's not just in Vancouver; it's in the north and the south of Vancouver Island; and it's an increasingly difficult problem in the Fraser Valley and other regions of the province.
It's not a circumstance or a situation that the Ministry of Human Resources can fix, repair and address in isolation. British Columbia is the only province -- this is where the political stuff comes, hon. Chair -- in the country involved in social housing: 600 to 900 units a year. The federal government bailed out on us. Yes, British Columbia is the only province in this aspect of social housing. If we go back to Expo, we had a commitment at that time for 7,000 social housing units as an Expo legacy. I would refer the member to the leader of his caucus, who was the mayor after that, to find out what happened to them. Where did they go? Had they been built, we wouldn't be facing this problem today. We would have solved our problem ahead of time.
We have had multiple proposals in the downtown east side from a number of years ago, centred around a trade and convention centre, a casino, a cruise-ship terminal and social housing all built in and around that area, and the much-ballyhooed Woodward's project.
We recognize that it's a serious problem within our communities. It's a problem that will require a solution, and it will require a solution with the broadest approach, I guess -- whether it be from federal, provincial, municipal or regional governments, or from developers. We all have to concentrate on this, or we'll see increasingly difficult times for the poor in our communities.
M. Coell: I believe the minister and I could have a great debate on whose fault it is that there isn't social housing -- whether it's the federal government, his own government, the Social Credit government or the city of Vancouver.
I guess the problem I want to deal with today is that there's the potential of thousands of people being without homes, and they're on low incomes. The city and groups like the Downtown Eastside Residents Association are describing it as a potential emergency, and I think it's something that we need to deal with. I think his ministry is a key ministry, and I don't disagree with the minister when he says that there are a number of other ministries that need to be brought onside to deal with this issue. I wonder if any discussions have taken place with the other ministries that would be involved, and that could be Women's Equality, Municipal Affairs and Health, as well as the Ministry of Human Resources.
Hon. D. Streifel: My earlier comments were not to focus blame on anybody -- the federal government, the city of Vancouver or anybody else. The need is not new, and we have to work in a cooperative manner to solve this problem. The Ministry of Human Resources in general terms is not a capital funding ministry for the purposes of building housing. We have some shelter programs, and we have been in with a portion of capital and some shelter, and we will continue that responsibility. But the Housing ministry is charged with responsibility for social housing projects in the province. If we're going to explore the broad aspect of housing, then I would refer the questions over to the Minister of Municipal Affairs and Housing.
[3:15]
V. Anderson: I appreciate that the minister is very much aware of the long-term difficulties right across the province, not in any one community, with regard to ongoing housing which is affordable for low-income people, and particularly affordable for people who are on social assistance or for some working poor, who are even worse off in some cases than these.The situation at the moment, though, is one of those unpredictable short-term crisis situations when all at once the developers have decided -- and they are moving quickly, apparently, before bylaws are in place to prevent them from doing so -- to take advantage of a loophole, if you like, to reclassify their buildings and redevelop them for other than low-income but particularly for tourists. There is a focus here that's happening within a one-month or two-month span.
So people are out, and those people are going to end up at the doors of the Human Resources ministry in far larger numbers. What I think we are asking about at the moment is: what is the crisis or emergency situation? How does the ministry, either individually or cooperatively with other ministries, move in to help deal with and support the front-line workers who will be facing this pressure? The demand will be very great.
Hon. D. Streifel: The member for Vancouver-Langara, as usual, has punched the button right where it belongs on this one. It's a crisis, an emergency, approaching us. Our regional manager, Isobel Donovan, does meet with the community in the area -- and DERA, the Downtown Eastside Residents Association, is part of that meeting group -- with a view to establishing a plan to address the crisis, if and when it comes and in whatever form.
In this ministry, as well as supporting individuals on income assistance, we do address crises in certain areas. This is certainly one of them, and we will do our part. We will do our part within this ministry to ensure that the needs of these individuals are met while we participate with the other ministers and other ministries in an overall strategy for increasing the social housing component of the market every year.
I have had this discussion with the various ministers in cabinet, and I have discussed it with a number of our caucus colleagues. In some ways, I am encouraged that the discussion comes up here today so that we can focus on the problem and find a solution. Part of the key to this comes through other pieces of legislation. I understand that the Residential Tenancy Act we did was opposed by the Liberal opposition at the time as being an act that has rent controls and is unfair to landlords.
I would ask the members opposite to listen very carefully to the member for Vancouver-Langara and where he places the focus of who is making the move that is putting housing for these folks in jeopardy. I think that will then allow us to work with local communities, and in a broader sense, to have that group in our communities deliver fully not only on their financial commitment to make money in the communities but also with a social commitment to protect and help those who
[ Page 4612 ]
need housing -- not only income assistance clients but the working poor as well -- and to recognize that this isn't an isolated problem within the major metropolitan areas of our province. It exists all across the province.
As a result, I have asked my ministry to conduct a review of our shelter program, of how it works and how we deliver it. Is it successful? Are we over or under capacity? In what areas can we do better with that? Would we be ongoing participants in capital? Would we be working on leased spaces? How can we do it better, and in what areas do we need to do it better? I am waiting to participate in discussions with my staff when they come forward with that information. Then I can take that forward to the other ministers and other ministries that are also involved in housing to see if we can have a coordinated effort to relieve this problem.
V. Anderson: I thank the minister for his encouraging comments, and I am glad to know that the review is underway. We'll be happy to receive a copy of the review when it's completed and happy to pass on the information to others who will be interested. You mentioned cooperation with other ministries. Is there an interministerial committee that can be brought together to deal with this kind of emergency? I don't know in how many cases it may go on, but is there an ongoing interministerial committee to meet these kinds of emergencies?
Hon. D. Streifel: For the hon. member for Vancouver-Langara, the review I referred to is within my ministry, and I don't know if I'll be producing a public document. I rather doubt it. At this time, I would encourage the member to share his views with me or with my staff in some form of a written critique or commentary on the housing needs as he recognizes them. Maybe he could add to that some costing provisions and what the cost would provide and what it would not. We would certainly carry that forward when we look at the ideas.
The other answer is yes, there is an interministerial committee. My ADM Chris Haynes sits on that, from our ministry. It includes Municipal Affairs and Housing, Health, Children and Families, Women's Equality and Attorney General, providing special needs housing to ensure the most efficient and effective use of provincial resources.
My internal review of our own shelter program will be coming forward to that committee for discussion, to see what else we need to do better. For instance, there's a lack of shelters for women, as I understand it. I think we have to be prepared to address those concerns in our communities.
V. Anderson: I appreciate knowing about that interministerial committee in regard to shelter, when we're talking about that. The emergency shelter, which is in the Marpole area, is in my riding. It has been there for the last two winters and has been greatly appreciated. In all the time that it's been there, there has been not one complaint from the community, as far as I'm aware.
Indeed, the community groups and individuals were over helping get it ready and helping set it up. They have been over to contribute food, clothing and volunteer help, and they have been very much a part of it during the time it was in the community. I want to pass on the appreciation of the people who use that and of the groups who undertook it -- plus the community, for the manner in which it was operating. I appreciate that result.
I know that this is a concern not only in the Vancouver area but, as the minister has indicated, all around the province. I appreciate that and will pass the information on. I plan to attend the DERA meeting tomorrow morning, when this will be discussed. Through the graciousness of the government, I'll be able to be there, so I will plan to attend and will be able to share some of this information with them.
While I'm on my feet, I'd like to comment on a couple of other things that were just discussed, if I might. One is about sign language, and I would hope that programs could be extended and more opportunities could be made available, because there are a significant number of people who have need of that. My daughter works in sign herself, so I have some experience and just recently attended a recent organization of signing-family parents concerned with children learning sign. There is a possibility there. That's been very important for having services available, if the minister is able to give some help in that regard.
With regard to literacy skills, one of the realities we find, even in our constituency office, is that people will phone up with a concern, and we'll ask them to give us a note about the concern so we have something definite from them. Time and time again, they say to us: "I can tell you on the phone, but I can't write it." Or they'll come in and say: "Can you help me write an application form?"
It seems to me that perhaps the minister, through some interministry committee, might encourage some description of those who do not have literacy skills up to a certain level. This might be a standard kind of opportunity for people. Without that, people can't go anywhere. They can't even get the kind of the help they need, or they miss the directions or the deadline for whatever it is. I'm sure it's this ministry that contacts probably more of them than anyone else in that regard, so I would just encourage the minister in doing that. I appreciate his policy.
One other point. We were talking about advocates, and it was mentioned that people come in for help with writing skills. What's the policy of the minister, either of encouraging or discouraging, when people come in for help with writing skills. What's the policy of the minister of either encouraging or discouraging people having an advocate with them at the time they come and meet with the ministry in any of the dealings they have?
Hon. D. Streifel: I thank the member for his words. I'll answer the last question first, because it's quite simple. The client coming in can have an advocate, virtually whoever they need or want. There's no discouragement.
For the member's comments on the Marpole Shelter, I was there this past winter. I walked in and had a look around. My intention, once we can set the House down here, is to get back into the community and, on behalf of the people that elected us, do the work where the real work goes on: out in the communities. I will be doing a walkabout in the downtown east side and visiting different shelters to see for myself. I'm kind of a snoopy individual. I always think that I have a great idea, and I like to bounce my great ideas off those that are delivering the services on behalf of those that need them to see how they fit together. I bring my ideas from the community and from different areas, and I put them together with those that work in that capacity. Sometimes we come up with some really good ideas. The odd time, as a matter of fact, I find out that my idea wasn't so good, so I go away a bit disappointed and try and fix it later. In fact, the shelter program is a very important aspect of what we do. Sometime we should actually talk about some of the folks that were at the Marpole Shelter this year. There were quite a variety of individuals
[ Page 4613 ]
from all corners. But I'm afraid it would be misunderstood if we spoke about it in too specific terms. I was there, I think, on laundry day this year, and it was kind of fun.
I thank the hon. member. We'll do what we can on the literacy side. We're always looking for ways to improve it.
V. Anderson: I'm very disappointed that he came into our area, within two blocks of my office, and didn't drop in. When he comes next time, we'll have the coffee pot ready for him and be delighted to invite him in, and even go along with him in some of his excursions in the area.
When we get to the comment on the housing, I would comment that Vancouver city has probably done more in developing low-cost housing units than almost any place in the country, by providing land and encouraging people to do this. We have about eight low-cost housing co-ops in our community, between where the shelter is
I'd like to thank the minister for his comments in that area at the moment, and we'll keep in touch about what happens in the downtown area and report back to him.
Hon. D. Streifel: I have no interest in prolonging our discussions, but I think that when we're making progress collegially and socially, we should actually extend some of these discussions to join the member in recognizing the good work that the city of Vancouver has done and is doing. We know that. I'm aware of it personally, as well as through the ministry. But we do need to do more.
[3:30]
One of the ways that I guess we can assist individuals in achieving good, affordable housing is through the co-op housing program. This ministry and this minister undertook an initiative last year. We will supply 50 percent or up to a maximum of $850 for membership share costs for income assistance clients in order to facilitate housing in co-op units. This is a modest amount that we undertook to spend, but in fact, for those that benefit from that, it's of tremendous benefit to have that kind of stable housing. Those are the kinds of initiatives that I have a keen interest in, in a cooperative way with the other ministries that are involved in this. So we can see how far we can expand this. The member spoke of the use of public lands. Well, I think it should be in some way mandatory that public lands that are freed up for development contain an aspect of social housing.The member is well aware -- maybe -- that the Marpole Shelter was well received in his community. Unfortunately, in a number of the communities we live in, the shelters aren't well received at all. NIMBY rears up and starts to bite folks, and I think that's extremely unfair. It's a hurdle. Whether we want to supply short-term shelter facilities, whether we want to get into co-op housing initiatives, or whatever kind of social housing project is discussed, along comes NIMBY and takes a piece out of our backside. That's one of the emotions -- and I suppose it's not much more than an emotion -- that we should all join together in fighting in our communities and discouraging at all costs. I think it's not inappropriate to have provisions that fit within a community structure, but certainly, for the sake of denial, it's just plain not fair to those folks who need help and assistance.
I'll like to take this opportunity
V. Anderson: Since we're following up on that, I'll take a few minutes, too. I had the opportunity to visit the community skill centre on Main Street recently, in the Attorney General's riding, and saw the fine work that they are doing. They're excited, and you see excitement in the teachers about what's happening. They have very real stories of how lives are changed and opened up. So it's a wonderful undertaking. The meeting of the blind group that I referred to was in the downtown skill centre. They're doing great work in that regard.
Since the minster likes to be creative and go with new ideas, let me pass on an old one. I think it's time to revive it. That is the inter-city service project, a summer project of university students that began in 1967. During the summer it had 30 to 40 students from all faculties of the university working together downtown. Many of the innovation projects that we now take for granted began during that program. One of the students was Mike Harcourt. He began his community law work as a student in that area. Out of that came the crisis centre and a whole group of other things. That kind of summer program, using students coming down into the community, would be an excellent one to do on interministerial work. Having been in the orientation of that one at the beginning, I'd be delighted to share some information. I think it's a wonderful model, and with very little money it creates both experience for students and an opportunity for revitalization.
Hon. D. Streifel: A very quick response to that: Margaret Mitchell, Darlene Marzari, as well
[ Page 4614 ]
M. Coell: I have a few more questions regarding the downtown east side residents' problems. But just to add to what the minister and the member for Vancouver-Langara are saying, the city of Vancouver does have a very good record, as does the capital region, in developing social housing. I think one of the problems we're facing now is that the federal government has backed out of developing social housing. One of the keys in getting the capital regional districts -- the greater Vancouver regional district and the city of Vancouver -- involved in housing was that it was a three-way partnership. You could also find that municipalities were able to enter into that partnership, making it almost a four-way partnership with the leasing of municipal lands.
So there's a real problem growing in British Columbia, because I don't think any one level of government -- municipal or provincial -- can sustain the amount of money and the amount of organization needed. So if there's anything I think we can agree on in this House, it is the need for a multilevel-government response to the housing crisis.
This particular crisis -- and I'll share my thoughts on what's happening
[H. Giesbrecht in the chair.]
When the member for Vancouver-Langara is at the meeting, I think they need to know that both sides of this House are concerned about the residents in this area, and that both sides want to see some solutions. As I mentioned before with the closures -- some through the will of the owners, and others because the buildings have been left to deteriorate so much that they are not suitable to government standards -- there needs to be a corrective mechanism put in place now that will help the stock of housing, whether it is social housing owned by government or rental housing owned by individuals. I think we need to find solutions for both those categories in order to provide the housing necessary for this area of British Columbia. It's unreasonable to think that this area of Vancouver is going to all of a sudden be filled with $200,000-plus condominiums. There is a desperate need for good rental housing in this area.
What I'm concerned about is that we're prepared for an emergency -- that our offices in this area are prepared for a flood of people who have been evicted with five days' notice.
The area that I want to spend some time talking about with the minister is hardship allowances which aren't in existence anymore.
We're going to find people without a means of shelter because the limited number of shelters in the area are full. There's a waiting list every night at all of the shelters, including the ones that supply alcohol and drug programs. There aren't a whole bunch of open doors for these folks to go to. They're going to be on the street, and I don't think that's acceptable to British Columbians. I don't think it's acceptable to the people who live in Vancouver and in the downtown east side. I would like to spend some time talking about what organization is happening now in the offices in this area, and what potential we have for finding accommodation for a potential emergency that is just waiting to happen.
If the minister could just comment on those points, I would be pleased to hear his answer.
Hon. D. Streifel: Without getting overly confident, I would try to reassure the member that we are prepared to do our share and meet our responsibility in this circumstance.
The member comments that our shelters are at full capacity and have waiting lists. Generally, year over year, we don't run full shelters. We run at between 75 and 88 percent of capacity. Admittedly, that's in the broader scope, not exactly in a neighbourhood-by-neighbourhood area.
M. Coell: Not in the summer.
Hon. D. Streifel: There was a comment: "Not in the summer." Last winter our shelters weren't full in a number of areas, as well, hon. member. I visited a number of them during the winter -- here in Victoria and in other areas -- just to see. In fact, they weren't at full capacity, which was a surprise to me.
On the issue of housing, I'll give my experience that began last year, shortly after coming into this ministry. I went through three or four weeks of criticism -- front-page stories in the Maple Ridge paper complaining about this minister and my refusal to address the housing issue. Nobody seemed to want to accept that I'm not a capital housing ministry -- that I have a responsibility to provide support for folks, in general terms, that are in transition. Gap-filler support is the way this income assistance -- or welfare, as we know it -- was devised and evolved.
We have circumstances where individuals who come to us for support need more than short-term help, and we have addressed that through disabilities benefits, child benefits and things like that. But in this circumstance, the ministry does not lead folks over here and say: "This is where you must live." It wouldn't be acceptable in our communities. And on that side, I won't accept the criticism or the comments that that's what I should do.
In the circumstance in Maple Ridge, it was an abhorrent place to live, and our income assistance clients lived there because there was virtually no other place they could afford to live. Our FAWs and caseworkers don't give referrals to this kind of dwelling, but they certainly brought forward concerns to the appropriate agencies that would be charged with inspecting these buildings -- for instance, Health, municipalities. I questioned then and I question now, why on earth they ignore their responsibility for years, in the face of ongoing complaints, until these structures get in the condition to precipitate a transition to another kind of dwelling.
[3:45]
The building in question in Maple Ridge was a former home, of a sort, under Health, and it was sold to a private individual. He operated on minimal expense, generally with direct-deposit rent for income assistance clients and no upgrades, no plumbing that worked and lousy carpets. When the story broke, we were finally able to get the municipality and Health to live up to their responsibilities and do some inspecting, and the guy cleaned the place up -- kudos to him.[ Page 4615 ]
He said that all along his interest was in having his apartment building as an apartment building, not running it into the ground. We were able to act in conjunction with other ministries, and our staff were able to act with staff of other ministries to effect a change here.
I don't know what kind of attention has been paid in the downtown east side to addressing the ongoing complaints on the quality of housing from the inspection side before it becomes too late. I believe that's a small aspect of what we have to do, in cooperation with other levels of government and other agencies, in order to maintain and secure the housing stock we have.
While we move on and expand our cooperative initiatives and our social housing programs and our low-cost housing programs, this province does participate in 600 to 900 units a year. We used to have participation from the federal government; they are no longer in it. I think I cut the ribbon on about the last one the federal government was involved with in British Columbia just up here across the Johnson Street bridge last year. We would like them back. We would like to see the federal government come in and partner up with us and the municipal government.
I would suggest that the climate in British Columbia right now is just right for multiple-level partnerships, including the business community and the developers. We've pulled off two or three of these accomplishments in Mission -- not around social housing; we're working towards one of those -- around highway interchange, the placement of a railroad station there, which was funded by the municipality, and the building of a new college campus with a high school and a theatre. That was all done with a multiple-level partnership within and without the community.
I would like to see an equal amount of energy focused on the need to address social housing. We'll probably be into a social housing debate -- or a discussion; we're not having much of a debate. I think the discussion is a very healthy one. The unfortunate side is that I fund folks that live there. As a ministry we don't build these developments, so this may be a much stronger and a much more meaningful discussion with Municipal Affairs and Housing.
M. Coell: Two areas. First, I think the minister is correct in that we need to find ways to build social housing and to make sure that it is affordable -- and affordable for people on income assistance, as well. I would make the offer, similar to the member for Vancouver-Langara
V. Anderson: I appreciate the minister's concern and interest, and I look forward to future discussions and future actions with some sense of expectation.
I agree that the minister's role primarily -- not primarily, but first at the moment -- is the paying of shelter costs for persons. What is the basis of arriving at the shelter cost at this present time? What is the formula? What is the base that is used in order to arrive at a reasonable and an adequate and a marketable shelter cost for those who are on support from Human Resources?
Hon. D. Streifel: I'm going to beg the indulgence of the member for a bit. I'm not sure the formula he asked for exists. We'll get back to the member on that not too far in the future. But in general terms, the levels of support in British Columbia are in the mid to higher range if we compare ourselves to other provinces and other jurisdictions. We know that in some instances, the shelter portion is not fully subscribed. Individuals may find shelter for less than that in some areas. That's in just very general terms. Other than that, I guess we'll move on with the discussion around this with the member.
V. Anderson: Just a comment on that, and then we'll come back to it later, because a colleague wants to come in for a moment. To compare the flat rate we pay in B.C
Hon. D. Streifel: My answer about being average or about the mid range still stands, taking into consideration the cost of living.
R. Thorpe: I believe the minister made some comments about us all working together to solve problems. In my particular riding, which I have the pleasure to represent, I would like to just advise the minister and his deputies that in our constituency office, through my assistant Mike Reed, we've been able to develop a very effective working relationship with two people that work in your ministry in Penticton -- namely, Norma Reid and Rob King. In fact, I personally have visited their office a couple of times for meetings, and I've been there on days when funds are being disbursed, etc., to see first hand. So I would like to compliment not only Norma and Rob for their efforts and cooperation with my staff but also the staff that work for them. Overall, with a delicate situation, it's a very good working relationship, and we appreciate that.
But one of the things that
This individual wants to help herself. She receives income assistance, she receives some child care support funds, and she also receives some monthly maintenance from her ex-partner, but unfortunately, by the time it all works out -- the amount she pays for day care and the clawback off the maintenance -- she's ending up in the hole. Is there a standard formula that people are only able to keep $100 out of whatever extra funds they get? Or are there exemptions based on the circumstance of when you have two young children that require day care?
Hon. D. Streifel: In general terms, the way the reporting has happened on maintenance payments is a little bit, I think,
[ Page 4616 ]
unfair to the system and how we treat maintenance payments. In fact, the individual keeps it all. They keep all the maintenance, and if it doesn't reach income assistance levels, we top up. They keep all the maintenance. If it reaches income assistance levels, we top up above the levels by an additional $100. That's how the maintenance is viewed when it's paid. So I'm not quite sure how the individual in question could fall behind what would be available on basic income assistance in these circumstances, unless what is happening is that the individual could be paying more for child care than the subsidy, and this kind of stuff. If that's the circumstance
Interjection.
Hon. D. Streifel: Hon. Chair, I'm going to sit, and the member is going to give me some other stuff. Then I'm probably going to refer the member through to my staff to try and solve the problem.
R. Thorpe: That's in fact exactly the situation. Day care is costing more than the subsidy, and therefore there is a negative position. And then, I'm led to believe, out of the certain amount of money that she receives in maintenance, she's only allowed to keep $100, and therefore it compounds the issue. If the answer is that in a standard reporting procedure certain things are going to take place, then if there are special circumstances they can be addressed in individual situations, instead of one suit to fit all, maybe that's the road we have to go down. Maybe I do have to see staff.
[4:00]
Hon. D. Streifel: I don't want to end the discussion on this, but unfortunately it's very difficult to dissect a case piece by piece. I have in the past, with other members of the Liberal caucus, undertaken to have this referred directly to staff to look at. We sit and discuss aspects of this, and I come up with four or five questions that I can't get answered, like: why are we dealing with regular benefits and not student loans? Is it in our jurisdiction or is it for the Ministry for Children and Families? Does the B.C. family bonus factor into this? There are all these numbers of things.If the member would contact my staff or my ministerial assistant
R. Thorpe: I don't know why the minister would be concerned about ending the conversation on a positive note. I think we should always strive to have positive solutions, and I do appreciate him offering his staff.
The only reason I was asking about this particular case, because cases like this
I would just move along to another area that we're not able to resolve at home that has to do with damages and landlords coming in to see us. There are a few things I want to say before I get into my questions in this area. As I've heard about in Vancouver and parts of Victoria, people in Penticton do help people every day. That's just the way we live our lives in the Okanagan.
So this is not about big landlords taking advantage of poor or disadvantaged people. This is about people that want to be treated fairly. They're not profiteering. But the systems do not appear to be acting in fairness. What I'd like to do is ask a couple of questions. As I understand it, complaints and requests for payment all flow through a Vancouver office. I just wonder if the level of complaints is increasing with respect to damages from income assistance cases on rented properties.
[W. Hartley in the chair.]
Hon. D. Streifel: I commented earlier that I didn't want to cut this conversation off, and I have no interest in that. I have an interest in solving some of these problems -- the ones that we can here. I think before I address the member directly, I'd like to thank him for his comments on the staff in the local office in Penticton -- the ones he deals with. If the member opposite isn't going to send the Hansard clip up, certainly this minister will, because our folks deserve credit for the job they do.
They do a tremendous job on behalf of British Columbians. They do it in a respectful, dignified way, and they're there because they want to be there. They're not just in there to fill in job time. They have this driving need to help people, and they do, within the confines of their employment. They do a great job. I have a fairly good relationship with a number of offices. I thank the member for those comments.
On the other side of the damage stuff, we don't have a sense that there are increasing problems in this area. It surfaces periodically. It's the subject of the odd story now and again -- someone did a good turn and they got burnt. We don't hear the stories of the numbers of folks that live in accommodations for years. They are there on income assistance, and they become virtually part of a family structure, living in somebody else's home, as well.
The Residential Tenancy Act has a dispute resolution mechanism. This is where we would refer landlords and clients to, to solve this problem. In general terms, our security deposits are down in 1996. I don't want to get into future policy, but I've asked my ministry to pay attention to security deposits and how it happens, how we address it and whether or not the current system works -- not only for the client but for the landlord as well. We're doing a bit of looking around in other jurisdictions to see how it's handled in other parts of the country and in other parts of the world, just to see if we can do it better here. We'll be throwing that into the mix when I sit there, coming up with these brilliant ideas for my staff to work on.
R. Thorpe: Sometimes it's better to be a steady singles-hitter than to go for home runs. But as long as you're in the game every day, that's the important part. With respect to damages, etc., I think you're fairly accurate
One of the things that has come to my attention
[ Page 4617 ]
in your ministry any way of maintaining a tracking of some clientele that have a less than admirable performance record in this area?
Hon. D. Streifel: I thank the member for this line of questioning. We have recognized that there is difficulty from time to time around the security deposit issue. We don't track a client per se and alert a landlord that this individual may or may not be a bad actor. But certainly we're aware of the number of security deposits that are allocated for each individual. If there's a problem which we've recognized in the past, individuals would, in general terms, only be entitled to one security deposit; after that they're recoverable by the ministry. This is an attempt to control some costs and to recognize that somebody renting premises has a responsibility. They have a responsibility to the landlord by law under the Residential Tenancy Act. The ministry is not interested in aiding and abetting any other relationship. We've paid attention to our security deposits. We recognize fully that the vast majority of our clients are good tenants in difficult circumstances. Where the problems have arisen, we've attempted to address it through the security deposit measures that we've undertaken.
R. Thorpe: Just a quick follow-up on the portion recoverable from people that have a less than respectful manner to other people's property. Do you have any documentation to suggest how successful you've been at recovering from people that have been habitual in their destruction of other people's property?
Hon. D. Streifel: August 1 this year is when we begin our security deposit initiative, so for estimates next year we will have hard numbers. We have recognized some of the concerns that the member has brought forward, and we have taken action so that the changes come in August 1. To read the note here: "We will continue to take assignments from landlords to recover security deposits funds directly. Beginning August 1, security deposits will be issued on a repayable basis. Recovery will begin when a second deposit is issued."
R. Thorpe: With respect to individuals skipping out, it has been suggested to me that one of the ways that we all -- taxpayers, government, landlords -- could be more cost-effective, much more efficient and reduce red tape and bureaucracy is to have direct payments. What percentage of the rent that is paid by the province for people in these difficult situations is on a direct-payment basis?
Hon. D. Streifel: That's an interesting thought from the member. I'm not sure how it reduces admin and tracking and all those kinds of costs. In fact we do administer, on behalf of a small number of our clients, a direct-payment structure, but in general terms, I think it would be quite offensive to most British Columbians to single out individuals because they have come to us for help. They would need help for a short period or an extended period of time, and because they are requesting that help, we take over the management of the limited resources that they are issued. This ministry is not considering that, nor, I think, would any rational-thinking government ever consider getting into that kind of Big Brotherish attitude. We do have clients that come to us that have difficulty managing, and we direct-deposit their rent for them. There are societies out there that help manage payments for our clients, as well, on an as-needs and volunteer basis and sometimes on a recommended basis. I think that's the system that works best for us, and that's what we would like to stay under.
R. Thorpe: Perhaps I could have been clearer in asking my question. My intent and my focus here has been with people who have been habitual in their difficulties, not the people that find themselves generally in short-term difficulties, who certainly do not want Big Brother. I am very encouraged by this minister's comments on Big Brother and the involvement of government in people's lives. My focus here -- let me be very clear -- is on people who have
[4:15]
Hon. D. Streifel: To go back to an answer I gave four or five questions ago: we don't track individuals as tenants by performance. Our tracking system per se would be the deposit system. That's why we have undertaken the initiative that as of August 1, security deposits will be repayable to the ministry. If a second deposit is required, a first deposit becomes repayable; if a third one is, the rate of repayment increases. So we're addressing it in that manner. After August 1, I would suggest to the member for Okanagan-Penticton that the member for Vancouver-Langara will come up and say: "This isn't fair; it's a burden on the poor." So I'm presupposing what's going to be said over there. That's in fact what I'll be faced with.We've recognized that there's a problem. There's a financial problem with security deposits, as well, in some areas, so we've taken some action. That's our method and manner of tracking -- tracking is too strong a word -- or dealing with this circumstance.
R. Thorpe: I, too, know that the member for Vancouver-Langara is very, very responsible in discharging his responsibility. And I take guidance from him on issues from time to time, as I know the minister does. Perhaps if the minister listened a little bit better, some of his great ideas would become excellent ideas with the inputs from the member for Vancouver-Langara.
I just want to leave the thought: if the word's not "tracking," I don't know what it is. After August 1 -- and I wish you well with the introduction of your new policies
That's all I had. These were just the two areas I had from home. I just wanted to make sure you knew that they are concerns, and I will look forward to talking to your ministerial assistant on that one particular issue. Thank you very much.
B. McKinnon: I think the minister covered this subject a little bit when I wasn't able to be here, and I hope he will bear
[ Page 4618 ]
with me and indulge me in asking a couple of questions to do with Surrey. It's to do with the men's recovery home, Cornerstone Manor. I happened to attend an open house at Cornerstone and had the opportunity to talk to a number of the men that use that home for recovery from drugs or abuse, or whatever. I listened to man after man get up and speak about his alcoholism, his drug addiction and how he lived a life of violence and spent time in jail. They also spoke about being violent and abusing women. They would speak about coming to this men's recovery home and how these people who work there helped them to recover and adjust their lives and get their lives back together again. The people there worked long hours.
My first question to the minister about this recovery home is: how much money does the ministry give these homes -- well, I'll say this particular home in general, just to break it down -- to survive and help these men and pay the people that work there?
Hon. D. Streifel: Before I give my response, I'm going to ask the member's forgiveness for our first introduction to each other in these estimates the other day. My comments about casework
In general terms, we don't force anybody to reside in a home. We don't require anybody to go some place. It's an individual choice, whether it be Cornerstone or any of the other recovery homes. In that respect, I guess the clients would go there with their income assistance cheques, rent their space and participate in the programs. I'll ask the question of whether or not we fund them over and above in direct terms, and I'll get that answer as soon as I can for the hon. member. But that's how the system works in British Columbia in these circumstances.
B. McKinnon: I understand that part of it. I think my question was: how much money goes to the recovery home, say, to pay the people that work there and do the jobs? I think that was the main question.
Hon. D. Streifel: For the information of the member, my ministry doesn't directly fund any of the drug and alcohol centres. They're under Children and Families. The only moneys that would flow to this facility, or any, would be through the fees that are paid by the clients who are on income assistance or through a per diem structure of support. The facilities themselves are funded through Children and Families.
B. McKinnon: That's strange. To me it's strange that they would be funded through Children and Families. Oh, and I do accept your apologies. Thank you.
Then back to these gentlemen. Having me listen to these men talk about their lives and what they were going through was to try and show me what type of life they led and how they were now trying to make a recovery. I know that each of these men was paying, I think, approximately $360 for room and board there out of the cheque that they got. I would imagine that's from your ministry. From that cheque, they had $60 left. That's since your ministry has taken away, I think, $96 per person because they are considered employable.
My biggest concern, as I listened to these gentlemen, was that I didn't know how the ministry could even consider these men employable with the conditions they had and what they were going through, and how anybody could actually live on $60 a month. So my question, I guess, is: how does anyone expect a full-grown man to live on $60 a month and actually survive?
Hon. D. Streifel: The member's reference is to the unemployable category and the reclassification to disabled, employable, temporarily excused and special needs. We haven't finished the reclassification. We're in a three-month transition. I can't directly answer how many of these folks have been reclassified or how many would or wouldn't qualify for the special needs. I think there are something like 5,000 or better now that have been reclassified from unemployable to special needs, and we haven't got a final number yet. It's growing. It could be quite dramatic.
In this instance Cornerstone charges a fee, and the individuals would pay that out of their income assistance. It's a relationship they have with the Cornerstone group. That's just the relationship we have. As I understand it, we don't have an accreditation process for drug and alcohol treatment centres in British Columbia. I don't think we have licensing under these circumstances. If we did, it would be Children and Families. It used to be under Health. When the Children and Families ministry was formed, this aspect of that came to the Children and Families ministry from Health.
B. McKinnon: Would you say that most of the questions I'm asking you as the minister should be going to Children and Families rather than to yourself?
Hon. D. Streifel: Not really
B. McKinnon: Okay. I'll try and see how many I can ask on this.
I think what bothers me about the amount of money these men are receiving to live on and even pay for their rehabilitation is that many of these men have cost the ministry or the government in some way or another millions and millions of dollars, either in jail, as drug abusers, healthwise -- you know. I think the cost is far greater to us if they aren't able to have the confidence to continue attending these places. I think they would soon find out that they cannot live on $60 a month. So they may go back to the life that they led -- stealing or whatever that may be. We may have them again, put them back in jail; that's costing us far more money.
So I guess what I'm trying to say to the minister is that taking that money
Hon. D. Streifel: The member's reference is to the reclassification of unemployable that is in process now. These individuals that the member refers to
For the member's information, this discussion around individuals that are in residential treatment programs
[ Page 4619 ]
recognized very early that we may have a problem there. I asked my staff to devise a strategy to deal with this, because I have no interest at all in interrupting a recovery process for an individual. They're in transition in their lives; I recognize that. I recognize that an individual may in fact be two, three or four months into a five-, six- or seven-month residential program. I've asked my staff to be prepared to address those circumstances as they come up. We will be doing that, because I don't want to have that negative impact of ejecting somebody from one of these programs. So just on that line, that's what we are going to do.
Now, I will be assessing the overall impact of the change of unemployable to disabled, to temporarily excused, to employable and to special needs. When we approach the end of the month, we'll know more what we have to deal with -- just to let the member know that I am aware of this and I'm aware of the circumstance. In general circumstances, we have 82 of these facilities in British Columbia, with about 1,000 individuals in them. They're not all our clients. But we're prepared to work on behalf of our clients to ensure that the recovery is there.
For the member's clarification on where the questions should come, if it's income support questions, they should come to me. If they're questions around the centres themselves, the facilities, how they get there, the physical aspect of it, the administration of them and all that, it would go over to Children and Families. I deal with the residents, with the clients and the money they have to rent space there.
It is a rental of space. The Cornerstone, in this instance, charges the fee; they set the fee. So they attach the amount of money that the individual has. I think the member's information was $360 or $340, whatever the case may be. That would leave the
[4:30]
B. McKinnon: If I understand you correctly, you're going to be sort of tracking this -- the people that you take off the unemployable and put them on the employable sort of thing. You're going to be tracking this to see if this is actually working and that they're actually getting jobs or that they're notHon. D. Streifel: I'll try to be clearer.
B. McKinnon: Thank you.
What sort of criteria do these men or do you go to, to decide on? What are the criteria you use to decide whether a person is going to go from the unemployable status to the employable status?
Hon. D. Streifel: The minister's paying attention to this doesn't necessarily mean I'm going to be following folks to see if they became employed. It's just that I want to know that our overall policy hasn't had an adverse impact on the lives of certain individuals in recovery programs, in that kind of circumstance. But I did go through this yesterday, on the special needs category. I'll repeat it for the information of the member; she wasn't here yesterday. Then if the member needs further information on it, we can supply that clarification.
The criteria for special needs if you're under 65
B. McKinnon: I thank you for your time. Those were my questions that I wished to ask.
M. Coell: I'd like to follow up on one point that was just made. Possibly, if there was an added category -- that if someone was in alcohol or drug treatment for a period of time, they would fit that category -- you may solve that problem and also encourage people to seek treatment, because there would be an added benefit to getting into a program.
Hon. D. Streifel: I thank the member for his suggestion. I know and we know that we tread out of bounds in these estimates when we talk about future policy. But I'll accept the member's comments. They're not dissimilar to my own comments that I've had with my staff. The member may well be aware of some of the hurdles, given his past employment and where and how he's worked with individuals in his life.
Part of the problems we face is that not all of these facilities are really very credible. Some are; some aren't. Some of them have real serious problems in how they treat the individuals who are there. They're not much more than flophouses, quite frankly.
If we were to construct a policy like that, I think it could only really happen in cooperation and coordination with other ministries, where we get into a process in the province where they are accredited facilities -- they deliver on behalf of the individuals; they don't just take from the individuals. For the member's information, I'm familiar with a number of these that are takers, not givers. I would like to, on one side, protect the public purse and ensure that we're getting value for what we spend on behalf of these individuals and then, on the other side, not participate in a cruel hoax on our clients who would come forward for help.
So I would look for help, as I always am, from members opposite and my colleagues in other ministries to get on with an accreditation process and get on with doing a job on behalf of those who need it.
M. Coell: Briefly, I agree very much with what the minister said -- that there would need to be an accreditation for facilities that people were entering into.
J. van Dongen: I would just like to pick up on the discussion that the minister had with regard to security deposits in rental situations. I didn't hear it all, so I may repeat some of it. I'm interested, first of all, in
Hon. D. Streifel: This is an estimate. It is estimated that $19.5 million in security deposits will be issued for '97-98; it's a large amount of money.
J. van Dongen: I appreciate that information. The next question is: how many damage deposits would that represent -- how many clients?
[ Page 4620 ]
Hon. D. Streifel: I have a number for 1996 that may bring this into relative discussion. Nearly 86,000 security deposits were issued in 1996. This is down 16,000 from 1995, due to a declining caseload.
J. van Dongen: Does the minister have any information as to what percentage of those damage deposits are claimed by landlords -- are actually claimed? I'm just looking for a ballpark number -- maybe for the past year, for example
Hon. D. Streifel: The member's question was: what's the percentage? I think I will offer to the member that we'll compile the numbers and try to get them for him in two formats. If we can cut the percentage, we will; otherwise, we'll get the dollar figures for the member on what was paid out in damage to landlords. We'll get that back for the member as quickly as possible.
J. van Dongen: I guess another way to look at it is -- and maybe the minister could consider this in the information he provides
Hon. D. Streifel: Well, we'll try and put that all in the package. I'm not trying to avoid these questions, but the numbers are somewhat fluid, I would think, depending upon which months and which years and what we view as
J. van Dongen: I appreciate that. I'm very interested and supportive, certainly in general terms, of the program that's being talked about for August 1. In looking at that, I just want to ask: is there
Hon. D. Streifel: The dispute would be lodged with the residential tenancy branch, not with the ministry, and that's where
J. van Dongen: I'm happy to hear that the minister is setting a good example.
So the ministry itself has no involvement in that process through the residential tenancy branch? It was my understanding from discussions with landlords that there was some involvement by the ministry in the process. Maybe the minister could clarify that for me. Does the ministry, for example, act on behalf of the client in that residential tenancy process?
Hon. D. Streifel: For the information of the member, if the landlord has a claim, it would be presented to the financial services division in Vancouver. If the ministry or the financial services division or the landlord disputes the value or the validity of that claim, then the residential tenancy would resolve that when the claim progresses to a dispute.
J. van Dongen: Just to clarify -- and I don't want to belabour the details of this
Hon. D. Streifel: That's essentially correct. The landlord would present the evidence: here are the receipts, here's the damage, here are the pictures, here's a hunk of hair I tore out, and all this other kind of stuff. If there's no dispute, then the deposit is retained. If either party disagrees, then it would go forward to the adjudication process under residential tenancy.
J. van Dongen: So in terms of the changes on August 1, then, there would probably be a couple of weeks -- I assume that it's a couple of weeks -- for the landlord to make his claim and go through a process. But whenever that issue is resolved of the first -- shall we say -- damage deposit, if that damage deposit is retained by the landlord, then the second damage deposit, which at that point, presumably, the ministry has already advanced
[4:45]
Hon. D. Streifel: After August 1, we will be taking repayment agreements for those security deposits -- recovering them all from the client.J. van Dongen: As I said, I'm pleased to see that there's an initiative taking place in this area. I would ask the minister to forward me any information in terms of the details. I'm very interested in the program. If he could just forward that to my office, it would certainly be appreciated.
I think that we in government have a duty in a general sense to promote self-reliance and responsibility through programs such as social assistance. So I'm pleased that things are happening in this area.
I want to ask the minister a couple of questions in terms of staffing levels. I'll ask the question specifically about Abbotsford, because I don't have a good sense of whether staffing levels are changing or are basically stabilized in terms of the shift between the two ministries. But I do hear complaints. We do sometimes have difficulty getting through to the Abbotsford office, even with phone calls, to the point where I even went down to the office myself one time when we couldn't get through.
I'm wondering if the minister could comment on staffing levels, particularly from the perspective of where there is a growing population, which certainly is the case in Abbotsford.
M. Coell: While the minister is getting some advice, he might like a five-minute break to stretch his legs. And we can do the same on this side.
The Chair: With the agreement of the committee, we'll take a five-minute recess.
The committee recessed from 4:48 p.m. until 4:56 p.m.
[W. Hartley in the chair.]
[ Page 4621 ]
Hon. D. Streifel: The question was on workloads related to the Abbotsford office. We have, I think I said yesterday, some 2,272 FTEs in the ministry and a thousand or so financial assistance workers. They're distributed around the province, based, really, on the job requirements, the determination of the number of open cases and the number of closed cases. I would expect that the level of difficulty of the case -- for instance, disabled versus just a regular file or case, and that kind of stuff -- would determine the placement of FTEs in a particular office, based on those office needs.
I guess I could draw the attention of the member to offices in neighbouring communities, two blocks away from each other. They may have similar caseload numbers, but they may have vastly different FTE equivalencies based on the kinds of cases handled there. So it's kind of a loose assessment
J. van Dongen: I appreciate the minister's answer. I'm sure that the composition of every community is different. But one of the things we're finding, first of all, is that caseloads are increasing. There are people moving out. People that used to move out from Vancouver moved out to Surrey, and now they're moving out further. I'm wondering if the minister could verify trends in caseloads in Abbotsford for me. That would be the first question. Can he verify what the trends are in the level of activity?
[5:00]
Hon. D. Streifel: For the member's information -- he might be moderately surprised at this; I am not, because overall our caseload is dropping -- the region that the member's office is located in had nearly an 8 percent decline in caseload last year.J. van Dongen: The minister talked about open cases and closed cases. Do you find that FAWs would handle the same number of open cases and the same number of
Hon. D. Streifel: The criteria for the placement of caseloads with workers are reviewed every six months to ensure that there is fairness of application -- that one worker isn't overburdened more than another in certain circumstances. There are methods within
J. van Dongen: Does the ministry have some sort of benchmark figures they would look for across the province? Is there sort of a standard target that the ministry uses as a benchmark in terms of what an FAW is expected to handle? Or is it viewed that 20 cases in Nelson are not the same as 20 cases in Abbotsford?
Hon. D. Streifel: The question is very difficult to answer. Part of the mandate of the ministry is service delivery, as well. So if we look at some of the rural offices
J. van Dongen: I appreciate the minister's answer, and it's probably to be expected that there's some difference between rural and urban offices. If we were to compare an office, say, in the city of Abbotsford with an office in Coquitlam, for example, would the expectations be fairly similar in terms of what staff could reasonably handle?
Hon. D. Streifel: Endeavouring to answer as directly as possible for the member, it's probably not possible to compare Abbotsford with Coquitlam, or any community with any other community, based on example. There are some circumstances where our workers are doing all maintenance, for instance, or our intake processes may change from area to area, or we may be in a process where only a certain kind of case is assigned to a worker. That would skew any kind of base benchmark. That would also be problematic in determining how, for instance, Mission would compare with Chilliwack, or Hope with Princeton, or something like that.
Suffice it to say, the commonality in all the cases is that the folks that come to us need help, and our workers are there to help them. I know from my involvement with this ministry that where we address circumstances that are on the ground within communities that have a large urban area, we have a broad, deep problem. Where you have a smaller urban area or a small community, you have a smaller problem that's just as deep.
That was, you know, the rationale
J. van Dongen: I think what I'm understanding from the minister is that the ministry tends to track the history and performance in an office unit against its own history, basically, as opposed to other offices.
I just want to ask one more question in this area. Would the computer programs and the equipment and facilities generally be similar in all of the lower mainland offices? Are they working with common equipment and common programs?
Hon. D. Streifel: The equipment is common across the province, as I understand it.
But in order to help flesh out the other answers to caseload and how it's structured, we have undertaken new or different forms of service delivery in some areas. We spoke in
[ Page 4622 ]
quite some detail yesterday on electronic funds transfer. That reduces some of the admin side, the ongoing cheque-writing that can happen. We have specialized intake officers that really do specialize in certain forms of intake, or criteria of intake, to smooth out the process and ensure that in that smoothing of the administration of intake, in fact, those individuals that have come to us that are in need get their needs served. That's the purpose of the ministry.
J. van Dongen: I just want to pick up on an answer the minister gave a few questions back, and that was on the 8 percent reduction in the caseload in Abbotsford. I just want to
Interjection.
J. van Dongen: In the overall region? Okay.
Well, I wonder if the minister could just clarify what that number represents. Is it overall caseload, and if so, are there different categories of cases within that caseload?
Hon. D. Streifel: Yes, the answer is that that was nearly an 8 percent -- I think it was a 7.8 percent -- drop in the overall caseload in the north Fraser region. That would be all the cases. So there are many categories within the overall caseload.
J. van Dongen: I would be interested in whether the minister would be able to provide some of those statistics in terms of a year-to-year comparison for the region. Are those statistics also compiled on an office-by-office basis?
Hon. D. Streifel: We will have available, within a very short time, the numbers for the region. We will supply those to the member. If the member would offer us a bit of indulgence at the same time, we would supply the numbers for the offices around Abbotsford. It would take us a little bit longer to put it together -- a few days -- but we'll get that information over for the hon. member.
J. van Dongen: I really appreciate the offer of the minister, and certainly I'm quite happy to have the minister take whatever time is necessary. I'm not in any rush for it. It would be useful to look at.
I guess the whole motivation for my questions is that it appears that the situation has worsened in the past year, and I'm asking the minister if he could explain why that might appear to be the case. I know that there are now lineups forming fairly early in the morning for people with new applications. A lineup may start at 7:30 for people to enter the office at 8:30, because there appear to be quotas as to how many new applications can be seen that day. So there are people who may arrive at 9 o'clock and who would not be able to see anybody that day. I know of cases where people have gone back three times, three days in a row. So if the caseload is down, what is the reason for apparently more stress on staff and an inability for people to access an FAW?
Hon. D. Streifel: I thank the hon. member for his concern on this issue. He should be aware that I share some of the concerns myself, as the MLA across the river. I receive a tremendous amount of input from residents of Abbotsford, Matsqui and the Chilliwack side when help is needed to access government services.
Interjection.
Hon. D. Streifel: Well, you know, quid pro quo.
So in this instance the member has brought forward some concerns. If he would give us the opportunity, we would refer it through to the regional manager, while we're looking at the numbers and what not and the style of service delivery, to see if the regional manager would require that some changes be made.
I do know that some offices work on a first come, first served basis for appointments, and there are only so many that can be served in a day. I know some offices work on an appointment schedule where appointments are made, and within the next few days or so the appointments are kept. So I'm not quite sure, quite frankly, what the process is in all of the Abbotsford offices. I think there are two or three offices left in the Abbotsford area.
In that circumstance, we'll pass that information on to the regional manager to have a look-see. I thank the member for his questions and his concern on this issue. We'll pass over the information that we committed to as quickly as possible.
J. van Dongen: I appreciate that offer from the minister again. I have another meeting to go to, so I'm not going to be pursuing this in any more detail.
Just one final comment. I would hope that where it's not a matter of organization but a matter of resources and where there may have been a shift in either staffing or caseload, that be taken into account in terms of assessing this particular region against other regions within the ministry's operations. That would be the one final request I would make. I make that request not only on behalf of clients but also on behalf of staff, who I know generally work very hard and sometimes under stressful conditions. So I appreciate the minister's answers and look forward to further discussions.
[5:15]
F. Gingell: I am sure the minister will remember that I tabled a petition earlier in the session that related to problems in Delta South from the closure of the Delta South Human Resources office. Because we have been geographically attached to Surrey, people from the Ladner-Tsawwassen area have to take three buses. Well, it is three buses wherever you live basically, because you've got to get to the Ladner exchange first. So there's one bus to get to the Ladner exchange, then one to get up to the exchange in North Delta -- which is nowhere near the Human Resources office, which is on the Surrey side -- and then a bus from there. It's an hour's trip. If you don't make one of the connections, it takes an hour and 40 minutes. If you were to miss two of the connections, you could be involved in a two-hour trip. And it's expensive, particularly if you travel during the times when the premium fares are on.The Ladner-South Tsawwassen area is not a high intake area, because we don't have a lot of low-cost housing there. There are still a lot of your clients who live there, but they tend to be more maintenance issues. They really do find it difficult to get all the way out there. There have been some discussions between your staff and my assistant, looking for solutions. One of the solutions we have suggested to them is that the ministry might think about identifying a caseworker as an itinerant officer. There is an office of the Ministry for Children and Families in Ladner. That is still there. I am sure we can find one room for even one day a week. If they knew that it was always going to be Thursday or Wednesday mornings, it
[ Page 4623 ]
would save a lot of people money, who really do find it difficult to get around, and it would improve the service dramatically, I think, at no extra cost to the ministry. So I would like to put that forward as a suggestion.
Hon. D. Streifel: I remember the petition and teasing the member. After scanning the petition page after page after page on into the night looking for the member's signature, I didn't find it. So then I accused the member of actually agreeing with me by default by not signing the petition, but at the same time I recognized the seriousness with which the member brought this issue forward. We face problems all the time as government. This member is very aware of finances and financial obligations, and many of the measures we undertake on an ongoing basis are proffered up as cost-saving measures. The closing of the offices saved us $9 million. One side of the member I know applauds that, but at the same time the compassionate side -- the local MLA side -- says: "Yes, but what about these folks that need help?"
With that, I am going to suggest to the member that we're exploring solutions in every one of these cases, because one of the prime criteria around closing these offices was that we were able to deliver a service to our clients that need it. I take the member's comments very seriously and want to compliment him on coming up with a good idea, and I have just asked my staff to have a look at this. So I thank the hon. member.
F. Gingell: Good. One other solution you might consider
Hon. D. Streifel: Not too many.
F. Gingell: No. Well
One other thought is that you might allow the Ladner-South Delta people to go into Richmond, because I think they can
We've got that as a health issue. When I had a heart attack, I was in Richmond Hospital; when I had to have some orthopedic surgery on my foot, I was in Richmond Hospital. One tended to go in that direction. That's another alternative that perhaps you could consider. I think the best solution would be to borrow some space from Children and Families. There's an office with the Ministry of Attorney General there. You don't need to have a permanent establishment. To have someone there for one day a week would sure help.
Hon. D. Streifel: Just to thank the member for his comments on this issue
M. Coell: We have a little while left this evening. I have a number of reports that have been presented -- I think the minister probably has them -- that wish to canvass
Hon. D. Streifel: Are you asking if I have read them?
M. Coell: I'm sure the minister has read them.
The first one that I would like to deal with is one that was released earlier this week: "Widening The Gap: A Comparison Between the Cost of Daily Living and Income Assistance Rates (B.C. Benefits) in British Columbia." This was produced by the Social Planning and Research Council of B.C. It's an area that I think has been under some discussion for a number of years now -- the rates of income assistance and the philosophy that goes with income assistance for people who are on assistance more permanently. I think the government has addressed that to some extent with the new regulations that are coming out this year. I wonder, firstly: has the minister had an opportunity to review the report, and would he be able to answer any questions on it?
Hon. D. Streifel: I haven't read the report cover to cover; I'll put that out now. But I have reviewed portions of it, and I've had advice from others who have read it cover to cover and assessed the impact. I guess some of the vacancies that are in the report, many aspects of it that aren't fully legitimate
So from that aspect, I can answer some questions on the report. In general terms, I disagree with the report. In the broad context of who we are and what we deliver
In general terms, our focus is somewhat different than the report would suggest. If I remember, the cut of the report was a criticism of only income support levels that are supplied. They don't look at the holistic programs and an overall view of what the needs of a society and a community are as we move to work on these other things. We can get into it a little bit, but it's not my report. Generally, I disagree with the focus and the scope of the report, and I am somewhat disappointed that all sources of income weren't included -- for instance, that the child tax benefit, GST credit and that kind of stuff weren't included as income in the report. That would really skew the numbers.
Then, fully recognizing that income assistance is not a great way of life
M. Coell: One of the areas I'd like to canvass is that of how we develop, for instance, the basic B.C. Benefits of $500. It's broken down into a number of areas: your basic food and shelter and the like. I just wonder how the government goes about deciding what level is adequate for shelter. How would they come up with that number? There has been a change for the maximum single-adult B.C. Benefits this year. It's gone down. I wonder if we could have a look at how the ministry came up with the breakout of what's in that number. What method
[ Page 4624 ]
cheaper in others. But I'd be interested in hearing how the ministry comes up with its basic criteria for the breakdown of that $500.
Hon. D. Streifel: In general terms, we distribute the resources that are available within the capacity of the province. We know, again, that we're within the mid-range, the upper mid-range and the top range in support offered to clients that come to us, as compared to other parts of the country. As I understand it, the SPARC report was based on a market-basket approach to the cost of existence, or what it costs to get along. So given that, we recognize a modest, meagre support in a lot of cases. In other areas we have taken a marvellous step forward, hon. member, in the face of severe cuts from the federal government.
I know people get tired of us talking about the cuts from the federal government, but it's a reality. It has had a huge effect on our capacity to support our social programs. When the province gets cut off and has to go it alone, we look for ways to support those that are most vulnerable and those that are truly in need. Our focus on children, for instance, is a model across the country. Our focus on support for disabled, and how the legislation was formed, is important to discuss, as well. So this is where we've moved forward -- when we supply the short-term aid, in most instances, for individuals that come to us for help.
M. Coell: I guess one of the problems that I don't think is specific to this present government or any of the other governments in Canada is: how do you
[5:30]
I look at what CMHC would say. In most places in Canada you could get a bachelor suite for $325 a month, and in Vancouver the average suite, exactly the same, is $495 a month. Earlier on in the discussion I think we were talking about the problems in the east end of Vancouver. I guess what we're seeing is that those buildings that you can get for $325, where you can only rent by the week, are the ones that people are gravitating to. Whether our policies -- I stress that this is not just in British Columbia, but across Canada -- are ghettoizing people more and more as we go through this time of tight money from governmentAs I say, I'm not casting any blame. I'm interested to see whether there is a way of looking at the problem from a different angle. I think this report points out a problem. I don't think it particularly points out a solution that we can deal with today in British Columbia, because I don't think government is just going to double or triple rates for income assistance. I don't think that's going to happen.
I think we have to start to realize that there is a problem emerging here. In places like Vancouver, for instance, the amount of rent and where a person will have to live are changing dramatically. It has been slowly shifting, I would say, for the last ten to 15 years. I think it's coming to a head, and I think reports like this show us that maybe we have to think of different solutions.
As I say, I don't have all of the solutions, but I do see a problem growing, and I don't disagree with some of the figures they've put out. There are a number of other reports I'd like to look at, as well, that are pointing in the same direction. It's mostly that the two most basic things we need in life are lodging and food, both of which are vastly outstripping the amount of money that government has in order to make sure that every individual has adequate nourishment and a safe place to sleep and to live.
I guess my question to the minister is: is the ministry looking at reports like this with an eye to solutions, or are we just dismissing reports like this because there isn't money in the budget? I realize that when the minister goes to the cabinet table, one of his jobs is to make sure there is adequate money in the budget to fund the programs that are necessary.
That's the reason for bringing this report forward -- to have a discussion on what the ministry sees as an emerging problem and how we could possibly find some solutions, knowing that government probably isn't going to find the solutions in monetary means at this point.
Hon. D. Streifel: The temptation is great for this minister to do just this and duke it out over the past election platform of the Liberal Party -- the proposed changes. I don't want to do that, and what prompts that is this: the member asking the questions now publicly walked away from that platform on "Voice of the Province." The member stood there, as a full and honourable member of the Liberal Party, saying that he didn't really like that. He didn't say it in so many words, but he did say that he is taking his time, over the next 18 months to two years, to develop the policy of the opposition on income assistance.
With that, I believe the questions are sincere and legitimate and the interest is sincere and deep. I hope that through these estimates, up to this juncture at least, I have demonstrated to the members opposite that I'm an interested minister, that I pay attention to what's going on in this ministry and that I'm innovative, and that I'm prepared to take action and require my staff to take action when things happen that I believe are unfair and that most individuals would believe are unfair.
Having said that, I do take seriously the reports and information that come to me on this issue. But I do take serious exception to reports that aren't complete or that conveniently leave out legitimate influences -- in particular, legitimate financial influences on the poor. I also take very seriously the concerns and the needs of our clients as we serve them. As a government, a couple of years ago we began a tremendous, aggressive focus on work as a way of life. We've aided that through an increase in the minimum wage. We've aided that with changes to employment standards that would give recognition of employment protection for what would almost be called classes or groups of individuals that had no protection, which would actually increase the value of that work so it becomes a more legitimate place to go to work. I speak of farmworkers and domestic workers who literally had no protection at all and now do.
I look at the work relationship in the province, and that's somewhat stable compared to the years that I remember. We
[ Page 4625 ]
still have labour disputes in British Columbia. Wherever you have employers and employees, you're going to have labour disputes. We look at the stability of the labour force in British Columbia and the maturity of the labour force. All of this helps us do what we have to do, and that is to support those that truly need the support -- the most vulnerable -- and at the same time find a way to have folks go to work when work is there. We have 500,000 jobs turn over in British Columbia every year. The turnover is large; it's great.
So when we look at reports like SPARC and other reports that come in, we should be able to look at what the needs of our society are in a changing workplace, a changing workworld. Currently there's lots of bantering between parties about the possibility of a shorter workweek. I can remember the reduction in the workweek in the industry that I was in, from 44 hours to 40 hours a week. I can remember my father moving from a 48-hour week to 40 hours. You can go back further to the reduction from 52 hours to 48 to 44. When you take it to the extreme -- when all the arguments roll in about those aspects and about those needs that if we're going to have increased employment to benefit the individuals who need work in this province -- all the arguments against this were the same arguments that were used in the discussion of slavery versus no slavery. If we have to actually pay somebody to be there, we can't afford to do it, and we won't have any jobs. If we reduce from 52 to 48, we can't afford to survive and we won't have any jobs. If we reduce from 48 to 44 to 40 to
If we don't take these bold moves, we won't have a place for workers to go to work. Then what do we do? All of what we focus on, all of what we need to expend our energies on is not just receiving criticism and trying to respond to that criticism, but what the criticism is based on. What are our needs on behalf of our clients, and how do we address them? We have to be prepared as a ministry, and we have to be innovative enough to take our legitimate place in that role in the forming of that kind of a relationship. I am ever so pleased to hear the hon. member have the interest and come forward in all sincerity to move in those directions.
M. Coell: I'd offer this comment. With regard to rent and food and the amount that our society has decided to offer people who are in need, the reason I bring this issue up
You don't have to go very far. I think Seattle and some of the bigger American cities would be a good place to start looking at where income assistance is for food. You go and find a place to sleep, if there's a hostel you can get into or one of the big gyms full of 500 adults sleeping on cots. That's what their social assistance has become, and it started out with the similar problem that we're seeing, which is that the amount doesn't cover
There's a lot of ways to attack that, I think. Social housing, which we talked about earlier, is one way. I just want, from a critic's point of view, to make sure the government is focused on that issue. In some respects, it may be that that issue isn't in your estimates because you haven't got that far along. But as long as I'm the critic for Human Resources, I
So I think it's an important issue, and I agree with the minister that there are many things in this report that lack detail. But reading through it -- and that's why I wanted to discuss it today -- triggered for me a potential problem, one I think we need to look at. I'm pleased to hear the minister's comments. I think that we're probably both sharing some of the same thoughts as to what to do and where to find the answers. They're not easy answers. They're answers that I think are going to take a lot of society and a lot of a non-partisan approach to solve, or else they'll be there years into the future.
With that, I'll leave the minister to either answer or adjourn or whatever he wishes.
The Chair: Minister, noting the time.
Hon. D. Streifel: I have a short answer, actually. I really genuinely appreciate the input from the member on these issues. Now, we're caught in a vise all the time, hon. member, wherever we go. If we look at how the cheque is split, the shelter component and that, what would happen if we added $25 or $30 or $40? History tells us: right into the landlord's pocket without a change to the style of accommodation that's available. So it puts us in a bit of a trap. In the short term, we address the circumstances that we can within the limited resources; in the long term, the requirements are a change in strategy, a change in attitude -- much of what we spoke about earlier today.
I'm aware -- and I'm hoping and I'm fully optimistic -- that we won't drift the way the United States has drifted in its need to
[5:45]
Oh, I forgot -- the hour. I move we rise, report progress and seek leave to sit again.Motion approved.
The committee rose at 5:46 p.m.