(Hansard)
MONDAY, JUNE 23, 1997
Afternoon
Volume 6, Number 3
Part 1
[ Page 4627 ]
The House met at 2:06 p.m.
Prayers.
Hon. P. Priddy: I'm very pleased today to introduce 24 people -- actually, elected people -- from the Federation of Swedish County Councils, who are being hosted by the Ministry for Children and Families and the Ministry of Health on their week-long visit here. The chair of the group is Mr. Ilmar Reepalu, who is the chair of the Public Health Program Committee of the Federation of Swedish County Councils.
Interestingly enough, Sweden has piloted our B.C. Healthy Schools program over the last several years. They are here spending another week in British Columbia. We have in common our desire to make schools in British Columbia, Sweden and, obviously, throughout the world healthy, safe places for children to be. So I would ask people, please, if they would say v�lkommen or welcome to the delegation.
G. Campbell: Hon. Speaker, I know that Members of the Legislative Assembly will have already started hearing the early results of the Wimbledon tennis championship's opening rounds in England today. But, of course, they have been focusing far more on the annual tournament for the valued and prestigious Speaker's Cup. I know that many members of the Legislature look to that cup with great admiration, and hope the legislative team will be able to secure that cup year in and year out.
It will come as no surprise to Members of the Legislative Assembly that the press gallery tried to squeeze around the rules and to recruit one of the most prestigious tennis tournament players in Canada for their team. Naturally, within all of the rules, known as MacMinn's rules, we followed all of the rules, and we were able to offset that real ringer with the recruitment of Alec Macdonald, QC, a former Attorney General of British Columbia.
Needless to say, the weekend's tournament was hard fought. One member of the press gallery received an injury to the head when he was struck by the racquet of one of his team members. It was a simple lob, and they were fighting over it; it was nothing serious. But the knees of another member of the gallery started to go on him as we reached the sixth and seventh hour of play. For all of that, I simply want to point out that once again the legislative team has defeated the press gallery team in an event which
P. Calendino: In the gallery opposite me today is a very well behaved group of 44 grade-4-to-7 students from Aubrey school, l'école bilingue. With them is their teacher, Mrs. Virginia Barteluk, and one of the administrators for Burnaby, Dr. Raya Fransila. They're also accompanied by a couple of generous parents, Mrs. Janine Thompson and Mrs. Cheryl Archibald. Would the House please make all the students and volunteer parents welcome.
J. Dalton: Visiting us today are 50 grade 5 students from Chartwell Elementary in West Vancouver, accompanied by several parents and three teachers: Ms. Kerry Fairburn, Mrs. Fran Jones and Mr. Philip Hurst. Would the House please make them all welcome.
Hon. P. Ramsey: Joining us in the gallery today is Mr. Lee Doney. Mr. Doney chaired an advisory committee of business, labour, educators and government representatives, who recommended to government the establishment of the Industry Training and Apprenticeship Commission. Mr. Doney will be serving as interim chair of that commission after the legislation -- which is going to be introduced by my colleague the Minister of Labour -- is passed later today.
R. Masi: It's my pleasure today to introduce Mr. Surjit Kooner, a longtime colleague, friend and political activist from Surrey. Would the House please make him welcome.
S. Orcherton: Joining us in the gallery today are a number of the members of the executive of the Victoria Inter-Cultural Association. The members should know that over the next ten days in Victoria, just across the way, across the Inner Harbour, Folkfest '97 -- the twenty-fourth -- is occurring, an opportunity for all of us to join and share in the different ethnic and cultural backgrounds that we all come from. The folks that are joining us today have spearheaded this particular project over the last 24 years. With us today in the gallery are Ben Pires, president of the ICA, and joining him: Charlayne Thornton-Joe, Nelson Lah, Miklos Fisi, Daralynn Monita, Gurdeep Sundher, Michael Nation, David Law, Lauren Sprague and Nora Butz, the honorary Folkfest mayor. I'd ask the House to make them welcome and to also partake in the events happening at Folkfest '97.
K. Krueger: It's my privilege today to introduce some very important people, constituents of my colleague from Shuswap, who has graciously allowed me to introduce them, in that they're all related to me -- even though they number six, which is almost the margin of victory in the contest of last May 28. They are: my sister Alana Harper, her husband Brian and my magnificent nieces and nephews Jeremy, Reisha, Becky and Chris. Would the House please make them welcome.
F. Gingell: I only have one person to introduce, but he's very special. It's the son of the member of the Legislature for Shuswap. I would like all members to join me in making Brant Abbott welcome.
S. Hawkins: I have two special guests to introduce to the chamber today. Marion Bremner is a city councillor with the city of Kelowna, and with her is Cathy Williams. Would the House please make them welcome.
Hon. J. MacPhail: I notice in the gallery Lin Rubin, who has been a longtime community member contributing at all levels of government and in political life. I ask the House to make her welcome, please.
[2:15]
INDUSTRY TRAINING AND
APPRENTICESHIP ACT
Hon. J. Cashore: Hon. Speaker, in conjunction with my colleague the Minister of Education, Skills and Training, who
[ Page 4628 ]
shares with me the responsibility for administering this act, I move that Bill 43, the Industry Training and Apprenticeship Act, be introduced and read a first time now.
Motion approved.
Hon. J. Cashore: This act establishes the Industrial Training and Apprenticeship Commission to govern a new industry training and apprenticeship system. The creation of this commission results from the consensus recommendations of the key partners in the system: business, labour, education and training providers, and government.
The commission will be responsible for creating an industry-driven training and apprenticeship system for the twenty-first century which is relevant, accessible and responsive to industry needs and priorities. The act sets out the governance structure, including the mandate and operations of the commission, the appointment of commission members, staffing, financial administration and accountability, and the establishment of advisory committees to assist the commission with its mandate.
The act sets out the powers of the commission to designate trades and occupations which will have established industry training and apprenticeship programs. It also provides the commission with the power to grant credentials to individuals who have successfully completed an industry training or apprenticeship program or who otherwise meet the qualifications established by the commission.
The power to require compulsory certification in a designated trade or occupation rests with the Lieutenant-Governor-in-Council. The act sets out the general provisions, including an independent appeal mechanism, entry and inspection powers, industry assessments, and offences and penalties.
I want to say, hon. Speaker, that I thank the former Minister of Labour and Education, Skills and Training for setting up the process that has led to this very significant event, which is historic in British Columbia -- indeed, it's the most significant apprenticeship legislation in all of North America.
Bill 43 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.
CONSULTATION ON SECTORAL BARGAINING
G. Campbell: On a number of occasions in the past, the NDP has promised not to bring in sectoral bargaining without full consultation with all those involved. We now know that after consulting with building trades supporters, the NDP is planning to impose sectoral bargaining in the construction industry in British Columbia. Once again the people in this province are asking if they can trust anything that this government says.My question is to the Minister of Labour: will you live up to your promise and undertake to carry out full, open public consultations prior to imposing sectoral bargaining on any industry in the province of British Columbia?
Hon. J. Cashore: Once again the opposition leader suffers from a very bad case of poor research -- and also a serious case of premature expectation. [Laughter.]
I would like to call on that hon. member to take his time, wait for the legislation to be introduced, pour himself a glass of milk and sit down with a couple of cookies, and study, learn and then really digest.
G. Campbell: I hadn't thought it would be premature expectation to expect the government to tell the truth, hon. Speaker. But I must admit that after seeing this government perform, it is obviously something that the government doesn't feel people should expect.
The IWA says that sectoral bargaining in the construction industry "sacrifices democracy and the fundamental right of workers to freely choose their bargaining agent." Sectoral bargaining takes away workers' rights to choose. Last year this government's own report, the Kelleher-Ready report, recommended against sectoral bargaining in the construction industry.
Can the minister tell this House when he decided to structure a special sectoral bargaining deal for the NDP supporters in the construction unions?
Hon. J. Cashore: Once again we see this legacy of negativity coming from the opposition, an unwillingness to look at the positive aspects of a government that is diligently working with all the communities in British Columbia to bring forward legislation that will be progressive and far-reaching and bring stability.
G. Campbell: It's a sad thing when the Minister of Labour is in fact killing jobs in the province of British Columbia instead of trying to help build new jobs. This NDP government's policies have taken B.C. from being number one in economic growth per capita in the country to number ten. Small businesses have constantly told this minister, this government and those members on that side of the House that their job-killing taxes and job-killing regulations are driving businesses out of business and jobs out of the province. The Labour Code is consistently pointed to as an obstacle, and the government promised business that they would be included in any discussions with regard to sectoral bargaining for any workers in the province of British Columbia.
My question to the Minister of Labour is: when will this government stop taking away people's rights and stop killing jobs in the job-creating sector of this economy -- small businesses?
Hon. J. Cashore: Well, that again describes the difference between that side of the House and this side of the House, and it explains why they didn't get elected and why we did. We know who they represent: the banks, the corporations. We know the communities of interest they want to represent.
What I think is needed on the part of this Leader of the Opposition is for him to wait until the legislation is introduced, study it and then contribute to a constructive discussion instead of forming his conclusions before he's even seen the legislation.
J. Dalton: Section 3 of the Labour Relations Code provides for the appointment of a committee of special advisers to undertake a continuing review of the code. On June 22, 1994 -- three years ago yesterday -- the then Minister of Labour said the following about that section: "Since the Labour Code provides for a process of review, I think we should use that."
[ Page 4629 ]
To the Minister of Labour: why is he ramming these changes down the throats of British Columbians before workers and business have had any say in those changes?
Hon. J. Cashore: Hon. Speaker, I make no apology for the fact that we talk to all segments of society in British Columbia. We don't just represent the interests that the opposition represents.
Just to take the kind of messaging they gave when we brought in the Labour Code, they said doom and gloom, yet their dire predictions didn't come true. When we brought in the Fair Wage Act, they said the same thing, and their predictions didn't come true -- and also with the minimum wage. So I say to the opposition: take your time, wait until you see the legislation, and then let's have a meaningful debate.
J. Dalton: Another quote on that same infamous day, June 22, 1994, from the then Labour minister: "I think it is important that we put a committee out at some point, as committed to under the code, and that we look at issues that may exist out there, get advice back from people who represent the variety of interests in the field
To the Minister of Labour: in the interest of fair play, will the minister shelve the planned legislation and today strike a committee under that section 3 and conduct a review that all interested parties can contribute to?
Hon. J. Cashore: Let's be very, very clear, hon. Speaker. The hon. member just said "shelve the planned legislation," and he hasn't even seen it.
Interjections.
The Speaker: Order, members.
GOVERNMENT POLICY ON GAMBLING
K. Krueger: The NDP's negligent handling of gambling expansion has been exposed by one of the most respected economists in Canada, Prof. Richard Lipsey of Simon Fraser University. This report shows that the NDP has dramatically overstated the benefits of gambling expansion and has not taken into account the long-term social costs.My question is to the minister responsible for casino promotion: will he now rip up the report by Peter Clark and KPMG and halt the gambling expansion program?
Hon. D. Miller: Mr. Speaker, I'm curious. Does the member advocate that we use this report as the basis for moving forward?
K. Krueger: I'm flattered that the minister asks what I advocate. The opposition advocates that we definitely abandon this gambling expansion plan -- a massive expansion with huge social costs.
Professor Lipsey raises very serious questions regarding the integrity of the KPMG gambling report, which cost double what KPMG projected it would cost. This Lipsey report proves that the NDP's gambling expansion plan is based on distortion and half-truths.
My question is to the Deputy Premier, the minister responsible for gaming in British Columbia. Will he show some leadership, listen to his caucus and to the public and please halt this ill-conceived gambling expansion plan?
Hon. D. Miller: I'm not surprised that the member equivocated in response to my very simple question. Upon my cursory examination of this report, it's premised on VLTs in the province, and we're not doing that; it's premised on a major casino, and we're not doing that; and it's premised on a 1.56 percent tax increase across all taxes in British Columbia. I'm surprised that that opposition would stand up today and suggest that we simply raise taxes. It's not something this government is prepared to do. We think the modest expansion that we've outlined is one that will bring some benefits. We canvassed it thoroughly under the estimates, as the member well knows. I don't think the report is really germane to the issues that we're dealing with.
GOVERNMENT POLICY ON GAMBLING
AND SECURITY AGAINST CRIME
My question is for the Attorney General: which of his statements is true, his statement in the estimates debate that he was monitoring the issue very, very closely, or his statement two months later that reports of gambling crime came as a complete surprise?
[2:30]
Hon. U. Dosanjh: There is no question that my ministry has been monitoring this issue. Hon. Speaker, the gaming audit and investigation office of my ministry has eight special constables attached to it. There is going to be an increase in those special constables in the very near future. There are 20 personnel attached to the Gaming Commission to deal with monitoring and investigations. Two of those are special constables, and there is going to be some increase in those numbers. So in addition to the current two CLEU members that deal with these investigations, there are ten other special constables available now, there will be more in the very near future, and this government is committed to providing additional resources to deal with any modest expansion in gaming.G. Plant: According to Prof. Bill Thompson from the University of Nevada, "Every card cheat in the United States is up in Vancouver taking advantage of the increased limits, and [B.C. doesn't] have the resources or the expertise to deal with it." It is astonishing that the Attorney General is asking for his first briefing on the criminal effects of gambling expansion -- after the expansion has begun.
My question is to the Attorney General: what concrete steps has he taken to prevent an onslaught of gambling-related crime?
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Hon. U. Dosanjh: The United States gambling industry is entirely different from what's envisaged in British Columbia. Those members opposite want to take lessons from the U.S. The situation in the U.S. is entirely different from what we envisage it to be in British Columbia. We're going to have modest expansion in British Columbia, and this government
Interjections.
The Speaker: Order, members, please.
Hon. U. Dosanjh:
G. Plant: Well, there is the statement of commitment, and then there is the question of real action. One of the Attorney General's own detectives from the CLEU says: "
The question is: what action will he take now in order to bring this problem under control?
Hon. U. Dosanjh: The police enforce the law on the ground. I have said time and time again that we will monitor the need for an increase in resources, if that's the case, and that we would be providing those additional resources.
In terms of the briefing, those members opposite do their research from the newspapers, where they can't make head nor tail of the particular article that they read. Let me tell you, hon. Speaker, and let me tell the House that I was referring to the need for a briefing with respect to poker clubs and the like. In August of 1996, on the advice of the Gaming Commission and the law enforcement agencies, we delicensed social clubs, and I had not been informed until a couple of days ago that there were continuing problems with respect to those social clubs.
The Speaker: The bell terminates question period.
Hon. J. Pullinger: I have the honour to present the annual report of the Ministry of Small Business, Tourism and Culture for the year ending March 31, 1996.
Leave granted.
B. Barisoff: On behalf of 340 residents of the Queen Charlottes, I present a petition: "Why Are Roads on the Queen Charlottes in Such Bad Condition?"
J. Kwan: I seek leave to make an introduction.
Leave granted.
J. Kwan: On behalf of the Premier, actually, I am making an introduction today and ask the members to welcome Lord Beaconsfield Elementary School. There are 45 grade 7 students here, and they are accompanied by their teachers Mr. Ernest Ewert, Mr. Les Rowe, Ms. Helga Hamilton and Ms. Donna Cannon. Would the House please make them very 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).
D. Jarvis: We were talking the other day about what I contended was a write-off of software development in the financial statements. Looking at Hansard afterwards, the minister definitely stated that there was no such write-off. As I said before, in the back of my mind I find that I keep hearing people tell me, first of all, that the program which the software stuff was built up for with the agents was of no value whatsoever; it was about a $40 million drain right down a hole. The minister says it wasn't a write-off in the statement of operations. Not being an accountant is, I guess, probably a disadvantage in this sense. I go back to page 23 of the statements, and under "Property and Equipment," where last year the software development was up around $14 million, this year it's down around $4.7 million. In effect, there's about a $9 million difference there.
If you'll just bear with me, Madam Chair
Hon. A. Petter: I'll do my best to try to answer. If I can provide further clarification, I'll either try to do so orally
As I understand it, first of all, there was not a write-off. A write-off implies that the investment produced something that
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was of no value. In this case, the investment produced something of considerable value. In fact, we talked last day about how it will be put to its first application in the very near future. What happened was that a decision was made to expense the costs in relation to the investment to date because of the change that took place in the way in which this was financed -- originally a partnership and now moving to a different financing operation. That expensing is what brought the amount into the fiscal year in the large sum that it did.
In respect of the move to the $4.7 million, this is where I will have to get back to the member, either orally now if he wants a follow-up or in detail if he wants more detail. It is my understanding -- and I think I said this last day -- that the expenditure does not relate to NGIS; it relates to other software development. The NGIS development is not included within that number.
[2:45]
D. Jarvis: If we went back onto the NGIS end of it, the development costs there with IBM are, I have been told, up in the high $70 million and $80 million range. This is quite a concern, because I don't see anything in the statements whatsoever under that section where there are any costs attributed to the NGIS. I wonder if you could clarify what costs are attributed to the NGIS program, which they use -- the specific costs.Hon. A. Petter: Again, I think this answer was given last day, but just to make sure that we pick up where we left off, the specific costs to the end of last year were $37.6 million or $37.7 million. Those were the total costs with respect to NGIS to that point.
D. Jarvis: Going back to what my first question this afternoon was, I've been informed that if an item has to be expensed, then it is in fact a write-off.
Interjection.
D. Jarvis: Okay, I'll go on. What's it considered as, then, if an expense is not a write-off?
Hon. A. Petter: The question of whether an item is capitalized or expensed has to do with the accounting treatment of that particular item. If it's capitalized, as the member knows, an investment is made, and the accounting treatment then attracts the amount that's paid to retire the principal plus interest. If it's expensed, then the actual payments over time to retire the total costs are accounted for in the time in which the expenditures are made. It does not have to do with the question of whether it's written off or not. That question has to do, as I am informed, with whether the investment is one that proves to be productive or not productive. If it turns out that the investment is one that has no value -- it cannot be utilized -- then there will be a write-off, and that will show on the books as such. That will reflect the cost and remove from the books the accumulated cost.
That's not what's happening here. What's happening here is that ICBC is expensing -- that is, accounting for the payments that were made in the years in which they occurred -- rather than capitalizing with respect to an investment that does have value. And that value will be reflected in the fact that this software is going to be put into application as soon as September of this coming year.
D. Jarvis: Going on to another subject now, I refer to it, using a little bit of alliteration, as the six-point Petter program that was brought out in the June 12 press release. I appreciate that the minister said that he didn't want to get into the specific dollars and cents of this program he is proposing for ICBC, because of the fact that it is still being proposed. I want to know a few things about it, such as ICBC's feeling towards it. One would be on the $250 they propose for property damage claims in the future, and if they propose to index it. I was told some time ago about a 1920 insurance manual down in the United States which showed the real cost of a $100 deductible in those days. Today it would reflect somewhere up around the $3,000 mark. So if there's going to be a deductible, I was wondering if they have given any consideration towards indexing it.
Hon. A. Petter: If, as I believe is the case, the member is referring to the material-damage deductible that is proposed in legislation before this House, then I really think the appropriate time to debate and consider that is when the legislation is before us. It's not appropriate for us to be debating the legislation, and that's an issue which speaks directly to the substance of the legislation and the regulations that flow from that legislation.
D. Jarvis: I thought that was exactly what the minister would say. With regard to the change in the program for cancelling the no-fault, I wonder if the minister would be prepared to consider telling the House what their feeling is towards a change of rates with regards to insurance premiums. The freeze will be off as of December of this year, I assume. The purpose of the post-product change was to hold rates from rising. If that's the case, then the product change will sensibly reflect an increase in premiums in the future. However, with the other safety and road initiatives coming in, we would possibly be looking at a saving. Certainly their business plan shows that they feel there's a saving. I'm wondering if the minister is prepared to reflect on that in any way.
Hon. A. Petter: I'd be happy to reflect or even to ruminate a little bit, but I don't want to protract the debate in this House, because we have talked about this to some extent. The government has been very successful in recent years in keeping ICBC premiums from increasing. That has been a major contributor to keeping inflationary pressures down in the province, as indicated in recent Statistics Canada reports. Even in the two years preceding the freeze, the rate increase was only 3.5 percent in 1994 and 1.75 percent in 1995. So the average rate increase over the last four years has been something like 1.33 percent.
We've made it clear that we want to keep rates affordable in the future. We're not prepared to go back to the bad old days when rates went up at a huge rate in excess of growth in the economy. For that reason, the Premier announced the rate freezes and the process of consultation took place, which we discussed at length last day. I'm determined, and so is the government, that we keep rates affordable. That doesn't mean there will not be rate increases. There may well be some rate increases, and as we discussed last day, there may be adjustments within the rate structure to better reflect and apportion the true costs of premiums. But at the end of the day, our commitment to keep rates affordable is one that we stand by.
There are changes within the package of legislation we'll be debating very shortly in this House that affect the product, including net income and material-damage deductibles. And, of course, there is the most aggressive traffic safety initiative ever undertaken in this province, which we believe can effect significant savings. How significant and how much those
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savings contribute to rate stabilization are matters that are debatable. But clearly there will be significant savings, and our intention is to maximize those savings as quickly as possible with the support we have from all stakeholders and to ensure that those savings translate into premiums that do not rise unduly for the motoring public.
D. Jarvis: Could the minister reflect on what the cost of the freeze actually was as far as ICBC goes? What did it cost ICBC, or what is it going to cost?
Hon. A. Petter: I think we discussed this last time. We talked about the fact that had rates gone ahead as previously proposed and had the freeze not taken place, there would have been an increased payment by consumers of some $60 million a year. That $60 million saving is directly attributable to the government's action to prevent rates from increasing in each of the last two years.
D. Jarvis: In the '96 operating plan of ICBC, it said that the road improvement action program is a four-year program and that they hope for a benefit of around $54 million. Does that pretty well hold true with what you're expecting with the proposed
Hon. A. Petter: I'm not quite sure what estimate the member's referring to, but it would not pertain in any event. This package, which has come together after extensive consultation, goes well beyond anything previously contemplated or announced. It does include some product changes, as indicated, that will save the corporation dollars and improve equatability in terms of pay-out. It also includes traffic safety measures that go well beyond anything previously costed or anticipated. For that reason, of course, it's difficult to predict with absolute accuracy what the savings will be. ICBC is now working on implementation plans, and our focus is to maximize those savings and use them to avert rate increases in the coming years.
D. Jarvis: With regards to that same operating plan ICBC has, I want to get into the impaired-driving program a little bit. They were going to speed up the number of impaired-driving roadblocks and things like that -- the CounterAttack program. I think the best overall net savings on CounterAttack has been around $5.5 million, and possibly it's saving $15 million in the way of preventing accidents. I want to ask the minister if he can tell me what figures they have now on impaired driving versus what they had for the year prior to that -- the number of convictions, I guess we would have to say. Percentagewise, is it up or down?
Hon. A. Petter: I can do no better than quote the annual report of last year, which indicated that investment in CounterAttack programs will save the corporation as much as $18 million in insurance costs. That, of course, was based upon a far less ambitious program than the one we're now proceeding with, which will include much more restrictive restrictions on new drivers, which includes a policy of removing licences altogether upon a third conviction. For those reasons, the program is anticipated to increase the savings substantially beyond the ones that are referred to, based on the current already aggressive -- but not as aggressive -- CounterAttack program and the number in the annual report I've referred to.
D. Jarvis: The minister and everyone else in this country knows that drinking-driving is causing a considerable amount of costs and heartache, and all the rest of it. We had that lady at Gibsons in December '95
I just wonder where the government is going to go. We hear of all the methods that are available to stop drinking-driving. We could have mouthpieces mounted on the dashboards, so before an engine will start they have to blow into it. Has the government experimented with that or looked at the experiments they've had down in the United States with regard to situations like that? That would save millions and millions in expenses and heartaches, as I said. Plus the fact that
[3:00]
Hon. A. Petter: The corporation is aware of some of the devices that have been experimented with elsewhere, including in other Canadian jurisdictions. Utilizing some of those devices to, for example, enforce the three-strikes-and-you're-out policy that's reflected in the legislation we're going to debate sooner rather than later, hopefully, is certainly a possibility. But I'd also say that reflected in the legislation -- and I want to give credit to the opposition, in particular to the justice critic for the opposition -- is also opportunity for the superintendent of motor vehicles or for the courts to require remediation and rehabilitation on the part of those who are guilty of impaired driving. That's certainly something which this side supports. But I also know that legislative proposals have been put forward by the official opposition. So when we get to the legislation, we can debate all of this.Let me say to the member that I share, as I think do all members in this House, the revulsion at the rate of deaths that occur on the highways, particularly through drunk-driving, but from other causes as well. Our determination, in any way that is possible, to reduce the rate of accidents and the number of victims is central to this whole traffic safety focus. That is one of the reasons why it is important that we make traffic safety the central initiative that it has become, and that we throw all of our energies and resources into making it work, not only to save costs but, more fundamentally, to save lives.
D. Jarvis: I want to ask the minister
Hon. A. Petter: The member is trying to draw me into a legislative debate again, and this is really something that is in the legislation and that we can debate. There's always a balance between trying to provide a regime that deters, on the one hand, but provides an opportunity for people to rehabilitate themselves on the other. I look forward to the debate concerning whether or not we have struck the right balance in the legislative proposals that are before this House. They correspond to similar proposals in other provinces.
[ Page 4633 ]
At the end of the day, I think we want to make sure that we have created the right amount of disincentives and incentives for people to not drink and drive and, if the problem is one of addiction, to allow people a chance to overcome those addictions -- and if the problem is one of social behaviour, to make sure the incentives are there so their social behaviour will change.
I look forward to that debate. I think we share a common objective. If the member feels we haven't been tough enough, I look forward to his suggestions when we get to the legislation.
D. Jarvis: Through the CounterAttack program, could you tell me how many vehicles last year were actually
Hon. A. Petter: The figures I have available to me -- and if the member wants the fuller numbers that he's asking for, I'd be happy to undertake to obtain those for him -- are from the annual report. Page 11 of the report indicates that more than 20,000 roadside breathalyser tests were administered and that 9,832 people were charged with alcohol-related offenses. I guess the member wants to know how many people were stopped and what kinds of alternative action was taken in the form of people having their licence temporarily suspended. I will try to get that information for him. If I can't provide it during the course of this debate, I'll make sure that we provide it to him in written form as soon as I can.
D. Jarvis: In the report -- I apologize, because I obviously should have read that in there -- the cost was approximately $6 million. Could you tell me if they have a percentage as to the effect of CounterAttack versus the previous year?
Hon. A. Petter: I'll help the member with his previous question, because had I gone back half a sentence in the annual report, it indicates that more than two million vehicles passed through roadside checks in 1996. The information he is now asking, which is comparative information on this specific program
D. Jarvis: Could the minister tell us the cost to the police? I guess it's broken down into RCMP and municipal police. My understanding is that it's mostly in overtime -- that ICBC pays for all of the costs of CounterAttack
Hon. A. Petter: As I understand it, there are two aspects to the CounterAttack program. There's the regular CounterAttack program, which is part of the regular responsibilities of the police, and then there's the enhanced CounterAttack program, which has been given funding assistance through ICBC. With respect to the latter, I will again be happy to get the kind of detailed information that can be more responsive to the member's question. At this time, if he wants the information on the basic CounterAttack, then presumably that information would be available through the Attorney General's ministry.
D. Jarvis: Earlier in the spring ICBC put out a memo to the effect that a 15-member team of officers from the RCMP and other police forces in the province would be formed in the next few months to basically deal with auto theft. It was reported that about $1.5 million was going to be allotted to that program. Could the minister tell me if those moneys have been spent yet? With respect to the police, how advanced is this crackdown on the theft of vehicles?
Hon. A. Petter: I believe the initiative the member is referring to is one that was announced three or four months ago: a proposal from ICBC that an investment of $1.6 million might well be appropriate and beneficial, in terms of an auto-theft initiative. What has happened since then is that that has formed the basis for discussions with the Attorney General ministry and with the police. I understand that there is work ongoing by the Attorney General ministry to see if such a program can now proceed as part of the general approach to community policing.
I note, in response to previous questions, that again the annual report does help the member somewhat in terms of what it says about investment in CounterAttack programs: "In 1996, ICBC spent more than $6 million to enhance drinking-and-driving enforcement." The member wants to have a projection of the coming year, as I understand it. That number will certainly increase. We'll get that number and the differentials for him.
D. Jarvis: Have ICBC and the ministry looked at the aspect of interlock transmissions and whether the cost of that
Hon. A. Petter: Certainly ICBC has been very aware of the Texas experience. The Texas experience has been looked to in developing the proposal to invest some $1.6 million in an auto theft initiative, part of which would go towards enhancing police resources. But another part of that might be well targeted towards providing inducements, incentives, for people to use a variety of devices that would discourage theft. Again, when we get to the legislation, the member will see, I think, that that's provided for, along with disincentives for people to leave their cars unlocked with the keys in the car as an invitation to theft.
D. Jarvis: I want to get into the aspect of fraud and all the rest of it. But another member wants to revisit another scene. I wonder if I could yield to the member for Oak Bay-Gordon Head.
I. Chong: I appreciate my hon. colleague from North Vancouver-Seymour yielding to me. I wasn't going to participate in the debate until I heard some of the responses from the minister regarding the software development costs. I've been reading Hansard to make sure that I follow along closely with the original debate and the questions, and then reading the notes to the financial statements as well.
I am somewhat confused. As the minister is aware, I have some fairly strong technical background in these areas. I'm
[ Page 4634 ]
asking the minister if he could just confirm once again -- and confer with staff on this if necessary -- regarding the software development expenditure that's listed here: some $37.6 million in the financial statements for 1996.
Reading note 2
My confusion is: why would we, in previous years, have capitalized up to $13 million and have it amortized over a period of time? Whereas in one year alone, we would be writing off over $37 million. What kind of software development costs would that comprise? I'm curious if the minister is able to provide perhaps more clarification and understanding as to why there's such a particularly large amount in 1996.
[3:15]
Hon. A. Petter: We did cover this at some length last day. First of all, the $37.6 million represents the cost over two years. The decision to expense it was taken in the last year, and therefore that expense reflects the total cost that previously was being capitalized. But for accounting reasons, it was decided to now move to an expense basis, and the expense was brought onto the books and was therefore based on the two-year expenditure for NGIS. That's why the number is as large as it is, as I understand it and am informed.Secondly, this is a major investment by ICBC in terms of software -- and some associated hardware -- development. But it's principally software development to put the corporation on a new software footing in terms of its ability to operate throughout the province. Therefore, while it represents a very substantial investment, it's an investment that is substantial because of the substantial activities that ICBC undertakes. Therefore a change in software to put ICBC into a better position in respect of its technological delivery is one that is going to be large and, in this case, has been large. But as I said last day, the investment, while it has not proceeded as far as had originally been hoped at the stage that the decision was made to go from this partnership agreement to a contracting situation, has nevertheless provided a very useful basis on which ICBC can now develop further. An application of this software will proceed, as I understand it, initially sometime this September.
I. Chong: As I said earlier, I'm not trying to be repetitious here, and I did check Hansard. Unfortunately, last Wednesday, when we were last here
In the 1995 statements, if it had been capitalized -- and you've now removed it from being capitalized
I would like to ask if the minister could advise, if this is a two-year program -- a two-year cost, two-year contract, two-year partnership or whatever he would like to call it -- where it was included in 1995, so that I can better look at the comparative figures.
Hon. A. Petter: If the member wants a more detailed briefing on this, it might be more productive, given her particular interest in this issue and the expertise that exists on either side of me -- and not in the middle -- on these kinds of accounting issues
Then the decision was taken in response to the development of this contract and to some accounting directives that were received, corresponding with a change in the way this development was proceeding, that it would be better to expense the development of this software. Because it was a longer-term project that involved significant research and development components, the advice was that it was more appropriate to expense it. ICBC acceded to that advice and went back and expensed it, but because it had been capitalized in the previous year and not expensed in the previous year, the expense that took place had to be reflected in the past year's accounts with respect to the costs that have been incurred over two years. That's the reason.
If the member wants a more detailed account and a more sophisticated explanation from the accounting perspective, perhaps the problem is in the transmission. I'm sure it's not in the information I'm receiving or in the member's understanding of these matters. It may be in the transmission, in which case I'd be happy to organize a more specific briefing of this accounting treatment for her benefit.
I. Chong: I appreciate the minister's efforts to try to detail the accounting policy and practices and changes for me. I have to say that the explanation does somewhat clarify it.
I understand that about $8.6 million -- and that was the figure I saw in 1995 -- was suddenly removed in 1996, as it states on page 23 in note 4 of the notes to the financial statements. The $8.6 million was capitalized and therefore removed, and I understand it being listed on the 1996 statement. Ordinarily, I would have expected some prior period of adjustment, but I won't get into that. Again, that's another technical term. However, being that it's $37.6 million being written off and that $8.6 million of that was in 1995, then the difference -- about $29 million -- was, I suppose, the cost that was accumulated in 1996. Can the minister confirm that at this point?
Hon. A. Petter: Yes, I can.
I. Chong: So $29 million was accumulated in this two-year partnership program in year 2. Can the minister advise if is this the extent of this particular software development venture? Will we be seeing amounts in 1997, or has this software development cost now been abandoned?
Hon. A. Petter: As I explained last day, hon. Chair, the answer is yes. This is in terms of a venture, if by venture the
[ Page 4635 ]
member means the partnership arrangement that existed between IBM and ICBC. There is need for further software investment to take this development now and put it to application, and that is now being managed by ICBC directly through contracts involving IBM and others. But the venture -- that is, the partnership arrangement -- was brought to a conclusion. Therefore, if that's what you mean by venture, the answer is yes, understanding that there are additional investments to develop this software further and bring it to the application stage. Initially, as I indicated last day, the expectation is that that will occur in September.
I. Chong: Again, for clarification -- and I won't try to refer to it as a venture, then -- if these development costs are still being incurred for 1997, and if it is anticipated that this will be put in use in September, can the minister advise as to the expected or anticipated cost for 1997? Are we looking at another $29 million, or less? In that particular case, will those costs be capitalized, or will they also be expended on the 1997 statements when those are drafted?
Hon. A. Petter: I'm informed that ICBC has allocated some $7 million to bring the current software to the application stage and have it applied in one initial instance. That investment will take ICBC through to September 30. There will then be an evaluation of that application and a decision will be made on further costing, which will relate to then extending that application to other parts of the province and other applications. So it's $7 million through to September 30, which will bring it to the application stage, and then further costs will be determined according to how quickly ICBC wishes to proceed to extend that application in a broader fashion.
I. Chong: When this venture -- and I now will refer to it as a venture -- was first undertaken two years ago, was there an agreement or a contract as to what the total cost would be? It just seems a fairly large amount -- $37.6 million over a two-year period -- even though it's being expensed. Can the minister advise whether there was an original contract and whether this amount was in line with that?
Hon. A. Petter: The arrangement, as I understand it, was that of a partnership in which fee-for-service was provided for by IBM as one of the partners, as part of this partnership contract arrangement. The estimated total cost at that time was thought to be in the range of about $35 million, I'm informed.
I. Chong: That's a fairly large amount of expenditure for software development. I do appreciate the clarification I've received to date as to the timing and how it has been treated; I may not agree, but
I see, in note 2 on page 22 of the financial report from ICBC, that development costs include preliminary research design, development expenses relating to leading-edge information technology projects and that kind of thing. I appreciate that those all have costs to them, but surely for $29 million in one year and $8 million in another year, with an expected $35 million project cost, there must be something more that the minister can advise as to specifically what we were going to be getting for this $35 million -- now $37 million, soon to be $44 million.
Hon. A. Petter: Of course, this kind of software development is always a difficult area to estimate with respect to trying to tailor software to the specific needs of a particular corporation. But the original hope was to try to move forward on a broad range of applications with respect to the major insurance systems of ICBC.
What has happened through refinement is that now the approach is going to be to proceed one application at a time -- the first application, as I understand it, is in respect of licensing and insurance decals and the like -- and then to build from there on a building basis. But initially, the original work had looked at a much fuller range of comprehensive applications. It became clear that that approach was not going to be the most cost-effective, and therefore the decision was made to proceed forward and start to move the system into delivering in particular application areas. That indeed is where we're at today. The system will start to serve a useful function in terms of its application and licensing area initially, and then it can be built upon from that platform to serve in other applications and eventually throughout the ICBC system.
[3:30]
I. Chong: I thank the minister for that bit of clarification. My concern, of course, is the fact that a project was undertaken to significantly change a number of the operations within ICBC. What I'm hearing -- and the minister can certainly advise if I'm incorrect here -- is that essentially a $35 million undertaking has now been abandoned for breaking it down into segments.I see the minister shaking his head. However, I want to say that I'm concerned, because $37 million in costs is so significant. Would it not have been more advisable or more productive to have done a report -- as the government always does -- breaking these segments down and realizing what the costs are, as opposed to developing $37 million worth of software which essentially
My concern is that
Hon. A. Petter: I'm certainly not an expert in software -- or hardware, for that matter, or computers generally -- but, as I understand it, when you have a major new application of computer technology and software technology to what is, in effect, the largest insurance corporation in North America -- at least, operating in a single jurisdiction -- to upgrade a system that is 23 years old to service a whole range of new functions, you can't just go with shelf or some predetermined set of specifications. One enters into a relationship -- in this case with one of the leading providers of software development in the world -- and tries to establish an approach. In this case, it was referred to as an object-oriented-technology approach to try to bring forward software development that would meet the needs, and applications associated with those needs, of a massive insurance undertaking. As this works, one proceeds forward with a range of different objects in mind, and then as the process unfolds one makes decisions about which applications to proceed with, which to hold back on and how it will be developed.
Far from abandoning or -- to go back to the term used by the member's colleagues some time ago -- writing off this initiative, what was decided instead was that the development to this point has provided a useful basis on which to now proceed. The decision to proceed was
[ Page 4636 ]
to proceed on all fronts at once, let us proceed and bring it to application in areas where it can start to service the corporation, be tested and then be built upon and extended.
That kind of work -- proceeding forward, testing applications, developing the software to meet particular needs -- I believe is not unprecedented. In fact, in an undertaking of this kind, there is a necessary ongoing interaction between a software development company and ICBC. That interaction is indeed what has brought us to the stage we're at. Certainly more has been spent than was originally intended, and obviously I would prefer that that wasn't the case. But on the other hand, what has been spent can now be usefully applied. ICBC has taken over the responsibility of working with IBM and also with others now, through contract, to manage the application of what has been developed for specific uses, starting in September.
I. Chong: Certainly I can appreciate that whenever you're upgrading a 23-year-old system, there will be some significant and major costs involved. However, my concern is the fact that this particular cost of $37 million was perhaps undertaken with a view to upgrading the entire operations, as I understand it, and now we are only going to be dealing with applications in certain segments that can be put in use at this particular time. My concern is that the development that was done may not be useful in the future. We all know how fast technology changes; we know how fast demands are placed on our financial and computer systems. So if in fact we have made this expenditure prematurely, without being able to use some of those applications five years from now when the balance of the applications will come into use, have we lost the benefit of that $37 million? If the minister can assure me that we haven't, I would be most grateful.
Hon. A. Petter: When you're operating with a system of the kind ICBC now has -- which, as I indicated and the member acknowledged, is a quarter of a century in age -- that system is simply not able to meet the demands that ICBC now faces. So ICBC had the challenge of developing a whole new software development system. In the course of that development, strategic decisions had to be made. Do you try to move forward on all fronts, and to what stage? Or at some stage do you then decide to push forward to particular applications, test those out and use those as a basis for then extending the system into other areas? This is a strategic question amongst experts, of which I am not one.
But let me assure the member that the goal of this development -- resulting in applications that will service ICBC, in terms of the myriad of functions it performs -- is unaltered. It's simply a strategic and technological issue as to how best to achieve that goal. The decision was made to now build on the general base of software development that has been achieved at this time, to push forward in specific areas of application, to test that and to use that opportunity of testing those applications to provide information that will then assist in the extension of applications into other areas. The overall goal remains the same. The strategic decision has been made to proceed in this way. I can only assume, and I am informed, that that decision was taken to maximize the cost-effectiveness of the system and to ensure that we do achieve all of the goals this system originally had, but do so in an orderly and cost-effective way.
I. Chong: I would have to agree with the minister that we all want to see things proceed in an orderly and appropriate way. I want to be assured by the minister that in fact these costs which have been incurred -- this $37 million to date -- are not wasted dollars; that they are, I guess, the basis of the technology, the basis of the program development, and will be able to be used in the future.
If I could phrase it another way: are we going to see this kind of cost again? Can the minister advise? If the $37 million was spent to lay the groundwork for the upgrading of the system and to provide ICBC with an ability to move forward in upgrading all of the system, then I'm satisfied with that. But if we are going to be looking at tens and twenties of millions of dollars again, three or four years from now, then I will have to look back at this particular time at these dollars having been a wasted cost. I'm wanting to get from the minister some assurance that we will not see this kind of expenditure in the next five years.
Hon. A. Petter: Let me see if I can give the member the reassurance she's seeking. As I understand it, once the software development had reached a particular point, there was an evaluation done by ICBC. As I indicated the last day, Coopers and Lybrand was brought in. The determination was made that the investment to date was an investment that could now be productively used and best productively used if it was brought to application in particular areas.
The additional investment this year is designed to bring it to application utilizing the existing software, which is therefore not being wasted -- the investment to date. If that application is one that is successful, as we anticipate it will be, then yes, there ought to be additional dollars spent. But those dollars will be on the side of utilizing the same software base and bringing it to application in other areas. In that sense, there will be additional dollars spent not to duplicate what has been spent to date but to build upon it in transforming the software development to date into its application in a number of different uses within ICBC.
I. Chong: I do appreciate the minister's efforts to provide me with some assurance. I was looking to ensure that there was in fact no duplication or potential duplication in the future. As I say, so often we undertake to change, alter or upgrade systems, and as soon as we do, they're obsolete.
In this particular case, when you're talking about $37 million, we would hate to see that it had a useful life of only two years -- which is perhaps one of the reasons why it was highlighted in the financial statement, showing that it was expended as opposed to capitalized.
So there are those concerns -- whether there is usefulness to that. I appreciate the minister's efforts. In the future I will be watching software development costs, and I appreciate that they will only be minimal in the next few years.
I have one last question for the minister before I yield to the member for Richmond-Steveston. Can the minister advise whether at this point there are any other contracts existing with any other firms similar to IBM? If there are, can he advise of the amounts?
Hon. A. Petter: As I understand it, there are no other contracts for software development at this time. There may well be contracts to buy off-the-shelf applications for particular uses.
I just want to say that, like the member, I will be watching very closely, as well, as minister responsible, as this software moves to application and as it's evaluated and considered for further application. I'll certainly be monitoring that and the costs associated with it.
[ Page 4637 ]
F. Gingell: I'm just going to slip in first to ask a couple more questions with respect to the computer systems. I apologize if the question has been asked before. Are you currently millennium-compliant?
Hon. A. Petter: As I understand it, the applications that come from the system we just discussed will, of course, be millennium-compliant. ICBC is, on an in-house basis, reviewing its other systems and determining -- where it's relevant, obviously -- that it also has the capacity for being millennium-compliant. There is an in-house project to ensure that compliance is achieved before the millennium.
F. Gingell: Does ICBC have any inventory of those systems that are not currently millennium-compliant and of what the cost will be to bring them into conformity?
Hon. A. Petter: Not all systems are millennium-compliant, as I just indicated. I am informed that this project to review compliance is not at the point yet where a budget has been determined, but there will be costs associated with bringing systems that are not millennium-compliant to date into millennium-compliance in time for the millennium.
[3:45]
F. Gingell: Could the minister give us assurance that when the evaluation of the current status is complete, with an evaluation of costs, we will be so advised -- with all the numbers?Hon. A. Petter: I'm informed by the corporation that they will be making that known publicly, and obviously I'll make sure the member is informed once that announcement is made.
G. Plant: I want to ask questions on a couple of subjects that are different but that both relate to the Insurance Corporation. Both spring from the public controversy over the past number of months around what has sometimes been euphemistically referred to as product change. It did look at one point as though it were a debate happening in a particular way about the possibility that British Columbia would be faced with some form of or variation on no-fault insurance. It's really the context of that debate that gives rise to my questions.
I want to remind the minister, if I may, of a couple of episodes in the course of what passed for our public discussion of this issue. Both occurred in January of this year. In the first of them, on January 30, on a radio show hosted by Bill Good, Mr. Ken Hardie, whom I understand to be a public relations official for ICBC, was being asked questions about the advertising and the apparent campaigning around proposals to change the way automobile insurance is structured.
There was a discussion about the legal system and the judicial role in the legal system, because apparently that has had some relevance, from Mr. Hardie's perspective, to the question of whether some kind of no-fault insurance proposal should be made. During the course of his remarks on the radio, Mr. Hardie talked about the judges -- the members of the superior courts of British Columbia -- who decide motor vehicle accident claims. He said: "This is the same justice system that makes deals with criminals."
I want to come back to that in a moment, but give the minister a bit more of the same. A week before that, an individual who, as I understand it, is a consultant with the KPMG firm that had authored some reports -- I think his name is Ray Healey -- was also on the same radio program, again discussing this interesting question of what the legal system does in respect of motor vehicle accident claims. He said this:
"When judges are making their decision and determining the sizes of their awards, they know reasonably closely what that amount" -- i.e., lawyers' fees -- "is going to be, and intuitively they have decided that $80,000 is the amount that would satisfy your claim because they know that $20,000 is going to the plaintiff's lawyer, and that is a cost of the system."So it was obvious to all those listening to Mr. Healey that he is apparently a person of some significance, from the point of view of the government, in terms of looking at whether or not there should be some change made to our insurance scheme. It was obvious that Mr. Healey, a highly paid consultant, believes that judges in our province inflate personal injury awards to provide for fees to lawyers, and I'm sure the minister realizes that that is entirely false.
Both of those statements -- the one by Mr. Hardie and the one by Mr. Healey -- did excite some comment and have, over time, excited some comment. In fact, I think the treasurer of the Law Society recently said some things about these statements to a group of newly called lawyers. I must say that at the time I thought both of these statements were thoroughly offensive and, in fact, were a disgrace to the corporation and to its consultant. I thought it was appalling that we should have something like an excuse for a public debate about motor vehicle insurance change in a context where people who are important participants in this debate clearly don't even begin to understand how our legal system works and, furthermore, appear to have some fairly negative views about it.
I must admit that at the time I was a little bit disappointed that I didn't hear anybody from the government step forward and say: "Well, those are the private views of those individuals. I very much regret the fact that they said the things they did, but I want all members of the public to be reassured that these views do not represent the position of the government."
Months have passed, but I suspect that the debate is not forever behind us. As part of the process of going forward with the debate about whether or not our motor vehicle accident system works and can be improved, I wonder if we could have the assurance of the minister -- who is a lawyer himself and is a law professor who has taught law to many hundreds of young British Columbians, as well as being the minister responsible for ICBC -- that these views don't in fact represent the views of the government with respect to the way the legal system works. I apologize for the length of the question, but I want to give the minister the full context.
Hon. A. Petter: I didn't have the opportunity to hear either of the programs. I don't know if the member has more time than I do to do so. I guess I've learned, in respect to comments made by all sorts of people, including members of the opposition, on hotline radio shows in which there are heated exchanges, not to comment on quotes that may or may not be accurate and which may or may not be taken out of context. I haven't seen the transcripts, and it wouldn't really be appropriate for me to comment on those remarks.
What I would say is that I think even the Canadian Bar Association has acknowledged, without getting into the particular elements the member is referring to, that court costs are a contributing concern in terms of automobile insurance costs. Indeed, because of that concern, the Canadian Bar Association recommended that government look at an aggressive alternative dispute resolution process in order to minimize those
[ Page 4638 ]
costs. As a result, within the initiatives we brought forward, there are proposals for mediation and other forms of alternative dispute resolution as a way of trying to minimize some of the costs that parties incur in trying to resolve these matters -- in particular, some of the costs associated with more formal dispute arbitration which, I think, has been an ongoing concern of the bar and of those who have commented on dispute resolution.
I'm very pleased that we've gotten very broad agreement for that. I hope that the bar, who recommended this, will support it. I know that in Washington State, for example, where mediation is used extensively to resolve these matters, a fair bit of that mediation is provided for minimal cost or on a pro bono basis by the bar. Through representatives I have asked the bar here to consider whether, as their contribution to minimizing costs, they might not do the same.
Obviously these are individuals, and they made whatever comments they made. But without seeing the context, I don't want to subscribe to or disassociate myself from them. I think it's much more constructive to say that while I believe the courts play a very important and useful -- indeed essential -- role in our society, I don't think it's inappropriate to suggest, as the Canadian Bar Association has, that we can minimize costs by finding alternative dispute resolution mechanisms that may not require one to have to utilize the more expensive system of the court -- one that distracts the court from other important business -- where those dispute resolution processes protect the rights of litigants, provide them the ultimate opportunity to go to court and provide a useful alternative.
I would also point out to the member -- because I think his introduction needs a little clarification -- that I hope the member doesn't ignore the fact that our current insurance system includes elements of both fault and no-fault. Part 7 benefits do provide universal coverage, regardless of fault. And thank goodness they do, because we do have instances where people get severely injured and are unable to find a party at fault, even though they themselves may have been, I suppose, inadvertent in some way or, in some cases, not inadvertent at all. Yet there are benefits within our current insurance package -- and I understand the bar supports those very strongly too, and I hope the member opposite does -- that do provide some benefits, regardless of fault, as part of the basic insurance package.
G. Plant: Is the minister saying that it's inappropriate for him to have a position with respect to the appropriateness of public statements made by the public relations officer for the Insurance Corporation of British Columbia?
Hon. A. Petter: No. What I'm saying is that all I have is the member's assertion of statements. I have not seen transcripts of those statements; therefore I am not really in a position to either validate the member's concerns or to contradict them. The member has voiced his concerns. As I have indicated, I am someone who has spoken consistently about the value of the courts in resolving disputes. But I also encourage the member to consider that there are sometimes alternative dispute resolution and more formal legal processes which the bar itself has put forward. I prefer to engage in that debate and state my own position rather than try to second-guess what might or might not have been intended, based on third-hand accounts of what people did or did not say in the context of hot-line shows that I did not happen to listen to.
G. Plant: I can assist the minister in one respect. I'm reading from a transcript rather than recalling from memory something that I never heard either, for that matter. But I do have a transcript, and in that respect the issue is not whether there are useful alternatives to the judicial process, as the minister has stated. The issue is whether we will ever have an intellectually honest debate about that. And at the moment, I have to say that those who spoke on behalf of the corporation -- at least throughout the context of this particular program on two occasions and perhaps on others -- were not in fact prepared to have that debate. That's what appears not only from the words I quoted but also from those words taken in their entire context, which may, of course, be the cut and thrust of an open-line radio show.
The minister knows better than I what an unpleasant experience -- or at least intellectually rigorous experience -- that can sometimes be, but occasionally the truth comes out a little bit more forcefully, if occasionally a little bit accidentally, when people are pushed. Rather than deal with the specific remarks, I think I am as keen as the minister is to move forward in this discussion. I will decline the invitation he gave me a moment ago to engage in a debate on the legislative proposals that he has put before the House, but I simply want to have the minister's assurance that as this debate moves forward, he will at least maintain the balanced perspective that he has just expressed in respect of the role of the judiciary throughout the debate. I think it will be a positive step forward in this debate if we acknowledge that the judiciary plays a valid role but, at the same time, that it is perfectly legitimate to look at alternatives.
Hon. A. Petter: I'm more than happy to assure the member -- I thought I already had -- that indeed I am not only prepared to but I encourage a balanced debate. We all despair about various participants in the debate over the last year who may not have been fully balanced, but I take tremendous pride in the fact that I think the proposals we will be debating -- I'm not inviting this debate now on the legislation -- do reflect a balance and an understanding of proposals that were put forward. Some of them address concerns about court costs, which I've already referenced, and others address other concerns. I personally think the way the government is proceeding, in respect of putting its priority on traffic safety and some associated changes in process and in product that are fully endorsed by most stakeholders, reflects the very balance the member asked me to endorse -- and which I'm happy to endorse.
[4:00]
G. Plant: The second aspect of this topic I want to pursue has to do with radio and print advertising that appeared with frequency and regularity over the past year. Much of this was advertising by the Insurance Corporation of British Columbia, not about the various safety programs it has underway, not attempting to explain its product as it is delivered, not attempting to convey information to the public about different ways to purchase this product; but rather, advertising which conveyed and advocated a particular position about how our society, how our government, should move forward or make changes in the area of automobile insurance products.[ Page 4639 ]
I recall, for example, one particular print ad that caused me a certain amount of distress. It had a picture of a man in a wheelchair in front of the law courts of British Columbia, on Smithe in Vancouver. The headline in the newspaper ad, and the whole text and tenor of the ad, was essentially an attack on lawyers and the judicial process and had a fairly strong undercurrent of advocacy for a particular perspective on how to change insurance products.
That being the context
So I read through the statute, which is the Insurance Corporation Act, to see the kinds of objects and the kinds of powers that the corporation might have in relation to what I'm going to call advocacy advertising. That is advertising in which the corporation puts forward a vision of itself and a vision of what it would like to do. It seems to me that it is not the function of a Crown corporation to participate in a public debate about what it should do. It is the function of a Crown corporation to explain to the public what it does, and it is the function of a Crown corporation to engage in information and education around what it does in a way that might inform consumers who use its products so that they'll use its products better. But I don't think it is philosophically consistent with the position of a Crown corporation to be an active player, up front on the main stage, in what its simple and driving purpose should be.
That's for the rest of us. I think that's for those of us in this chamber, and I think that's for those of us out in the public who want to engage in that debate: what should ICBC do? The government could look at the question of product reform; the government could look at drafting bills and introducing them; the people could respond to those proposals. But the one player that I think really has no role of any consequence in that debate is the corporation itself. The corporation is the object of that exercise, rather than an advocate for a particular perspective.
That is a long introduction to a couple of questions. Is it the view of the minister, as informed by ICBC, that in fact ICBC does have the power and the capacity to engage in advocacy advertising? If so, on what is that information or position based?
Hon. A. Petter: Well, we had a bit of a discussion -- in fact a fairly extensive discussion, I think -- the other day on the question of ICBC's advertising. I would invite the member to review that discussion if he hasn't had a chance to do so. I must say, I think perhaps he's allowing his own professional position to perhaps encourage him to be a bit thin-skinned about his response to some of this advertising.
Be that as it may, I believe ICBC's obligation, obviously in addition to informing the public on issues such as road safety, which is where the bulk of its advertising goes, is also to explain to the public some of the challenges it faces on the fiscal side and some of the options it faces. What ICBC did, during the course of some of the advertising the member is referring to, was to try to provide that kind of information to members of the public. I view that as a service and as consistent with ICBC's mandate to provide information to the public. That information may be communication of some of the legal costs associated with processing ICBC claims, which, if one includes the costs of providing legal services to claimants, exceed $200 million a year; or it may be to explain that there are various steps ICBC might take in order to keep costs down and to prepare the public for a debate concerning those steps.
I could review some of the advertising with the member, but I think if he reviews it fairly, he'll see that in fact the majority of things that were put forward in those ads were proposals that not only excited public interest but also produced the kind of package and agreement that was achieved and recently announced, and which will help ICBC to keep rates from increasing, which is certainly in the public interest. I'm reading from one ad right here, where it says: "There are six steps for improving the car insurance system in B.C.: (1) get tougher with bad drivers, (2) invest more in road safety, (3) make the injured victim the priority, (4) focus on helping people recover faster, (5) reduce fraud, abuse and auto theft, and (6) keep rates stable and affordable." So a number of proposals were put forward in the form of information on some of the costs of and obstacles to keeping rates down.
From that information, the public and interest groups responded in the forms that were available, and the government benefited from that input. As a result, we now have what I think is a very forward-thinking and successful product of an extensive consultation process. If the member is saying that ICBC should have been less forthright in identifying some of the options and some of the costs, I simply don't agree.
G. Plant: Well, I just want to pursue the thought one more step -- recognizing that it is hypothetical, but I hope it might engage the minister's interest. It always occurred to me when I saw these ads to try and think about what might be an analogy. An analogy would be to see an ad for B.C. Hydro advocating its privatization. There we would have a Crown corporation that is, loosely speaking, pretty important in the power business, taking a public position on an important issue of public debate, one that members in this House maybe would have different perspectives on. It may be one where we would all agree, but it would be an issue about what that corporation should be doing and perhaps a situation where the board of directors wanted to stir a little public debate around the privatization of B.C. Hydro. I would think that that kind of advertising would be totally inappropriate, because you'd have a Crown corporation essentially advocating a position with respect to law reform, legislative change and government policy.
Who is ICBC, in this context, advocating to? When ICBC, or the minister himself -- because the minister himself, at a fairly late date, became the
I want to leave it with the minister on the basis -- because I assume he has approved of all these ads, and because it's clear he's familiar with them -- that he rethink whether it is in fact appropriate for a Crown corporation to be an active participant in a public debate about itself.
Hon. A. Petter: I wish the member could have been here earlier when other members of his caucus were complaining that there wasn't sufficient information provided to the public and that that the public wasn't well enough aware of some of the issues.
G. Plant: There was no public consultation process, ever.
[ Page 4640 ]
The Chair: Order, hon. member.
Hon. A. Petter: Well, methinks the member doth protest too much, and maybe he needs to consider why he's doing that. In any event, hon. Chair, there were complaints by colleagues of the member opposite that perhaps the public was not adequately informed about some of the choices that were being contemplated, and now the member complains that ICBC made some of those choices known to the public.
The government made it very clear as a matter of government policy that rate increases that were exorbitant would not be permitted -- certainly in the period of the freeze, which was announced government policy, and beyond it. ICBC was expected to take steps to prevent that from happening. In the course of doing that, there were a series of processes in which information was gathered through KPMG and then through the Allen process, and various stakeholders and members of the public were invited to make their views known.
During the course of that process, ICBC engaged in advertising, letting the public know both the outcome of some of those processes, in terms of some of the identifiable costs that were contributing to potential rate increases, and some of the options that were available. Because of that, I think people and the stakeholders were in a better position to judge, and we had some very excited and productive input from stakeholders and others. That has resulted in an excellent public policy decision concerning the package that's been introduced.
You can't have it both ways. You can't on the one hand complain that there isn't enough information and then complain that there's too much. If this advertising hadn't taken place, I suspect the argument would have been that the government or ICBC or someone else was hiding the ball. I guess we just can't win.
G. Plant: First of all, hon. Chair, I want to apologize for the outburst a moment ago, because I was struck then, as I'm struck now, by the disingenuousness of the minister's answer. This is not a debate about public consultation. There never was any public consultation, and if any of my opposition colleagues have suggested that to the minister during the course of this debate, I fully support everything they have said. The minister's attempt to turn the question-and-answer into a discussion about public consultation is disingenuous. This was a discussion about advertising not by the government but by a Crown corporation.
It was a narrow, specific and focused answer. I have the minister's position on it, and I'm grateful for that. His view is that it's appropriate for a Crown corporation to stimulate the debate. That is as I understand it. The question of whether the ads chosen were appropriate for that purpose is a question that others will be left to judge. But I did not want the moment to pass without ensuring that the minister was clear on what my point was, because his answer in respect to public consultation is completely beside the point. I understand what his position is on consultation. It's entirely unnecessary for him to repeat it, but it's entirely unrelated to the question of ICBC participating in an ad campaign.
Hon. A. Petter: Well, if one wants to split hairs, the fact is that it's difficult for the public to voice an opinion, be it through the Allen process or directly to government, without knowing what the options are. If the member thinks that that isn't the case, well, I leave him with his thoughts.
I also want to clarify that I do not regard this kind of advertising as advocacy advertising. I don't want to have the member mischaracterize my response as acknowledging that. I believe it is advertising in which ICBC, given a specific policy mandate by government -- namely, to contain costs, a policy mandate that I hasten to add is, in my view, wholly in the public interest -- then engaged in discussion with the public, through advertising, to inform the public of what those costs are in some cases and of some of the options that might be considered in dealing with them. In both cases, I think the public benefited from that information, and it assisted the public in communicating back to government and back to ICBC. If the member chooses not to see that as a process of consultation, then he is the one who makes that choice, not I.
F. Gingell: I would like to move on briefly to the issue of the policies of ICBC in relation to dealing with, approving and authorizing vendors. I've had some preliminary discussions with ICBC people about the issue of glass repair, and I'd like to just follow that through.
My understanding is that every glass chip, if not properly treated, will become a glass replacement. I understand that roughly 25 percent of windshield claims are for the repair of chips and 75 percent are for replacements. That's only the number of claims. The dollars, in fact, are 4.16 percent for chip repairs and 95.84 percent for replacements. That's because a chip costs $47 plus tax to repair, and I know that on my own car, when the windshield was replaced, it was in excess of $1,300. This issue has come forward because I have been dealing with a company that is in the business of repairing of chips but not in the business of replacing glass.
[4:15]
I'm sure the minister will appreciate that replacing whole windshields is a process that had better be done right, because all kinds of liabilities can arise from improper installations. My understanding of the situation is that after the particular people I had been speaking to were approved in an informal manner and told they could go ahead and start doing work, and that on the form where it says "vendor number," they could put "applied for," they have subsequently been disenfranchised.In September 1996, ICBC came out with a new policy statement, No. 96-15, in which for the first time and all of a sudden, new glass vendors must do both. They must do both repairs and replacements, and the people who used to do repairs must do at least 30 percent of their work in replacements and mustn't farm that business out to people who are more capable of doing that work. I wonder if the minister could advise me why ICBC came forward with this policy.
Hon. A. Petter: I think that the root of this goes perhaps to a disagreement with some of the assertions made by the individual the member refers to, as to the beneficial impact of chip replacement versus not chip replacement -- if I can put it that way -- in the sense that ICBC is, I understand, reviewing the extent to which chip repairs do in fact avert more serious damage to windshields. I take it that their view is not consistent with the view of this individual that chip repair is the great cost-saver in all cases. In fact, it may not prevent subsequent extension of damage.
In any event, I understand that ICBC's view is that having a new form of business emerge in which vendors would go out and seek, in shopping malls and the like, people with chips in their windshields -- essentially a "churn-up" business, to use a stock market term; churning business -- would in fact add to costs, not prevent them. Therefore they took action to prevent that new business from emerging.
[ Page 4641 ]
The particular case in question, as I understand it, involves an individual who may well have applied prior to the change in policy. Obviously that raises issues concerning his specific rights and ICBC's responsibilities. I don't want to comment on those, because those matters are currently being investigated by ICBC's ombudsman referral department in order to see if a satisfactory response can be provided to meet the individual's concerns. Those specific concerns are the subject of further discussion and deliberation.
As I understand it, ICBC is looking at the question of whether chip repair can assist in preventing further costs, and that will be part of their ongoing review of cost containment. But seeing a plethora of chip-replacers out there in the parking lots of the supermarkets of British Columbia was certainly not seen by ICBC as something that would contribute to cost saving -- quite the contrary. Therefore the change was undertaken.
F. Gingell: But I would take it that every chip repair that was presented to ICBC was a valid and legal claim.
Hon. A. Petter: We learn more and more each day. Apparently ICBC has a practice that with authorized glass repairers, a chip repair -- because of the administrative costs of overseeing that repair and giving authorization -- is essentially something in which the vendor is authorized to go ahead and make the repair. ICBC validates it afterwards, and usually there's no issue.
The procedure which I was testing in my discussions with staff, in response to the member's question -- because I think the member's question raised, at least implicitly, a point that occurred to me -- is: if ICBC retains control, what's the problem? Why not get out there and repair all these windshields? Apparently, because of the costs associated with ICBC giving prior authorization to every chip repair, ICBC's practice has been to allow discretion to vendors to proceed to chip repair and to authorize subsequently. That would have required a change in that practice, particularly if someone was out there making their almost exclusive business out of doing on-the-spot chip repairs in malls. For that reason, ICBC took the steps that it did. I think it does raise the question about whether it's good public policy to have a very active chip-repair industry out there. It was something that ICBC did not feel it was prepared to support at this time, and because the regulations had this loophole, if you like, or this opportunity within it, ICBC moved to close that regulatory loophole.
F. Gingell: The minister didn't answer the question I asked. Does the policy provide a legal responsibility for ICBC to repair chip damage in windshields?
Hon. A. Petter: The answer is yes.
F. Gingell: Does ICBC have any other cost containment initiatives which involve avoiding your legal responsibilities?
Hon. A. Petter: I think the member is being a tad cute in his point there.
Let me use an analogy from the legal profession. People have all sorts of rights that they may choose to act upon, but it's still considered champertous and therefore inappropriate behaviour for a lawyer to go out and seek and solicit clients. Similarly, I believe, in an area that the member may be more familiar with than I, stockbrokers who go out and churn business may
Let's stick with the lawyers. There's a fundamental difference as to whether the business practice is one in which people who have claims seek out ICBC to have their claims satisfied or whether someone on a bounty-hunting kind of basis goes out and tries to drum up business in a way that, essentially, allows people to make judgments on the spot without ICBC being able to supervise. Clearly the business practice that ICBC has developed over time with established glass vendors has been one of stability, in which the judgment of those vendors who do a full range of different kinds of services, as I understand it, is for the most part trusted.
The concern is that to move to a fundamentally different marketing practice in which someone would have a strong incentive to encourage people to undertake chip replacement and would be able to do so without ICBC's prior authorization, or that if prior authorization were required, it would entail an expensive administrative change in practice
F. Gingell: I'm sure that in the wild west in days of yore, bounty hunters were considered to do some good things. They reduced bank robberies in the future in exactly the same way I'm led to understand that fixing windshield chips reduces the subsequent replacement of those windshields at a substantially greater cost. So I take it that ICBC have done some form of study and have some statistics on the number of chip repairs that have been done and on the number of chip repairs -- where the chip was repaired -- that have turned into a subsequent windshield replacement.
Hon. A. Petter: I am informed that ICBC has been for some time, in fact, encouraging the development of the chip industry, because it can have beneficial effects under appropriate circumstances. It doesn't mean it does in every circumstance, and ICBC's initiative to encourage the use of a chips as an alternative to replacement of windshields and to prevent the need for replacement of windshields has been something that ICBC has been pursuing within a particular marketing environment. The proposal to change that marketing environment radically was one that caused concern within the corporation. Outside of that controlled environment, ICBC was not satisfied that the use of chips -- which is not, as I understand it, a benefit in every case, and in some cases may in fact be a detriment -- would be carried out in the controlled way that ICBC was assured would effect the kind of savings the member is referring to.
However, this is a matter that ICBC continues to review. The particular case is one that, as I say, is being resolved within ICBC. If there are savings to be had through a more aggressive approach to chipping as opposed to replacing people's windshields, I'm sure ICBC will be happy to pursue that, but the evidence is not there. What was being undertaken here would have meant a fundamentally different approach to the whole marketing environment, through which ICBC's initiative, which is in the direction of chip replacement where appropriate, might well have been undermined.
F. Gingell: I'll just make one closing suggestion, then. I really do think the minister and ICBC are not suggesting that
[ Page 4642 ]
any of the repair people are carrying on criminal activities by putting forward claims for repairing chips that did not exist. It seems to me that the logical conclusion is that you should be encouraging
With that, I'll turn it over to Kamloops-North Thompson.
[4:30]
K. Krueger: If I can make my way through the puns that are flying around the House just now, I'd like to take up the questioning on this repair program a little bit. It sounds as if the minister may believe that this is a relatively new program, but it isn't; it's been around for years. For years, ICBC has been tracking how many people have their windshields repaired versus how many have them replaced.There is a prevailing notion among some of the senior claims managers that there is potential for an avalanche, a flood, of repair claims if they were to allow the businesses that perform the repair to go ahead and market directly to those whose windshields they see chipped. Well, the fact is that throughout most of this province, where the weather is a little more inclement than it tends to be down at the balmy tip of Vancouver Island or in Vancouver itself, there are wild fluctuations of temperature that take place. Frequently, when a windshield has a stone bruise, it will abruptly run when a person turns on their defroster or when the temperature changes. As soon as the windshield has run, it has no value and it has to be replaced.
The first question, then, is this. The numbers that I have in front of me suggest that the average repair bill -- and forgive me if this was covered when I stepped out for 15 minutes -- totals $47.28, and the average replacement bill for a windshield totals $366.50. Are those numbers accurate?
Hon. A. Petter: I don't have the specific number for windshield replacement as opposed to chip repair. The average in terms of chip and windshield, I believe, is in the range of $274. Staff advise me that the member's estimate, if we're talking about the windshield side of it, sounds to them to be in the ballpark, certainly.
K. Krueger: Then I just make the point to the minister that an insured, as ICBC refers to its premium-paying public, would have to make approximately eight windshield repair claims before they reach the average cost of a windshield replacement claim. I can assure the minister that most members of the public would never go through that amount of hassle willingly or frivolously.
ICBC had controls on who presented these claims, how they were checked and how they were paid, and used to have insureds bringing their vehicles through the claims office for visual inspection and completion of a form. The other day, the minister and I dealt with the question of how windshield claims are handled now. I believe he said that it's on a pilot-project basis, that the glass companies are allowed to handle the claims directly with the insureds rather than ICBC being the middleperson, the verifier of damage and of coverage and so on. That, evidently, is a risk that ICBC has decided to take; it's an obvious risk. The minister appears to be expressing some suspicion of part of the industry, at least, that claims might be submitted for damage that wasn't really there. I'd suggest to him that one way of dealing with that, if that's a serious concern, is to go back to having the claims staff look at them.
But all things considered, it makes a whole lot of sense from a dollars-and-cents point of view and also from an environmentally friendly point of view to repair glass before it splits rather than replace it after it splits, because, of course, once a windshield's been replaced, there's the discarded glass to contend with.
I'd like to ask the minister if he would personally look into this question. I have to tell him that he can get blithe assurances from some of the ICBC managers who get to make these decisions that aren't necessarily backed up by anything but their suspicions as former adjusters. It seems to me that with a $52 million program -- that being the figure I'm given for the 1996 payout on windshield claims -- he could reduce that, not even necessarily by eight times -- which would be the severity number, apparently -- if everybody had a timely repair instead of an ultimate replacement. If he could even cut his windshield claim expenditures in half, he'd be saving $26 million in the coming year. Would the minister give us that commitment -- to actually have this management opinion independently evaluated to see if it wouldn't make sense to, yes, turn these people loose on the parking lots and let them put their business cards on the windshields, assuring people that they can have their glass fixed for free and avoid the cost of replacement and paying a deductible?
Hon. A. Petter: The member for Delta South has already written to me on this matter, and I'll be responding to him. In the context of doing so, I certainly will be asking ICBC to provide me with information concerning the position that they adopt. I'm happy to say, for the member's benefit, that I will scrutinize that closely, and if I think there is cause for some further evaluation, I'll certainly do some. But if there is some potential for savings here, as the member suggests and the member for Delta South intimates, then clearly, above all, I want to make sure that that potential is realized. I will review whatever response I am provided by ICBC in the course of responding to the member for Delta South with a critical and economical mindset.
K. Krueger: I do really appreciate that response from the minister; I know he means it. I've seen for myself in the past that he follows things up when he has committed that he'll do so.
On a somewhat related topic, for years ICBC paid the original equipment manufacturer's suggested retail price plus a percentage for parts. A lot of people never could understand why the largest customer in the province would pay a percentage in addition to OEM-recommended prices when the man on the street or a little body shop anywhere in the province could actually get a discount from OEM prices. Perhaps the minister could ask the experts with him what the current relationship is between ICBC and original equipment manufacturers' parts suppliers.
Hon. A. Petter: As the member may be aware, ICBC is looking at ways of saving costs in respect of parts, including looking for used parts where appropriate. I'm informed by staff that the policy the member is referring to dates back some time, and staff believe that it is no longer the case that a premium is paid for OEM parts.
But my question to the staff -- I'll share it with the member -- is: quite apart from paying a premium, why
[ Page 4643 ]
doesn't ICBC, as the largest purchaser, get a discount as a volume buyer? In anticipation that the member might put that question to me, I have asked staff to provide me with an account of what the policy is in this regard. I'll be happy to provide a written report to the member of what I find out in the course of what seems to me a very appropriate line of inquiry.
So at this point, likely that premium is not continuing to be paid, but I'll check and get back to the member. But I would like to know why, in fact, ICBC can't use its position to secure discounts. It seems to me volume buyers generally pay less, not more.
K. Krueger: It's gratifying to note that the minister and I are forming such a cosmic bond here that he not only anticipates my questions but agrees with them before they're put. I look forward to that advice, because it may be the case now that ICBC is -- as it should have been long ago -- enjoying a discount on OEM prices. But certainly it didn't for a long time.
Once again, it was a senior manager in charge of the material-damage side of the claims division who, for whatever reason, thought it made sense to pay prices that I believe ranged to 20 percent over and above OEM-suggested prices. It always seemed ridiculous. The minister, of course, is correct that there should be economies of scale. That's one of ICBC's own arguments as to why it's such a viable corporation and why it can deliver wholesale insurance coverage -- that it does have economies of scale. Certainly, in the area of parts, one would expect them to have the best prices in British Columbia rather than the worst. So I look forward to the minister's advice in that regard.
Turning briefly to the ICBC annual report again for 1996, specifically to page 14 and the "Performance Report," under the heading "Net Operating Income," the corporation offers this as its explanation of the $135 million loss: "The operational results are significantly worse than forecast as a result of increased claims and other expenses as explained above." But it doesn't mention the fact -- as the minister and I canvassed last week -- that ICBC had $60 million less premium income than it anticipated for 1996 because of the premium freeze and rollback by this government. In fairness to the people who drafted this report, I'd like to know if the government ordered ICBC not to include that obvious explanation when it dealt with the $135 million loss, or in any way suppressed that being pointed out as an explanation for the size of the loss.
Hon. A. Petter: As I indicated on the last day we talked about this, yes, if we had increased premiums and made consumers pay an additional $60 million, that would have helped ICBC, but it sure wouldn't have helped consumers in this province. It was because of consumers' concerns that the freeze was brought about.
I also pointed out last day, of course, that there was this prior-year adjustment that occurred last year which deflated the loss picture of ICBC by something in excess of $100 million. So one can look at the numbers from both points of view.
What I did say on the last day that we discussed this was that I would provide the members -- and I hope they've received it -- with a copy of the third volume of the KPMG study, which looks at some of these numbers in terms of the accident incidence and costs, and looks at cost comparison year over year, rather than trying to sort out all these numbers in terms of the financial statements.
K. Krueger: But they're huge numbers, and that's why it's worthwhile for us to address them. Not in keeping with his normal forthright responses, the minister didn't actually respond to that question, which was, specifically: was ICBC told or pressured or in any way influenced to leave out of the reporting that the $60 million loss of income they had anticipated was a major factor in this $135 million loss?
Hon. A. Petter: Absolutely not, and if the member looks at the very top of page 14, he will see that the statement concerning premiums earned is qualified at the end by saying that the premiums were offset by the premiums refunded and rolled back as a result of the government-directed rate freeze. It's right there, and I think everyone in this province knows that was hardly a secret.
I'll be frank with the member. The one that was kept secret in this report -- and I think unfortunately so, because it led to a false impression -- was the fact that the bottom line of ICBC was made to look considerably better than it might have otherwise by virtue of this prior-year adjustment. Yet that was not specified here. I've made it very clear to ICBC that I believe that that should have been more fully reported, because it gave the impression that in fact some of the pressures on the personal injury side had somehow dissipated year over year.
That impression, of course, found its way into the media through some of the advocacy groups, and that impression is wholly incorrect, as the KPMG study shows. So the ball, in terms of premium refunds having an impact, was not hidden at all; it's right here. The one thing that wasn't well disclosed in this report -- and I'm not at all pleased about it; I made that very clear -- was the fact that the prior-year adjustment was not pointed to as a contributing factor to the fact that the deficit incurred by ICBC was relatively lower than it might have otherwise been.
[4:45]
K. Krueger: Well, just for the record, I'll read in the paragraph that the minister is referring to:"Premiums earned are higher than forecast as a result of the response to Autoplan 12, the monthly payment plan, being greater than expected and more optional coverages being sold, offset by the premiums refunded and rolled back as a result of the government-directed rate freeze."That is hardly a forthright declaration of the fact that ICBC had $60 million less income than anticipated, even though this is a report that's dealing in hard numbers.
But I don't wish to belabour that point; I just want to make the point that Crown corporations should be allowed to put it all out on the table when they're doing annual reports. And I have the sense that the somewhat debilitating effect of that so-called premium freeze has been suppressed in many ways from giving the public a clear understanding, even in this annual report, of how it affected the corporation and its bottom line.
Also for the record, I'd like to make the point to the minister, since he has repeatedly referred to the $100 million-plus saving, from his point of view, that ICBC enjoyed because of being able to, as I understand it, dump into their financial picture that sum of money -- $100 million or more -- that apparently was in claims reserves, and they found they didn't need it
We hear from constituents all the time who are hard-pressed to pay their premiums and to actually cover the cost
[ Page 4644 ]
of driving in British Columbia. We receive information from government that this is a wholesale insurance company and these are the costs to pay claims in spite of all the tremendous efforts that are put out to try and keep accidents down and claims costs down and so on. But if we had a $100 million return from what had been claims reserves, then there was a serious performance problem in those claims reserves. I'd like to know what ICBC has done to deal with the fact that apparently that much money was essentially taken from the public -- it's not like people get to negotiate how they pay for ICBC premiums -- at some previous date, perhaps not long ago, and then was found not to be needed. What disciplinary action occurred?
Hon. A. Petter: Well, I won't debate with the member. KPMG has reviewed the performance of the corporation in terms of its projections and in terms of performance of what is a $5 billion base, and $100 million, against that $5 billion base, I take it, is an acceptable adjustment. I wish it had been more fully shared, because it did not help people understand that ICBC was insulated, to that extent, from increased costs. I also point out to the member that on page 7 of the report it's made very clear that the main contributing factors to the loss incurred by ICBC include "the effects of the government-ordered rate freeze."
If the member is as insistent on this point as he is, then let me assure him that in addition to sharing with British Columbians, as I said I would last day, his wish that those in the lower mainland have higher rates, I'll be happy to share with British Columbians his position -- and no doubt that of his caucus colleagues -- that British Columbians should have paid $120 million more in premiums out of their hard-earned dollars over the last two years. I'm pleased that the official opposition has put that position forward, because it very clearly marks the difference in approach this government has taken -- which is to try to save those who pay premiums from those kinds of increased costs and to push ICBC to find savings -- as opposed to the member's solution, which is to regret the fact that $120 million wasn't taken out of the pockets of hard-working British Columbians. I regret that the member regrets that, but I'll make sure British Columbians know that he, along with his colleagues, regrets it.
K. Krueger: As I carry on, I'd like to express to the minister how much better a forthright answer looks on him than a facetious answer like the last one. What we dealt with on the last day that we had these questions between us was the effect of the premium freeze on various regions and the disruption of the rating process on the basis of the regional claims experience that occurred.
Surely the minister and the Premier didn't believe that we had a bunch of morons at ICBC setting the premiums at the rates they were -- quite the contrary. There's all sorts of feedback that the people who set the rates and make those decisions know what they're doing and that they emerged normally, at a fairly remarkable point, quite close to break-even on this $2.25-billion-a-year company. So to abruptly freeze the premiums in a vote-buying exercise, to halt the process and hurt people all through the interior, including my constituency, and people all over Vancouver Island, to the benefit of people in areas where premiums were going to rise
The member in front of me is holding up a headline that says, over the minister's picture: "I Don't Expect You to Believe Me." I assure the minister that we'll make sure the public understands what we're talking about if any of that sort of nonsense does take place.
Carrying on -- back in the last paragraph on page 14, the corporation discusses certain unusually high income received in its investment portfolio, apparently, in 1996. It says: "These gains will be amortized over the next five years according to our accounting policy." When did that accounting policy come into effect?
Hon. A. Petter: Let me first of all say that the member can run, but he can't hide. Anyone who fairly reviews the record of his comments over the last half-hour of debate will see that he has been pursuing a line of argument in which he argues that ICBC ought not to have been made to give up the rate increase it would have otherwise imposed and that the $60 million that would have then been forthcoming from consumers would have assisted with the bottom line. There's no escaping that. The member may not like to have it put back to him in the way that, in fact, it will be interpreted correctly by British Columbians. He would have liked that $60 million to have come out of the pockets of British Columbians in order to improve ICBC's position. That's regrettable. He can try to reinterpret that and worm and squirm and try to get around his own remarks and his own line of argument, and no doubt his caucus colleagues may try to do the same. But he -- inadvertently, perhaps -- fairly represented the position of his party, which was that the consumers ought to have paid an additional amount of money and that the rate freeze ought not to have taken place. British Columbians can draw their own conclusions -- as I think they already have -- about how well they'd be protected by that policy.
In respect to the accounting policy the member refers to, I understand that the accounting policy of amortizing these kinds of returns is one that dates back to the early days of ICBC, to the genesis of ICBC.
K. Krueger: To my amazement, the minister persists with those foolish comments. When we talk about what's coming out of the pockets of British Columbians, where does the minister think the $135 million loss -- if it's true -- came from? Who does the minister think is going to cover the $135 million loss? Surely the same British Columbians who he is suggesting enjoyed a $120 million benefit because of the brave little fighter Premier's decision to abruptly freeze ICBC rates and throw the corporation into financial chaos. It's no coincidence that the minister and the corporation are suggesting that it was $60 million per year for two years. We're talking about a $135 million loss. We'll get to some other discussions about whether there actually is a loss or not.
For anyone to suggest that this opposition is in favour of the way this government squanders money or the way it accounts for money, its ridiculous deficits or this whole foolish business of interfering in a Crown corporation's business activities and then having to defend a loss and somehow suggest that it's the opposition's doing
In any event, talking about this accounting policy, the paragraph goes on to say: "If all gains had been recognized in the year, the rate of return on investment would have been 10.2 percent" -- that is, instead of the 7.3 percent that's published as the actual for 1996. What does that translate to in dollars and cents?
[ Page 4645 ]
Hon. A. Petter: On the first matter, which we've tortured to death, I'll let the record speak for itself. I think it speaks loudly and clearly.
On the second matter, I'm not going to indulge the member in calculations concerning an incorrect accounting treatment, one that's contrary to the advice provided by those who instruct ICBC as to what the appropriate accounting treatment is, so he can start reinventing the numbers. The numbers are as they are because that is the appropriate accounting treatment. It has been that way, as I indicated, for some time. The other day I answered questions extensively as to why the accounting treatment is that way -- in order to provide a fair and non-disruptive treatment of those benefits in terms of the statements.
K. Krueger: This Finance minister can hardly take umbrage with anyone questioning his ability to either produce the right numbers or deliver on the numbers.
Over on page 18 in the column under 1996, this number is given as deferred investment gains and losses, $194.657 million. Is that the number I just asked about -- the difference between 10.2 percent and 7.3 percent? Is that where that number comes from?
Hon. A. Petter: As I say, if the member wants to pursue this line of what-if accounting based on inappropriate accounting practices, page 23 breaks down the $194 million figure into its component parts.
K. Krueger: Certainly I'm no accountant, but with no record at all in accounting, my record is much better than the Finance minister's with regard to balancing books. The point I'm making is that if ICBC enjoyed unusual income to the tune of $194 million in 1996, or anything like it, then one has to question whether it really lost $135 million in 1996. I think it probably did. I don't know how it could have done anything but fail -- lose money -- in the year when the Premier unexpectedly hacked its income back the way he did. In any event, all the numbers this Finance minister publishes in any area are suspect, and these are the kinds of questions I think he ought to be ready, willing and able to deal with, even if it is to just frankly admit that the finances of British Columbia and ICBC are in a mess because of NDP interventions -- which is the way we see it.
I would like to know the cost to the Insurance Corporation of B.C. of the Premier's abrupt premium freeze in terms of the administrative cost of handling it. Twenty years ago ICBC was telling people that it cost $12 to process a draft, which is what they used at the time instead of cheques, through the system. They use cheques now, but there's been inflation since. Certainly a lot of staff time was involved. There was an obvious breakdown in communications between the Premier making his lordly decree and ICBC trying to deliver on it, so a lot of people had to receive two different premium refund cheques, some of them for amounts as ridiculously small as $1 each. I'd like to know ICBC's best estimate of the administrative cost of complying with the Premier's edict and issuing all those cheques and making all the changes they made.
[5:00]
Hon. A. Petter: Well, I think it's regrettable that this member would prefer to use this estimates debate to play politics rather than to get to some fundamental information that may be helpful in assisting him and the public in understanding what's going on here. The numbers reported by ICBC are subject, of course, to external auditors who are charged with the professional responsibility of auditing these books and making sure the accounting treatment is appropriate. Frankly, the member can criticize me; that's in the order of this House, and it really doesn't affect me one way or the other. In fact, few members of the public would expect him to do anything other than that. But when he starts to grandstand about public statements, financial statements of a Crown corporation that have been audited by independent auditors of stature, then I think he kind of crosses the line a bit and really cheapens debate in this House, because he calls into question their professionalism, not mine. I hope he doesn't intend to do that.I don't have a specific number on the administrative costs. I think it was raised last year during estimates, and I think it might have been answered last year. If it wasn't, then I'd be happy to try to get a number for the member. But I don't have that number, nor do staff, because it was an issue that, frankly, if it was raised, would have been more appropriately raised last year. I believe it was raised last year, but I don't have 100 percent recall of it, so I can't attest to that fact.
K. Krueger: I'm not sure how the minister can get up one moment and twist things that have been asked about in this estimates debate as to what he'd like to promulgate to British Columbians, and then get up the next minute and purport to rebuke an opposition member for asking questions about whether or not the Insurance Corporation is ordered by this government to report its financial status in a certain way, when very obviously the Insurance Corporation suffered tremendous intervention by the Premier during the election campaign last year.
So we'll just pass on the obvious absurdity of those comments, and we'll go back to a question that I was asking when we finished up ICBC estimates last week, and that has to do with absenteeism. The minister's initial response was that ICBC had enjoyed a 0.38 percent absenteeism rate in 1996, and then he made a correction and said that it was actually the increase in the absenteeism rate in 1996. So what was the global absenteeism rate in 1996?
Hon. A. Petter: I understand that absenteeism as a result of short-term disability is approximately in the range of 4 percent and has been in that range for a number of years now.
K. Krueger: What, then, is the overall absenteeism rate including long-term disability?
Hon. A. Petter: We add about 3 percent as a result of long-term disabilities, so that would bring it to 7 percent.
[R. Kasper in the chair.]
K. Krueger: Is there any difference between absenteeism statistics for managers and for non-management personnel?
Hon. A. Petter: Staff do not have it broken down in a way that I can provide an answer to that for the member. But again, I'd be happy to follow up and try to get that answer.
K. Krueger: If ICBC has 7 percent absenteeism overall and it has 4,510 employees -- which I believe is the number that the report sets out as what it actually has now that it's taken in the motor vehicle branch employees -- 7 percent of
[ Page 4646 ]
4,510 is around 316, I believe. The point I'm making, obviously, to the minister is: if that could somehow be ended, if that tremendous absenteeism rate were corrected to zero, he'd apparently find himself with 316 more employees at work than he had in 1996, which is a very significant number of people. What programs does ICBC have in place to deal with an abominable attendance record like that?
Hon. A. Petter: I understand that ICBC has been pursuing an active awareness action program to reduce absenteeism. Efforts have been undertaken to try to step up this program, and in particular, to target -- if I can put it this way -- instances in which, perhaps, absenteeism is not justifiable, in order to minimize absenteeism.
K. Krueger: Those are laudable goals. They're just verbal goals. Does ICBC have a numerical goal, a percentage to which they hope to reduce the absenteeism rate at the Insurance Corporation?
Hon. A. Petter: I would say that the goal is to lower the absenteeism rate -- particularly the short-term rate, which is the one that is most subject to change as a result of active initiatives -- from the 4 percent downwards. But there's no specific target level that the Insurance Corporation is pursuing at this time, other than to try to reduce that rate through the program that I referred to.
K. Krueger: I know for a fact that for years ICBC had a goal of reducing its absenteeism rate to 2 percent or less. I don't understand why they would have abandoned a firm goal -- other than, perhaps, having difficulties in reaching it. As the minister indicated earlier, he was quite willing to question ICBC for some firmer goals with regard to OEM parts and so on. I'd like an assurance that he will also look to ICBC for a firm goal in this area.
Hon. A. Petter: I have no problem with a firm goal, and I'll be happy to try to press the corporation to establish one. But my greater concern is that the measures to reduce absenteeism be ones that are going to be productive and that the goal, therefore, is realistic. Having a goal without a credible action plan to achieve it is not of much use, and I'm sure the member would agree. So it's a matter of making sure that the goal is one that corresponds with the measures taken and conversely, that the measures taken are realistic in light of the goal. But I agree that it would be useful if we could attach some targets to this initiative, and in that respect I will communicate that -- in fact, I'm doing so right now -- to the corporation.
K. Krueger: As always, I appreciate this minister's willingness to commit to firm action. I can tell the minister that in years gone by, a few forward-looking, visionary claims managers instituted some programs at ICBC with regard to actually rewarding employees who had such a healthy lifestyle and such a positive work ethic that they achieved perfect attendance records, or something close to it. In some of those locations, the success rate was such that the absenteeism record was more like the 0.38 percent that the minister initially thought the corporation had enjoyed last year, even though the goal was 2 percent at the time. People do respond to these things.
I can also tell the minister that the union executive of the day made the decision to launch a policy grievance against ICBC because of those activities and against at least one of the managers involved, because the union felt it was inappropriate for a manager to confer a benefit, as they termed it, upon employees outside the collective agreement. The upshot of that grievance was that it was abandoned, because it was not a violation of the collective agreement. The union hadn't apparently ever foreseen that a manager might actually give employees something management didn't have to give them under the collective agreement.
But there are positive incentive programs that do deliver results in this area, and certainly I look forward to the minister's success in encouraging ICBC to bring on some of those. Can the advisers who are with the minister tell us what percentage of short-term sick leave has to do with non-physical illness -- things such as the notional stress leave that we hear so much about?
Hon. A. Petter: I don't have the breakdown in numbers that the member's seeking, but I'll be happy to try to follow up and see if we have those numbers. I'm not sure if ICBC can break it down in that way.
K. Krueger: Again, I appreciate that. I'll leave the issue alone and look forward to the minister's further advice.
Turning to the issue of severance packages, that's always an important topic. How many people left employment at ICBC in 1996 and received a severance package in the bargain?
Hon. A. Petter: In terms of managers, if that's where the member's question is directed, I understand that there were eight terminations of managers that would have entailed severance in 1996.
K. Krueger: So what would the global cost of those eight severance packages be?
Hon. A. Petter: That number is one I can try to ascertain for the member, although I'm told it's one that may be difficult to calculate, at least in the immediate term, because some of the severance likely did involve salary continuance, in which people continued to receive remuneration subject to their finding some other form of employment. So it's difficult to quantify. Apparently the number is not broken down and available at this time, but I'll try to find it for the member in due course, if he wishes it.
K. Krueger: Without asking their identities, could the House please know why those eight managers were terminated?
Hon. A. Petter: I think a simple answer here is no. These are personnel matters, and obviously it would not be appropriate for me to comment in a way that one might be able to infer who the individuals are or to speculate in any way about particular personnel decisions and why they were taken.
K. Krueger: Yet those decisions cost the premium-paying public money. One wonders if the public would agree with the reasons for those terminations.
Recently there has been a lot of attention paid to the Simon Fraser University harassment policy and the way an individual has been treated as a result of that. Corporations evolve their own ways of doing things.
I continue to hear disturbing things about investigations that are launched at ICBC against managers, sometimes on a
[ Page 4647 ]
complaint by an employee that really isn't properly weighed at all compared to the employee's own work record and behaviour. I have an impression that under an NDP administration, managers who have worked for performance and who have really looked to their employees to deliver -- in short, they've been strong and effective managers -- are great targets for performance-problem individuals they may have had to deal with in the past. So with respect, I think we are entitled at least to the general details of why managers are terminated at ICBC and severance packages have to be paid out.
[5:15]
Does the minister not think it would be appropriate to have some individual at ICBC -- and perhaps at other Crown corporations and in government departments -- who would act as a sort of a management ombudsman to review cases when managers come under accusation for various reasons before termination is the decision?Hon. A. Petter: I think I'll stay with the answer I provided. Personnel matters are ones where obviously the individuals concerned have certain rights and abilities to protect their interests. There is obviously a public interest in containing costs here, but I don't want to get into the particular circumstances concerning why these kinds of decisions are made. I don't think it would be appropriate for me to do so.
K. Krueger: I have to tell the minister that somebody has to look into these things. Surely no corporation should be a law unto itself. Surely managers who are doing their jobs in ways that they believe are appropriate ought to have someone have a look at the situation when they find themselves under the gun. The employees are well represented by a union, with competent people representing them as business agents, but managers aren't necessarily.
I know of one instance, for example, where an allegation was made that the head office manager sent out to investigate an individual for a sexual harassment complaint ended up living with the complainer. I've had a subsequent letter from another individual that suggests that this manager's behaviour has not been appropriate in the past. I wonder who looks into that if this individual is a favoured manager by the corporate executive and they turn away such allegations from informed employees.
Would the minister like to look into that kind of matter directly? Can he assure us that that would be done by him or his delegate without unfair consequences to the whistle-blower, so to speak? How in the world can anyone other than a very senior-level manager, when he finds himself, in his own mind, unjustly accused, look for justice at ICBC?
Hon. A. Petter: Well, I must confess that I'm having some discomfort in answering these questions for two reasons. One, as I've already indicated, is that I don't want to enter into internal personnel matters. I'm happy to address questions of the opposition regarding general matters. Certainly in respect of harassment, there are both internal and external harassment advisers at ICBC.
But I have to confess that the other reason I have some discomfort -- unless my understanding is incorrect -- is that I believe the member asking these questions is himself an employee of ICBC who is on leave from ICBC. I must say that I just find it inappropriate, frankly. Indeed, I think it raises questions of potential conflict for this member to be using this forum to ask questions with respect to his employer. I am just astounded that the member would be pursuing this line of questioning at this time in this way, unless I misunderstand the situation. Perhaps the member can inform me as to why I misunderstand it and why it's appropriate for him to be using this forum to pursue questions that could have a direct pecuniary and personal interest in respect of his own employment.
K. Krueger: I'll clarify that question for the minister. I am an employee on a leave of absence without pay from the Insurance Corporation of B.C. I have a written ruling from conflict-of-interest commissioner Ted Hughes, which makes it very clear what I am entitled to deal with in these estimates or in any other debate touching on ICBC matters. I can assure the minister that I do have that in writing, unlike individuals on the other side of the House who have had problems with that question in the past.
Interjection.
K. Krueger: As the member for Parksville-Qualicum says, I do have explicit approval to engage in the kind of questioning that I am.
So now I'd like to turn to the issue of management perks at ICBC and ask: how many individuals have leased cars or cars otherwise provided for their personal use by the Insurance Corporation?
Hon. A. Petter: Perhaps I could ask the member, so he could give me some comfort in knowing what the acceptable bounds are in answering questions and dealing with matters -- which I must say that in some instances, I think, during the course of this questioning have affected policies that could have a direct pecuniary benefit to the member -- if he would be prepared to table before this House and provide me with a copy of the opinion he received from the conflict-of-interest commissioner so that I as well as the member can understand what the bounds of questioning are that he is entitled to ask in respect of matters that could bear upon his own personal situation in regards to his employment with the Insurance Corporation.
K. Krueger: I'll take that question under advisement, and if the minister is more comfortable, someone else will ask the question that I was about to. I'll turn the floor over to the member for Prince George-Omineca.
P. Nettleton: I can assure the minister that never having been an employee of the Insurance Corporation -- and I'm certainly not on leave -- I'm not in any potential conflict.
I have a few questions dealing with registries, if I may, which I think are reasonably straightforward and non-confrontational and all of those things. I'm presuming that you have the appropriate staff here to deal with registries. Is that the case?
Interjection.
P. Nettleton: Oh, okay. In any case, I'll ask my first question. I'm dealing with registries as special operating agencies. I've made reference to the '96-97 business plan dealing with registries and the special operating agencies.
Interjection.
P. Nettleton: Would you like me to sit down?
[ Page 4648 ]
Hon. A. Petter: I'm a little perplexed. My understanding was that we were dealing with ICBC during this course of the debates. Maybe the member can clarify whether he's referring to registries that somehow bear upon ICBC. If he is, then I'm sure we can provide answers, although we're a little perplexed over here as to what those registries might be.
P. Nettleton: No, indeed, we are not dealing with the Insurance Corporation of British Columbia. It was my understanding that there was a Mr. de Faye, who I believe is an assistant to the minister, who was going to be dealing with registries. Let me just help you, if I may, and refer to some of the registries that we will be considering: manufactured home registries, personal property registries -- things of that nature.
Hon. A. Petter: No, the staff that could assist me in responding to that line of questioning are not with me, although they could be very quickly. If members opposite can provide me with some direction
F. Gingell: I believe there are a few more questions to finish up on ICBC, and as arranged, we will complete those before we move on.
R. Neufeld: I just have a few brief questions about ICBC in relation to no-fault insurance.
Earlier in the year an individual from ICBC came to a chamber of commerce meeting in Fort St. John and gave the community a speech. It was on how great no-fault insurance would be and that if no-fault insurance was not accepted as a way of controlling costs, those costs would increase within three years by 40 percent at minimum. The person also stated that if no-fault insurance were instituted, ICBC would see immediate savings of 14 percent in costs. Unfortunately, that 14 percent was not going to be passed on to the consumer as stated; rather, it was going to go to a bunch of programs that they hoped would improve driving habits.
I just wonder now with
Hon. A. Petter: I can only try to make suppositions based on what the member has said, but I think it's fair to suppose that the presentation made by the individual described by the member referred to a reporting out of the KPMG report that was done on ICBC. That report looked at the numbers and suggested that if no changes whatsoever were made at ICBC to contain costs, then indeed rates would have to increase over the next two to three years in the order of some 40 percent.
It also recommended aggressive traffic safety and then put forward a number of product options, all of which involve some element of fault but some of which also involve benefits that flowed irrespective of fault, building on the part 7 benefits that already exist. There was a range of different ways of doing that. It suggested that, depending upon the mixture of both product change and traffic safety that one initiated, one might be able to contain costs to differing extents.
That report, of course, provided part of the information that became part of the public consultation process. In the course of that process, many groups argued that with an even more aggressive commitment to traffic safety than that envisaged in those KPMG reports and with a common commitment to achieving savings through those, the savings on the traffic safety side -- which everyone, including KPMG, agreed were necessary -- might be sufficient to prevent costs from rising unduly. There was another body of opinion that they would not be.
The judgment that I and the government made at the end of the day was that rather than argue about those things that we disagree about, the best thing to have happen would be for all stakeholders to work on the things they all agreed about -- which was the fact that aggressive traffic safety was required, in any case, and that it could achieve substantial savings, in any case. The question of whether those savings will be sufficient to keep rates from rising beyond an acceptable level is one that will be answered through the implementation of those aggressive traffic safety programs.
In the course of consultation with stakeholders, agreement was achieved to proceed on this basis with an aggressive comprehensive traffic safety program with some elements of product change, which are contained in legislation which we can debate before this House in due course -- changes I've already referred to, such as moving to net income, which better reflects the true replacement value of the income that people lose as a result of becoming injured -- and also to move toward aggressive mediation as a way of trying to minimize court costs, and to introduce a material-damage deductible.
With those added features, the commitment was to try to maximize the savings and then judge from the experience where we would go from there, with the clear understanding that the goal of maintaining rates at an affordable level would remain intact and that that goal was one that all stakeholders agreed to support and work towards, with traffic safety as the primary and, hopefully, only initiative required to satisfy that goal, but with the understanding that there would be monitoring throughout. Should that not be adequate, there would be some subsequent process to consider what further steps might be required.
[5:30]
The focus now is on making traffic safety work, on monitoring the savings and also on taking advantage of the associated savings that come from other elements of the package that all stakeholders agreed to that are product-related, and to try, through that experience and through a very strong and common commitment, to see if we cannot enhance savings on the traffic safety side beyond those that were originally envisaged in the KPMG report so as to obviate the need for further product reform.R. Neufeld: When I add up the 40 percent and the
[ Page 4649 ]
three years, if you were to add it all together. Is the minister comfortable with the fact that with the measures that have been taken so far, we can actually save almost 20 percent per year, or 18 percent per year, in ICBC costs over the next three years?
Hon. A. Petter: Yes. On average, claims costs are going up about 8 percent per year. That's what needs to be saved. Obviously we're in a deficit position this year, so although there are rate stabilization reserves to cover that deficit, it's the 8 percent increment that is of greatest concern. Rather than make a projection -- because there are different views -- my commitment is, as it has been, to the stakeholders and to maximize the savings achievable. Numerous stakeholders believe the savings are well in excess of the 8 percent. Others are perhaps more skeptical but are prepared to work to try to maximize the savings and learn from the experience.
Frankly, I think a lot depends on how quickly we can bring about what is, in effect, a cultural change in people's approach to driving in this province. Those are hard to predict. We have seen such changes in the areas of smoking and in the areas of drinking and driving to some extent, although not to a great enough extent. Certainly there's been a change of attitude in the last 20 years.
If we can see a further cultural change around road safety start to take hold in the next number of years, then I think that yes, we can see substantial savings beyond those forecast, even by KPMG. That's the challenge that the stakeholders, and to some extent the motoring public directly, are now being asked to respond to. Government will certainly play its role, but government alone cannot change behaviour. The fact is that the root of the problem is that we have an accident rate in this province that is 25 percent higher than in other provinces. Part of that may have to do with topography, but much of it has to do with behaviour.
R. Neufeld: Like I said earlier, I applaud the steps that we're taking. I'm not trying to dispute or argue them. I just wonder: if we're not meeting those thresholds over the next three years
What further steps does the minister have in mind? I appreciate that this might be a little difficult to answer, but over the period of the next three years, when we're looking at these targets -- and I think we have to keep them all in mind -- are there further steps that the minister has that he thinks he could take to bring down the accident claims rates, other than what has been initiated so far, excluding no-fault insurance?
Hon. A. Petter: Well, in the course of consultations there has been a range of proposals. We've already discussed some of them in this House. Some would argue for being even tougher in some areas of impaired driving, although I think that this is a pretty tough package. As we get to the legislation, I think the member will agree. There may well be other things that we could do. For example, some suggested compulsory arbitration, as opposed to mediation -- which again, I think, we can discuss more easily under the legislation.
So there are measures, and part of what we have got an agreement from the stakeholders to do is to work with government in monitoring the improvements, monitoring the cost savings and making recommendations as to how we might go forward. There is a proposal -- and again, I don't want to preclude or anticipate the debate under the legislation -- to have a traffic safety commissioner whose task will be both to monitor and to advise government on further steps that might be taken. I think there are additional things we might contemplate that might grow out of the experience, and the stakeholders have agreed to work with us to that end.
If the current package does not achieve sufficient savings over the next two years, then some of the stakeholders in particular have agreed to participate in some independent review of ICBC's financial situation and to identify further strategies both on the product and on the safety side -- on all sides -- that might assist in containing costs. If I had things that I felt were going to be of immediate tangible benefit and would assist in increasing traffic safety, I guess they would have found their way into the package. There are other ideas out there, and we can canvass those during debate on the bill.
R. Neufeld: I also want to bring forward to the minister that in the northeast specifically, the area I represent, there's a need for further investment into our roads and into the infrastructure that we expect these people to drive on. I know the minister states that we have a high accident rate in British Columbia, but I would say that some of those, at least a good portion -- not all of them, of course, but a good portion of them -- are caused by terribly poor road conditions that can result in heavy dust.
I know that's not common in the lower mainland, because most of the roads have pavement on them. We don't have the same thing you do in the south when it comes to pavement on the roads; we have heavy dust. We have some roads that are barely passable with tractors at different times of the year. In fact, I can bring to the minister's attention that it was just this spring that they were using four-wheel-drive tractors to pull school buses down major arterial roads in the northeast. In both the North and South Peace, if you can imagine, they were pulling school buses with four-wheel drive tractors. They were, in fact, getting stuck with the tractors and the buses and having to take four-wheel-drive vehicles in to get the children.
When you put all that about road conditions into perspective
Hon. A. Petter: The information I have is that, by far, the greatest cause of accidents is driver error. It's something in excess of 90 percent. I don't have specific figures in respect of the breakdown of northeast versus southeast, although I guess the suspicion is that where road conditions do contribute to accidents, it's more to do with the configuration of roads -- that is to say, blind corners and intersections -- and not the pothole factor of roads, which I think the member is referring to.
Again anecdotally, the suggestion would be that the northeast is not an area in which there would be a higher incidence of accidents -- at least, accidents related to road
[ Page 4650 ]
conditions -- but that's a figure I don't have specific information on. I'd be happy to try to break it down. I think that last year we went through an exercise to try to provide the member with some information concerning insurance premiums in and out and that kind of thing. I'd be happy to do the same on the accident side, if we can provide that information in a regional format. I don't know if it can be gained in that way, but if it can be, I'd be happy to pass it on to the member.
R. Neufeld: I appreciate that. I would very much appreciate the minister getting as much information for me as he is able to on that issue. I can imagine that
The other part is that I didn't mean to relate to the minister that potholes were the only thing we were experiencing. We are experiencing poor infrastructure, and it could involve blind corners or corners that aren't sloped right. When you have no gravel on the road, vehicles slide off. I guess that could be classified as driver error in many cases, but had the road been decent in the first place, maybe the vehicle wouldn't have left the road.
[5:45]
So I think there is a direct correlation. It's obvious that there must be. ICBC wouldn't be undertaking some work in the lower mainland on some intersections if there weren't a direct correlation between the configuration of roads and the condition of the roads and accident rates. I think it is high. Comprehensive coverage in the northeast is probably fairly high -- running into animals and those kinds of things. If the minister could get that information for me, I would appreciate it very much, so I can relate it to the people that come to my office.I've had a number of people come into my office that have had rocks fly through their side windows -- in fact, one was just recently. The person left the road. He came in to complain to me that it was "driver error," but he had a rock come through the side window and hit him on the head. It knocked him out and he left the road. Well, that's "driver error." The police weren't going to believe him on that.
I'd be interested in finding out a little bit more of that kind of information. Maybe ICBC should be spending some money on roads in the northeast, rather than just on some intersections in the lower mainland.
Hon. A. Petter: I appreciate the member's comments. Clearly the member has an excellent point: that in terms of comprehensive claim coverage with respect to windshields, obviously there is going to be a high correlation between gravel
R. Neufeld: The further north you get, the bigger it gets.
Hon. A. Petter: I'm not sure if getting bigger or getting smaller is optimal, but I understand that at ICBC they're doing some work.
In terms of road safety, ICBC is not just looking
Finally, I'd be happy to try to get that information for the member, as I said, but I think the member also makes a point that it may not translate. The member and I may have to interpret it, because I think the member is right: if a vehicle slides off a road that has gravel on it, and the speed of the vehicle is such that it's excessive in relation to the surface, I suspect that it will be judged to be a driver error and not a factor of the road. The member is trying to argue that had it been a different surface, perhaps the driver would have been less likely to run that risk and the error would have been less likely to contribute to that kind of accident. So I'm not sure that statistics are going to help resolve that. We'll just have to accept the statistics as they are produced, and then the member can interpret them as he will and account for the kinds of factors that he's indicated.
D. Jarvis: Sometimes it doesn't pay to lose the floor for a while, because it's a long time before it comes back again. I have a few questions that I want to ask about, but I just want to make a comment. I've been driving for over 41 years, and I've never had a windshield replaced. I can't believe that the member from Peace has had four in one year. It's hard to believe.
In any event, I wonder if the minister could tell me: how many of the 1,279,000 bodily injury claims were litigated?
Hon. A. Petter: Well, in terms of claims as opposed to dollars, as I understand it -- in fact, this is in the annual report if the member cares to look on page 15 -- writs received as a percentage of bodily injury claims recorded are in the range of 31 percent. The actual number that then go to litigation would be substantially less than that. I'm told something in the order of 500 a year.
D. Jarvis: I imagine that he has letters, too, but I get stacks of letters about individuals who feel that they were treated very badly by ICBC. Hence the old adage that they are being driven into the hands of the lawyers by ICBC itself, through various methods or means or ways of trying to settle a claim. So I just want to know: how far do ICBC insurance adjusters or staff inside go, if a lawyer hasn't been called in ahead of time to
The CEO of ICBC, who is sitting with you, will know full well that I've written to him on several occasions, where there's been terrific
We wonder why so many bodily injury claims have to be litigated, and I think ICBC has to take a big responsibility for itself in-house. They push a lot of these people into the law-
[ Page 4651 ]
yers' hands. So with all these Road Sense operations that we're putting through and all the road safety, we wonder why there doesn't seem to be any mention whatsoever by ICBC or by the ministry as to whether they are looking into ICBC to try to straighten out some of these matters that are going on. I wonder if the minister would comment.
Hon. A. Petter: I think the answer is yes. ICBC is obviously concerned about effecting speedy resolution of disputes. The member will be aware that ICBC initiated a pilot project in Kingsway to try to get mediation as an alternative to protracted dispute resolution. Just to put it in context, I point out to the member that surveys of those who have registered claims with ICBC indicate a relatively high satisfaction rate -- about 82 percent. I'm told that of those who are not satisfied, about half of those are dissatisfied in respect to the finding of fault as opposed to quantum.
There are always going to be people dissatisfied in the case of insurance claims, and ICBC is in the situation of having to defend, on the one hand, those who paid premiums, in respect of trying to ensure that the corporation is protected in respect of its financial position, while on the other hand, providing an adequate level of compensation, and judgments will differ on that. Certainly ICBC is -- and as minister I am -- determined to try to improve dispute resolution wherever we can. When we get to the legislation, one of the key provisions concerning mediation recommended by the Canadian Bar Association is an effort to do that and to see if we cannot improve the resolution of disputes.
I just point out to the member that I get complaints on both sides from the public: those who claim that ICBC contributes to the problem of cost by offering to settle too easily for too large an amount, on the one hand -- I heard that a lot from lawyers claiming that the problem of cost lay with ICBC being too ready to settle -- and on the other hand -- some of this also from lawyers -- arguing the point that ICBC is far too tight-fisted and strings things out, etc. And the motoring people with claims obviously voice that particular point of view strongly. So you hear it from both sides. I think that in this kind of area, where people are obviously seeking compensation for losses that are not easily quantifiable in very many cases and that involve pain and anguish, there will be dissatisfaction. Against that backdrop, I think ICBC's performance rate is pretty good. And we are, of course, determined to make it better.
With that, hon. Chair, noticing the hour, I move that the committee rise, report progress and ask leave to sit again.
Motion approved.
The House resumed; the Speaker in the chair.
Committee of Supply B, having reported progress, was granted leave to sit again.
Committee of Supply A, having reported progress, was granted leave to sit again.
Hon. A. Petter: I move that the House at its rising stand recessed until 6:35 p.m. and thereafter sit until adjournment.
Motion approved.
The House recessed at 5:57 p.m.
The committee met at 2:44 p.m.
ESTIMATES: MINISTRY OF
HUMAN RESOURCES
(continued)
M. Coell: Last week we canvassed a number of issues, and one of the issues we spent some time on was the new program for classifying people with special needs and the effects that might have. We talked about the amount of money going down from $596 per month to $500 a month for those people who didn't qualify for the new classification.
[2:45]
I'd like to mention two things before we get into some questions. I think one of the impacts of that is that prior to changes to B.C. Benefits, individuals were allowed to keep $100 or $200 a month that they might have made outside the government income. They're not allowed to do that now, so any money they make is deducted from their amount owing. That is a drop in someone's potential income. With the reclassification, if someone wasn't classified as special needs, they would drop $96 a month. So now you're potentially seeing $196 a month taken away from someone's base salary, which they needed to live on. I just want to stress that I think that is a significant drop, percentage-wise, for anyone in our society, let alone those who are living on $500 or $600 a month. So with that in mind, that is where I would like to spend some time -- looking at the government's estimates of how much they're spending.The reclassification that we talked about last week
Hon. D. Streifel: It's always a pleasure to stand and correct the record. The member referenced earning exemptions and that we had reduced some of the programs. The $100 community volunteer program that our clients can operate under in this ministry
So again we talk about the basic rate of $500. Last week I understood the member very clearly when he said that he represents the Liberal caucus as the critic. To expand slightly, I
[ Page 4652 ]
suppose, on the comments on "Voice of the Province" that at this stage the Liberal caucus has no policy on human resources or social services, and they will be taking the next 18 months to two years to develop one, therefore we don't have to address the prescribed $470 level that was in the Liberal platform of last May, and that makes me very happy.
On to the next question around the special needs criteria, the temporarily excused criteria, the employable criteria and the disabled criteria. All of those four categories would have been a spinoff of the cancellation of the employable category that was existing. This minister said very emphatically when this program was announced that I will be monitoring it in process and that if I wasn't satisfied as we approached the end of the transition period, if I wasn't satisfied and we weren't achieving our goals, I would be prepared to review. That's what I have done. The appearances were that as we approached the end of the three months, there were a number of folks who were falling through the cracks -- a number of folks that the member for Vancouver-Langara had brought forward.
Listening to my staff and the advocacy community, I took the decision last week to call a halt at this stage and review the criteria with the view in mind that we have a goal to meet. That goal is to cooperate within the legislation that we brought in with the Disability Benefits Program Act -- the broadest definition in Canada -- and at this stage to break out the unemployable category into disabled, special needs, temporarily excused and employable, which should fit within that scope. That's what I've done. We will take this next period of time to do our work and deliver protection for those British Columbians who are most vulnerable.
M. Coell: I wonder if the minister can tell us how many people have taken the time to apply to be reviewed at this point in each of the categories: the disabled, the temporarily excused, the special needs and the employable.
Hon. D. Streifel: I can have hard numbers for the member as of June 11, if that's satisfactory. As to issuing the order to review criteria as of last week, I will attempt to get those numbers. They're probably still in process.
On June 11 we had 12,335 applications for special needs, and we had 11,598 processed as of June 6. Now, I know that last Thursday every application that had been received had been processed, and we will have that number for the member in due time.
M. Coell: Before the decision was made, how many in each category -- if they were processed -- were disabled, temporarily excused, special needs or employable?
Hon. D. Streifel: Up to the review of the criteria, there were 14,000 applications. We will get the hon. member the breakdown of the employable category. Just so I understand what the member needs here, he wants to know how many were designated employable, temporarily excused, disabled or special needs. He wants to know what the numbers were in each of those.
Interjection.
Hon. D. Streifel: Yeah, we'll get that for the member.
M. Coell: The ministry must have had some research prior to making the decision to go with this reclassification. Had they any projections of how many people would go through reclassification?
Hon. D. Streifel: On the date in March -- I think it was March -- that this program was kicked off, I understand there were 27,000 in the classification of unemployable. Bearing in mind that the number is somewhat fluid -- there is attrition; there are some in and some out on virtually a monthly basis -- it's difficult to nail down the 27,000 as being a static number that's there forever. In other words, that can change in any given month.
M. Coell: I am aware of that. Would the minister have any research on the number of people who had been in that category for longer than two years as compared to the people who had just come into the category of unemployable prior to March?
Hon. D. Streifel: At any given time, about one-third of the caseload of unemployables would have been longer than 12 months -- those are the numbers that I've been given -- and about two-thirds would have been less. Two-thirds of that within any 12-month period, I guess, would be changing over. So it's quite a fluid number.
M. Coell: So you'd be looking at approximately one-third of these people who would have been longer than 12 months, with two-thirds coming in and out of the system, if I'm correct. I don't see the minister correcting me.
The decision to go ahead with reclassification must have had some reasoning, must have had a
Hon. D. Streifel: There are a few reasons why we undertook a reclassification of the unemployable. With the advent of the Disability Benefits Program Act, we extended the definition of disabled under our legislation to recognize episodic illnesses and other areas of recognition that the advocacy community in British Columbia had been after for a long time. Once having achieved that, there was a fold-over, a domino, a move-down effect in other categories.
With the broadening of this definition, we undertook the opportunity to work with the community to reclassify large sections of the caseload. The advocacy communities were very busy contacting their clients and working within their groups to have them reclassified on the basis for determination of whether or not there would be inclusion in the category under the Disability Benefits Program Act. That movement was going on, so that's standard business as usual on behalf of the advocacy community. We looked at our unemployable category to determine whether or not there were sufficient criteria in place that would move some of the folks who were listed under unemployable into the disability program, which would dramatically enhance their economic opportunity, their support and their dignity. That was one of the driving forces.
[E. Gillespie in the chair.]
Once that question is asked and then answered, what happens other than that? What is the next domino? Well, there are numbers of folks in there. Why are they there? There were
[ Page 4653 ]
very few base criteria, other than a note from a doctor that says: "This individual can't work." We didn't know how or why or how long. Those kinds of standards don't exist anywhere else in our community, whether you're employed, whether you have private insurance or whatever the case may be. We recognize that there must be a reason given for the impairment to employment. What is it?
[3:00]
Anyway, when that question is asked, then the answer is that we need some criteria to determine what is affecting an individual's ability to be employed, how long this may happen and what kind of support would be needed for this individual. That drove the criteria.Assessing the criteria application, then, we looked at a number of the other programs that some of the other ministers administer. For instance, Youth Works and other training programs have criteria built into those programs that say the individual must be actively seeking work and other initiatives. If they have a problem so that they can't go to work, I mean, we aren't going to just kick them out the door -- as I remember some of the May 1996 platform had suggested; I'm very pleased the member has walked away from that. In fact, we had to look at it and say: "All right. Here's an individual that can't participate in the job search or the training programs." They don't have an extra medical need of any kind. They're just down and out, for whatever reason, for this short period of time.
So we built in the temporarily-excused category. That was the process of starting with the Disability Benefits Program Act, which contains the broadest definition of disability in Canada; it recognizes episodic illnesses. That developed with aid and support from the disability community at large.
What other effect comes out of that, with broadening that definition? As a matter of fact, when we get the numbers from this review of the unemployable category, we will see there's been a significant movement into that category. That -- I'm hoping I'll get at least a nod of the head from the member for Vancouver-Langara -- would be a positive aspect of what we've gone through, to move the -- how many? -- hundreds of folks that we did into that category. It would give them a more dignified life and certainly improve their economic position. So that's really the history around driving the decision-making process based on the inception of the Disability Benefits Program Act.
M. Coell: My understanding is that the special needs category wouldn't be getting any more money. They'd be keeping the money they were getting, the $596. But if you didn't fit into that category, you'd lose about 18 percent of your monthly income through the employable category.
The question that is in my mind is
Hon. D. Streifel: For clarification, again, the program is not cancelled. We're reviewing criteria. There were a couple of initiatives. One of them I've spoken about at length already today. The criteria, in terms other than I've spoken about, weren't sensitive enough. This minister felt there were numbers of individuals that were or may be falling through the cracks. That wasn't the basis of the delivery of this program in the first place. I wanted to be absolutely sure that this wasn't going to be the end result of this program.
That was one of the reasons -- or the main driving reason, quite frankly -- that I asked for a review of the criteria: to assure myself, so we could assure British Columbians, that we would be protecting the most vulnerable in our communities.
Some of the reasons -- one particular reason -- why a number of folks were falling through the cracks in this issue were some of the differences in the way in which medical practitioners approached and assessed the criteria for special needs. That was one of the problems that we encountered. So this minister had a pile of questions around some individual cases that were brought to my attention. That seemed to be kind of an indicator of the criteria being a little more rigid and not responsive and sensitive enough. That's why I asked for a review. It's no more and no less than business as usual, as I announced when we announced the start of this program, in a three-month transition period.
M. Coell: If this is not a cancellation and is a review, as the minister says, what can the people who are applying for these classifications expect? Should they still continue to apply, go to their doctor, be reviewed and bring that back? What's being reviewed here, the program itself or the implementation date?
Hon. D. Streifel: We're treading into the territory of future policy, as we are in a review of the program and the criteria for the program. We haven't set a date for re-establishment. We haven't had the opportunity over the weekend to apply the criteria or debrief or assess where we're at, at this stage, quite honestly. We are now in a review of the criteria. I'll be participating with my staff and with the health services division in order to effect a review of the criteria and a review of the concerns that the staff in implementation have brought forward to me. I will be doing that.
I don't have any projections at this time of dates or whether the criteria will be changed. But I do know that when we deliver this program, we will be protecting the most vulnerable in our communities. That's what we started out to do.
M. Coell: There are 15,000 people who have yet to apply for this program. As of the first of the month, they're each going to lose $96 off their income assistance cheque if the program isn't suspended. If the program goes ahead, those individuals would have had to apply and be reclassified in order to still have that $96 on their income assistance cheque. So my question to the minister is: what can these 15,000 people expect on their July income assistance cheques if they haven't been through the process but were asked to go through the process?
Hon. D. Streifel: The rate will be maintained for the folks who were caught under the unemployable category, until the criteria review is completed.
The question the member has for me, on the folks that applied or didn't apply under this, is a question that I have, as well. I share it with the member. If we have on the March date about 27,000 cases
[ Page 4654 ]
such a great job on our behalf -- had worked through their caseload and made the contacts for the program. They did their job fully.
With the mailings, with the personal contact, with the work from the advocacy community and the uptake -- the 14,000 applications of the 27,000 or so on that date -- it's a very interesting question. I don't have an answer for it. I don't know if the member would have an answer for it. But part of that caused the minister enough concern, as well, to ensure that we have our net just right here, that we don't leave too many folks behind.
M. Coell: One of the complaints, I think -- we have some individual examples to share with the minister shortly -- is the stress that people with very long-term disabilities have had with the system -- that now they've had to
That's a lot of stress for people to go through. The way the minister has described the review is that that stress is still there for them, for all 27,000 people who have to go through their reclassification process. Those people have gone through it and been rejected. They're probably in the appeal system now -- which costs the government money, as well -- and the tribunal system. The other people will have to wait until the review is complete, and if it's a go-ahead, then another 15,000 go through the system.
My question to the minister is: for the 27,000 people making doctors' appointments -- and one or more visits to doctors, I'm sure -- was there a discussion with the Ministry of Health into what that added cost was to the Health budget?
Hon. D. Streifel: The member opposite disappoints me, given his experience in his worklife, in that he continues to roll in and interchange unemployable with disabilities. We did not review the disability category. It's the broadest definition in the country. I can't help it if the members opposite don't agree with it; I can't help it if they don't have a policy on social services. They've abandoned their stance. Their proposal was a limit of $470 support for folks. Let them explain to anybody they want to mail this to, who that would have helped.
M. Coell: Just so the minister can think about it
R. Thorpe: When I returned home on Thursday, I actually talked to a constituent who had received one of the letters or notices and then went to the doctor. The constituent was on disability, and the doctor's report confirmed that she should still be on disability. She's been denied that by the worker in the local office. The lady came into my office on Friday to inquire into that, and she said that it appeared to her that everybody was being disallowed. I would not want to believe that that is the case, so first of all I would like the minister to confirm that there has not been a policy decision that everyone is automatically disallowed.
Secondly, the client indicated that on Friday she also received word that her funding would stay in place for this month -- and she's been advised of that by her worker -- but that there was no certainty for the future.
I've asked several questions there. The last question would be: when will these clients have some certainty on this very significant issue -- these folks who find themselves in this disability situation?
Hon. D. Streifel: If the hon. member has a constituent who is classified as disabled under the Disability Benefits Program Act and we've made this alteration, then I would offer the member to bring it forward, and we'll have a look at it with the idea of fixing it. There has been no review of disability benefits under the act. The category is permanent, so to speak, given that you can move in and move out, but the classification of disabled is permanent. The decision is not made locally, so I'm not quite sure what the member's reference to local involvement is about. The decision on that classification is made by the health services division.
R. Thorpe: I know I asked several questions. This particular individual indicated that she has been assured that funding will stay in place while some review is apparently going on. I came in late, so I assume that was the review you were talking about. I could be wrong. The review goes to the end of June, I'm told. What is the certainty for the people moving forward for the month of July, or is there any certainty?
[3:15]
Hon. D. Streifel: I'll try this one again. Any individual who was in the unemployable category through this process will have that right maintained until the criteria are reviewed. For the member to try to get on the record that everybody was being denied under the criteria that were there, it's not quite true. Through this process there were very close to 5,000 approved applications of the 14,000 that hit the door. I'm waiting for the number on those who went to disabled and those who went to special needs. There were 8,400 denials in that process. We have 29 or so that we're looking for further information on.But the criteria are now under review. For the member's information, the rate for the folks who were classified as unemployable remains until such time as we've reviewed the criteria to ensure and to assure that we in fact protect those who need the protection in our community, the ones who are the most vulnerable.
Again, there was no review of the disabled category -- none whatsoever. If this member has a constituent who was classified as disabled and has been pulled through this process into a review, I would like to see that information.
M. Coell: The minister has given me some of the numbers that I asked for earlier, in that of the 14,000 people who applied, 5,000 were found to be special needs. Eighty-four hundred of them were found to be employable, so they would have had their income assistance reduced by $96 per month.
The other question is about the criteria that were used. If a person is going to see a doctor and the doctor is making the assumption that this person is not able to work -- is deemed, in the professional's eyes, to be a special needs -- then that application was not dealt with in the district office. It was dealt with in Victoria. Is that correct?
Hon. D. Streifel: The determination was assessed at the health services division after the information was brought forward.
[ Page 4655 ]
M. Coell: That's the point I'm trying to make -- that you have a doctor's recommendation. Did you have a recommendation from the financial aid worker, or were they unable to make a recommendation? Or did the doctor's recommendation go directly to health services?
Hon. D. Streifel: The criteria that we were looking for from the doctor would supply information as to what the problem is, how long there will be a problem, why the individual can't work and what support the individual needs through this process -- that is, medical support -- and that would then have been brought forward by the doctor. As those criteria were based on that kind of medical evidence, I'm not sure that we should be asking people other than the medical practitioners to assess these needs.
As it is with the disabled category, and as it was with the unemployable, the individual who applies for that must attend a doctor's appointment under the special needs category. As we broke out unemployable, we required slightly more information than the doctor would have had to supply under the old process, so the doctor's visit
M. Coell: I suspect they may have underestimated the cost of doctors' visits on the coverage the minister is mentioning. Can the minister tell me if any of the doctors' recommendations were overturned, or were all the medical recommendations taken and acted on?
Hon. D. Streifel: If the member is asking if I reviewed every one of the applications to see if the doctors were correct or not, no, I didn't.
M. Coell: I'm glad to hear that he wasn't making recommendations on medical services; that would be quite inappropriate. What I want to know is whether ministry staff made the recommendations or whether the doctors' recommendations were accepted. When the recommendations from family physicians came to the ministry, did the ministry approve the recommendations as they were, or did they read them and decide whether or not they fit the criteria? What I'm wanting to know is whether non-medical people actually made these recommendations.
Hon. D. Streifel: The information was supplied by the medical practitioners. It had to fit the how long, the why -- the who, what, where, when and why of investigation -- based on medical reasons. If the doctor supplies information that says that there's more than a year and that there's a need for medical support, then that information, I'm assured, would have been accepted under the criteria. The decision was made by the health services branch, based on information that was brought forward.
M. Coell: Maybe one of the reasons I am asking this question is that I don't think the criteria are widely known. I don't think the criteria are known by the general public. Well, maybe the 27,000 people would have made a point of knowing those criteria.
The number of hospital visits, when you think of 27,000 people visiting a doctor once or twice, or possibly more
I'm concerned about the appeal process and the costs of all this -- whether it was truly thought out to get to this point where you're really at the final hour. You're days away from this program supposedly kicking in and changing the categories for people. Can the minister tell me how much he has calculated that the review will cost per month? Were there going to be savings made with this program? Was it going to break even or cost even more money to do this?
Hon. D. Streifel: The last one first. Of course, whenever individuals who work for a living handle a document, there's time consumed and that time is paid for, so there will be costs. We haven't broken out what those costs will be. We don't know, until we assess where we're at on the review of the criteria, how extensive it will be and where it will take us. We have no way of predicting the proposed costs at this time. We will be working on that as we go through the process of reviewing the criteria, and
I'll probably just drop the rest of the comments from the member.
M. Coell: The program came under some pretty strong opposition from community groups, I think. The downtown east side associations in Vancouver were very critical when this program came out. They still are. The Downtown Eastside Women's Centre, as well, was very critical of the program because of the confusion they felt it was going to cause -- because of the decrease in assistance to some people and the stress that others who are disabled or special needs would feel in having to go through this process. So there was a fair amount of criticism, I think, levelled at the ministry. To have the program now temporarily shelved at the last minute goes a long way to proving that that criticism was indeed correct.
I know that the member for Vancouver-Langara has some questions regarding that, so I'll turn the floor over to him.
Hon. D. Streifel: It's amazing how the opposition tends to try to chair meetings from their side. In fact, the Chair controls these meetings, and the Chair recognizes those who stand.
I am going to try this for the umpteenth time. There was no reclassification of the disabled category. The members opposite want to conveniently roll in different inflections, different intentions and different motivations in their form of questioning. For the member opposite to suggest that the criteria weren't widely known
M. Coell: How about the 15,000 who haven't applied?
Hon. D. Streifel: Extend that question and try to get an answer for it, brother, and maybe you'll be rethinking your position.
The Chair: Order, please.
V. Anderson: First of all, I would like to thank the minister for a follow-up that they did last week from our discussion. I received a thank-you back from that follow-up, but
[ Page 4656 ]
with it came a question. This had to do with the question regarding a person from the Downtown Eastside Women's Centre. The ministry did contact them afterwards and are following up. They indicated that in this particular case this person would not be cut off by the $96, at least for the time being.
But when they tried to understand that, the advocate working with that person, from the mental health advocate situation, asked the client to bring in her stubs so that they could do a review and understand what had happened. The client said that she didn't have the stubs, because she had returned them to the ministry office. When they contacted the ministry office to get a printout so that they could review it and understand for themselves what had happened, the ministry office wasn't prepared to make the printout available but instead only offered that they could come into the office and look at the computer screen. Is it the practice not to make a printout of the client's needs and payments available if they have need to ask for it to clarify the situation? Are they expected to come in and look at the computer screen without getting a copy of their printout?
Hon. D. Streifel: A little clarification from the member opposite. Was it the client or the client's advocate who was requesting information? If it's the client, then we should re-look at the member's problem. If it was the advocate, it's not likely that we would be passing private information of our client's to anybody but the client.
V. Anderson: It was the client through the advocate from the health centre who had been working with them, and I'm sure they had written permission for this. What I will do is give a copy of the letter to the minister, to follow up directly. I will appreciate hearing the result as it comes around this time, as well. Thank you, hon. Chair, for allowing that to be passed on.
[3:30]
I've been listening for the last little while to the discussion. I must say that I'm still not clear what the situation is, and perhaps I can clarify it. The 27,000 people that were being reviewed -- I heard the minister saying that this did not include the people who were previously on disability. They were not reviewingHon. D. Streifel: Our disability caseload -- again, with a number of changes as additions happen -- is 26,818. That's the disability caseload. There was no movement to reclassify downward anybody on disability. The main focus of part of this exercise was to move more folks who had been classified as unemployable into the disability category. An actual consequence of reviewing their circumstances -- asking the basic investigative questions of who, what, where, when and why -- would have the effect of moving folks to the disability category.
V. Anderson: That's what I understood, and that's why I wanted to get that clarified. The minister said there were 26,818 on permanent disability who were not directly affected by the change.
Interjection.
V. Anderson: Directly or indirectly, right. Does the minister know at this point how many of those who applied for disability as a result of the change from the special needs category, or as new applicants, were moved onto disability from the previous unemployable category?
Hon. D. Streifel: That information is coming forward. The hon. member for Saanich North and the Islands had asked that question -- for a category breakdown. We will supply that as soon as we can get it.
Another word on the disability category. When we changed our focus under the Disability Benefits Program Act, since April of 1996 -- just slightly over a year ago -- we have had a 13 percent increase in the disability category. That was the intention of that act and of the work with the advocacy community, and the member is well aware of this and of the positive response that it has had in the community.
[W. Hartley in the chair.]
V. Anderson: I appreciate that, and I will affirm that it has had some positive response from the community. They and myself, I know, were delighted when that change was made, so I affirm that wholeheartedly.
Then we are dealing with the 27,000, about half of which at this point have applied and been processed, give or take 500 or 1,000 one way or the other. Of those who have been processed, is the minister saying that now that things have been put on hold in order to review the category, none of those who were previously classified as unemployable are being downgraded by $96 until the final situation is clear, and that in effect they will continue to receive that until further notice even though they've gone through the process?
Hon. D. Streifel: That's correct. I would share my concern on the number of applicants versus the 27,000 number. I want to get on the record that 27,000 isn't a permanent, solid number or a base to work from. It was the number of unemployables at that specific date; that changes from time to time. So I've been very careful over the past three months to not get trapped into saying that this is a 27,000-person caseload and never shall it change. So just be aware that that number could or could not be fluid. I mean, it could be higher or it could be lower.
When we looked at the numbers that had come in for application after the work we went through on the mailings, the stuffers, and after the contact with the advocacy community themselves and the ongoing work with our front-line staff working with their caseloads -- the individuals they deal with on a regular basis, the work they did to make the contacts -- it was a huge concern of mine that out of the base number, movable or not, we dealt with 14,000. What happened to the rest? Where did they go? Were they not aware
Hon. member, I asked those questions myself of my staff. And when I couldn't get satisfied that we had the numbers locked down, that in fact the caseload through attrition
So that's why it's time to take a look at this. This is why I've asked my staff to take a kick at this again to find out, to assure me that we are doing this thing properly. Without that, I have no intention of striding forward blindly, saying: "Well, them's the rules, folks. Just forget it."
As a minister, I think I have been responsive, and I've been able to act when it's been necessary in this ministry with
[ Page 4657 ]
this caseload. As far as I'm concerned, what we've just gone through is business as usual for me. It was what I signalled right from the very beginning. If the problems were looming and if it looked like there were problems, then I was prepared to take action and review the criteria. That's exactly what I've done.
V. Anderson: I'll deal with the two categories, because I think there are two categories: those who have been in the process and those who haven't yet.
Dealing first of all with the process, to be clear about those who have been in the process and have applied, is the minister saying that they will continue to receive, as I understood him to say, the $96 that they previously got in the unemployable category until such time as there is a further announcement and a clarification of the process? So they don't need to do anything more in this process but wait until they hear.
There's an uncertainty out there, I know, from that group: is that a day-by-day process, a week-by-week, a month-by-month
What I'm trying to get at is that when you go to your landlord, you have to give a month's notice if you're not going to be paying your rent and he's not going to be receiving income. What kind of lead time will they have in the next few months for when they will hear, and what kind of process time will they have to follow through with their personal concerns?
Hon. D. Streifel: To try and offer some clarification for the member on where we're at now with the review of the criteria, those folks that were on the unemployable caseload will receive their benefit until the review of the criteria is finished.
Earlier, after questions from the member for Saanich North and the Islands, I stated that we don't have a time frame for this yet. I took this action last Thursday night and overnight to Friday morning, to begin the review of the criteria. We will now assess where we're at, and perhaps in the next few days or a short number of weeks we will know what work has to be done around this. I will be able to more definitively answer the member's question as to when this would be, but for now it's business as usual. Those that have been through the process and have been reclassified are there; those that were unemployable are there. As for new applicants that have come in and applied for special needs, yes, they retain that $96 as well. From now on we have work to do.
V. Anderson: For the second group who have not applied yet or who have not entered into the process, is the recommendation at this point that the process ceases and that they should not be filling out application forms until the new criteria are in place?
What I am trying to ask is whether the advocates in the field say: "Whoa! Until we have the new criteria we shouldn't continue with the applications, because we'll only have to do them again afterwards." What's the process from here on in?
Hon. D. Streifel: Individuals should continue to apply. Within this next short period of time, we will be putting together the basis for review of the criteria. So I would recommend that individuals continue to apply under this category and supply the information that's needed.
V. Anderson: First of all, has the minister done a press release? And is there information going out with the cheques this month -- which will go out this week, I presume? Is there information going out to the advocacy agencies and to the recipients this month with their cheques and in press releases, so there's clarity for everybody in the process?
Hon. D. Streifel: I'll be communicating this both to my colleagues and to those that are affected as we go through this process of reviewing the criteria. So I can't say to the member that we're going to throw out press releases, or however we're going to do this. But we will continue to communicate with our clients and the advocates on an ongoing basis. On any issue that comes along, we will communicate with the folks that are affected by this process as well, and we will deal with them.
V. Anderson: So all of the ones who have not applied should continue to apply, I understand from the minister's comments. Does it mean, then, that when the criteria are updated, all of the persons who have applied will have to reapply with the updated criteria? Or else how could their work be processed if there are new criteria in place that weren't in place when they first applied?
Hon. D. Streifel: I'll try this for the member once more. We had 14,000 applications at the declaration to review the criteria; that's all who have applied. I would like to know what happened to the others as well, and that's one of the reasons for this review and one of the reasons we're going to take some time to do this review. The member is trying to move me off into where we would be once we've completed the review, and I can't give him that information. We haven't had a debriefing; we haven't had the full effect yet; we haven't got the word back from the field yet. So we're in the process of reviewing the criteria, but I can't predict what the outcome of that review is going to be.
V. Anderson: I think I'll leave it at that point for the moment. I understand from what the minister has said, then, that the review will be contacting advocates and all the people involved to get a feel from the field. I appreciate that they will be undertaking that process and that in a way they'll be providing them with an understanding of what the criteria of the review itself are and how they can feed their concerns into that. I think it will at least relax people somewhat for the summer, and they'll be able to enjoy their summer.
In looking at the minister's comment that we are protecting the most vulnerable -- and I appreciate that -- I want to come to the report that was done by the Social Planning and Research Council, "Widening the Gap." Let me first of all take the single person we have been discussing. In their report, SPARC looked at the adequacy of support that people received through income assistance in 1982 as against 1997, using comparable dollars. In 1997 a single person would receive $175. The comparable amount in 1982 would have been $312 in purchasing power. That's not saying that it was adequate at that time, because it was about 50 percent of adequate at that point. So they declined by 44 percent. Two adults have declined by 40 percent. A single parent with a child has declined by 13 percent, because there has been more support given in that area, and single parents with two or more children, by 11 percent. For the single person particularly, and the two adults, does the minister consider this adequate? Or is it that single adults are less vulnerable, and therefore they are not in need of the same kind of support that families have been getting in the last support system?
[ Page 4658 ]
[3:45]
Hon. D. Streifel: We had a fair discussion with the member for Saanich North and the Islands last week on the SPARC report. The same questions were asked then, and I would really, for the most part, try to refer the member to his critic to understand this.The concern I have on the SPARC report is that it did not take into account the income supports that are available under the system. It conveniently left out bits and pieces. So as far as I'm concerned, if they're going to do a review of the economic standing of any individual or group of individuals and not include all the economic support that's available, it pretty well discredits the whole report. That's my view of it. They did not consider child tax benefits; they did not consider the GST credit in that. That's a significant amount of money when you have a minimal existence on the kinds of moneys that are there.
Given that, there still wasn't a recognition that the income support system is in general terms a temporary measure. It's not to be viewed as a permanent home for the vast majority of the individuals that come there. They're passing through; they're in and out in a matter of months anyway. There are other sources of support within the communities -- for instance, employment -- that would be more appropriately viewed when we look at base levels of support. The income support system is a temporary stopgap measure. In those categories where it's not temporary -- for instance, persons with disabilities -- a single person on disability receives $271 a month above the basic rate, plus ancillary health benefits and other benefits. I'm stretching my mind to find that referenced in that manner within the SPARC report.
V. Anderson: I'll ask a companion question to the one I asked last week, and I'm waiting for the answer on it. The one I asked last week was: what is the formula for arriving at the $325 for housing allowance for persons? Perhaps we can get the answer to that first before I ask the second one. That was taken on notice to be brought back.
Hon. D. Streifel: Our income support system has been primarily focused on the support side. Part of the difficulty we have, as the member himself referenced last week, is in reference to developers and the development community and the problems we're looking at within the landlord community in some areas. An increase on the shelter side has never translated into a direct benefit in improved shelter for the clients. It's generally moved right into the landlord's pocket and status quo on the accommodations side.
That's certainly a problem. It led us last week into other forms of ideological discussion on who has the sole responsibility in the community for developing social housing and whether or not this ministry is a capital ministry or a support ministry and a program ministry. We examined this area fairly extensively last week. I would refer the member to the Blues for references to his questions.
V. Anderson: I know I'll find in the Blues that the minister said he would research the basis or formula for housing and get back to me.
I had asked -- I'm still asking -- the question: what is the basis for that? And what account is taken of the different costs of housing in different parts of the province? That's another part of the question. Housing in Vancouver is one thing; housing in other areas of the province is quite different. Does the minister use the comparison of the rental allowance that's available in communities and pay the low end of the rental allowance -- a certain standard or a certain portion of the average rental allowance that's available? What I'm trying to get at is: what is the base for an adequate rental payment -- a basic rental payment that's adequate for the average person in the community -- taking a single adult as a person in this regard, in asking that question?
Hon. D. Streifel: I'm not aware
V. Anderson: Well, I'll leave that thought with the minister. I've discovered that he's willing to take new ideas and go in new directions if they sound reasonable, so I'll leave that suggestion as one to be considered.
I did have the opportunity to attend the DERA conference on housing in the downtown east side, with the concern for the closing of the hotels down there and the increased need for low-income housing, particularly for single persons, although it affects others as well. I'm wondering if the minister has had any chance to look into that situation in the meantime and whether he's working with the local community or the provincial or federal government and other agencies in dealing with that crisis.
Hon. D. Streifel: As I explained last week, we're part of the meetings where they're attempting to find a solution. The ministry is an active participant. Not being a capital ministry, our role is somewhat limited. We are prepared to address the needs of the clients as they come up, if this circumstance becomes the crisis that the member assures us that it will be.
I have a deep concern that we have a problem of low-cost rental housing in the downtown east side. I've participated within and without government in initiatives that would bring low-cost homes to our clients in that area. I had great hopes after Expo that the social housing component of the Expo legacy would be fulfilled. It was not. I would refer the member to his caucus leader -- his party leader -- to ask the questions as to why that didn't happen. I remember that report, in general terms -- again, in the papers and the press about 18 months or two years ago.
I share the member's concerns on this issue. That's why my ministry is a participant, and we will be assessing the needs of our clients as they come up. In the interim, we are participating with the discussion groups around this issue to ensure that we have full input on behalf of our clients.
V. Anderson: I might refer the minister to -- and he might make sure he has a chance to look at -- the 1990 survey of low-income housing in the downtown core, which was done by the housing centre of the community services group of the city of Vancouver. It does indicate the difficulty of the situation, and, of course, it's become more drastic since then.
One of the trying times of the meeting was that right next to the Carnegie Centre, where the group was meeting, is one of the latest hotels to be closed by the health department -- the Roosevelt Hotel. The people at the meeting were saying that as much as they agreed with the condemnation of the building because it wasn't fit for human habitation, they still had a request that at least two floors of that hotel be left open because it was still the best accommodation that was available
[ Page 4659 ]
for many of the people in the community. That expresses that the crisis is not something that's coming; it's already there. I want to highlight that and get that message back from the people in the community, because they were there with good questions and good concerns and wanted to be involved in the results themselves. I hope the minister will consider that.
I want to go back to another question that was on notice, which the minister was going to find out about just as we broke last week, and that had to do with the earned-income exemption. The minister was going to explain the 25 percent. It used to be that a family member could earn $100, until that flat rate was taken away from them. The minister said today that it would be very easy for that to be replaced by working. If I understand correctly what the minister said, if a person went out and earned $400, they would be able to keep 25 percent of it and therefore earn the $100. Is that what the minister is saying on the 25 percent exemption?
Hon. D. Streifel: Before I get back into the discussion on enhanced earnings exemptions and earnings exemptions
Earnings exemptions. The amount of earned income exempt from deduction is calculated as 25 percent of net income. Net income is total employment income less deductions for CPP, employment insurance, pension, union dues and medical insurance. So if an individual earned $400 and had no other deductions off the cheque, then 25 percent of that would be $100. If there were deductions off that -- on the gross side of the cheque, for instance -- then it would be after that. The more you earn in this circumstance, the more you can keep -- until you reach the level where you no longer qualify for income support.
V. Anderson: If a person is earning that $400 -- you mentioned CPP -- are day care expenses and clothing and travel allowances deductible from that $400 before you figure out the 25 percent? For most people there's transportation; if it's a family, there's day care -- which it is for this $100. Are clothing allowance and food allowance and other expenses deductible from that $400?
[4:00]
Hon. D. Streifel: The net income is income after statutory deductions have occurred. Many of the other expenses the individual talked about may or may not be covered already. There could be a subsidy provided for child care; there could be a transportation subsidy already supplied by the ministry. There may or may not be a clothing allowance available, and other transition-to-work benefits may be in there. They are not deducted from the paycheque. Those are enhancements to move individuals into the workplace.V. Anderson: I wasn't recommending to the minister that the Roosevelt Hotel be opened. I was telling the minister that the people at the meeting who live in the downtown area were saying that of the choices available to them, even being able to move into the Roosevelt Hotel would be better than anything else available to them. What I was indicating -- the crisis of this
Coming back to the other, in effect the earned exemption of 25 percent is really not a feasible figure. Can the minister indicate how many persons are presently claiming the 25 percent exemption out of earnings? I would suspect it's very small, in that it's unrealistic. It costs you more to try and earn the money, other than you would have work experience. Is the minister willing to think of a staggered exemption so that they might keep $75 of the first $100, $50 of the second and $25 of the third, so that they can actually work themselves out of unemployment? The present system just doesn't make that possible.
Hon. D. Streifel: The discussion we've had to this extent is around the basic earnings exemption. I will produce for the member, on my list of commitments, the actual number of individuals that are claiming an earnings exemption. To state again: through this whole process of my tenure in the ministry, looking at moneys that are received by our clients is, to say the least, an odd policy. I'll try to explain that.
Moneys that come in are viewed in different ways for different purposes and for different individuals. Taking to heart the member's comments of the past earnings exemptions
V. Anderson: I appreciate the minister's indication and willingness -- and eagerness, I think -- to have that briefing at this point, so I commend him for that. May I just ask -- after he's talked to his ministry people -- that he include in that briefing some of the advocates and the people who are working on his behalf in the downtown cores throughout the province. I think he needs to see the briefing from both sides, and they would very much appreciate having his presence and the opportunity to speak directly to him. I hope the minister would be willing to do that.
[S. Orcherton in the chair.]
M. Coell: The idea of reviewing this policy and the one we were dealing with earlier regarding the new categories of reviewing that policy at this point
[ Page 4660 ]
they don't need to be reviewed because they don't come up with some serious problems -- as I think the member for Vancouver-Langara pointed out with the one program and as I tried to point out with the other. For the people who have these services, it is unfortunate that they are the ones who are put through the wringer when it comes to reviewing problem policies. I wouldn't for one minute blame staff for this need for review. It is the responsibility of government to ensure that once policies are put in place they are thought through and that the problems down the road are seen and can be acted on.
I'd like to return to the first issue we were discussing, which is the reclassification of the 27,000 people who are unemployable. I have a couple more questions I wish to add before we move on to another section. The reason I said that maybe the program wasn't widely known is that almost 50 percent of the people that you identified didn't apply. There's got to be a reason for that, and I hope the review can enlighten us all on what the reason for that is. For the people who have been reclassified as employable, I believe the minister said they would not have a reduction in their pay during this review, even though when they were classified as employable their pay would have gone from $596 down to $500. Can I be reassured that that isn't happening in the meantime -- that they will continue to be paid at the level?
Hon. D. Streifel: A couple of quick questions for the member. When you brought forward the information that 14,000 out of 27,000 didn't apply, you asked the question why. How do we find out the answer unless we look at it? If we look at it and call the look-at a review, perhaps I could escape criticism from the members opposite if I said: "No, we're not reviewing anything at all; we're just kind of looking at it." I'm not sure how to get at the answer to that question. That bothers me deeply until I look at it, and that's what I've ordered that we do right now.
If the hon. member wants to talk about, "You shouldn't have to have a review of something, because if you set the policy it should work
M. Coell: In response to that, if I was going to be critical of the minister, it would be for not telling these people during the election that he was going to cut their pay by $96 and for not letting the people know that he had an idea to cut welfare rates by 20 percent after the election. That's the sort of criticism I would level at the minister. But I'm not going to do that, because we're here to look at the estimates and we're here to look at how this particular minister is running or not running the Ministry of Human Resources. One of the reasons we've spent a couple of hours discussing this latest problem with the ministry is that it gives people a disadvantage in our society. It costs taxpayers a lot of money to do reviews when programs go sideways, and I think that it warrants at least two hours of this minister's comment to the people of British Columbia through the members of the opposition.
So I've enjoyed his comments for the most part, but I still come back to a problem that should have been seen three months ago. The advocacy groups were telling the minister that this was going to be a problem three months ago. This is not new to the minister. It might have been new to the minister a couple of days ago, when the decision was made. It was not new to the people who were affected, and it was not new to the people who were delivering programs and services out in the community. I am not pleased to have to have a review at this time. For all the best intentions of the minister in the world, he should have had those best intentions three months ago, when these problems were pointed out. He didn't do that. That's the reason we've had the discussion on this issue.
I have a number of other items that I wish to cover before we break. The first item takes us back to the prevention, compliance and enforcement area that we canvassed a couple of days ago, and I wish to get some further information on what is
Hon. D. Streifel: I'll attempt to answer the member's question and see if we can
[4:15]
In general terms, I think we have to view this as income assistance -- being a top-up ministry. If you have other sources of income, other sources you can attach, whether it be a private pension, a government pension, lottery funds, an inheritance -- whatever the case may be[ Page 4661 ]
has another source of income, it's expected that they attach that source of income prior to applying for income assistance. There are some exceptions, I suppose. When you look at asset levels for individuals that apply, there may be a small amount of an asset that's available. An individual may not have any money at all and may in fact be on income assistance and achieve a few thousand dollars somewhere down the line. If it doesn't go above the asset level, then it still doesn't affect the individual's qualifications for income assistance. That's the premise behind requiring our clients, upon application, to signal and attach all other sources of income before being qualified for income assistance.
M. Coell: I may have the titles wrong, but under phase 3, those who had looked at welfare
Interjection.
M. Coell: Federal, Workers Compensation
Hon. D. Streifel: I'm not quite sure what the member's reference to disability is. As I heard him, when I kind of shrugged and frowned, he had mentioned WCB -- he had mentioned others -- and I'm assuming he's including Canada Pension disability and any other kind of private disability. Yes, if an individual is qualified for income from one of those sources -- it could be Workers Compensation, Canada Pension disability or an insurance settlement as a result of a car accident -- and that source of income is higher than income assistance rates, then the individual won't qualify for income assistance. We are, at the end of the day, the payer of last resort, and in some areas we are a top-up ministry. If an individual has another source of income, be it from a disability pension, be it from a retirement pension or be it from employment, they're expected to use that income before coming onto welfare. I'm not quite sure that the public would have it any other way. If someone has income available to them -- supportable income -- it would be kind of unusual that they would then qualify for welfare if they have other streams of income available to them. We don't use the individual's first car, their primary home -- these kinds of possessions -- as assets for the test in this ministry. But if somebody has other assets beyond that which would support them, then they're expected to use those assets.
Sometimes those assets are an attachment to a pension plan. For instance, when we did some of the work around the early rolls here
To answer the member's last point, it is possible that somebody who would have had attachment to another source of income in this manner -- Workers Comp or employment insurance or something -- would be responsible for repaying temporary benefits to the ministry, under some circumstances.
M. Coell: Just to follow that up, the group of people that I have some concern about is people who maybe applied for income assistance and received it. Once they were investigated by this prevention, compliance and enforcement group, it was found that a year or two years ago they could have applied for disability benefits. Those benefits would have been seen to offset income assistance.
I just wonder whether we're going to be going after those people for the money that they should have applied for and had as part of their income. Or would they be going to retro some of those programs, as well, to look for the money?
Hon. D. Streifel: If the member is referring to the CPP disability benefits tape match and those moneys that the individuals collected from CPP as well as from income assistance, so they were collecting twice, the decision that was arrived at through the court proceedings, as I understand it -- and I'm looking for a nod here -- said we won't go back and attach that money. That was the order from the courts.
M. Coell: I appreciate that clarification. So those people will not be asked to repay that money at this point.
Hon. D. Streifel: That's the group you referenced?
M. Coell: Yes.
Hon. D. Streifel: No, we won't be going back.
M. Coell: Okay.
Could the minister tell me how much money that is provincewide? Is that a large sum of money? If you have the number, I would appreciate it here.
Hon. D. Streifel: It's a significant amount of money. That's all, at this time, we have here. We'll try and get the tight figure for the member.
I apologize for offering to get information that the member may feel we should have at our hands, with this very extensive ministry. Some of these numbers, in fact, change virtually on a weekly or monthly basis, so it's difficult to prepare for this process and then have solid numbers. I'd really prefer to be able to pass through to the member a solid number on these issues. We will retrieve that number and pass it on to the member.
M. Coell: I understand the minister's comments. I guess sometimes we don't get that information for many months in the future. At times, it's not as useful as it is during the estimates period. I wonder whether that minister has that number prior to the court case -- when the government would have been concerned about the number of dollars involved, prior to going to court.
Hon. D. Streifel: I'll try this, and it may help the member. Annually there's $30 million worth of Canada Pension Plan income declared to our offices; I guess it's during the intake process. Someone will say: "Yes, I have this much money." So that's $30 million annually. We don't know how that splits, with who may or may not have reported that last year or the year before. But we know on an annual basis that this is what
[ Page 4662 ]
we're currently at. That's the best information, at this stage, I can give to the member. It indicates that the attachment to CPP income versus Ministry of Human Resources income -- income assistance -- is quite considerable; $30 million annually is declared.
M. Coell: I would think it would be the moneys above it that would be of interest to the ministry, in that those people are actually costing the taxpayer less.
Hon. D. Streifel: Is there more?
M. Coell: That's what I would presume this group is about. It's those people who didn't have that -- didn't apply for the disability payments or payments that the minister is suggesting -- that we're now going back to look for. We know who these people are, with the $30 million. They're being upfront and saying: "I've applied for this, and this could be part of my income." What the court case, I believe, was about was those people who were over and above that.
I wonder whether the minister would have an example of how much the prevention, compliance and enforcement division found that could be considered overpayment to this group of individuals.
Hon. D. Streifel: We'll try to get that number for the member. But the member's presumption has a basis in accuracy, in that this $30 million is what we annually have declared to us. But prior to that we don't really know until we do -- here's this word again, and this is what I've been trying to avoid with the member -- the investigation, because we have to do an investigation in order to achieve our goals in this manner, as well.
So we look at, after the information match
We'll try and break out those numbers to the best of our ability for the hon. member, maybe in all of those categories while we're at it. They probably come from the same place.
M. Coell: I would be interested in that. I believe, if we look at phase 3 investigations, the minister said it is a sizable amount of money that is seen as overpayments, because of those people who didn't qualify for disability and CPP benefits. The court case has said you cannot go after them retroactively to get that money back. So we're going to lose a large sum of money. The minister can correct me if I'm wrong, but that's how I read the court case. You're not able to go back now and retrieve the money that you may have been able to under phase 3.
Hon. D. Streifel: That is correct.
M. Coell: I just wonder whether the ministry now is reviewing its policy on retrieving moneys in phase 1 and phase 2. If the minister could comment on that
Hon. D. Streifel: I'll ask the member for further clarification on his references to phase 1 and phase 2.
To try to offer some clarification on the results of this decision, in fact we didn't know that folks owed us money until we generated the capacity to match tapes and to work with other agencies, because when we asked, obviously they didn't tell us. It's been policy for some time -- a requirement, for some time -- to attach all sources of income. But when you asked the folks and the information wasn't coming forward, and when we found the folks through the tape match process and the folks disputed our capacity to recover or actually have them attach that source of income -- which in some instances was and in others was not higher than income assistance rates
So that's really where we're at. I'm not going to stand here as a minister and criticize the outcome of a decision of the courts. They are in fact the basis, the fabric, of our society -- our courts and justice system. So the member may want to go on and try to explore the decisions. I don't question them. I accept those kinds of decisions that come from our courts, and I will not interfere with them. I will not question them publicly. I will not rethink, publicly and loudly, the decisions of the court system in this matter -- or virtually any matter.
[4:30]
M. Coell: The phase 1 research that the prevention, compliance and enforcement division came up with is, I believe, those claimants aged 60 to 65 who failed to apply for pensions. Those are the ones we're talking about, right? They failed to apply for a pension. Phase 2 is those investigated who opted to go on income assistance rather than push for widowed or orphaned benefits. I just wonder whetherHon. D. Streifel: I'm going to try this clarification for the member. The group that he references as group 3
The other ones
M. Coell: I'm aware of what the minister says. My concern here is that the ministry has identified a number of areas of overpayment, all of which I suspect will be part of the $93 million in overpayments that we discussed the other day. The court has said that you're not going to be able to go back and
[ Page 4663 ]
retroactively collect from this group of individuals. The minister says that is a significant sum of money, and he will get that number to me.
There are also other categories of individuals. Just for clarification, the minister is now saying those categories are under judicial review, and there would be an opportunity
Hon. D. Streifel: I can't presuppose the outcome of the court decision, but I'm assuming the potential would be there.
For the member's information, last year, in 1996, there were 365 criminal charges for fraud laid by the ministry. That's just the criminal side of it. There were 14,000 investigations. Where we have overpaid somebody income assistance benefits, we generally ask for it back -- with one or two restrictions imposed by the courts, in this case. We will strike a repayment agreement for these individuals in order to, I guess, recover that money. So that's how the process works. It's under the prevention, compliance and enforcement division -- PCE, as they're known.
In 28 percent of the cases, the allegations were either unfounded or there was insufficient evidence to proceed with an investigation. Charges were laid, as I said, in 365 cases. There were 188 convictions. So the system works quite well, in that respect. It's the first time we've ever had that kind of interest from this ministry in recovering funds from those that were paid to incorrectly or those who purposely defrauded the ministry. And all the while we're keeping in mind that the reason we have to do this is because with scarce resources, we must protect those that are the most vulnerable. We were able to do some work on disability benefits and do the other things that we do within this ministry.
M. Coell: Just to finish this topic, from my perspective
With regard to the 14,000 investigations that the minister has mentioned, how many of those would have been dealt successfully with by having a repayment agreement signed once the investigation took place, rather than being ones that went on to court? I just wonder how much success we're having with investigation, identification and then compliance with the repayment program.
Hon. D. Streifel: A surprise for the member: I don't have to have him wait for this number; I have it here.
We had 6,105 repayment agreements last year. That's a 32 percent increase over 1995. The value is $11 million, and that's a 27 percent increase over 1995.
M. Coell: I wish to spend just a short time dealing with the cost of the legal fees for the 365 cases and to spend some time looking at the cost of the cases, convictions and cost of legal fees. I wonder if the minister has a breakdown on how much the ministry spent on the legal fees for the 365 cases.
Hon. D. Streifel: I'll try and get for the member -- and here we go back to that answer mode -- a definitive breakdown of the costs. We generally save $5 for every dollar invested in prevention, compliance and enforcement, so it's a very successful program. It's one of the most successful of any province in the country. Again, this is the first time ever in British Columbia that we've had this kind of program.
We've all torn out our hair in the past -- in other governments -- and complained about welfare fraud and all kinds of things around the system. Never have we taken the opportunity and the time to get into the system in this manner. With a division dedicated to it, we can break down some of the stereotyping and deal with the problem, and not continually use this as a reason to distrust and mistrust folks because they need help.
This is a significant program that comes forward and does the job on behalf of our clientele as well as on behalf of the public of British Columbia. It ensures that the folks who truly need help receive help from us, and those who decide that they want a little more help than they are entitled to are dealt with in the appropriate manner.
M. Coell: With the minister's approval, I move that we break for five minutes.
Motion approved.
The committee recessed from 4:39 p.m. to 4:55 p.m.
[S. Orcherton in the chair.]
M. Coell: I just want to spend a moment on this before we move on. I would presume that the 365 cases have a bill attached to them -- what we paid lawyers. That's really what I'm looking at: the cost of legal fees. I don't disagree that it's a good idea to use the legal system to retrieve money that's owed to the government. I think that's a good thing. I'm just interested in what the cost is and what was recovered because of those 365 cases.
Hon. D. Streifel: The Attorney General ministry charged us $320,000 for the prosecution of fraud cases last year. That would be the bill attached. I don't have a breakdown of how much we got back out of these 188 convictions. They're in the courts; I haven't reviewed all of the proceedings. If it's possible to come up with that number, then we'll come up with it.
M. Coell: I can't for the life of me think of how you could have 365 court cases and only spend $320,000. There have been court cases in the ministry that have been almost that amount of money for one case. So I don't know whether that was reviewed by the Attorney General. Maybe the minister could clarify that for me. It seems like a very low number.
Hon. D. Streifel: That $320,000 represents the charge for a special prosecutor and that activity. It's 365 charges that were laid -- it's not the court cases -- with 188 convictions.
[ Page 4664 ]
M. Coell: I appreciate that. It seems more reasonable that the $320,000 for the special prosecutor's office would be the cost of administering the legal fees. That seems more in line with what I was thinking.
With 188 convictions, that means we had court cases. I wonder whether the minister has a dollar figure for the legal fees for the 188 cases where we found convictions.
Hon. D. Streifel: Not with us. We'll get it for the member, if we can.
M. Coell: I'm starting to think that I might have more answers on this side than the minister has on that side. I would appreciate it if many of the things that have been promised come to us in a timely fashion. I know that last year it was quite late in the year before some of the answers came back.
Through the estimates we've tried to touch on a number of issues that have financial ramifications and also have ramifications on individuals who are receiving assistance from the ministry. I just want to spend some time looking at some of the areas that I think are of importance to people on assistance. Going over, for the record, some of the programs that have been offered and some that have been dropped in recent years, I just wonder whether the minister could comment on the Christmas allowance for individuals and families. Is that still part of his budget this year? If so, what is the dollar figure for it, and could the minister possibly outline for me what that dollar figure was in the prior year?
Hon. D. Streifel: Yes, the Christmas bonus as well as school startup support is still in the budget. Those are a few of the other things that I believe the SPARC report may not reference. Last year it was $9.3 million for Christmas allowances.
[5:00]
M. Coell: I wonder if the minister could break that down for me and how it relates to families and to individuals.Hon. D. Streifel: A slight correction on the last answer: this budget estimate is $9.3 million.
If the member's question is how this relates to families, I'm not quite sure what the question is, but I'll try this answer: $70 to the family and $30 per child.
M. Coell: Has that changed significantly over the last five years? I'm wondering whether you've been giving $30 per child for five years or $70 per family for five years. What has been the change in the ministry over a period of five years?
Hon. D. Streifel: Given that we're the only province or territory in the country that offers any kind of special consideration at Christmas -- in excess of more than $9 million this year -- I think it's applaudable and remarkable in the face of all that's happened to us from the federal government and in other jurisdictions that we've been able to salvage that program and maintain it. I'm not aware that it's had any increases.
M. Coell: I think it's an important aspect of support for families at Christmas. Christmas is an extremely tough time -- and I know the minister knows this, as well -- for people who are living on $500 or $600 a month, for an individual, and a little less than that. I would suggest to him, just so he has it on record, that I would support the family allowance for families and individuals at Christmas as a very good and supportive thing. I would suggest to the minister that he could probably increase that and not have any complaint from this side of the House.
This province is, I believe, the last province in Canada to give such an allowance. I'm not sure whether Ontario still does, but we may be the last. I would suggest to them that it is a very good program and probably saves a great deal of stress and frustration. As I said, I don't think you would see a lot of disagreement on an increase in that in your next year's budget.
The other area that I wish to canvass -- and I believe there may have been some changes in it -- is the clothing allowance within the ministry's budget. The minister may want to comment on the back-to-school startup fund as well. But is there a clothing allowance in the budget? There was a number of years ago.
Hon. D. Streifel: I'll go back and pick up one of my answers on the Christmas allowance, considering the member's words. The allowance is $35 per single person, $70 for couples, $70 for families plus $10 per child, just to get that correction on the record. Yes, we are the only jurisdiction that delivers it, and the complaints I get from folks who are working and are not able to attach that Christmas allowance are really quite remarkable. Somebody who works at a very low wage doesn't achieve that benefit. It's only there for people on income assistance. It's one of the
Clothing, right? Yes, we budgeted $1.7 million on the clothing allowance in the last estimates. School startup -- I'll find it in here someplace. We spent $42 per child aged five to 11, and $58 per child aged 12 and over. If we could find the whole amount on that
M. Coell: I appreciate hearing that from the minister. On the $1.7 million clothing allowance, I wonder if the minister could break that down for me. Is that for adults over 18? Does it also apply to senior citizens? How would one go about applying for that if they found themselves in need of a clothing allowance? What criteria would they have to meet?
Hon. D. Streifel: Two aspects of the program would be special clothing and special care. If someone was in a group home, they'd be eligible, and if somebody had a confirmed job, they'd be eligible for a clothing allowance.
M. Coell: Would that include workboots for someone who is in the forest industry or construction industry if they needed workboots to get the job?
Hon. D. Streifel: That's possible, with a confirmed job. If a requirement were safety boots, then certainly that would be under the allowable portion of the allowance.
[ Page 4665 ]
M. Coell: Is there a maximum allowance for clothing an individual could apply for during the year? I have a suspicion that this isn't a problem. I just wonder whether there is a maximum amount that someone could apply for and what that would be.
Hon. D. Streifel: The financial assistance worker may authorize up to $500. If it's over that, the authorization would have to come from the district supervisor.
M. Coell: The Ministry of Education is involved in a court case right now involving the charging of fees for students to take programs in school. I just wonder whether, with the school startup, there are moneys that people can access for fees within the school system. I'm thinking of many of the courses now where you might have a fee of $15 or $20 to take part in the course. Can someone on assistance actually apply for that money to pay for their children's fees within school?
Hon. D. Streifel: Not in our budget.
M. Coell: Just on that for a moment, I'm not aware of where a parent would go, other than to a parent advisory council within a school, to make up that amount of money for fees. I know that schools don't blanket anyone with increase in funds for programs. So I would suggest to the minister that that may be an area where parents who are trying to do the best for their children are having to make do out of their assistance cheque to make sure their children benefit from programs in school.
The other area that I want to canvass is crisis grants. We talked somewhat about hardship grants and the government cancelling that part of income assistance. I just wonder, in dealing with the so-called crisis grant that used to be part of the ministry and the reduction or elimination of hardship grants, what funds those two programs -- or the program of crisis grants -- will have and what funds are available to individuals.
Hon. D. Streifel: The budget for the crisis grant program this year is $13.4 million.
M. Coell: I wonder if the minister could outline -- and I don't need a lot of detail -- where the majority of the crisis grants are coming from. What's the application? What I'm trying to get at is that we had a hardship allowance that is no longer there. We still have crisis grants. What I'm trying to get at is: is one going to shift into the other?
Hon. D. Streifel: Crisis grants are for individuals already in the system. They are clients that are on income assistance. Hardship was for folks from outside the system.
M. Coell: There are two other areas that are of some concern to me. One is the day care subsidy that was in your ministry. Has that now gone totally to the Ministry for Children and Families, or does the ministry still have any funding and responsibility for those?
Hon. D. Streifel: The money is in the budget of the Ministry for Children and Families.
M. Coell: The other area that I wish some discussion on is guide dogs for people who are on assistance. That money, I believe, was previously in the Social Services budget. I wonder whether it is now part of your budget. Or would someone on income assistance have to apply to Children and Families if they had a guide dog?
Hon. D. Streifel: There's $40,000 in our budget to provide for this aspect of our programs, the guide dog program.
M. Coell: Would a person apply through their financial aid worker, or would they have to make application through any other ministry of the government?
Hon. D. Streifel: Hon. Chair, it's confession time. This is the first one in the three or four days where I've missed the question entirely. I would appreciate the member restating it.
M. Coell: That's quite correct; the minister hasn't missed any of my other questions. The answers on some of them
Hon. D. Streifel: Yes, that's what would happen. As well, for an individual on income assistance who is blind and has a guide dog, we have a support allowance for the dog -- $62 a month.
Hon. Chair, I would just request of the member at this stage -- as we've had a reference several times for information that I've offered, and it hasn't
[5:15]
M. Coell: I appreciate that.We talked briefly about school startup fees. One that used to be available in the former ministry was that of camp fees. If a person had the desire for one or more of their children to go to camp, they would be able to apply through income assistance for funds for that.
[W. Hartley in the chair.]
Hon. D. Streifel: Camp fees are still available. There is a yearly budget of $700,000. The process is: apply to the FAW.
M. Coell: Is there a top -- where someone would apply for funds and they would be rejected because it was too much money? I'm looking for a criterion for the Boys and Girls Clubs camp versus a Club Med or something like that. What I'm looking for is what the average cost is for these programs.
Hon. D. Streifel: My heart goes pitter-pat when the member opposite references Club Med; we're not going to send folks to Club Med. The assessment would be made on the reasonableness of the camp. I can't recall any circumstances in my memory when we've had folks who have been rejected because they're way too expensive. It isn't a large budget at $700,000, but it's still there within the ministry.
[ Page 4666 ]
M. Coell: I want to bring to the minister's attention that I think it's a very good part of your budget. The more young boys and girls we can encourage to go to camps or whatever they may be
The area that I've had a lot of calls -- I shouldn't say a lot
Hon. D. Streifel: The budget is $6.8 million for this. The medical transportation program pays for the less expensive, most appropriate form of transportation to and from doctors' offices or hospitals, provided the service is covered by MSP and no other funds are available. That would be exclusive of emergency transportation, I would expect. So that's the program and how it's delivered.
M. Coell: Does that have a maximum amount a person can use, or is it as needed?
Hon. D. Streifel: As requirements are met, it's as needed.
M. Coell: My understanding is that there's also an ability for mileage to be paid, or a meal, if the distance is long and that mileage could be given to a seniors' volunteer driver, or such. You can correct me if I'm wrong, but that's my understanding.
Hon. D. Streifel: There's no correction necessary. The hon. member is correct.
M. Coell: There are a couple more areas that we wish to canvass before we break for dinner. I'll turn it over to colleagues at this time.
G. Plant: I rise to participate in this debate with respect to one particular issue. I'm told that
Hon. D. Streifel: Yes, that's correct.
G. Plant: I'd be grateful if the minister could explain, in a very summary way -- I don't need a long explanation -- the public policy rationale for making this request of income assistance applicants.
Hon. D. Streifel: I think that in simple terms, a difficulty arises if there's an individual who comes from another jurisdiction, has a warrant out for their arrest, it's a returnable warrant, they're fleeing the justice system in our country, and they come to find a home here on income assistance. Most in the public would agree that that's not acceptable. As our policy currently is, an individual fleeing a warrant like that could be disqualified from receiving income assistance.
G. Plant: Is it the approach of the ministry that if an applicant for income assistance were to disclose that there was an outstanding warrant for them, they would be denied assistance?
Hon. D. Streifel: We're dealing with indictable offences, and the member opposite would know full well the range and scope of that. If an individual is fleeing a warrant for an indictable offence, that disqualifies them from receiving income assistance in British Columbia.
G. Plant: Does the question asked of assistance recipients refer specifically to indictable offences? I apologize for my ignorance in that regard.
Hon. D. Streifel: When an individual is asked if they have an outstanding warrant, depending upon the answer, the information would then be referred to the special investigations unit for follow-up.
G. Plant: I may not be fully informed on this, but it occurred to me that it would be open to the ministry to make an inquiry with respect to whether or not there is an outstanding warrant for an applicant, without the assistance of the applicant -- that is, there could be a criminal records check or an outstanding warrants check conducted by the ministry without engaging the applicant in this interesting process of asking a question that perhaps by a remote analogy might be construed as offending the privilege against self-incrimination.
I'm wondering whether the minister or his staff have thought about other ways of achieving this information, other than by asking the question, and whether there was a debate or discussion around that, and why it was decided to do it this way as opposed to some other way.
Hon. D. Streifel: I'll try this one the first time a bit tongue-in-cheek, and ask the member for Richmond-Steveston to check with the member for Saanich North and the Islands on the concerns around cost of doing too much administrative and looking-at, and why on earth we would want to run a criminal records check on our income assistance caseload. I think that would be rather offensive.
G. Plant: In fact, criminal records checks are conducted in our society on all kinds of people in all kinds of contexts, for all kinds of reasons. But I understand that in this particular case the reasoning the minister says is operative here is reasoning around cost control, and that's a perfectly legitimate public purpose. I'm sure that if the ministry had reason to suspect an applicant were wanted somewhere on a warrant, they would conduct the necessary investigation. And it sounds like, in some cases, investigations are conducted.
So am I right that the question is asked, an answer is given, and if the answer is that there is a warrant, that would typically trigger an investigation into the circumstances rather than an automatic denial of assistance? Is that a fair summary, or not?
[ Page 4667 ]
Hon. D. Streifel: If the member for Saanich North and the Islands will allow me to use the word "investigation
G. Plant: Actually, I find that one of the singularly least interesting ways to conduct an estimates debate is to refer to what other members of other caucuses have said at other times in the debate. It tends to lengthen the proceedings for no apparent purpose. I can actually assure the minister that before asking these questions, I consulted widely with all the members of my caucus. I'm actually not advocating any particular perspective; I'm interested in knowing how the ministry has approached this very interesting and difficult issue. I'm assisted by the minister's answers.
If I could just bring it back into focus for a moment, in order that I complete the task I see before me fairly quickly, I take it that what happens is that there's a question asked on a form. If the answer is that yes, there is an outstanding warrant, there is some kind of check undertaken to confirm that the information is correct. If the information is correct -- that is, if it is confirmed that there is an outstanding warrant -- then assistance is denied. Is that the basic process?
Hon. D. Streifel: In fact, the question asked refers to warrants. The information gathered is as to whether or not it's an indictable offence, an indictable warrant. Then a decision is made. And yes, in general terms the individual would be disqualified from receiving income assistance benefits. If there are children involved in the process, we will look after the needs of the children. We won't punish children for the actions of their parents.
G. Plant: What, if I may ask, has the ministry's experience been since this was instituted, in terms of the actual number of people who have answered yes to this question on the new form?
Hon. D. Streifel: From April 7 to June 9 there have been 790 requests for information and 97 denials of benefits.
G. Plant: Is the request for information not made in the case of every income assistance applicant? I'm sorry if I missed something about that process.
Hon. D. Streifel: It's only those individuals who, through the process, indicate that there may be an outstanding warrant against them. That's the 790 number. The upholding number on the indictable side of those that have been cut off for fleeing criminal prosecution some other place in the country -- or even here -- is 97 denials.
[5:30]
G. Plant: So in respect of what is just a little bit less than 700 other people who have said that there is a warrant outstanding, there have been some kinds of checks made, and benefits are continuing.I overheard the minister say something that made me think I don't have the question exactly right as it's posed. Are applicants also asked whether there may be a warrant outstanding? That is, it's not simply asking, "Is there a warrant?" but the question is rather: "Might there be a warrant?"
Hon. D. Streifel: When the question is asked -- "Is there an outstanding warrant?" -- I would expect there to be a variety of answers: "yes," "no" and "could be" or "maybe." I'm not quite sure that we should just take the could-be and the maybe answers and set them aside. I think the member would agree that it would be responsible to take a further look at that. Sorry, member for Saanich North and the Islands; that would require a bit of an investigation.
G. Plant: So the experience to date has been that a total of 97 individuals have been denied further income assistance as a result of this process, and that's over just a few weeks, I guess, or a couple of months. From the ministry's perspective, what happens to those individuals? Do they simply disappear from sight, or is there something else done that might, for example, expedite the return of those individuals to the jurisdiction in which there is a warrant?
Hon. D. Streifel: At the end of the day it's in everybody's best interest to clear up the matter in front of us. For the record, I know the member opposite is well aware of what an indictable offence is versus a general warrant; I don't know if it's common knowledge throughout the public. So we could be dealing in indictable warrants from offences of a serious nature such as arson, murder, robbery, treason, break-and-enter and sexual assault. Those are the categories that fall under indictable offence. In fact, through the process, if we're dealing with a dangerous offender, the alert would go to the RCMP or the police force in that jurisdiction, and action would be taken. We don't supply transportation back for individuals who face up to their actions.
G. Plant: I appreciate that answer. I must say that part of the context of that answer is a problem for me. It may in fact be a fairly good thing that there is now this vehicle for identifying a few people who have been out there using our system, as it were, in circumstances that most people would find offensive. But having identified them and then having dealt with them appropriately, or being able to deal with them appropriately, is another matter.
The issue of what to do with outstanding warrants, non-returnable warrants, including in some cases warrants for awfully serious offences is, I think, a difficult issue for government. I know the Attorney General sort of throws up his hands and says: "I'm trying to find solutions, but they're awfully expensive."
I was just curious to know
[ Page 4668 ]
ministry did with this information. It sounds like there was an attempt made to communicate with the jurisdictions where the warrants are outstanding, at least in respect of the more serious offences. From that point on, it becomes a matter for that jurisdiction to deal with as it wishes. Is that more or less correct?
Hon. D. Streifel: I'm encouraged by the member's comments that focus on this issue, which will be included in the review by the Liberal caucus of the social services system. One of the roadblocks we have, for the member's information, is that other provinces won't take responsibility for the actions of their citizens in this matter. If they would agree with British Columbia, British Columbia is willing to participate in a program across this country to bring our criminals back to face justice here. Other provinces aren't as open or as accepting of that on returnable warrants, and it creates a bit of a roadblock.
We do our job in identifying those that are applying for income assistance who have an outstanding warrant. We check to see if it's an indictable offence, if the individual would be on the dangerous list or however that may be. We put those reports through and deny them public support.
In an utopian world, if this were "Star Trek," the next generation after the one they've been in for a long time, those folks would voluntarily step forward and say: "Look, I want to deal with this matter." But human nature isn't so, so we do our part within the Human Resources ministry to ensure that we steward our scarce resources for those who truly need them and not those that are fleeing the justice system in some other part of the country.
G. Plant: Just one concluding thought. I've spoken about these 97 people as though they are conclusively not terribly good people. But in fact a good number of them may be at large on warrants outstanding for their arrest in circumstances where, if there were to be a trial, they would be acquitted of the offences they have been charged with. I've been thinking about that from time to time. I don't have the resources or expertise which are available to the minister in terms of coming up with answers to what are complex public policy problems. I certainly understand the frustration of the provincial government of British Columbia in terms of dealing with other jurisdictions about this problem. But it has from time to time occurred to me that one way you could deal with the 97 in this case, rather than deny them benefits altogether, would be to give them one-way bus fare to the jurisdiction from whence they came and tell them that if they go and clear their good name of the charges against them by establishing their innocence in a court of law, thereafter they would be able to return to British Columbia and, having established residence here, qualify for income assistance.
I'm sure there are a host of perfectly good administrative reasons why a simple solution like that wouldn't work, but occasionally solutions that simple just strike me as being a way to look at things. I commend that idea to the minister, because it seems to me that over the long term it doesn't bring his ministry or the rest of government into disrespect, really, to have identified people who are within the jurisdiction who are at large on warrants outstanding for their arrest, and who are in need of some form of assistance in all likelihood; and to deny them assistance without, at the same time, making it somehow possible to ensure that they are processed through the criminal law system
Hon. D. Streifel: The first hurdle would be: what if they got off the bus early? Here you're on your way to Southern Beamsville, Ontario, because you have an outstanding warrant for an indictable offence, for arson, and we say: "All right, get on the bus and head on down there." How can we stop that individual from getting off the bus anywhere on the route?
But, really, what I stood up to say was that: this is absolutely amazing. Throughout the whole examination of this minister's estimates, we have member after member after member of the Liberal caucus stand up and distance themselves from their election platform in the spring of 1996. This was one of the issues that was in the platform. It said anybody with an outstanding warrant would be cut off -- not just indictable offences; not any kind of a look-see at their own circumstances; no consideration for children; anybody would be cut off. And I am really warmed that we now have the third, the fourth or the fifth member of the caucus that has said: "That really wasn't such a good idea. That whole platform was kind of goofy, and I'm getting away from it as quickly as I can. I'm going to join my colleague from Saanich North and the Islands for the next year to 18 months to actually form a policy so we can explain to the people of British Columbia what we mean." We'll wait for it.
G. Plant: Well, there we are. It's great
First of all, I want to commend the minister for having adopted the B.C. Liberal platform in respect of non-returnable warrants. I think it's good that his government has shown some common sense on this issue. I think it's also unfortunate, however, that the minister appears to be lost in some kind of time warp -- that for him the world could never change past the spring of 1996, that celebrated halcyon season -- and it might not be possible ever to rethink an issue of public policy and approach it on a slightly different basis.
While I commend the minister for having slavishly followed the B.C. Liberal policy in this respect and having seen the wisdom of that policy, I also encourage him -- as a thinking individual -- to from time to time make sure that the implications of the policy are working as he sees them to be working and as he wants them to work. If we didn't ask ourselves questions about even our good ideas from time to time, we'd be awfully unhelpful and uninteresting people, and I'm sure the minister never wants to do that.
Hon. D. Streifel: Where were you for the first two hours? I needed your help.
G. Plant: I think the minister should always be prepared to engage in an interesting debate about every aspect of the way that his government and his ministry make policy, and I'm grateful for the fact he's been able to engage in the small issue that I've raised with him. I really encourage him for the balance of the estimates debate -- for whatever teeny, tiny bit my opinion is worth -- to stick to the questions and the answers and leave the partisan political nonsense to some other context.
[ Page 4669 ]
V. Anderson: To follow up on this for a moment, since the minister has referred to me on a number of occasions, I would bring him back to reality. The minister in his responses to this has indicated that the primary reason for this has been for people coming from other provinces with indictable offences. In hearing the conversation, that's been the reason for the policy: (1) they came from other provinces, and (2) they had indictable offences. Is that right? Are these the two reasons why the policy is in place?
Hon. D. Streifel: No, that's incorrect.
V. Anderson: Then, who else is it meant to cover if it wasn't those two? Those were the two that the minister referred to. Perhaps he could tell me why the policy was put in in the first place if it's not mainly because of those. I would gather from the minister that the number of people affected by this -- from other provinces or for indictable offences -- might be a small portion of those who would be affected by the question. Can the minister explain why it's there?
Hon. D. Streifel: There is no requirement that you be from another province to be looked at if you answer the question with: "Yes, there is an outstanding warrant for my arrest." I mean, you could be from British Columbia. It's the policy around supporting a criminal that's fleeing justice in some part of the country. It could be here, it could be there. So with that answer well delivered, in view of the time, I move that the committee rise, report progress and seek leave to sit again.
Motion approved.
The committee rose at 5:45 p.m.