[ Page 4903 ]

The House met at 2:05 p.m.

B. McKinnon: It gives me great pleasure to introduce a friend of mine who is visiting here. She lives in Victoria. Shirley Bouck is the wife of Mr. Justice Bouck of the Supreme Court of British Columbia. I bid the House make her welcome.

Hon. D. Streifel: It's my pleasure today to introduce my wife Linda to the House. She is touring the precincts someplace. She is over for a few days to enjoy our new second home, which we bought in the constituency of Victoria-Beacon Hill, and so is her travelling companion Sidney Squirrel. I would like the House to please make them welcome.

Hon. G. Clark: I understand that the Leader of the Opposition yesterday thanked the interns working for the opposition caucus. I'd certainly like to join with him generally and thank legislative interns Clayton Jones, Anne-Lise Loomer, Amanjit Pandher, Lisa Pape, Jane Ramsbotham, Liz van der Kamp and Lori Ziebart. They will have completed their four-month caucus assignments tomorrow. I hope that what they have learned here will contribute to their goals, whether they are continuing with their education or beginning a career. I know that during this busy legislative session, having the help of Clayton, Liz and Jane on our side, in the government caucus, has meant a lot to our caucus. We wish all the interns the greatest amount of success.

G. Plant: I'm delighted today to have the honour to introduce and welcome to the House my mother Frances Plant, and my sister Brenda Plant. I ask that all members please make these important members of my family welcome.

Hon. J. MacPhail: I'm delighted to introduce two members of the Richmond Seniors Advisory Council who were meeting with my staff today -- lovely young women who have much advice to offer me: Lillian Durant and Aileen Cormack. I would ask the House to make them welcome.

L. Stephens: I am very pleased to welcome to the House today two people from Fort Langley and Aldergrove who are here for important meetings: the Langley township administrator, Mr. Mark Bakken, and Dean Drysdale, one of our Langley township councillors. Would the House please make them welcome.

H. Lali: It gives me great pleasure to introduce a couple of friends of mine who are here today. Sitting up in the gallery is Mr. Amrik Sangha and Inderjit Hundal, who is actually meeting with other folks in the buildings. Accompanying them are their colleagues John Frostad, Mark Watson and Harish Joshi. The group met with me, the hon. member for Esquimalt-Metchosin and the Attorney General to talk about trade opportunities with India.

G. Farrell-Collins: I'd ask the members of the chamber to help me welcome 15 grade 9 students who are here from Bodwell College in Vancouver. With them are Ms. Elizabeth Workman and Mr. Grant Chu, their teachers. I'd ask the House to make them welcome.

S. Orcherton: I have two announcements to make to the House today. The first is that a constituent of mine, Maureen Jacob, and her cousins Susan and David Farr, here in Victoria from Durley, Hampshire, are joining us. I'd ask the House to make them welcome.

Mr. and Mrs. Johal and their daughter Taryn are joining us in the assembly today, as well. The House should know that they are parents of Asha Johal, one of our assembly Pages. I'd ask the House to make them welcome.

M. Sihota: I'm sure we've all had students spend a day with us so that they can learn a little bit about what we do as MLAs. Today I have a very special young student. . . .

Interjection.

M. Sihota: Well, this person in particular hangs out with me, as you will find out in a moment. This young student has been spending the whole day with me and has spent the last ten years of her life with me, and that's my daughter. She is here visiting today: Karina.

Hon. P. Priddy: It's my pleasure to introduce, in the gallery today, 40 youths from the Native Youth Movement, who are here talking to ministers about issues of concern to them. I've worked with some of these youths before. It's important, actually, that I acknowledge that it is because of the voices of the youth who are here today that issues such as street issues and alcohol and drug issues for native youth are being dealt with. It's because of the power of the stories they tell. I would ask the House to make them welcome.

A. Sanders: I'd like to introduce in the gallery Mr. Fred Herfst from the Federation of Independent Schools.

J. Kwan: Visiting us today is Nikki Hill, a person with a lot of energy, a lot of enthusiasm and a lot of commitment. She is the co-chair of the Young New Democrats. Would the House please make her welcome.

Hon. C. Evans: At the risk of embarrassing myself in front of my deputy and others, I'd like to suggest that perhaps the most difficult job in public service in British Columbia is that of being chief executive officer of the Columbia Basin Trust, an area the size of a European country. Ivan Robinson and his wife Jackie are here to join us today. I think, actually, the chief financial officer, William Wallace, is as well. Will the House please make them welcome.

E. Walsh: It gives me great pleasure to be able to stand here in the House and wish my LA, Monica Ghosh, a very special and happy birthday today. I would like the House to join me in wishing her the same.

J. Smallwood: I'd like the House to join me in welcoming another group of young aboriginal students who have joined us today. They are participants in the United Native Nations Local 162 aboriginal watershed restoration project. They are accompanied by Bruce Ferguson, the administrator, and Margot McDonald, the coordinator. There are three other young people joining us today, and I'd like us all to welcome them.

Introduction of Bills

EMERGENCY COMMUNICATIONS
CORPORATIONS ACT

[ Page 4904 ]

Hon. U. Dosanjh: I'm pleased to introduce the Emergency Communications Corporations Act, which will enable the development of integrated public safety communications services on a regional basis throughout the province. This act will enable the creation of corporations to govern regional wide-area radio and dispatch centres. It provides the legislative authority for public safety and emergency agencies to join together in non-profit corporations designed to meet local and regional needs. The integrated services which this act will enable will improve coordination in the event of an emergency by allowing police, fire and ambulance services to communicate efficiently with one another in a single system. This legislation responds to recommendations in the report of the commission of inquiry into policing in British Columbia by the Hon. Mr. Justice Oppal.

[2:15]

Bill 48 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.

POWER FOR JOBS DEVELOPMENT ACT

Hon. D. Miller: More good news at the beginning of summer. I am pleased today to introduce Bill 50, the Power for Jobs Development Act. The Power for Jobs Development Act follows through on our throne speech commitment to use the province's hydroelectricity strategically to benefit all British Columbians.

Our government is committed to job creation and economic development right across this province. Bill 50 will enable our government to implement Power for Jobs. The plan includes using energy from downstream benefits, or DSBs, from the Columbia River Treaty to create jobs here in British Columbia. It empowers government to provide development-priced power to new and existing investors in exchange for jobs.

Here in B.C. we're very fortunate to have access to vast and valuable hydroelectric resources. This abundant supply of power provides a comparative advantage. Starting next year, Columbia River Treaty DSBs begin to revert to provincial control. Bill 50 creates an opportunity to use the province's hydroelectricity to generate jobs and new industrial activity in British Columbia while protecting our environment. The good-paying, family-supporting jobs Power for Jobs can create will uphold British Columbia's treasured quality of life.

By providing access to development-rate electricity, Power for Jobs will attract industrial investment and spur regional economic growth. Industries such as mineral extraction and processing, forestry, electrochemicals and science and technology will be the primary focus of Power for Jobs. These industries will be attracted to Power for Jobs because they're energy-intensive. Their energy costs represent a fairly big part of their overall costs.

We are looking forward to addressing this bill in the House. We know that the opposition will be supporting this bill, which in its first incarnation will develop over 4,000 direct new jobs here in British Columbia and up to 3,000 indirect jobs. We are looking forward to this.

Bill 50 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.

Oral Questions

CONSULTATION ON LABOUR CODE CHANGES

My question to the Minister of Labour: what groups other than Mr. Georgetti and the B.C. Federation of Labour did the minister consult with prior to stripping the rights of the people of this province?

Hon. J. Cashore: I think the hon. Leader of the Opposition knows that a good many of the recommendations came from the labour board itself. Many of these amendments could be classified as housekeeping, characterizing. . . .

Interjections.

Hon. J. Cashore: That is factually correct. Many of these amendments are housekeeping amendments.

Of those amendments that are of significance beyond housekeeping, there has been consultation. As I have said before, the consultation that has taken place has taken place with a wide variety of British Columbia interests over a great many years. We have been in discussion with all facets of business, and we have been in discussion with all facets of the broader interests of the province as well. Through that discussion, we have concluded that we should proceed with what is in that bill.

I also add that it does not help when the content of that bill, now that it has been seen by the opposition, is misrepresented.

The Speaker: Thank you, minister; I'll ask you to wrap.

Hon. J. Cashore: I call on the opposition. . . .

The Speaker: Excuse me, minister. I think we're going beyond the scope of the question now, so I'm going to ask you, if you'll presume. . . .

G. Campbell: What's clear is that the minister doesn't understand what's in that bill and the devastating impact it's going to have on the economy of British Columbia. But what 

[ Page 4905 ]

is unforgivable is that the minister doesn't care about the devastating impact it's going to have on the economy. The minister doesn't care about what's going to happen to small businesses in this province. He doesn't care that he's driving jobs out of the province. He doesn't care that he's putting a stop to outside investment in the province.

The minister has said that Mr. Georgetti felt this was a bill that Mr. Georgetti was entitled to. My question to the minister: did the minister spend any time at all talking to the small business community in this province and finding out what they were entitled to? Or did he even care about what they had to say?

Hon. J. Cashore: Yes, very early in the year I met with the small business community. I listened to what they had to say. They said very clearly what their position was on a number of these issues. I also met with Mr. Hochstein in March. I listened to what he had to say, and he made his position very clear on a number of these issues. But when this hon. member suggests that he is standing up for the rights of working people in British Columbia, then I know that we will have no difficulty in passing this bill.

G. Campbell: I expect the minister to stand up and be forthcoming and forthright. For him to suggest that he had a meeting with Mr. Hochstein where they shared their thoughts with regard to changes in the labour bill is simply not true. The minister knows -- and I know, because Mr. Hochstein and his group came and talked to me after that meeting -- that they'd talked to this minister, and the minister said: "I don't know what's going to be in the labour bill." He obviously hadn't received his instructions yet.

My question to the minister is. . . . He has stripped rights from the people of British Columbia -- from workers, unions, small business and enterprise in British Columbia. He has certainly considered what Mr. Georgetti felt he was entitled to. Did the minister spend one minute considering what all the rest of British Columbia is entitled to?

Hon. J. Cashore: This Leader of the Opposition talks about rights. What about the rights of women? What about the rights of janitorial workers? What about the rights of food service workers who have fairly bargained collective agreements, and one day they come in and they find out that somebody has underbid that contract and they don't have a job anymore? They have mortgages and they have families that they care about. Is this hon. member saying that he doesn't care about them?

C. Hansen: This minister has the gall to talk about the rights of women and the rights of janitorial workers while he's sponsoring legislation in this House that's going to deprive them of their right to vote -- deprive them of their right to have a secret strike vote -- and deprive them of the right to choose the bargaining agents that they want. He's got a lot of gall!

The Minister of Labour was asked yesterday to explain what problems were going to be solved by these Labour Code changes. What was his answer? "It was something the unions felt they were entitled to." Will the minister tell us what entitlements small businesses have and what entitlements individual workers have when it comes to influencing Labour Code changes?

Hon. J. Cashore: We know that this opposition is against the minimum wage, we know that they're against employment standards -- they've said that -- and we know that they're against the Labour Code. We know what they're against. But when this hon. member asks a question and says that this legislation takes away the right to choose a bargaining agent, he is factually incorrect: this legislation creates the right to choose a bargaining agent.

C. Hansen: Perhaps the Premier should brief this Minister of Labour about what he said to Nike when it comes to workers' rights and the priority of workers' rights. On this side of the House we are going to stand up for workers' rights. We have a minister who thinks that the union bosses are entitled to dictate changes to legislation. Did the Minister of Labour ask individual workers and individual small businesses what they thought their entitlements were when it came to changing legislation? Or did this minister even care?

Hon. J. Cashore: We talk to those entities regularly; the hon. member knows that. When the hon. member talks about who we have talked to. . . . Yesterday he said that business is entirely against what is happening here, and he knows that is not the case. I'm sure that you've seen the letter from Bob Morrison of the Construction Labour Relations Association. They were consulted. I believe that Mr. Lampert respects Mr. Morrison and that Mr. Morrison is a responsible business person. He is praising this legislation and saying that what this legislation does is not being served by the alarmist, untrue statements that are being made.

[2:30]

B.C. HYDRO POWER MARKETING ANDAMERICAN TRADE LAW

My question to the minister: does the minister agree that B.C. Hydro should knuckle under to this level of American extortion, as they are doing with their urgent application before the B.C. Utilities Commission?

Hon. D. Miller: Well, I don't know that that is particularly called for -- the way the question is framed. The member is correct with respect to the Americans overstepping their jurisdiction on the question. Notwithstanding that, as has been evidenced by the debate we had in the estimates this morning, we do not -- B.C. Hydro does not and British Columbia does not -- fear competing in a competitive environment. B.C. Hydro is taking steps -- through the application to the B.C. Utilities Commission for the transmission rates -- to further the application to FERC to maintain and enhance export opportunities. We fully expect that we will obtain that.

So while dealing with the Americans becomes a bit of a challenge -- as the member quite rightly points out. . . . We've seen that in softwood lumber, where notwithstanding a free trade panel ruling, they imposed a tariff on our lumber. We see that now in the absolute failure of the American government to make a commitment to conclude a Pacific Salmon Treaty, and the efforts of the Premier of this province to stand up for British Columbia's interests and the interests of conservation.

[ Page 4906 ]

G. Wilson: Supplementary. I would point out that the Americans have withdrawn from salmon talks, and it is yet to be seen what we intend to do now.

But having heard the minister and having read Hansard from this morning's estimates debate, where the minister says that Hydro and government are proceeding to deal very prudently with the way these issues are dealt with. . . . that's out of this morning's Hansard.

Could the minister tell the House if he has a legal opinion that advises him that after this application to the B.C. Utilities Commission, if it is successful, we will not have foreclosed on our options to be able to use the protections that exist under NAFTA, and that we will not have made legal in British Columbia what is currently illegal in international law?

Hon. D. Miller: We are confident that we will proceed through the FERC process. But the member raises an important point. There are those within British Columbia who have gone running to the United States, telling lies about how we run our operations here, both in Hydro and in forestry. Last night I was dismayed that the Liberal opposition gave comfort to those people who are running to the United States and trying to use trade dispute mechanisms to harm our economy here in British Columbia. I've appealed to the Liberals to stop doing that, to stop feeding into that process, but so far they haven't paid attention to me.

CONSULTATION ON LABOUR CODE CHANGES

The Speaker: Member, the red light went on some time ago. Would you please give me the question.

R. Coleman: My question to the minister is this: is it now the criterion that those who need help the most must donate to the NDP at the same level as Ken Georgetti and the B.C. Federation of Labour?

Hon. J. Cashore: I want to point out that this legislation only relates to the unionized construction sector, which is less than 30 percent of construction. I want to say very clearly that I respect union workers. I respect what they achieve through the joint effort of employers and union workers and through apprenticeships to be well trained and to ensure cost-effectiveness because of the fact that they are well trained in those trades. I don't know about you, hon. member, but I have friends who are having to pay an additional $20,000 because of leaky condominiums where the standards were inadequate. That's not acceptable. While this legislation doesn't directly address that issue, it gives me the opportunity to say to you that I have no hesitation in expressing my respect for those who have that training and are able to do that work.

The Speaker: Thank you, minister. I'm going to ask you to wrap that.

Hon. J. Cashore: In conclusion. . . .

The Speaker: Minister, I'm sorry. We are much beyond question period. I'll ask you to take your seat.

Following today I'm sure both sides will be anxious to leave the chamber and review the rules governing question period.

Tabling Documents

Orders of the Day

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

ESTIMATES: MINISTRY OF FORESTS
(continued)

T. Nebbeling: This morning when we started the estimates on the Ministry of Forests we started to focus on what I believe -- and what my caucus colleagues believe -- to be a very important part of the whole debate on where the forest industry is going in the future and how it relates to the budget for the upcoming year, the 1997-98 budget.

Much focus has been placed on the jobs and timber accord. What we are trying to pursue here today, and maybe tomorrow, is the foundation that has been used by the Premier of the province to justify the increase in job opportunities in the forest -- without truly seeing an increase in timber for forest workers to harvest. While we are not looking for an increase in the annual allowable cut, we would like to find out what has given foundation to the jobs and timber accord.

We spent about an hour and a half this morning pursuing this foundation for the jobs and timber accord. Unfortunately, we didn't get far, except that at the end of the morning session the minister did agree that indeed the answers were to be found in the two states south of us; that is, the state of Oregon and the state of Washington. What the minister concluded this morning was that the job ratios used in the jobs and timber accord in British Columbia are indeed based on what was supposed to have been achieved by the industry in these two states. So we went for recess and now that we are back. . . .

I know that the minister is worried about repetition of questions. Nevertheless I will come back to that whole issue -- based on the fact that if these two states have played such a dominant role in the decision-making process by the provincial government in British Columbia, we really have to know what that basis represented.

My first question to the minister this afternoon is. . . . Considering that there are rumours coming from Washington, in particular, but also from the state of Oregon that the forest industry is not in as healthy a state as we may believe -- based on it being chosen as the model to be used in British Columbia to justify jobs in the forest -- I would like to hear 

[ Page 4907 ]

from the minister what he believes. I haven't put my question yet, but I have a problem with discussions going on on at the other side. . . .

The Chair: I'm not conscious of any untoward noise in the chamber at the present time, so if the member could proceed.

T. Nebbeling: Well, I was -- that's fine. I'll remember that one from the other side when these points are raised.

My question is: can the minister give me a rundown of what he knows about the state of health of the forest industry in the states of Washington and Oregon?

[2:45]

Let me just reiterate for you. The Premier set a goal based on an understanding, a general understanding, of the rates of employment for a metre of wood in various jurisdictions. As I said, there are many sources of that. We then put this task to the forest sector strategy group, which created a task force on forest sector employment. That group reported to the forest sector strategy group that more work should be done. The forest sector strategy group didn't think that was necessary -- did not accept that recommendation. They thought: "It's wrong to quibble, but in fact we should engage in what we can do here in British Columbia."

We then moved to bilateral negotiations with industry -- between industry and government -- and we came up with the accord. That's the result. It is still a target, and we feel it's achievable. Some of that's going to be by increasing the flow of fibre up to the allowable cut; diverting fibre from export into remanufacturing; creating more full-time employment and other work arrangements. It's all very clear; it's all in the accord. We intend to pursue trying to reach those targets.

T. Nebbeling: I know what the objectives of the accord are. But can they be achieved? Considering that in this year's budget approximately $300 million, through Forest Renewal funds, was channelled towards the objectives of the jobs and timber accord, and another $100-125 million will go towards the accord in different forms, it is very much an issue of the estimates here today to make sure that the foundation that led this government to justify that kind of expenditure -- and not only for this year but for the next five years -- is indeed based on some solid principles.

We now know from the minister that many of these principles use a comparison with two states in the United States that have ratios of jobs against 1,000 cubic metres of harvestable timber and that we are trying to achieve the same ratio. I think it is very important to note that indeed we are using a benchmark that is based on a serious and a real foundation; I think it is very important to know that indeed that benchmark is a real benchmark, and not a benchmark full of holes.

It is not me who has made the statement that this government is using the benchmarks of the states of Oregon and Washington as its target. It's the Premier who made that point on March 21, 1996. It's the Premier who had pamphlets sent out making that point. It is not that I'm trying to add a new element to this debate. I'm just saying that if this is what the government feels they can achieve, because of what has been achieved in the two states, can we then make sure that the situation in the states is as it has been presented?

This morning I asked what kind of information has led the minister. . . . Who did he use to compile that material, and who was responsible for analyzing available documentation to show that these numbers are working? That's what I'm after here. I think it is very important. That's why my first question asks whether the minister is sure that what is happening in the states of Washington and Oregon is what it seems to be -- so that it is justified for us to become equal with these two states. So that's why my question is within the context of estimates. I can get to that question 20 different times. I hope it is not going to be necessary, because that is wasting a lot of time. But I think it is very important that before we get to talk about the jobs and timber accord, before we start talking about what really are the job opportunities in the forest industry today. . . . With what the forest industry is today, is it possible to meet these targets with the lack of investment in that industry today -- except, of course, now the government investment?

I think it is very important to note that we get these answers before we get to really talk about what I want to talk about, and that is the jobs and timber accord and the Forest Practices Code. But I can't do it if I have to second-guess whether your base for your programs is solid or not.

Hon. D. Zirnhelt: I think I'll answer this once more, and then after that, that member can talk till he's blue in the face. I just caution him that he's boring the public and boring everybody else, and I said we have moved on.

Instead of going through analysis after analysis that was inconclusive, the advisers to government -- the forest sector strategy group -- advised that we move on. So we very quickly moved into bilateral discussions with the major licensees. They didn't say: "We must have a base, we must have a base, we must have a base." There was an agreed-upon base, which was the survey of employee hours. I've told you that that's the base. We announced it when we announced the accord. That was agreed on. Sometime after, the Premier made his announcement. So you kind of slide the jobs that FRBC creates into all the other jobs, and you have to look at each sector. With the FRBC jobs, we know from our experience how many years of employment can be created from the $300 million investment. We know that. We're working on that; we're refining the data. We said it isn't good enough that they're part-time jobs; we want more full-time jobs.

The answer is that we are not going to quibble about what other states do. We know there is more employment. We're not talking about Oregon's forest policy now. We are talking about increasing the number of jobs per thousand cubic metres in British Columbia. That was the intent of the accord, and I can't make it any more clear -- just to let the member know that that will be the answer. Everything is in the record, and I think we should move on in the debate.

The Chair: I'm sure the member takes that into account. It is the Chair's position as well.

T. Nebbeling: I do take that in account. But let it be known, and let it be on record, that the ratios that this jobs and timber accord is pursuing to achieve, with any return that will create the so-called 21,000 jobs, are the identical ratios of 

[ Page 4908 ]

Oregon and Washington. They have been used as an example to sell this deal. They could do it; we can do it. That's not me; that's the Premier saying that. So to ignore these numbers and to ignore these facts, and to ignore that that is an important component in what we are doing here -- trying to find out if the business plan of the Ministry of Forests is truly a viable business plan --I think you are not serving the public. It may be boring, but dammit, the truth sometimes will take a long time. If that takes time that is considered to be boring by the minister, then we're going to go through a boring time.

What I would like to ask the minister at this point is whether he is aware of the state of the forest industry in Oregon and Washington and that they needed a $2 billion federal capital infusion to keep that industry going in 1993. That must be prior to the Premier's decision to take Washington and Oregon as an example of how we in British Columbia can create a healthy industry.

Hon. D. Zirnhelt: I'd be happy to answer questions about the estimates of the Ministry of Forests and related policies of our ministry.

T. Nebbeling: My suspicion is that the minister is indeed not very aware of the situation in the forest industry in other places. It's obviously shown by his answer. It is really sad because it is these areas that are going to be the example, or have been used as the example, by this government to say: "We can create. . . ."

Let's talk here for a moment about the minister's constant insistence that the forest industry is a partner in this. The minister stated it this morning clearly. There is no partnership. There is, as he described it, a good-faith agreement. Good faith on whose behalf? A $2 billion agreement based on good faith -- no agreement. None of the businesses, the industry leaders, have signed this accord. This is not an accord; this is an edict. I said this earlier on. So I think the minister should at least show that although the government has made this decision unilaterally, the decision is based on some solid principles, that there is full comprehension of the examples that the government has put in front of them and that they indeed reflect that the world is going around. And it is not. I'm really concerned that this government is in the process of committing, or has committed, $2 billion to create 21,000 jobs to achieve ratios per thousand cubic metres. That's the basis: ratios based on examples of the forest industry in the States, where the federal government had to come in and bail them out with a $2 billion subsidy.

Having said that -- and I think we are stuck with the fact that the minister doesn't want to show his knowledge on the situation -- I would like to hear from the minister. At the time the Premier made the announcement the first time, in 1996, there were contradicting reports from the industry questioning the numbers that the Premier used to justify his announcement of 21,000 new jobs. Is the minister aware of reports that contradict all the information that was used to come to the conclusion that we could create 21,000 new jobs in this province?

Hon. D. Zirnhelt: I'm certainly aware that there was debate following the Premier's announcement, and I know that it was well debated within the forest sector strategy. . . . We moved on from that debate, and industry and government agreed to a number of principles that became the accord.

M. Sihota: I just want to enter this debate briefly, to simply say this: one can talk about numbers all one wants and make sly comments about knowledge -- and I must say the minister has done an outstanding job as Minister of Forests -- but we really have to go back to some very basic issues.

What is our obligation as a government and as a society to our forest resources in this province? It seems to me that our fundamental obligation has to be to ensure that the next generation has access to the same level of resources that we as a generation had access to. Forests provide remarkable opportunities for British Columbians. They provide jobs, and they are also a comment on the state of the health of our environment. Constantly, within the policy apparatus of government, we are working to protect jobs and to protect our environment, and to seek a reasonable balance in terms of those often-competing tensions in terms of forests and environmental policies in this province.

When this government took office in 1991, we found ourselves in a situation where forest practices in British Columbia -- logging activity -- were certainly not up to standard. Our forest resources were being taken for granted. At that time our government brought forward tough, new standards to ensure that logging activity occurred in an economically and environmentally sustainable fashion. We follow that by ensuring that we protect the biodiversity of our forest base, in order to protect that resource for future generations. We did that by implementing land use plans, where we said to people: "Look, let's map our forests much like we map our cities. In the cities we decide what is to be zoned for urban development and what is to be zoned for schools and parks. In the same way, let's zone our forests and decide where we can cut and where we can't, and what we need to protect for wildlife, for fish and for other habitat values." During that time period, we took remarkable steps in terms of ensuring that we were able to sustain this resource for the benefit of future generations, so that they may have access to the same level of employment and enjoyment that we as a society and as a generation have had.

Having made those steps as a government, we also realized that we had an obligation to make sure that we maximize the number of jobs that are created from every tree that is cut, that we create as many jobs as we possibly can by not simply in cutting the tree, but using that wood for a multitude of purposes -- log houses, door frames, window frames, conventional lumber, pulp and the like -- to maintain the economic viability of this province. What we've done, through the jobs and timber accord, is ensure that we'll be able to use that forest resource to generate 21,000 new jobs in our forest sector over the next five years.

Each and every one of these steps has been opposed by the opposition. They voted against the Forest Practices Code, they indicated that they weren't in support of Forest Renewal British Columbia, and they have taken umbrage at the land use strategies that we as a government have implemented. All I can say is that in this complex area of public policy, we on this side of the House have offered salient solutions to ensure that future generations will have access to a sustainable forest industry. From that side of the House, we have not heard any constructive comments about what we should do to better manage our forest resources, but just sort of mindless criticism of government policy for the sake of criticism.

During the balance of this debate, I would hope that in his exchanges with the minister the hon. member opposite will be productive and positive, and willing to give this government credit for what it's done -- because in historical terms, that credit is long overdue.

[ Page 4909 ]

[3:00]

When this government came into power in 1991, for sure they started very rigorously to shift the agenda as far as the forests and the forest industry and the people living in communities that depend on the forests for their livelihood -- the forest-dependent communities. They started a series of changes in legislation and in policies that created a strong emphasis on the environmental-protection side in this province. I don't think anybody in British Columbia saw that as a bad thing. As a matter of fact, I think it was welcomed, because the practices of the past in the sixties, seventies and eighties have led to some very serious degradation of our forest base and our environment and to the viability of the buyer climate in our province. So everybody supported some changes, including. . . .

Interjection.

T. Nebbeling: I'm sorry, I was not in this House, hon. member. I'm talking about me, and I talk about what was in. . . . The majority of these members were not here in 1991. So if I can continue. . . .

Changes were needed. The protected areas strategy was a good thing. Nobody fought the creation of a land mass of an approximate 12 percent set-aside. I'm talking for myself, hon. member. What we did fight, and rightfully so, was the CORE process, because that process was based on selective groups dictating how we were going to deal with our environment.

When the protected areas strategy was introduced, this side also agreed that it was a good thing to set aside some land for park purposes, in perpetuity. So nobody was fighting about that. But we also said that that had to be it. Once that was set aside, we were going to take care of other important facets of the whole issue as well -- in particular, the people issue. Some of the things the programs of the past have done is protect forests, biodiversity, soil, water and trees. But the one thing that wasn't done was take care of the people who had been depending on living off the resources that were getting the protection.

The initiatives of the government opposite really led to a period of time when the protection became so excessive that thousands of jobs in the forest industry were lost. If the minister wants to write it down, I'll spell the word if he needs it. Thousands of jobs in forest-dependent communities were lost because of these initiatives of this government. Still today you see the impact of these initiatives. If you talk to the people in Ucluelet, you will hear it; if you talk to the people in Port Alberni, you will hear it. Even today, because of these initiatives -- because it not only saved the forest, it also put tremendous cost on people who work in the forest -- communities such as Terrace, Hazelton and Stewart are under the threat of losing their jobs. The minister knows very well that 600 people were laid off in the Terrace and Rupert areas last week: mill people, loggers -- no longer providing fibre to the mill.

Interjection.

T. Nebbeling: If the member opposite would check, he would see that all the logging operations stopped; roadbuilding stopped.

Interjection.

T. Nebbeling: I believe I'm still standing, so maybe. . . . Thank you.

Many initiatives were taken by this government, but it did a lot of damage to the well-being of thousands of people in this province. In 1994, the then Premier Mike Harcourt stood up in the Clayoquot and said: "Yes, we will have to reduce forest land. Yes, we will have to take more care of the environment. But don't ever worry, because we will make sure that because of our programs not one job will be lost." That was a commitment made by this government. The members opposite are suddenly very silent, because they know they were part of making that commitment.

Well, these jobs are gone, and they were in the communities such as Ucluelet and Alberni then, and in Terrace, Rupert, Hazelton and Smithers now. The minister knows it, so let's not say that the programs created by this government were all for the sake of the people of this province. Different values were given high priority at the cost of many thousands of people in this province. Every time a logger loses a job, there's a family behind that logger; there are children behind that logger who thought they were going to go to school; there is a family behind him who thought they had a future. So it is much more serious than the previous speaker is trying to say by stating how great the government has been for the environment. Yes, they did great for the environment, but it went with a lot of suffering by the people.

In spite of what that government thinks, I'm here for the people who are affected, and I'm going to speak for them. So when I see programs introduced by this government that are basically created for the sake of creating the funding to provide for the people who are kicked out of jobs and for the families behind those. . . . If those funds had been created to assist them -- not just to give them a handout, but to create new opportunities -- then I will stand up until I see that happen. That's what FRBC was supposed to do, which was another initiative by this government. For the first three years, that fund has done zilch: 943 jobs is ultimately what this government can say FRBC created. The rest were study programs, sending people to school for six or eight months and then nothing functional, nothing productive, nothing that could say: "Here is an opportunity to create something that is year-round, full-time employment at the end of whatever you do in studying or retraining."

So here we are in 1996. Once again the Premier stands up and says: "I've got it. I found a way to create 21,000 jobs, and I'm going to make sure that it will happen." So the world was smiling again. The Premier had made a commitment, and he said it with a smile on his face. I'm really sad to see the member for Skeena sitting with a smile, because it is in his riding that 9,000 jobs are under very serious threat. That is not a number that I make up; that number comes from the job commissioner, who is trying to save some of these jobs but doesn't get much cooperation from this government to do that.

So I'm going to continue to fight with the minister, through the Chair obviously. And you, hon. Chair, can indeed stop me if you so choose, but I will go on. Ultimately I will be fighting to make sure that the public of this province knows what the Minister of Forests is doing with his budget and with his ministry in the forests, in the communities. That is my job. I will make sure to point it out if I think something is not right. If something is not wrong, sure, we will point it out, as well.

[ Page 4910 ]

But if we are talking about the new direction today in the forest industry, which the Premier calls an accord and I call an edict, it's a financial handout for a period of time and then God knows what.

I will come back from time to time to what I was asking questions on before, because I have to know what the foundation is. If the minister doesn't know the answer, then I'd appreciate it if he'd say: "Well, I checked it out, and I'll get the information to you later." But to portray himself as an outraged person that I dare to ask questions that he doesn't believe to be important on the whole issue of. . . . Are we indeed going to create the jobs with the money that is going to be spent, the $2 billion? Or is it just another exercise that may work but not necessarily will work? Should $2 billion definitely be spent on the basis that it may work but not necessarily will work? So, Madam Chair, I've asked enough now.

Is the minister aware of what has happened in Oregon? I've asked the minister if he knows that Oregon's forest industry lost about 65,000 jobs in 1992-93. I've asked the minister if he knew that Oregon was given $2 billion by the federal government, during the Portland meeting with President Clinton, the industry people and the workers, to rescue that state.

Although he hasn't answered that question, if he knows that, then I would like to ask him: do you really believe, Mr. Minister, in using that Oregon and Washington scenario as an example to make the forest industry in this province wholesome? I ask that question, now that I've given him this information on what has actually happened in these two states that the Premier has constantly held up as the examples. Then, after that, I have some more questions on the ratios here compared to what's happening over there.

The Chair: Hon. member, I suggest you get to those other points. You've asked that kind of question for quite some time. I would suggest and encourage you to move on to another topic of conversation.

T. Nebbeling: Thank you, Madam Chair. Of course, I'm not going to argue with you, because that's not allowed. But I didn't think I had asked the minister if he knew that the forest industry in Oregon had been subsidized by $2 billion.

The Chair: Hon. member, hon. member.

T. Nebbeling: That's fine, Madam Chair.

The Chair: We appreciate your comments. Move on, please.

T. Nebbeling: At the time that the Premier came forward -- March 21, 1996 -- in British Columbia, 40,000 jobs could be created in the forest industry. It was to be achieved with a ratio of 2 to 2.5 workers per thousand cubic metres of timber harvested. Is the minister aware that these are the numbers that are the ratios in Washington and in Oregon?

Hon. D. Zirnhelt: Hon. Chair, I told the member that rather than being stuck in the past, when an objective was set to us, the forest sector strategy group decided to get on with it and cooperate with government. We've moved well beyond simply a matter of ratios. We've looked at British Columbia's industry, at British Columbia's policies. Based on our policies and the incentives in the accord, we came to an agreement that we would create the 22,400 jobs -- 20,400 plus 2,000 Fisheries Renewal jobs. We're confident that if we work hard -- industry and government -- and we each do our part, we will achieve those goals, based on a common understanding of many knowledgable people working together many, many hours and in lots of tough negotiations.

I just have to say that the member is attempting to respond to some of the inaccuracies. When the bank shut down and threatened to shut down Repap, it had nothing to do with B.C. policy. We have stepped up to the table, made the changes and adjustments which have been acknowledged by industry. There is nothing more for government to do, unless he's suggesting the massive subsidies to the banks that his leader dared suggest. That we give FRBC dollars to the banks -- we've ruled that out.

I just ask in return that the member try to focus his questions on the estimates of the ministry and what the ministry will be doing. I think we should leave Oregon to their own devices -- massive land withdrawals down there, with no mechanism in place except, as he suggested, a bailout by the federal government. We have programs in place; we have FRBC in place; now we have the jobs and timber accord. These major policy instruments will help us make adjustments, if we need to, in our communities.

[3:15]

We have never said anything to the banks. The only connection there with the banks is that the government, which tried to help some of the small logging operators who have not been paid for months on end. . . . The only way the government has worked with the bank is by making a deal with banks to become agents on behalf of FRBC to give small loans to these logging operators. But that's the only bank connection, as far as FRBC is concerned, that we have asked for and pushed for.

Considering that we are willing to spend $2 billion on creating 20,000 jobs in the forest industry -- of which 5,000 jobs actually are created with that $2 billion, and the rest is the programs -- I suggest that a handout to Repap would have been very much in order, not as a handout but as a loan to get them back into operation. That will be profitable and will ultimately save 9,000 jobs in that area. It is a very serious situation there.

The lack of coming in, in a manner that is viable and feasible, by this government and staying on the sideline, jeopardizing the lives of 9,000 forest workers' families, I think, is appalling. But we're going to go into that a little bit later when we talk about real jobs in this province. Are we creating jobs? Are we saving jobs? What is our mandate -- save jobs or re-create jobs? I don't know any longer, because the messages are very confusing.

[ Page 4911 ]

We don't want to talk about Oregon any longer, and we don't want to talk about Washington any longer. So we're going to talk about British Columbia. What I would like to hear from the minister, then, is. . . . The ratio of jobs against 1,000 cubic metres today in British Columbia -- what are these ratios?

[H. Giesbrecht in the chair.]

Hon. D. Zirnhelt: They're the answer when you divide the number of jobs by the number of cubic metres.

T. Nebbeling: I didn't ask the minister for a smart-aleck answer, but that's okay as well. If the minister today doesn't have the amount or the ratio that is standard in this province for what a thousand cubic metres produces in job opportunity, then again it is clearly a reflection of the knowledge of this minister on forest matters. I find it quite appalling. I don't get angry with this minister. I have gotten over that kind of emotion when I talk with government representatives.

The public out there should really be aghast, truly aghast that we have a minister running a ministry that brings revenue direct from the industry into the provincial coffers of about $1.5 billion, $1.6 billion -- considerably less than it was a couple of years ago, but nevertheless a major contributor to our provincial wealth; it creates jobs. . . . To not know what the ratio is today of how much each thousand cubic metres coming out of the forest produces in jobs in this province, and then turn around and say, "Well, we're going to spend $2 billion to bring that ratio up," doesn't make any sense to me. If this minister doesn't know what the standard is today, what the benchmark ratio is today, it's incomprehensible to me.

I mean, the thought that the Premier is walking throughout this province right now, telling everybody: "We will increase the job ratio per thousand cubic metres in order to create 21,000 new jobs. . . ." On my question -- what is the ratio today? -- the minister said: "Well, it's dividing some of the amount of money coming in on a 1,000 cubic metres by the number of people working." That's not an answer, so I ask once again: can you tell me, do you know the ratio? Maybe you don't know. If you don't know, say so, because then I can go on. If you do know the ratio of jobs created per thousand cubic metres in this province, please, I would like to hear that.

Hon. D. Zirnhelt: Perhaps I can add a little bit. We cut 70 million plus or minus a few -- it depends on exactly where you are, which year. We said we've used the base of 86,000 jobs, and if you make that division the way I suggested you do it, you get about 1.2222 forever.

Just in general terms -- because that's all that it was -- this was not some master blueprint for which they would castigate us without consulting everybody under the sun and never arrive at a better answer. The Premier thought that we should raise by at least 0.3 jobs per thousand cubic metres. If you happen to multiply that by 70 million, you end up with 21,000 jobs.

So we want to increase the number of jobs. We've been clear that that's the direction we're headed. The Premier has made it clear that he wants new jobs. He's not arguing about ratios; we're not arguing about ratios here. We just want more. We put a number down, and we drove an accord to achieve that, as close as we could get to that number. Depending on how you cut the numbers, there are more. Industry wants to include indirect jobs. We want to just speak to direct jobs, but we acknowledge that there is a multiplier effect and an employment effect of indirect and induced employment.

T. Nebbeling: This morning, when we spoke about the real job numbers in this province, we spent a little bit of time on that. The minister stated on two occasions, when I questioned the numbers of jobs in this province and when I stated that rather than having created jobs in 1996, there has been a deficit of jobs -- 5,312 according to StatsCan, based on jobs, hours and payroll -- the minister jumped up and said: "That's outrageous. We haven't lost any jobs in our province. We have built new jobs. In May 1997 we have 100,600 jobs." It's in Hansard. It was stated twice. So how can the minister say today that the benchmark of the jobs and timber accord is based on 85,000 jobs or 86,000 jobs -- whatever you mentioned? That's how we just explained how the ratio is created. I don't understand that. On the one hand, we have the minister saying that we have 100,600 jobs right now in British Columbia. Now, to give his story a different spin, he says we have 85,000 jobs. Divided over 70 million cubic metres, that means so many jobs. If we increase it by X amount, that will create 0.3 more jobs per thousand cubic metres, so that's how we get 21,000.

I really think that maybe we should spend some time on that number and see what indeed the number of jobs is today in British Columbia. By that I mean full-time, year-round forest sector jobs. If it is 100,600, as the minister stated twice this morning, the numbers obviously do not work as compared to what he just stated: that it is based on 85,000. I don't know where it comes from. So maybe the minister can give me some clarification on that.

Hon. D. Zirnhelt: I'm happy to try to give that clarification. I think that if you read the record, it is absolutely crystal-clear. What I said this morning was that you have incorrectly used a 5,500 job-loss figure. I said that you must be using the labour force jobs survey, which did show an up-and-down. . .they drop in the spring, and then they increase throughout the year. I'm just saying that if you use the labour force survey, if that's what you're using -- because in the debates, in question period and in all of your speeches you have used those, as near as we can tell -- from May of 1996 to May of 1997 there has actually been an increase from 100,000 to 100,600, using those figures.

We are not using those for the purpose of the accord; I've made that absolutely clear. Let me read into the record again that we will use the StatsCan survey of employment, payroll and hours, which is what was agreed to with industry. It doesn't matter what the base was that the Premier used. He said what the base was to be when he used them. This survey of employee payroll hours is about employees. It doesn't include contractors, so there is a weakness in it. Everybody recognizes that, but there is no one agreeable baseline. So I want to make it absolutely clear that the baseline we're using for the accord is the survey of employment payroll hours from Statistics Canada.

Based on that, in March of 1996, when the Premier set the challenge, set the goal, the baseline was 86,184. I've used that figure in calculating the ratio to help you. In March of 1997, it was 85,038. That's available to you. I'd be happy to give it to you. I'm just asking you not to say that there were 5,500 jobs lost, because the statistics show otherwise. The important thing is that we do have a baseline, industry agreed to it, and we're going on from there.

[ Page 4912 ]

T. Nebbeling: The most boring thing that we can ever do in debates, in question periods, is of course to work with numbers, because numbers confuse people and put people to sleep.

Interjection.

T. Nebbeling: Well, because -- through you, Mr. Chair -- the minister is constantly using numbers to defend the success rate of the affairs of the Ministry of Forests. Now he says that the Premier used the number of 85,000 on March 21, 1996.

Hon. D. Zirnhelt: No.

T. Nebbeling: No? Would he repeat the number, then, that the Premier used?

Hon. D. Zirnhelt: The target was 21,000 more than we had in March of 1996. In March of 1996, the survey of employment payroll hours -- in which, in the year that has intervened since the Premier set his targets, there has been agreement with the major partners on what the statistical basis will be, and it is the survey of employment payroll hours. . . . In March of 1996, when the goal was set by the Premier, the employment level was 86,184. That's the best measurement that we've got of employees. I'm saying that as of March 1997, it was 85,038.

T. Nebbeling: Well, if that is the case, then how can the minister, on at least six occasions during that year, have stood up in this House -- when we on this side made the point that instead of gaining jobs, we were losing jobs in this province. . . ? This minister stood up to proudly announce at the beginning of the session that there had been 10,000 jobs created since 1991, and at the end of the session -- and recently as well -- that there had been 15,000 jobs created. In that year, according to the minister's numbers -- given to this House -- 5,000 more jobs were created. If I add 5,000 more jobs to the number that the Premier stated. . . . We are well into the nineties.

[3:30]

And this whole jobs and timber accord -- I'm afraid to say it -- is based on how many jobs there are here today and on how many jobs are going to be here five years from now. That's the jobs and timber accord. If there are 100,000 jobs here today, then at the end of the five-year period, we can expect 121,000 jobs. We're going to spend $2 billion on that: $1.5 billion directly to land improvement programs, and the rest in topping up salaries, supporting companies that will provide services, with the Forest Practices Code in mind and adherence to the cost factor.

I need to know, in order to judge the jobs and timber accord -- its value and its achievable objective -- what number the minister is playing with. He cannot ignore the numbers that he has stated here in the House from time to time. You can go through Hansard, and they're there; I've got the whole folder. At the beginning of the first session, it was an increase of 10,000 new jobs in this province since 1991; recently, it was 15,000 jobs since 1991. That is a 5,000 gain.

The minister is shaking his head. Maybe the minister has changed his calculation system; maybe he's using another form of data -- I don't know. Can I be confused by what he's doing? It is very simple: if there are 100,000 today, that should be the benchmark -- not what it was in 1996. This jobs and timber accord did not start in 1996. It starts in 1997; it started a week ago. In 1996 there was an announcement that we were going to have 21,000 jobs by the year 2000. The government failed doing that. It didn't materialize. We are saying on this side that you actually lost jobs.

The minister has a problem with that statement; that's fair. But we get the new announcement -- new numbers, new conditions -- in 1997, two weeks ago. I would suggest, as it is again for a five-year period, that the benchmark is now. So is it the 100,600 jobs that you mentioned this morning? Or are we just going to stick with the number from the Premier? If you stick with the number in 1996 from the Premier, then just by virtue of waiting a year to reannounce it, he's already gained 15,000 jobs.

Can the minister give me a good idea of where the numbers come from? How has he found them? What database has been used? What is the ultimate number, and how does it compare to last year?

Hon. D. Zirnhelt: I've actually answered the question very clearly and fully. There's another part to his question -- and I would suggest that if there's any confusion, any attempt to confuse the public, it's on that side of the House. Let me just tell you, without holding me to exact numbers, that in rounded numbers since 1991 -- until March of '96 by one measure, probably the labour force survey -- there was an increase of 15,000 jobs. Then there was a drop-off, by the labour force survey, of approximately 5,000. But that was restored this spring, so we're back up to approximately. . . . I'd have to check the exact source of those numbers, but I have checked it so many times that for a while there we were prepared to stand behind an increase of 10,000 since '91, because there appeared to be a dip using that survey.

We're not using that for the accord because of the inaccuracies, because they in fact report people who are laid off at breakup. I suggest the member take my word -- read Hansard when you get it -- that we are using 86,000 as of March. The Premier said that was the baseline, as of March '96, and that is what would be measured. In fact, five years isn't the year 2000 but the year 2001. Maybe sometimes in speeches people round off a year, but he said clearly that he set the goal for the next five years. That's four years from now, if he said it a year ago. That's five minus one equals four: '96 to 2001 is five -- okay?

I think you're attempting to split hairs. I've told you what industry and government -- in the intervening year -- agreed was the baseline. We're going to use this baseline -- that survey. It will be that same database, unless somebody finds a better measure. But I assure you that we're not going to try to take credit for an increase in jobs from 86,000 last March to 100,000 this year. We have not created that many jobs in one year.

If you check the record, all of this is clear. I would suggest that any more debate on it really is a waste of the taxpayers' dollars. We've told you the baseline; I've answered the question, and I wouldn't want the public to get the impression that 

[ Page 4913 ]

the critic over there just doesn't understand. But I will not repeat it again, because it's on the record, the public record. It's clear as could be that industry and government agreed on what the baseline data would be. So I think that's very clear.

T. Nebbeling: I understand that the minister has to talk himself out of this little hiccup, and I consider it a little hiccup. But let it be known -- I've got it right here -- your statements in response to my questions in this House. . . . My question was: how can you claim more jobs when StatsCan says we have lost 5,300 jobs?

You're not talking in your answer about the different systems -- "Well, for this type of objective, we're going to use this data because it fits the picture; and then for that kind of an objective, we're going to use that data." The confusion is in using different data when it comes to jobs, depending on the project that we are involved with. You stated here very clearly, Mr. Minister: "We created as a government 10,000 new jobs in this province, and we are very proud of it." Those are your words, hon. minister.

That message changed not so long ago to 15,000. I'm so happy that you've got all your advisers sitting around you when I'm trying to tell you. . . . I don't mind that you take some hints on how to respond from other members, but I hope you understand that I'm not taking these numbers out of the air. These are your statements. I really have a problem with having a government that uses different data at different times to justify their position, their statements. If that were done in the private sector, I think business would be. . . . Well, no certified accountant would sign off on a yearly accounting report if the goalposts were constantly changed to fit the objective or the picture that a business tried to portray. You start off on the base, and you stick to that base. Then you can judge if you have achieved your goals or not.

This kind of wishy-washy, goal-moving type of an approach is obviously the reason that I'm extremely concerned that the jobs and timber accord is based on a lot of -- what can I say? -- moving around of the goalposts in order to make the picture look good. The numbers are being used to do that. I think principles are being used to do that, and I don't think that this can be a basis of a jobs and timber accord that is going to cost this province $2 billion over the next five years. I'm not going to argue with the minister, either, whether 1997, 1998, 1999, 2000 or 2001 is five years. If I restructure it a bit, I can make it six. The original deal was presented to be for the year 2002. At least, that's what I heard the Premier say in the meeting.

Now that we have agreed that the numbers are reflecting the real jobs in this province, as presented by this government, I won't say that they have no merit. There is a basis there, but they are very confusing. If I don't understand it, I don't feel bad about that, because I think the minister has just explained that part of the strategy has clearly been to create confusion. When you work with different data at different times in talking about the same subject, you create confusion.

If that is part of how the Premier is going to justify that in the future, he has indeed achieved his goal by taking a number today that five years from now, or maybe already by next year, will show that there is a tremendous increase. If you change the goalposts again next year, what do you do?

I'd now like to ask the minister about the data that are used, the labour force data. I believe you use the employment data and hours data and the annual manufacturers' data. Who in your ministry looks at this information and gives you the advice to say: "Okay, this is your number"? As there is so much confusion, somebody has to be responsible for that number, and I would like to know if it is a committee within your ministry or if it is an individual who gives you that information.

I. Waddell: I ask leave of the House to make an introduction.

Leave granted.

I. Waddell: I'd like the members of the House, in the midst of this important debate on forestry issues, to welcome to the House a group led by Ms. M. Chan. She is an instructor for SUCCESS LINC, which comes from the great and successful SUCCESS organization, a Chinese-Canadian organization in Vancouver, Richmond and other places. This is a class of ESL students -- English as a second language. I hope they can understand me quite clearly. I used to be an ESL teacher myself at one point. I urge the House to welcome this group of new Canadians, who are quickly learning the English language -- to go with the other languages that they are so fortunate to have -- to become citizens of Canada.

Hon. D. Zirnhelt: I'd like to assure the member that this minister and this government are making no attempt to mislead the public. We have made it clear what the basis of our numbers was, and I've repeated in this House the source of any data that I use. To answer your question, the trade and economics branch uses Statistics Canada numbers, unless there is information provided, for example, by somebody like Price Waterhouse, and then we will look at that.

It is the trade and economics branch, and when those figures are supplied, if we want them to be the official figures we use, they're usually, if not always, checked by the deputy minister. Ultimately, I'm responsible, and I would suggest that if you want any official numbers to be put in writing, we're quite happy to inform you what numbers we use. As we said, for the accord, we have made it clear that we use the survey of employee payroll hours.

The Chair: Before I recognize the hon. member, it's my duty as the Chair to inform the House that there are certain rules governing tedious repetition. I would caution all members that we have canvassed the issue of numbers extensively, and perhaps we should go on to another question.

T. Nebbeling: I appreciate that you caution the member of the government that the same answer is considered to be too tedious, and hopefully he will take heed of that. What I would like to ask the minister. . . .

[3:45]

T. Nebbeling: I'm not going to comment on anything.

What I would like to ask the minister now is about the job figures. I'm not going to get back to the confusion over how many there are. There will be other opportunities to come to that. Can the minister explain to me or give me a rundown on what kind of jobs are included in the count the ministry is using to come to the number that has been presented here?

Hon. D. Zirnhelt: The types of jobs that are direct jobs are in silviculture. There are some miscellaneous jobs in panel 

[ Page 4914 ]

boards, sawn wood, logs, pulp, the paper manufacturers, finished wood and engineered wood products. Those are what are considered the direct jobs.

T. Nebbeling: What number of jobs are in the harvesting sector, then, and what number of jobs in manufacturing? How many are indeed earmarked for or are actually land management jobs, such as silviculture and others?

Hon. D. Zirnhelt: Logging and forestry service jobs for 1995, from the survey of employment payroll, are 29,465; wood industries, 39,916; and paper and allied jobs, 18,248. That would total 87,629.

T. Nebbeling: So what was the total number? I think you were off about 10,000.

Hon. D. Zirnhelt: For the year of 1995, that was 87,629. For the year ending 1996, it was 86,323. It depends. We've got it by month. That's what we have it by, and it's summarized. I'm not sure what the member is getting at, but if you want the baseline of March 1996, which is the baseline for the jobs and timber accord, it's 28,056 in logging and forestry, paper and allied at 18,429 and wood at 39,699, for a total of 86,184.

T. Nebbeling: Sorry, I thought the minister had said 76,000; that's why I said you're about 10,000 off. This information comes to the ministry on a monthly basis through the district offices. How does this come to the minister?

[G. Brewin in the chair.]

Hon. D. Zirnhelt: These figures come from Statistics Canada, and they come monthly with a lag. For example, the most recent information we have is March 1997. So there is bit of a lag, but we get it monthly.

T. Nebbeling: Considering that I am trying to get a good sense of how the number that the minister presented as the baseline for 1996 was arrived at, is there any information or data collected in the district managers' offices or in the regional offices that comes to the ministry, as well as an element that is considered in the total consideration of what the actual job condition is?

Hon. D. Zirnhelt: No, the only data that we collect would be jobs associated with the value-added bid proposal sales. We need those when we're assessing bids. But other than that, we don't collect statistics.

T. Nebbeling: These numbers that you're giving are the 1995 numbers finishing in March 1996, I take it. Is it the '95-96 year?

Hon. D. Zirnhelt: To make it clear, the figures I was using were as of March '96. The baseline for the jobs and timber accord is the March figures for that year. You could back up to February and get different numbers, and back up to January and get different ones. They vary through the year.

T. Nebbeling: I understand that the numbers do vary every month, especially with the breakoffs at that time of the year. I think I was talking about that earlier on, and some variations I can accept. I can't accept variations of 15,000 in a given period. I'm still not happy with that number, but I'm trying to get a little bit more of a feel. . . .

The Chair: Hon. members, I have an introduction I'd like to make. At this time joining us in the gallery today is someone we all know well who works in the buildings: Alistair "Red" Grant. He is there, joined by his wife Joan. Today is his last day working for the Legislative Assembly of British Columbia, and I've got some information about his history here. If you will bear with me, I'd like to tell the rest of you about it.

He has worked for Saanich and the city of Victoria. He began his career in the public service in September 1971 with the Department of Public Works as a relief worker in the Legislature. Later he went on to work at the museum and the archives, and he came to the buildings permanently in 1978 when he joined the newly established British Columbia Buildings Corporation.

Red has always come to work a half hour early to check on the building, to say hello to folks and generally to see how things are going. As a dedicated worker, he often took on less desirable jobs without a word of complaint. As many here can attest, Red has always been happy at his work. During the course of his service to the people of British Columbia, Red has outlasted six Premiers, ten Speakers and eight Attorneys General.

Interjection.

The Chair: Oh, it's been added: "and only one Clerk."

On a personal note, Red enjoys taking walks with Joan, his wife of 26 years. He is a neighbour of mine, and I see the two of them frequently on their walks. He's a hockey fan, and he cheers for the Rangers -- he doesn't much like the Cougars, we've discovered. He's rather, we might say, like Gretzky -- he could have retired last year, but he continued on just like "The Great One" for another period of time.

For his future, Red will continue to live in Victoria after retirement, and the biggest challenge that lies ahead for him is remembering that he doesn't have to put on his work clothes at three in the afternoon. Alistair, we wish you health and happiness and fulfilment. Enjoy your retirement. We will miss your very ready smile. [Applause.]

I might add, for those hearing and those present, that in the Cedar Room there is a small cake to say farewell and thank you. For those who are, as I say, within hearing distance and watching, you might join them over there for the next hour. Thank you for your indulgence everyone.

T. Nebbeling: I should say that I've only been here for 14 months, but I do agree that the smile is phenomenal. Every afternoon around 5 o'clock I would see him. He always stopped. It's amazing, considering the amount of people that are in this building, that he did take the time to just say something to everybody every day. So I think he's going to miss us all as well, by the way. It's a two-way street.

Having said that, we were on the job situation. I'm a little bit surprised that the minister can only give his numbers for '95-96, considering that we are in '97 and that the minister stated that these numbers do come in on a monthly basis. But with this lag, there is a period of time between the information gathered and coming there. Can the minister give me any indication about the numbers, according to StatsCan, in the different regions for the year '96-97, counting up till March?

Hon. D. Zirnhelt: To our knowledge, there's no breakdown by region from Statistics Canada. Just to remind the 

[ Page 4915 ]

House, I did give the '97 numbers. I gave them at least twice. I'll give them a third time, and that will be the last time. In March 1997, these same statistics show a total of 85,038. So they're current to March, then there's a lag -- but no regional numbers.

T. Nebbeling: I was not looking for the regional numbers. I was again looking for the sectoral groupings we looked at for 1995 as well: the manufacturing side, the land-management side and the harvesting side. The numbers for '95-96 are broken down in these three categories. I was wondering if the minister could also give me the breakdown for '96-97, as he has the total number.

Hon. D. Zirnhelt: Yes, I do have the breakdown, and this is for the month of March. In logging and forestry, it's 25,982; in paper and allied, 15,734; in wood, 43,322, for a total of 85,038.

T. Nebbeling: So that we have it on record, wood is reman, sawmills and activities such as that?

Hon. D. Zirnhelt: Yes, that has to do with wood manufacturing.

T. Nebbeling: So there's a decline in jobs in the field, and there's a decline in land management of about 7,000 to 8,000 people that have been picked up in the reman industry. I think that's part of the problem we face when we talk about the forest industry. We see many scenes of. . . . Especially the logging community seems to be -- not the target; I wouldn't use that word -- the victim of all the initiatives that the government has taken over the last couple of years to put more emphasis on the environment and environmental protection. Of course, the Forest Practices Code has been a tool that certainly did not help any forest worker to go into an area where he rightfully could have been, because the area was approved for harvesting. But unfortunately, through other circumstances, that didn't happen.

That is the group I'm very much focused on, because I think we cannot just replace jobs as we seem to be doing here. If we haven't had the decline in jobs that we feel are happening, there certainly is a shift in jobs from one sector into another sector, from harvesting into reman. Not very often will many of the people that have been working in the forest for 30 or 40 years be in a position to go into a mill and become a productive worker. I've visited a few mills because of my critic role, and I'm always astounded by the amount of expertise needed to be a productive and safe millworker. Safety is a big issue, of course.

[4:00]

So what I am looking for is: has the government at this stage, or has it in the past, done any form of tracking as to which jobs are actually lost within these sectors -- how many, what percentage -- and what is happening with those workers? If that happens, I hope to be able to get a feel for how the ministry deals with that particular problem, because I consider this to be a very serious problem. When we talk about the job losses not really being there and we know that there are thousands of people walking the streets of the communities because they are not at work, something is wrong in analyzing the real job situation in the forest industry.

Having heard some of the numbers and how it breaks down in the different sectors of the forest industry, where there is a serious decline in one and an increase in another, these jobs are not necessarily useful for an individual who has been kicked out of one sector. Is there anything that the ministry is doing to track these numbers, as well, so that we can have a reaction and deal with that?

Hon. D. Zirnhelt: Just for the member's edification, he's talking about loss of jobs in logging and forestry. If you go from March of '96, you had 28,000 in forestry; by July it was up to 32,000, and by August it was up to 33,000. It was down in September and up again to 33,000 in October. So there are wild fluctuations. Weather is a factor, tech change is a factor, and pulp prices are a factor. When there's a slump in pulp prices, it's no surprise that there would be fewer people working in pulp. They just aren't cranking out as much of the material. And yes, the growth will be coming in the solid-wood side through remanufacturing. That's why we've targeted that sector in the accord -- because it has tremendous growth potential.

We are not going to have our district managers become statisticians. There are local economic surveys. There are various ways of trying to measure it, but you can spend an awful lot of time measuring. What our people do is worry about the goals of getting fibre out. That's what they're oriented to. They do notify Forests if there are individual firms with trouble on a licensed operation. They tell us about that, and they ask the mill management or the manager of the logging company how many jobs. . . . We collect the information on a needs basis. But in the end, the sector is dynamic and it's changing, and we expect that these numbers will fluctuate through the years.

T. Nebbeling: It is telling that in order to illustrate how the fluctuation in the job market for that harvest sector is a traditional element of the job base, the minister starts off saying that in March '95 we had 29,000. Then we have some dips and we have some ups, and then in October it is 29,000. I wish he would go on and come to March the following year, because then you can have two comparable points. In March 1995 there were 29,000 people working in the forest, and in March 1996, according to the numbers that the minister just quoted, there were 25,820. So that is a decline of 3,200 people, or 11 percent. That is serious.

Whatever the reason is, and I understand that there are all kinds of outside factors that have to do with it. . . . The minister keeps emphasizing that pulp price is a key factor. If there are high prices, there's more product demand, which means we can have more people going into the forest. I agree that price is a big factor. Down the road in these estimates we're certainly going to talk about what drives the need for a certain market price in order to make an operation profitable.

I think many of the provincial programs today are adding so many upfront costs to the raw product which will produce pulp, that at the time the pulp is being produced the price is higher than the market will pay for it. Am I right about these numbers -- that March '95 is 29,000 and March '96 is 25,820?

[ Page 4916 ]

Hon. D. Zirnhelt: I don't have figures for March '95. I gave totals for March '95, as I recall. I have March '96 and March '97. But as I say, it's up and down from year to year, and I think we have to agree that it would be a yearly average or something that we'd have to take.

We're going to leave the fine-tuning of that kind of thing to the jobs and timber advocate, who will look specifically at the need for an improved database in order to track it. Licensees will be anxious as to what their quotas of jobs might be under the accord, and they will be very willing to demonstrate just how many jobs per thousand cubic metres they have. I have had experience with trying to do this kind of survey, and it is difficult to get an actual figure of how many people are working at any given time. I don't even think the logging associations collect those, except maybe on a survey basis. I think there is a real need for data, and fair enough. We should try to get better data.

But the accord is looking at the province as a whole. Things will change as we move logging operations to the north, because that's where the available timber is. Falling is more highly mechanized there than it is on the coast. So you might find different ratios as you move into different timber types. On the other hand, as you move into high-lead logging -- helicopter logging -- the ratios of employment on the logging end go down. So it's very dynamic, and I don't think there's any snapshot anywhere that we could take and use as a measure, because we have to use aggregate data in order to assess it. We've put that out there and said that in the next four years we will look back and have it tracked, through time. We expect the jobs advocate to file a report annually, much like the job protection commissioner files a report, and he'll report out on the basis of employment.

T. Nebbeling: I agree that the 29,000 was March 1996 and the 25,820 was '97. Nevertheless, that's an 11 percent decrease. If we take March 31, 1996, as a snapshot and we take March 31, 1997, as a snapshot, and if these numbers indeed apply to that, then we have an 11 percent decline in that sector of the forest industry. I believe that is serious, and we can't ignore it. Either we're going to ask people working in that sector and most likely living in an area where there is very little reman at this time to move to other areas, be it the interior or the northwest, or these people are going to be out of a job. Or FRBC is going to create different opportunities in these communities. That was the intent, and that's why I think there are so many thousands of workers out there that are feeling betrayed because that money didn't come to their communities to create new opportunities through added value, through re-education.

That was the point I was trying to make earlier, and that's why it is important that we know the ratios per thousand cubic metres in different areas. That's why, in the beginning of this estimates process, I started to look at what has happened in the States as far as these ratios are concerned, because our target is to come up to their level.

It's 4:10. I am going to take a little bit of a break, and then I'll come back. My colleague from Cariboo North wants to continue.

J. Wilson: Good afternoon, neighbour. It isn't every day you get to stand up and chat with your neighbour, so I'm going to make the most of it here.

I noticed earlier today that the minister made a statement with regard to the creation of jobs in the formula. I believe what he said was: "We have aimed at getting halfway to the job ratio of other jurisdictions in the number of jobs per cubic metre." Now, do I take this literally, or was it simply a figure of speech? Would we not try to get all the way? Could the minister explain?

Hon. D. Zirnhelt: I really have nothing to add to the target figures. They have been canvassed very thoroughly, and I think the record will speak. Everything we have to say on that subject has really been said.

J. Wilson: I assume, then, that I take this literally -- that we are aiming at half the number of jobs per cubic metre that there are in some other areas. In which case, we may have canvassed this thoroughly, but I'd just like to know. I didn't ask him for those numbers. I didn't ask him where we had a comparison. I simply wanted to know: was it simply a figure of speech, or was it an actual projection?

Through the jobs and timber accord, we have Forest Renewal B.C. woven very intricately all through this plan. At this point I have yet to receive a copy of the business plan for Forest Renewal B.C. so that I can actually look at that, try to analyze it and transpose it onto this jobs and timber accord. Without this information, it's very difficult to stand up in this House and try to analyze or justify the spending of government.

I would like to ask the minister if this is available -- the business plan and the budget for the 1997-98 year -- or whether we will see it at all during this estimates process.

Hon. D. Zirnhelt: First of all, with respect to the business plan, until we concluded the jobs and timber accord, we weren't able to finalize the business plan of FRBC. We have been checking the numbers, and I think that in the next few days I will be tabling a business plan for Forest Renewal B.C. In fact, they're going through the last stages of getting it ready for publication -- so in the next few days.

With respect to the comment, "The minister was trying to put words in my mouth," when I said we would try and achieve half of the employment per thousand cubic metres, what I said. . . . This is notional; I want to make sure I use that word. It's notional because there is no definitive statistic on which everybody agrees. When the Premier made his announcement, he thought we were at something like 1.4 jobs per thousand cubic metres, and he'd like to get to 1.7. I said that 0.3 represents 21,000 jobs on a base of 70 million cubic metres. That's how he got them. There's nothing more precise than that about them. If other jurisdictions are at, say, 2 -- a lot of them are more than that; some of them aren't there, but some comparable jurisdictions are in that area -- that's halfway. One point seven jobs per thousand cubic metres is halfway.

In the year that has intervened, we've used a different basis for calculating. Industry agreed that we should use a different base, and at that base we are at 1.2. The fact is, we're not looking at decimal points and multipliers; we're trying to get more jobs for every cubic metre as an absolute goal. It doesn't have to be a relative goal anymore with other jurisdictions; it's an absolute goal. That's a very ambitious target; everybody has said that. It will test our ability to work together to get that 21,000 or 20,400.

[4:15]

[ Page 4917 ]

How about the budget for the upcoming year? Is that also being held up because of the jobs and timber accord, or is it available?

Hon. D. Zirnhelt: Yes. There are two things. There is the investment plan, and that was released last week by the Premier. Then there is the business plan, and that's what I will table in the Legislature here. Those are various aspects of their budgeting process.

J. Wilson: Going through the jobs and timber accord, it's not the easiest thing to try to figure out; it's a very complicated piece of work. We have a lot of job creation, and somehow each job creation program is tied into the job creation in the other areas around it. If one were to fail, you would have failure right through, except for the possibility of the money that is going to be put into our land-based projects. That seems to be the most stable component of the whole program.

With this job planning, do we have a plan in mind, or is this simply an idea at this moment? Is there anything there where we can say that at the end of next month we will have reached this target and at the end of this year we will have reached this target? Or is it simply an idea today, and we are starting from scratch, not quite sure where we're going?

Hon. D. Zirnhelt: In the words of one industry leader commenting on this, he said: "We now have a strategic plan." And that's how he characterized the accord. What we will develop now with industry is an implementation plan, and there will be planning at various levels. I expect the regional advisory process will feed into the planning that Forest Renewal does, to make sure that they're distributing the jobs in the best possible way that we'll end up with the job creation, the longer-term, stable jobs, that we have industry's commitment to create, using FRBC funds. We hope that that there will be a refinement, company by company, licensee by licensee, and that those then will add up to be regional plans for FRBC's investment, as we have now. And we will refine that process as we go along.

But if you were to ask if we now have a blueprint and whether I tell you where all of industry's 2,000 jobs will be, I could suggest to you that there's any number of fibreboard plants, finger-joining plants. . . . There are a number of things in the planning stage at the firm level, but this is a commitment. Industry said they'll create those 2,000 jobs through new investment. We know where some of those are; we don't where all of them are right now. There is not a master plan agreed to that is an appendix to this accord. These are all things. . . . The deliverables have to be worked on.

J. Wilson: I assume, then, that there has been some planning in process for a period of time now, so we'll undoubtedly see something happen this year. I would hate to think that it's all going to be thrown back out there and redesigned, and we'd have to get everyone to agree as to what they need and then put it back together and have the government go over it and then come up with a plan. That could take a year or two down the road, considering the pace at which the government moves. It's not real swift, sometimes.

The issue of 2,000 new jobs that the minister referred to -- these 2,000 new jobs are going to be created by the major licensees, I believe. He's referred to finger-joining, several types of value-added mills. Is this job creation going into, say, the construction of these facilities and that will be the end of the job? Or is it actual jobs working within these facilities?

Hon. D. Zirnhelt: These are direct jobs, permanent jobs. They're not construction jobs.

J. Wilson: So then the major licensees, as part of their commitment, will create 2,000 full-time, sustainable jobs that will be in the value-added industry. Am I correct in that assumption?

Hon. D. Zirnhelt: That's only one category. We expect some to be in producing and developing higher value-added products, but there will be other initiatives. We expect them to invest capital to improve technology, operations efficiency and product value. They could be in adding value to logs -- for example, by doing more sorts -- perhaps earlier in the chain of production. There could be jobs created in log distribution, log markets. They may wish to create a log market. There could be some in the initial breakdown. They could be in pulp and paper value-added; they could be in panel, shake and shingles, remanufacturing. . . . These are some examples. Beyond the mill, there might be more in marketing. Someone might start up a new marketing venture that exports to a different market. There are all kinds of things that can be done. We just have some suggestion of what those might be; the onus is on industry to do it.

You remarked about government taking some time. The incentives are there; they will be in place by next year. We have to develop a new delivery system for FRBC, and that will happen next year. We have to negotiate contracts with them -- or FRBC has to negotiate contracts. So there is a lot of work to be done. This undertaking will take time, and it will take a number of years.

J. Wilson: I would really hope that we can get there before the year 2001; otherwise there's going to be a few disappointed people. Now, I guess at this point. . . . This is a tough one to get into and get anywhere, because we've got potential jobs all over the place. Without being able to break these down in any way, shape, or form, it's very difficult to do an assessment on what I see here.

Does the minister have any idea at this point in time? He's indicated that some of these 2,000 new jobs will be in the value-added sector -- not all of them. They'll be all over the board, but there will be a few in the value-added sector. At this point in the evolution of this concept, does he have any. . . ? I'm not asking for a number, but for a proximity to a percentage that possibly is there.

Hon. D. Zirnhelt: No, we don't, for the 2,000 jobs. Industry just made the undertaking. There are, however, going to be some 6,500 jobs targeted for the remanufacturing sector, and they will be created by cutting undercut in the small business program, cutting the full cut that's allowed and through using sawn fibre coming from the majors. So when we talk about 2,000 jobs, the major licensees can create those in value-added, but it's only a portion of the jobs that we expect. We fully expect that there will be new, major primary opportunities becoming available. For example, a quarter of a million cubic metres is being advertised, or will be advertised, in the Fort St. John area. We expect somebody will bid for that and hopefully create additional employment with that.

J. Wilson: This quarter of a million cubic metres in the Fort St. John forest district. . . . Is that correct? Is this going to end up as a five-year non-renewable licence? Is it going to go to value-added, or will it go to a major licensee?

[ Page 4918 ]

Hon. D. Zirnhelt: I'm just getting the actual figures. It's 219,000. It will be one opportunity, and it will in all likelihood be in a non-replaceable forest licence. The number of years of the terms of the licence has not yet been determined.

J. Wilson: Then it would be up to. . . . Or is this going to be open now? Can a value-added mill come in and bid on this, or is it open to the majors to come in and bid on this wood supply? Is it open to some of the pulp mills to come in and bid on this wood supply? Have you got any direction for it?

Hon. D. Zirnhelt: As is the case with this kind of licence, we advertise the volume and say we're interested in employment and investment. And it's wide-open. Value-added people can bid or primary operations can bid. This type of licence is generally fairly wide-open.

[4:30]

Hon. D. Zirnhelt: Yes. We have just announced the accord. We intend to get into implementation, and there have been opportunities out there in the past. What we have said in the accord is that people have to play by the principles of the accord, and then they qualify for new wood when it becomes available. So in all likelihood, we will be looking at targeting jobs. We hope that any firm bidding will have thought about the accord, will have thought about maximum employment that they can generate. And in order to do that, we expect them to be full participants, for example, in FRBC funding and a number of things like that.

J. Wilson: There's a lot of hope around here. But suppose that no one does come forward that is going to put in a proposal or put part of their package up and say that we're going to create 300 new jobs or 100 new jobs. They simply put in a bid on the wood, so much a cubic metre. Will it be dispersed in that way?

Hon. D. Zirnhelt: Well, the bonus bid would be one factor that's considered. But we have to consider the criteria of the development objectives of the Crown. We've made it clear that we want to see more employment. So clearly maximum, optimal employment is going to be a factor in awarding any licence.

J. Wilson: Will this hold true, then, for every non-renewable licence that is brought forward in the future for various reasons -- one being that the allotted cut was not reached, things like this?

Hon. D. Zirnhelt: Well, the criteria are set out in the Forest Act, and it involves forest management objectives, stumpage that they pay, development objectives of the Crown. We will always use the licensing provisions to assist areas. For example, we're investigating an opportunity to make a licence available for the district of Stewart targeted for employment in that area. So the development objectives of the Crown are still there, and there is a tension in the economy for us to localize benefits. That's what local people want: they want fibre processed locally. But then there's the demand in the industry to allow logs to flow to their maximum utilization, and that is usually somebody who can pay a bigger price. But there's a tension here, and we manage that tension through very complex policy mechanisms. The accord will have to rely on us making timber available to people who will create full-time jobs and live by the spirit of the accord.

J. Wilson: I'm a little bit confused by the minister's explanation. It sounds like it may be business as usual, but on the other hand, it may be business as we see it. I guess what I want to know is: is there a set of guidelines? When I go in and make an application for this wood, is there anything that gives me, say, a point system, where I get so many points for this, so many points for that -- something that I can write up a project on? I can bring something forward based on your criteria, what you would like to see. They are guidelines and they give a target, and they make it a lot easier to meet that target.

Hon. D. Zirnhelt: Let me just point out to the member that nothing in the accord changes the role of the Minister of Forests. The Minister of Forests, under the legislation, when putting forward forest licences and then subsequently evaluating them, would look at five criteria. The first one is: "Creating or maintaining employment opportunities and other social benefits in British Columbia." The second one is: "Providing for the management and utilization of Crown timber." The third one is: "Furthering the development objectives of the government." Then: "Meeting objectives of the government in respect of environmental quality and the management of water, fisheries, wildlife and cultural heritage resources." And finally: "Contributing to government revenues." That is how we evaluate; there's no weighting, no points. Those are the criteria in the award of forest licences.

Under the accord, we have put in some incentives, and for people to have the benefits under the accord, which include access to new timber, we've said they have to abide by the principles of the accord and agree to create jobs by taking their share of those 5,000 jobs we expect industry to create with Forest Renewal dollars. But if it's a brand-new operation, we have to take that into account. Then they become a licensee.

We are concerned with the jobs and timber accord primarily with those people who have long-term, replaceable licences. They are the foundation and the backbone of the industry here.

Interjection.

Hon. D. Zirnhelt: That's because the accord is with the major licensees.

We also expect to make a deal with the small business remanufacturers, many of whom don't have any. . . . Well, probably none of them have replaceable licences.

[J. Doyle in the chair.]

J. Wilson: I would like to move on, and eventually I'll get sorted out in my mind, I guess, what's going to happen.

In the value-added component of this accord, we have a suitable number of jobs. This is going to the small business and secondary industry part of it. These are basically, in my mind, value-added. But if I'm wrong, I would like to stand corrected. Does the minister have any idea at this time as to the actual breakdown of where these jobs will be created?

Hon. D. Zirnhelt: The only breakdown we have at this point is that we expect that industry and government will work together to achieve 1,500 direct and 1,500 indirect jobs through tendering the full harvest of the small business forest enterprise program apportionment. We expect industry to help engineer the sales; some licensed people may be expected to engineer the sales. We will tender the cumulative undercut through non-replaceable licences, and we intend on. . . . Through the reman sector, government and industry 

[ Page 4919 ]

are going to work together to achieve a goal of 5,000 direct and indirect jobs by increasing the availability of sawn fibre. We expect to reach a target of 18 percent of sawn timber at the coast and 16 percent in the interior from the replaceable licences, directed and made available to the remanufacturing sector at internationally competitive prices. So there's 1,500 from dealing with the undercut and 5,000 from a redirection of fibre.

J. Wilson: I'd like to start with the undercut. Is there any possible way that the minister can, in his best opinion, break down the 1,500 that will be associated with the undercut?

Hon. D. Zirnhelt: For the purpose of the accord, since it's provincewide, we used aggregated information. There are 36 timber supply areas and 34 TFLs, all of which have small-business wood in them. So we took the volume, used a standard multiplier and came up with the 1,500 jobs. We can dig up the information -- how much the undercut is -- district by district, but for the purpose of the accord, we just took provincewide figures.

J. Wilson: I assume that these 1,500 jobs. . . . What I need is: are these jobs harvest-related? Will a percentage of them be created within the ministries to go out and monitor the harvest of the wood that normally would have been left?

Hon. D. Zirnhelt: These 1,500 jobs are in harvesting and in primary breakdown. They don't include figures from secondary and further manufacturing, and they don't include personnel in the Ministry of Forests.

J. Wilson: Now, I'm not in the forest industry, so could the minister lay out a fairly accurate description of primary breakdown?

Hon. D. Zirnhelt: Yes. Debarking, sawing and planing.

J. Wilson: So then the. . . . This is getting confusing here. This additional cut will come into an existing facility, I assume -- probably one of the major licensee's yards. It will go through the debarker; it will go through the whatever in that facility. Now, that is considered. . . . Only a portion of those extra jobs are going to be created through harvesting. The other question I would have in this is: has there been any consideration given to the hauling of this wood? Is that factored into the number that you've come up with?

[4:45]

J. Wilson: Okay, we have a few extra jobs here; then we've got some secondary spinoffs. Let's go back to the initial jobs. We can't actually break down the job and look at it as a job, I don't think. I assume you got this through your formula, whereby if you process this many more metres of wood, it takes this many hours to process this much wood or to harvest this much wood. Am I correct there?

Hon. D. Zirnhelt: We simply use a ratio of jobs. You know, you can get all kinds of estimates on how many jobs harvesters put out, but we haven't gotten into that level of detail, because we aggregate it for the sector, and we take it across the province. So it's more accurate than it is for any given operation. As you know, it varies with the type of machinery that's used. But we do have a database. We do have some numbers of harvest -- the amount of harvest. We do have some ratios of jobs per thousand cubic metres, and we use those. And industry uses them all the time.

J. Wilson: It's kind of a tricky situation we're in here, because in the past couple of years there's been a slowdown out there. And I'm sure the minister is aware of it. We've more or less gone from operations running nine months of the year to operating five months a year. Those crews are still there. They don't go anywhere, but they simply work fewer hours, because there may not be the supply of wood. The mills will shut down. They'll take extended periods of shutdown for maintenance, this kind of thing; they may close. Normally they would shut down for a week. They might shut down for three weeks. What that does is allow them to send their crew home without having to worry about anyone complaining, so they can say: "Well, we need an extended shutdown period."

If you dump this tiny amount -- it's a fraction of the total cut; that's what you're going to add to it -- how are you going to create actual new jobs here? All I can see happening is that you'll speed up production a little bit. You may add another two weeks to the operation during the year in that facility, or you may add another month onto the actual working time that the contractor gets out there on the land base when he's harvesting.

I really have trouble visualizing where these 1,500 new jobs are going to be created, other than through extended hours of employment. At this point in time, because of all the things that have gone on here, our window of employment could be stretched close to two or two and a half times what it is right now. It'll create a better job, yes, for those people that are working. But I fail to see how we are going to create this number of what I would call new jobs.

What I consider to be a new job is: I take this person who doesn't have a job, and I say: "Would you please pack your lunch pail tomorrow and put your work boots on? I want you on this worksite tomorrow morning. You're going to start a new job here." I don't see that happening. I don't see that window of opportunity for the creation of this portion of the 1,500 jobs that you have said will occur because of the additional cut that operations are going to be forced to take. Well, I shouldn't say forced. You're going to allow them to cut; you're going to see that it gets cuts so that it creates jobs.

The way I see it, we will create a better job for the person that has a job -- and the same thing can apply to the primary manufacturing facility, which is the mill that the major licensee owns. This wood will go in there. If they operate that mill an additional two weeks out of the year, they will have met their target of creating -- say it's half of that -- 700 additional jobs. But it's actually just 700 hours of more employment. Their workforce may not change. Could the minister comment on this?

[G. Brewin in the chair.]

[ Page 4920 ]

Hon. D. Zirnhelt: There are many factors, including technological change, that affect the ratios at the primary level. For the purpose of the accord, we have defined a job as a minimum of 180 days and/or 1,440 hours for logging, silviculture and other forest fieldwork, unless the traditional operating season in the region is shorter. We've defined it as 220 days for all other forest sector workers.

Just for your information, the example you use of somebody going down to five months -- a four-month reduction -- is about a 45 percent reduction. But it doesn't hold true across the piece, because we have. . . . In 1991, when we were first the government, there were some 73.6 million cubic metres harvested. It actually has gone up about one and a half million, to 75 million last year. The wood is being harvested. It may be harvested in different time frames, and we recognize that we don't want people working when it's too wet. But this varies, anyway, with weather and with where you are in the climate and where you are in the species. We're moving into more and more difficult land. A lot of the easiest and best land to log has been logged.

There are factors here, and all I can say is that we do use ratios and numbers. We add them all up at the end of the day, and we are expecting to get these 21,000 more. That's what we've done. There will be more in logging. If they're going to log more, there's either going to be more people working longer, or there's going to be more people working -- one of the two.

J. Wilson: The reason I asked all these questions is because we have to differentiate between people working longer and more people working. If you make the statement, "We are going to create 21,000 new jobs," my understanding. . . . I'm sure that the majority of the people in British Columbia will take that statement, and they will understand it to mean yes, there will be 21,000 additional bodies out there doing those jobs. If that's not the case and you simply extend the hours of employment, sure it'll be a boon to the people that do have a job, but it's going to be a major disappointment to the people that were expecting a job.

There's another point that I'm a little bit confused on. The minister brought it up at this point. Depending on the sector, he said that you'll get 200 -- I forget the exact number -- days of employment or 180-some days of employment. Is he saying that it depends on whether you work in a manufacturing facility or a primary facility, or whether you are in the harvesting sector or in silviculture? Is there a breakdown here as to where these number of days are going to be applied? Have you broken down the harvesting -- separate from the silviculture and separate from the actual work in the facilities?

Hon. D. Zirnhelt: No, no more than by stating and defining a job as 180 days or 1,440 hours per year for logging, silviculture and other fieldwork, unless the traditional operating season is shorter. It could be a job that's six months in an area where there are six months of winter. We have put the hours in here: 220 days for all other forest sector workers. There is no further breakdown of these numbers.

J. Wilson: When you work out a day for a worker, how do you arrive at what you consider to be one day?

Hon. D. Zirnhelt: Let me read what it says in the accord: ". . .a minimum of 180 days and/or 1,440 hours per year for logging, silviculture and other forest field workers, unless the traditional operating season in the region is shorter."

We've created a timber jobs advocate position. Industry and government will agree as to who it is, and that person will be making reports on the status and the effectiveness of the accord. He will be an advocate for the accord, and he will count the numbers. It's incumbent upon everybody in the industry that if they want credit for jobs maintained or jobs created, they'll have to begin to create their own baselines of data and be able to back them up.

[T. Stevenson in the chair.]

J. Wilson: If I go to work and I work 12 hours a day for 120 days, is the industry going to step in and say, "Okay, now you'd better go home; someone else has to take over your job here," or can I continue -- if I have an additional six weeks or ten weeks of opportunity -- to work? Am I going to be pushed out, or will I be allowed to carry on with that additional employment?

Hon. D. Zirnhelt: There's nothing I'm aware of in the accord that would push anybody out of a job.

J. Wilson: Then this brings us in a circle again. In order to create the 1,500 additional jobs, if they're going to actually be what you would consider new jobs, additional people on the workforce, then somehow you have to limit the number of hours that the present workforce is working. If you don't do that, as I tried to explain before, for that percentage of wood that's going to be logged and milled, the window of opportunity is there to simply extend the number of hours the employee works, and you won't see one new job created in that sector of the industry. It's very simple. You have to come in with a set of rules that say: "Look, you got your 214 hours, or whatever it is; go home for the rest of the year, and we'll call you when we start up again."

[5:00]

At this point in time, though, I'm going to drop my questioning on the jobs here. We've covered just a little bit, and I believe the member for West Vancouver-Garibaldi has a few more questions.

T. Nebbeling: When I stopped asking questions half an hour ago, I was still with the minister trying to figure out what exactly is happening in the various sectors of the forest industry. I think that is one of the areas that we seriously have to look at and consider: if the facts and the numbers we use actually reflect what is happening in the forest industry. So I appreciated the breakdown by the minister of the various sectors in the forest industry as far as where the jobs are, where the jobs are created and where the jobs are lost. I came up with some numbers that the minister gave me, in particular in the harvest sector of the forest industry, where the 1996 number in March was 29,000 workers, and in 1997 the sector had 25,820 workers. Now, at the same time I should also say 

[ Page 4921 ]

that in the reman or in the manufacturing, the log-handling, sector of the industry, there was an increase of approximately 3,000 jobs. Then in the land management sector we saw a decrease, again based on March 1996. Compare it with March 1997, and we saw a decrease of approximately 2,000-plus jobs.

One of the problems we have been discussing this afternoon is data, and one of the problems is that the numbers that we as the opposition have seen and have used to calculate what is happening in these sectors are often contradicted by the Ministry of Forests, through the minister or staff. It is obviously confusing, because I've always believed that we were all working with the same numbers. So why the discrepancy? Why do we hear optimistic sounds from the minister's side, whereas we reflect more what we see happening in the communities that we visit -- forest-dependent communities -- where we meet a lot of people who have no reasons for being optimistic?

Looking at these pictures in time that the minister gave me today, I think I may have touched on an area that we may have to clarify; that is, when a job is lost and two jobs are gained, are you saying we have created one job, or are you saying we have created two jobs? I compare it a little bit to a situation with Eaton's, which closed down 15 stores throughout Canada, and then they actually brought 40 new staff members into one store. The headline said: "Eaton's Hires 40 More People." They never talked about the people that worked in the other stores who were laid off. I begin to wonder if this is maybe one of the mistakes that we are making, as well, when the minister says: "We have created 4,000 new jobs this year." Well, he may have, but has he deducted the jobs that were lost in other areas, such as, in this particular case, the harvesting sector? Have you deducted from your number the loss in jobs from the land management sector, be it silviculture, tree planting, pruning, spacing? How does the minister deal with the losses, and how does he incorporate them in his numbers? Can the minister clarify that?

Hon. D. Zirnhelt: The figures that we are using as a baseline are net. There may be some lost someplace, some picked up somewhere else. It's happening all the time. If one job is lost and two are gained, it's a net increase of one.

T. Nebbeling: That means, then, that the jobs and timber accord is actually going to be responsible for a lot more jobs than the 21,000 as the end call. The minister's own number has indicated that in the year since the baseline was created -- the 85,000 that was mentioned earlier on, the number that we do not agree with but that is the number that the government is using nevertheless. . . . With the picture that is painted through the numbers he is giving us today, it's indisputable that there is a reduction in the harvest sector. With these two dates in mind -- March '96 to March '97 -- there's a reduction of 2,582 jobs. So these jobs have to be added onto the 21,000 to come to a number. Of course, there are many other areas where I can -- and I will, actually, in the next few days -- show that the numbers that the minister has do not reflect the reality of life; that is, obviously jobs are no longer there and have disappeared this year.

More worrisome, if what the minister says is true, is that he will take the net gain. I didn't think I was going to bring it up in this estimate, but I will now and will spend some more time later on tonight on that. There are a number of reports that were instigated and ordered and financed by the Ministry of Forests and the Ministry of Environment showing tremendous job losses in certain areas in the province. These job losses are often defended by the minister as a consequence of what's happening in the forest: it is just a fait accompli, and we have to live with that. So later on tonight I will tabulate, together with the minister and staff, the total number of these jobs that have been identified as going to be lost in the next three or four years. In some areas the job losses are already happening, of course.

That number of 21,000 direct jobs gained -- full-time, year-round forest sector jobs -- is a number that is being questioned by many in the industry. I can read on that as well. It's a number that the industry is saying is just not possible. It can't be done. And coming from the industry itself, that kind of statement. . . . Knowing now that the minister is not really looking at 21,000 new jobs -- he's looking at many more thousands of new jobs to offset job losses -- it really makes me wonder if this jobs and timber accord can, or should, have a stamp of approval by anybody, because the target seems to become more and more impossible.

Having said that, an important factor in the whole job creation, obviously, is going to be the definition of forest worker. What is a forest worker? What does a forest worker do as far as hours are concerned? My previous colleague asked some questions on that subject. And the minister gave a number: I believe it was that 1,420 hours annually constitutes a full-time job. Can the minister tell me if that is the same number that Forest Renewal B.C. has set as a target to establish jobs that are paid for by Forest Renewal B.C. under these same guidelines -- the 1,442 jobs? I didn't get the exact number. So if the minister can tell me if that, indeed, is the same as Forest Renewal B.C., I would be happy to hear that.

Hon. D. Zirnhelt: We have defined in the accord what jobs are. As we said: ". . .180 days or 1,440 hours per year for logging, silviculture and other forest field workers, unless the traditional operating season in the region is shorter." There are some areas where you just don't have year-round jobs. It's 220 days for all other forest sector workers. We intend the 5,000 FRBC jobs to be full-time jobs in these terms, and we're going to attempt to reach that. But the work has to be defined and organized so that we're concentrating on getting a full-time job for people under these terms. That's the objective: 5,000 full-time jobs. Rather than just dealing with person-years of employment by adding up so many months times so many people, it is to get so many person-years of employment. And that's not all the employment under FRBC.

T. Nebbeling: I think the minister is well aware of the fact that during the discussions in the standing committee on forests, we discussed at length the definition of a job that Forest Renewal B.C. uses as their measuring stick. Their job description and their definition were considerably less than what the minister is saying just now. As a matter of fact, in the presentation that we were given by the staff of FRBC, they spoke about 700 hours annually constituting a job. Does that mean that FRBC is now putting its numbers up? Or are jobs under FRBC-funded projects having different qualifications than the rest of the pack has to work by?

Hon. D. Zirnhelt: We have set a target of 5,000 jobs, which we defined. We want them to be full-time jobs, or as near as they can be. And those are future jobs that we expect them to create by the year 2001. We expect they'll reach that before then. The definition of a displaced forest worker that FRBC uses, as I recall. . . . I just encourage the member that when we want to get into FRBC, we'll get the FRBC staff here. But the number you used, 700 hours annually, was to define a 

[ Page 4922 ]

displaced forest worker -- recognizing that many of the jobs of displaced forest workers were short-term. We want to end the short-term jobs and get as many long-term jobs as we can. So we've targeted 5,000 full-time jobs in the enhanced forestry area.

T. Nebbeling: It was not to provide an individual with a job that would represent 700 hours a year, and thereby have FRBC say: "Now we have provided you with a full-time job." No, it was: how does a forest worker who is displaced qualify for FRBC-funded projects? That's where the 700 hours worked. . . . So there's a difference there. And my concern is, obviously, that if that standard is used with Forest Renewal B.C.-funded jobs, where the industry has to provide jobs that are based on the 1,440 hours, there's a serious difference there. We will bring it back when FRBC staff is here, because I understand they're not here. But it was just something that I picked up while my colleague was talking about the job definition and how many hours constituted a full-time job.

[5:15]

Of course, part of the jobs and timber accord is the requirement. . . . There is a push for creating 3,000 new jobs by reducing the workweek and banning overtime. So it is important what the minister sees as a workweek, and I would like to hear that.

Hon. D. Zirnhelt: The new work arrangements that we talk about in the accord are directed to the plants that operate year-round. They're not directed at loggers. You can't take one logger working 16 hours a day, split it into two 8-hour jobs and count it as jobs created -- no. Flexible work arrangements would be subject to collective agreements, where those things are negotiated.

We are not targeting. . . . We just have a definition of what a job is -- the number of days worked, with the qualifications -- and that's what we'll be measuring. That's what the jobs advocate will be measuring.

T. Nebbeling: This is an interesting statement the minister is making, because now he's saying that it is up to collective bargaining by the unions, I take it, to achieve these goals. And suddenly the union is going to have a role in negotiating, with the companies that they have a foothold in, a workweek that is less than what the worker has today, and the banning of overtime. So the union is actually a partner in fulfilling the obligations that the minister, as the representative of this government, is trying to impose on the government. Whereas I thought that this was a government deal, and that the union is only a partner in the deal when it comes to, potentially, the financial strategy of FRBC-funded projects.

Hon. D. Zirnhelt: The accord speaks to creating 3,000 new jobs through new work arrangements. Government has put a financial incentive on the table. Let me tell you what it says:

"Government commits to work with industry, union and other parties to achieve alternative arrangements that result in increased employment opportunities under the following policies:

"1. These terms will apply only where or if new work arrangements are negotiated and implemented through collective agreements.

"2. Government recognizes that adding additional workers increases direct payroll costs because of legislated and negotiated benefits such as CPP, WCB, etc. As a pilot project, government will provide funding or programming assistance up to one-third of direct payroll costs associated with new hires, up to a maximum of $3,500 per new employee annually for the life of the collective agreement or the accord, whichever is shorter.

"3. Government or Forest Renewal B.C. are further willing to consider other creative solutions which would result in cost savings to Industry but which are cost-neutral to government, for example, calculations of WCB premiums, apprenticeship training or retraining funds for displaced forest workers hired.

"4. The target for jobs under alternative work arrangements is 3,000 and the government's funding commitment to its involvement in these arrangements is up to $20 million."

I foresee a real problem, because we will have to prod for every bit of information that is in the jobs and timber accord, unless the minister is willing to provide us with a full copy of the full accord so that I can study it over the weekend.

Hon. D. Zirnhelt: I take it you're telling me that you haven't actually read the accord, which was in the press package. I'll be happy to send it to you. We've handed out hundreds of copies of it. They're available. There is the short four-pager, and then there's the somewhat longer actual wording of the accord that was negotiated. I'll actually send that over to you right now.

T. Nebbeling: I appreciate that very much. I should tell the minister that as I do not belong to the press corps, I was not there, so I didn't receive this, nor did any of my colleagues. But now I've got it, I will spend my weekend -- thank you very much for giving me homework -- looking at the full text. Hopefully, by doing that I can avoid asking questions that are maybe answered already in the jobs and timber accord.

Coming back to the whole job situation. . . .

Sorry for that interruption. I just found out that we will be working here tomorrow as well, so I had to cancel my flight to get home. But that's fine, I'm happy to participate in this process tomorrow, as well.

We were actually talking about the role of the IWA -- or any union, I take it -- in enforcing some of the conditions that 

[ Page 4923 ]

are in the jobs and timber accord. I don't know all the subconditions, but the reduction of working hours and what the government is willing to put into the kitty to subsidize these wages or to top up to a certain amount of money. . . . How is this going to work in a fair manner when a company in the private sector which does not employ union workers today. . . ? If they want to benefit from the benefit package that is in the jobs and timber accord, the incentives for companies to come onside and work with the new conditions so that they can also have the benefit of receiving more timber than they are getting today. . . . How can a company tap into that without the need for a collective agreement, if they are not in a union today?

Hon. D. Zirnhelt: Because, under the law, working arrangements are to be negotiated between the employer and the employee, all we've done is make an incentive available. We know no other mechanism but a collective agreement to negotiate those kinds of benefits. So that applies to this part of the agreement, and that's what the major licensees agreed to. To my knowledge, there was nothing like that brought forward through the small business reman sector, for example. They have a different set of problems, and they're largely non-unionized. The major licensees are largely unionized, and so the agreement fit the particular industry that we were dealing with, and particularly the kind of licensee we were dealing with.

T. Nebbeling: If that is the case, then. . . . I'm not just talking about access to timber in the woods for the major licensees. I'm talking about the increase in fibre, lumber or timber logs that will go to the reman section in order to create new jobs. . .as well, as is part of the accord.

I have reason to believe that that is the sector where the unions still will play a role in setting the conditions for a company to. . . . Well, I'll wait until you're finished.

I believe the union, at least, sees itself as having a role in that process. The moment they come in, no doubt, it will also be based on conditions. I'm saying this, Mr. Minister, because of statements made by the president of the union, who has visited various reman organizations' annual meetings. During these meetings, the president of the IWA made it very clear that if any remanufacturer wants to have the benefit that could be derived from the jobs and timber accord, there is only one way for them to tap into that.

I know that the minister is saying: "Hey, wait a second. The union is only going to get involved with the land management project, which is the $300 million that comes out of FRBC." But I believe that within the benefits or the incentives there are other moneys available for the upgrade of mills, providing other incentives that would be an incentive for the remanufacturing sector.

The president of the IWA made it so clear that there was going to be no choice for the remanufacturing sector -- I believe Mr. Allan was actually there, as well -- to benefit from any money that was going to be distributed under the jobs and timber accord. If they wanted to have choice, well, sorry, tough luck, but not a single cent of the moneys available would come through that sector. You may feel that indeed there is flexibility and opportunity for the remanufacturing sector to create new opportunities because of a new type of fibre -- maybe because of some assistance with remilling so that they can go into added-value projects, which they may not be able to do today. Where is the guarantee that the remanufacturing sector will not be put under that kind of pressure?

Hon. D. Zirnhelt: You know, I am surprised that your research department didn't dig out a copy of the accord or even ask for a copy of the accord. But given that you haven't read it, I will refer to page 7 of it, which talks about the remanufacturing sector.

There's no language in there. . . . It doesn't refer to union or non-union. There's nothing in the remanufacturing section. To my knowledge, this topic has not come up at the table with the remanufacturers that the government has. So what the president of the IWA says may be his objective for his organization, but the accord is silent on the subject of the remanufacturing sector and how it may or may not relate to collective agreements of its employees. This accord is fundamentally between the government and the major licensees.

T. Nebbeling: Well, then, maybe so. But the partners in achieving the goals have clearly gone beyond the major licensees, and the reman sector and the small business forest enterprise program are very much partners in achieving the objectives. Let me quote what Dave Haggard, the president of the IWA, told the Independent Lumber Remanufacturers Association in the interior in a speech he made: ". . .21,000 forestry jobs in B.C. by 2002." Here we are again; it gets moved forward. But you're not responsible for his text; I understand that.

[5:30]

"I think the challenge for the reman industry is to be able to make more money so that the IWA can get more of it in our members' pockets, and these are not necessarily incompatible. You know, I don't think that any union company or any organized industry is going broke today in this province because they are union or because they are not union.

"So you can't have us as a one-night stand but you can have us as a long-term investment in the future of the forest industry. That means that whether it is in the silviculture end or in the value-added, in a sawmill or a logging camp, the IWA will be your partner. We can create 21,000 jobs in this province, and it doesn't all have to be in the Ministry of Forests. It can actually be in our industry."

"People have got to have a choice, you as an industry are saying. They don't want to belong to a union, you are saying. Well, I find that impossible to believe. The reality is that if you are a true partner, then you overcome that hurdle and recognize the unionization of your workers. It isn't that bad. I know that when we sit down at the table we can negotiate, and you continue to tell those people who say we have to have a choice: b.s. We want them unionized and we want them organized."

So I do not have much faith in your assurance that the jobs and timber accord is silent on that particular issue. I believe there is an inherent danger that many people who are supposed to be part of it will be forced, through their collective bargaining system, to become part of the union in order to also be a partner in the jobs and timber accord. In his discussions, has the minister put any moves into action to ensure, in a legal manner, that the union cannot do what the president of the IWA has threatened to do in order to give opportunities to companies in the remanufacturing industry?

Hon. D. Zirnhelt: My deputy has been at many meetings with the remanufacturers. I've been at one of them. To our knowledge, the topic has never come up. I'm not here trying to defend the objectives of the IWA. I can explain what's here in the accord. I've said that the position around and the contribution towards new working arrangements have to be bargained. Government is prepared to create an incentive, 

[ Page 4924 ]

because we know that those arrangements can be arrived at through collective bargaining. I don't know of any other mechanism where you can arrive at those arrangements.

T. Nebbeling: Maybe the minister can explain to me who will be involved in the collective bargaining.

Hon. D. Zirnhelt: Collective bargaining refers to situations where there is a union and management. Management decides who their negotiators are, and the union decides who their negotiators are.

T. Nebbeling: I know that, but I wanted to hear if the minister knew that, as well. That indicates that indeed the union will have the power to infiltrate a type of industry that, as the minister said very clearly, is not generally unionized. How is the minister going to guarantee that the union does not have the power to come in, demand unionized status and then allow these companies to become beneficiaries of the jobs and timber accord incentive package?

Hon. D. Zirnhelt: I really would encourage the member and his research department to review the accord. It still amazes me that they didn't ask for a copy of the accord. If you read the remanufacturing section, we are saying that we're targeting 5,000 direct jobs through increasing the availability of sawn lumber to the independent remanufacturers. This section, again, is silent on the topic of union and non-union; there's nothing in the accord that will affect that. The normal bargaining can. . . . Of course, they go out and try to organize or get a collective agreement in any particular reman.

But we're talking here about the remanufacturing sector getting 18 percent more sawn fibre on the coast, or up to 18 percent of the total throughput, and 16 percent in the interior -- to making that available to the people in the remanufacturing business so they can create more jobs. Many of them are already covered by collective agreements. But there's nothing in here that will affect unionization of the reman sector. That was never talked about, never bargained and never negotiated.

T. Nebbeling: I think we can go on on this one for a long time. If you put the fox in the chicken coop, it's guaranteed that the fox is going to try to get at least a decent serving out of it. What you are telling us today is that indeed union representation will negotiate how a reman operator that is non-union can benefit from this particular jobs and timber accord incentive package.

What is the union rep going to do? He's not going to say, "You're going to get timber; you're going to get the benefits," unless they unionize. I can say that because the president of the union has already gone through these people and said: "If you want a single penny, you organize." For the minister to say, "Well, the government is silent on that," is the same as saying, when we discussed Bill 12: "Bill 12 will apply to all forest workers." When we asked whether you would include the independent silviculture workers. . . . No, you wouldn't do that, because there were forest workers, so there were enough.

Bill 12 was silent on the silviculture workers. We see what's happening to the silviculture industry; these people are losing jobs. You deny it, but they are. We've got the proof. I've got the letters; I've got the articles. Again, it is all because funding will be controlled through an agency that demands union status of the recipients. You can deny this, but this is the real world.

Why can't the minister see that if he has a document that says that the union will become the negotiator for the government. . .how can a remanufacturer operate within the jobs and timber accord and have the benefits? It doesn't make much sense to me that the underlying impact will be that the first demand is to unionize. I would like the minister to give me some idea of how he is going to safeguard that from happening.

If a company wants to become union-operated, fine with me. But for the minister to say, "Well, the document is silent on a reman operator becoming union, so why would you worry?" when he knows that it's the union that's going to negotiate with the remanufacturer, is truly putting the fox in the chicken coop. I think people have been eating more than enough nonsense.

Hon. D. Zirnhelt: I think the member is painting a scenario that cannot flow from the accord. The wood that's made available to remanufacturers has nothing to do with whether they're unionized or non-unionized within that sector. These new working arrangements are a completely separate part of the accord, and we say, "Yes, those arrangements have to be bargained," because we can't dictate new working arrangements. They're governed by labour law and by collective agreement negotiation. So those are separate parts, and you're blending the two.

I just have to say that that was never intended, and there's nothing in there. We're getting letters of support and so on. I've got one here from the mayor of Port Alberni that expresses support for the initiatives -- and the member knows that that mayor ran for his party. All over the province, people are acclaiming this, and what do the opposition say? The member for Cariboo North says the Liberals would scrap the whole idea if they were in power -- scrap the whole idea of creating 21,000 more jobs.

Interjections.

Hon. D. Zirnhelt: Then correct the record.

They would trash the accord. Are they going to vote for it? They certainly aren't speaking for it here. They speak against full-time jobs; they speak against decent, family-supporting jobs. They misuse statistics. They won't read the accord; they've got sloppy research. And they intend to enter into debate?

T. Nebbeling: I'm really happy that the minister is getting into his old feisty way, because he knows he is only feisty when he thinks he has something that he can stand up for. For the rest, he's quite insecure, and once in a while he brings in another member to cover him when the estimates get too heated, as we saw earlier on. That's fine with me, but let's talk about it, then -- this so-called support. Has the minister seen the reports in the press? Has he seen how little support there is for the idea and how much cynicism there is in the province?

To bring together 30 mayors and tell 30 mayors a story about a jobs and timber accord, not giving all the details, but being very selective. . . . I've talked to quite a few of those mayors, who were extremely surprised to hear of some of the elements that the jobs and timber accord was going to include; they were not told that that was going to happen. So obviously you can find a couple of mayors. At the same time, maybe the minister can tell us tonight what has been given to Port Alberni from FRBC to make the community of Port 

[ Page 4925 ]

Alberni feel quite confident and quite comfortable and almost obligated to support the accord. Has there been something given to that whole area of Port Alberni? I would like to hear that from the minister, as well. Or if nothing from FRBC has been going towards. . . .

Hon. D. Zirnhelt: You know, there are all kinds of statistics we can get into when we talk about FRBC, but every community has benefited from FRBC grants. The whole intent of the accord is to create 5,000 full-time jobs, so there are some there for communities. It will be quite a task to decide what the investment strategy is for the land-based programs, but they'll have to go to the places based on need and based on other principles of equity -- for example, how much stumpage comes out of the area. That's one of the factors. But it's based on need and opportunity; those are factors. And yes, Port Alberni will get its share.

T. Nebbeling: I ask the minister if Port Alberni has had an announcement made in, let's say, the last two weeks about a project that they would have loved to have had for a long time -- they were always denied it, and suddenly it has gone their way. Has such an announcement been made? Has such a commitment been made? Is something like that happening in Port Alberni right now? That's all I'm asking, not how the minister believes FRBC has been managed in the past. We know that that has been a miserable failure, and the minister knows that very well. He has admitted to that. Has anything been committed to the Port Alberni area in the last couple of weeks?

Hon. D. Zirnhelt: I'd have to get the information, but I'm sure Port Alberni has got its fair share.

T. Nebbeling: Isn't that funny? I don't know what it is, but I have a feeling something was promised, because Port Alberni is suddenly all onside. I know Port Alberni has been promised a co-gen project for the longest time. Of course, during the last election, the member from Port Alberni went around saying: "Oh, I'm going to get you your co-gen project. It's going to happen. Trust me. Don't you worry, you're going to get it." Then, of course, the election was over and another town got a co-gen project. Maybe they have now been given a commitment for a co-gen project, just around the time of the jobs and timber accord. I don't know; I'm only asking if something like that is happening. If the minister doesn't know how the money in his ministry is being committed toward the communities, well, that's a shame. But I'm not one to put words in other people's mouths. I think we can all speak for ourselves. . . .

Interjection.

T. Nebbeling: No. I think that if that knowledge is there. . . . They say: "You should ask the deputies." I don't think I should have to do that. If that knowledge is there, they will share it with us. And if the knowledge is not there, as indicated by the minister's answer, well, we have already said earlier on during the estimates that the minister has been shown to have very little general knowledge of what happens in his ministry. FRBC is part of it and, like I say, if he doesn't know, he doesn't know. I respect that, and so I won't ask him that again.

[5:45]

I went to a training centre in Port Alberni, and I couldn't believe it. I saw people there sitting behind computers -- three or four people, and there were 40 computers -- and I talked to them. I said: "What are you doing here?" "Well, I'm a displaced forest worker. I got kicked out of my job, but the government said: `Don't you worry. I'm going to have a job for you, my friend. Don't you worry; we'll take care of you. We will get the industry to put some money in the kitty that will be used to make sure you will always be okay.' "

So three years later this individual is sitting there in front of a computer, totally computer-illiterate, trying to learn how he can write a résumé -- for what? He had grade 8, so he had no schooling, no education, and he was told how to write a résumé. Then when he thought he had it figured out, he was going to print the résumé but the printer didn't work, and another person had to be brought in who didn't know how to operate the printer, either. It was just a sham and a mess.

It's an incredible situation that people have been kicked out of their forest because of these so-called proud achievements of this government -- the protected-areas strategy, the CORE system. I supported the protected-areas strategy -- yes, I did; the objective was great -- but how on earth you can mismanage even that one is beyond me.

Here are all these people who have to live with all these consequences, and the ministry is just saying: "Hey, listen, things are great." We have just talked about it. They are not little statistics. In March 1996 there were 29,000 jobs in the forest, and in March 1997, 25,812 jobs. That's a loss of 280 jobs; that's 11 percent. These 11 percent of people haven't a hope in hell that they're going to get a job, because even the money of FRBC that was earmarked to create infrastructure for their future is now going into an agency.

Sure, they can become tree planters, thinners and pruners, but that's where that money is going to go. That's not building a future for a person who has been in the forest for 30 years. That person is going to go, without a doubt. If that person has to become a tree planter, as the minister now sees happening, within six weeks that person will become a liability of the Workers Compensation Board, because that person hasn't got the experience to do that kind of really tough, hard work. That's what's going to happen with that so-called displaced forest worker.

When we talk about Port Alberni and support from Port Alberni's mayor, I have to say: "Well, is there maybe something else that forced the mayor to say thank you?" Because she, in this particular case, knows, as the mayor of Port Alberni, that there is tremendous hardship in anything that comes their way. She has to struggle for it and has to fight for it, because the MLA for the area won't do it. That's maybe the reason that the mayor of Port Alberni is supporting the jobs and timber accord. Could it be? I don't know; I'm only asking the minister.

I think things are not as rosy or as glorious as the minister likes to say. And the support that is out there, according to the 

[ Page 4926 ]

minister? Well, I go more by the statements from the people who cannot be targeted by the pressure that clearly has been put on certain people to stand up and say: "Hey, this is A-Okay." But the same people refuse to sign it, because they didn't think it was A-Okay.

A. Sanders: Hon. Chair, I seek leave to make an introduction.

Leave granted.

A. Sanders: I'd like to introduce the House to my daughter Adrienne and my mother Lila Robertson. Could we please make them welcome.

G. Janssen: I am pleased to enter into this debate, especially after the hon. member opposite from Whistler brought up the subject of Alberni, my constituency, and some of my constituents -- including the mayor, the former Liberal candidate for Alberni and former Social Credit candidate, who has already endorsed this accord. He talks about job loss in Alberni. Let us for a moment cast our eyes back to 1982, when MacMillan Bloedel, the owner of the largest tree farm licence in the area, had an annual allowable cut of 2.9 million cubic metres and 6,000 employees. It was before CORE, before land use decisions -- as a matter of fact, while Social Credit was in power and while that member was a member of the Social Credit Party and a supporter of the Zalmoids.

Well, let me tell you, they devastated that community. The pulp mill had 1,400 employees and now has only 800 employees; Somass division had 1,200 employees and now barely has 400; APD, 900, and now barely 350; and the plywood mill shut down. Who did that? MacMillan Bloedel. Who supported them? They took the cheque year after year. They took it last year; they endorsed the company and its layoffs. What was there for their employees? Nothing, absolutely nothing.

This government was strong enough and dared to propose FRBC. They voted against it. They said: "We don't want to help those workers. Give the money back to the companies. They need it." After all, Bob Findlay only made about $800,000 a year. Try living on that these days. But they took the money, and those people needed help. We recognized that and we came to. . . . How did we do it? FRBC. If you'd read the annual report, you'd know how, and you wouldn't be asking these silly questions.

Where did the $22.5 million from FRBC go? It went into retraining pulp mill workers, into on-the-job retraining. It went into retraining APD workers -- into on-the-job-training, not off-the-job training. It went into training people at a new mill called Timbermil, with 34 new jobs right there. It went into upgrading those skills so that we'd be competitive in the marketplace. It went into McLean's mill, a national historic site. It's the last operable steam mill left in Canada, which will be a tourist attraction that will be operating and will provide jobs in Alberni. And what did they do, ladies and gentlemen of this House? They voted against it. They said no to helping those workers. The Liberal Party said. . . .

The Chair: The member for West Vancouver-Garibaldi is rising on a point of order?

T. Nebbeling: Yes, Mr. Chair. I believe we are debating the estimates, not the track record of this individual that tries to paint a picture that does not in any way, shape or form reflect the reality. So can we stay to the estimates?

The Chair: Point well taken. Member for Alberni, proceed.

G. Janssen: The estimates are the Ministry of Forests, and this relates to forestry. We supported that scientific panel in Clayoquot Sound with the most innovative logging practices ever developed in the world -- not in Canada, not in British Columbia, but in the world. Labour's on board with the accord; government's on board with the accord; business is on board with the accord; the communities, the mayor herself and other mayors around Vancouver Island are on board with the accord.

I say to the Liberal Party, I say to the Liberal leader, I say to those Liberal members over there: "Move over. Get out of the way if you're not on board. And let us -- the communities, business, government, labour -- get on with generating jobs in this province, with generating the forests into renewal. Move over, get out of the way, and let's get on with our jobs."

T. Nebbeling: Obviously I'm going to stick to the estimates, because when we do that, you expect the members opposite to listen. I have no doubt that the mind of the member that just spoke was far gone, somewhere in Florida, where he spends his time now. We were explaining what has happened in Port Alberni -- not with the investments, not with the forest structure, but with the people. That's what we're talking about. And when this member is so proud of seeing Forest Renewal B.C. money spent on training centres for people who haven't got a place to go with whatever they learn, because there is no forest industry there any longer. . . . It is really a shame that this particular member, who is talking about his constituents, doesn't understand that all the training doesn't do a damn thing for the families, because there is not a job at the end of the training period. The lost jobs, the 70 jobs at Kennedy Lake -- they're gone. That affected his community. We didn't hear the member stand up and ask questions about that; this is the problem.

The minister made a point of the fact that the mayor of Port Alberni was onside. And I was just questioning if that could have anything to do with: "Well, Madam Mayor, here's a goodie. It's an expensive goodie, but nevertheless, here's a goodie for your community. Would you, by any chance, be willing to consider support for the jobs and timber accord?" Mayors in these positions, unfortunately, do not have the luxury to really express what they believe is going on. They are forced, just like other parties who are supposed to support this jobs and timber accord are forced, to support it. The consequences of not supporting this accord for people in that position are harsh and can lead to even more economic despair and, consequently, more social despair. So there are some of the reasons that some people have stood up and said: "Oh, I support it."

But the people who count most, the CEOs who are all supposed to have supported this deal -- not one of them wanted to sign it. Not one of them did sign it. Why didn't they want to sign it? Because they knew that had they signed it, they would have been on the hook. If they had signed it and been on the hook. . . . They knew there was not a hope that the jobs that this accord is supposed to provide could be created under circumstances of no investment -- because of the action, the programs, the policies, the regulations and the legislation of this government's past five years.

I stay in the nineties. The previous speaker went into the early eighties. I don't know if he smoked at that time, but he's still in that period of time. He's dreaming of Florida; I know that. He doesn't know what goes on in his community. He's 

[ Page 4927 ]

there when a goodie is given to the community to get them onside. But that is not the support that this jobs and timber accord needs. This needs real support, and I believe there are ways of getting it. But not by mandating, the way this government is doing. . . .

An Hon. Member: Dinosaur party.

T. Nebbeling: Dinosaur party -- the member opposite certainly doesn't even know how to spell the word "dinosaur." Spell the word "dinosaur" for me.

Interjection.

T. Nebbeling: Having said that, I would like to. . .

Interjection.

T. Nebbeling: Yes, you can do it.

Hon. J. MacPhail: 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. J. MacPhail: 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 6 p.m.

PROCEEDINGS IN THE DOUGLAS FIR ROOM

The committee met at 2:57 p.m.

ESTIMATES: MINISTRY OF EMPLOYMENT
AND INVESTMENT
(continued)

G. Farrell-Collins: I finished our discussions this morning by asking the minister a question which I suppose I can re-pose to him here today. Can the minister advise the people of British Columbia -- who will ultimately bear the cost and the impact, good or bad, from this decision and the announcement the government has made today -- what studies and what assurances he has that nothing in this agreement is going to impact negatively with the federal competition law and the international trade agreements? I asked that question first, and the minister advised me that he was assured that there would be no impact and no repercussions.

Can the minister tell me how he received that assurance? What studies had he done? What assurance, what legal opinions. . . ? What consultants has he retained outside B.C. Hydro or, for that matter. . . ? Heaven forbid that it was just inside B.C. Hydro. And what advice has he received that there are no transgressions involved here?

Hon. D. Miller: There is a bill now before the House under the Ministry of Employment and Investment. We are discussing the estimates of B.C. Hydro, and I think the proper forum for a debate relative to the bill is in both second reading and committee stage of the bill.

The Chair: I would have to make note that questions may be out of order if they deal with the detail of a bill which stands in Orders of the Day or if they concern themselves with proposed amendments.

G. Farrell-Collins: I would certainly agree with you, and I am very familiar with the standing order to which the Chair just referred. My question dealt with neither the details of the bill itself nor the amendments that may be pending on the bill, which of course haven't been tabled yet -- if there are any.

My question was merely on the assurances that the minister received, and how he received them and how they were done, and whether the bill itself, the whole project -- and the bill is only a part of the announcement -- and the announcement made today are not going to put B.C. Hydro at risk of retaliatory action. . . .

[3:00]

G. Farrell-Collins: I'm shocked that the minister isn't prepared to defend the announcement he made earlier this morning. The minister advised the House and advised me to be cautious and judicious in my questions -- that they shouldn't pertain to something that may come before the House and that there are details there that we obviously couldn't get into. He stated that; I agreed with him that I wasn't about to engage in a debate on the details of the bill itself. We had a good discussion this morning about the policy behind the announcement. The minister was unable to defend his announcement, and he continues to be unable to defend his announcement.

But certainly the minister should have some ability to justify the announcement that was made this morning and to reassure British Columbians that there won't be any negative repercussions. I would be astounded if we had to inform British Columbians, as we sit here today, publicly, that the minister is unable or unwilling to answer questions about the announcement he made this morning and give them assurance that he knows what he's doing.

Hon. D. Miller: It's a bit of a broad-based question. I'm not sure how I can answer.

G. Farrell-Collins: Let me get this straight. The minister won't answer specific questions because they're out of order, 

[ Page 4928 ]

and he won't answer a broad-based question, because he just certainly isn't going answer it. I can take this to assume, then, that the minister refuses to defend the announcement that the Premier made this morning. One can only assume that he doesn't support it. If the minister can't give anybody in the province of British Columbia any assurance whatsoever that he has looked into this and investigated that the government has consulted with someone -- got an opinion, a legal opinion or whatever -- to ensure that there are no violations in this announcement of those various components we talked about before, which were highlighted by B.C. Hydro -- namely, the federal competition act and the international trade laws -- I think it's pretty shocking.

B.C. Hydro sent a letter to the minister that said two-tier pricing would put the government in violation of federal competition law and international trade law. Can the minister assure the House that he has done some studies, that he does have some outside advice and that he does have some input that indicates that this is not the case? I'm hoping he does, quite frankly. I hope he does have some assurance that he can give us. I hope he has done his research. Or is this just another photo op that was done on an 8-1/2-by-11 sheet of paper in Tom Gunton's cupcakes office? Is this just the way the government does policy now: they just up and announce this stuff without doing any research and looking into it?

Certainly last year Mr. Shaffer -- and the minister himself, last December -- assured us that we had total, complete, unfettered access to the U.S. market and that in fact it was the federal regulators who just didn't understand B.C.'s proposal, didn't understand B.C.'s commitment, and that all the government had to do and all that B.C. Hydro had to do was clarify it. All they had to do was send another letter to FERC, and they would get a clean bill of health. That clearly wasn't the case.

The minister assured us at that time that everything was fine. So maybe the minister can tell me where he got his advice, where he got his support for the evidence that he says he has, such that he can give assurance to everyone in British Columbia that we're not going to end up in trouble with these two areas of legislation.

Hon. D. Miller: I think I responded to that question about half a dozen times earlier.

G. Farrell-Collins: Clearly the minister didn't. He hasn't assured us. He hasn't given us any indication other than to say: "It won't." He hasn't told us why he knows it won't; he hasn't told us whether he's done any studies; he hasn't told us whether he's sought a legal opinion; he hasn't told me what the comments or input were from the legal department at B.C. Hydro and Powerex. He hasn't told us.

So all I can say is that the minister has no intent whatsoever to defend this project. He isn't prepared. Once again we have another policy decision of B.C. Hydro that's written on the back of a napkin. And once again the Premier and the minister are playing fast and loose with B.C. Hydro. So I think the people of British Columbia will be very pleased to hear that the minister has no assurance, has no evidence whatsoever to back up his claim that his view of the federal and international energy industry is the correct one. And once again we've put ourselves square in the gunsights of another nasty American regulating body without taking the time to find out what our position is and without having any evidence to back it up. I think it's truly unfortunate that the minister has done that, and I'm sure that the people of British Columbia will be very glad to hear that when they do -- very shortly.

Can the minister tell us what the ongoing policy is, what the ongoing attempt is by Powerex to secure access to the American market so that they can continue to sell power in the American market?

Hon. D. Miller: Powerex is a member of the regional transmission group. In fact, Mr. Peterson is president of the northwest region of that. We continue to sell at the border into the U.S. market, and we will be shortly applying to FERC for a power-marketing certificate.

G. Farrell-Collins: I think that's pretty clear. That is in B.C. Hydro's correspondence. Can the minister tell us how he intends to receive the permit from FERC, how he intends to comply with the Federal Energy Regulatory Commission's laws, rulings and regulations in order to access the American market -- other than by just applying for a permit?

Hon. D. Miller: The utility has made an application to BCUC for the wholesale transmission rate. We will reapply to conform to the FERC rules, and we will await the results of that.

G. Farrell-Collins: Can the minister tell us why B.C. Hydro was so unprepared for FERC's ruling? Why do we now find ourselves in a situation where -- it was six days ago now, I believe -- we had the panic letter sent to the BCUC demanding approval of this new tariff model in, I think, two weeks?

Hon. D. Miller: I don't know that we were unprepared. The major utilities -- Hydro-Québec, Ontario and B.C. -- were all in the position of applying. B.C. was first. There is a changing regulatory environment. As a result of the FERC decision, by the way, Ontario and Québec withdrew their application. They're also in the same relative position as B.C. So while we have the existing FERC commissioners in place, we would like to get the new application in front of them.

G. Farrell-Collins: As the minister, perhaps he can inform me: is there some plan for the U.S. government to change the current FERC commissioners?

Hon. D. Miller: Yes -- with some retirements and perhaps some replacements. That's why we think that putting the application back in front of people who are more familiar with it is advantageous.

G. Farrell-Collins: Can the minister tell us when those changes are coming? I know he's obviously not the President of the United States, but he must have some anticipation of when those changes are likely to take place.

Hon. D. Miller: Not with a high degree of accuracy -- but generally, at the end of the summer.

G. Farrell-Collins: There seems to be a real sense of urgency in the letter that went to the B.C. Utilities Commission from B.C. Hydro. I know I've quoted it before. I just want to refer the minister to that letter, if I may. In the first paragraph it says that they're requesting the commission's interim approval by July 2, 1997, with all amendments effective August 1, 1997. From June 20 to July 2 is pretty much exactly two weeks, I guess.

Can the minister tell us how he expects B.C. Hydro to deal with that or how he expects the Utilities Commission to 

[ Page 4929 ]

do a thorough review and analysis of the new structures and the impacts on the various other people in British Columbia -- the customers, the interveners -- in just two weeks?

Hon. D. Miller: The utility does have a rate already, but in order to conform to the FERC process, we need to get that preliminary ruling from the Utilities Commission so that it conforms to the FERC format. When you're dealing with a regulatory body in a foreign jurisdiction, sometimes those are the kinds of issues you have to deal with. We are attempting to put that in a form that meets the test of FERC. Hopefully, that will be the case.

G. Farrell-Collins: I think I understand why they need to get the approval. I don't think that was the question I asked. If I recall correctly, I think what I asked was why we're doing this in such short order and whether or not the minister feels it's fair to do that and expect all the interveners to have to comply in the same two-week period.

[3:15]

G. Farrell-Collins: Can the minister tell us whether he's received any comment from various other interveners about the time line given to them to respond? This is a very tight window; it's unusual for BCUC to have two weeks to deal with an issue. I would expect that the variety of interveners who usually partake in these types of discussions would be somewhat inconvenienced by the tight window, given the significance of the issue and given the fact that, quite frankly, we should have been working away at this for the last five years, not the last two weeks.

Hon. D. Miller: We did conduct a two-day briefing session. I understand the industrials are satisfied. There have been no interventions to date.

G. Farrell-Collins: I apologize. I didn't hear the last sentence of the minister's response. It wasn't loud enough.

Hon. D. Miller: There have not been any interventions to the commission to date on the application.

G. Farrell-Collins: Although perhaps the minister can't answer it, I guess the question would be whether it's because they haven't had time yet -- seven days, including a weekend, isn't much time to put together an intervention -- or whether the minister is taking it as an indication that they don't want to intervene or don't care. I think it would probably be the former rather than the latter, but I doubt the minister knows that.

Can the minister tell me how large a submission this was, as far as the number of pages, just so I have some indication of what the interveners are dealing with?

Hon. D. Miller: I was wondering if the member wanted feet or inches, Mr. Chairman. It's a revised submission. As I indicated, the utility already received approval on that tariff, but the resubmit is to conform to the format. The submission was black-lined -- in other words, the changes were highlighted relative to the previous one -- so it's essentially a document that's been around for a while. I believe it's a couple of inches thick.

G. Farrell-Collins: I thought it was in the nature of that size, and would have anticipated it to be. . . . I'll just say it. I think it's patently unreasonable for B.C. Hydro to make that kind of a submission and give interveners all of two weeks to get it, analyze it, come up with their comments and input and then respond to it. I'm not sure that it's something that one can reasonably expect people to do, nor is it fair or good policy development for the B.C. Utilities Commission to be forced into that type of position.

I'd like to come back and discuss that at a later time. I understand the member for Powell River-Sunshine Coast has some questions, and I'd be glad to yield to him for a period of time.

G. Wilson: I appreciate the opportunity, and I thank the member for giving me that opportunity.

I want to go back to this B.C. Utilities Commission issue and focus in on three or four more specific questions. I guess the underlying question I'd like the answer to from the minister is: why did we choose this course of action? Now, I understand about FERC. I understand that that's an American domestic trade matter. It is not international; it is not regulated through NAFTA. In fact, it extends outside of the NAFTA regulation.

So I guess my question is: why would we knuckle under to FERC and, essentially, not force the United States to comply with international trade law on this question? It's clearly not in our best interests to cave in -- I wouldn't think. But that seems to be what we're doing, and I'm curious to know why.

Hon. D. Miller: Really, it was considered a more practical approach. I appreciate the member's views and support them, but we felt that the advantage of having that access was important and therefore proceeded in the manner that we are proceeding. Nor do I think that that is ultimately to the detriment of the utility. But sometimes in these situations it's not always so much a question of being right absolutely all the time; sometimes it's a matter of dealing with the kind of reality that's in front of you. So we've made those kinds of changes and hope to get the B.C. Utilities Commission approval to proceed to a renewed application to FERC, and hopefully we will get the desired result.

G. Wilson: There is some cliché about discretion and valour or something. . . .

Hon. D. Miller: I was going to say it and decided not to.

G. Wilson: Yeah, I got the mental patterns coming over.

But I would like to go on the record here, because I think this issue is going to be one that's going to be revisited. This is a bit of a historical situation, and I want to be able to go on record in these estimates -- at least in the Hansard record -- and to hear from the minister.

Where the PDA and I, as leader, differ from what appears to be an approach coming from the official opposition and an 

[ Page 4930 ]

approach possibly coming from the government. . . . I don't know -- I have a copy of today's press release from the official opposition which just tends to, I think, almost yield to the American position in advance of any tribunal, and I have some concerns with that.

I think that it's time -- it's surely time -- that we recognize that FERC's decision in the domestic market was based upon a domestic policy that is driven by very, very different circumstances in terms of delivery of electrical power than in British Columbia. They don't have the generating capacity in one place and the consumption in another, with huge transmission lines, to the extent that we do. They don't have the geographic and demographic relationships that we do. So I understand that FERC made a decision with respect to electrical power in the United States. And what they do, frankly, is up to them.

Where I really get my back up -- what gets me angry -- is when they turn around and then, by what in my terms is virtual extortion, say: "Now we're going to prohibit -- or make very difficult, obstruct -- your ability, historical as it may be, to access our markets, because it doesn't suit our domestic energy policy." My response to that is: "Too damn bad." I didn't like the FTA to begin with; I like NAFTA even less. But now that we've at least got a level of protection under international law, why don't we say, "Hey, stuff it; we're going to go and do what we are allowed to do under international trade law, and we'll challenge you on that basis," and stand up and protect our interests?

When the deregulation of the industry comes in. . . . And, hon. Chair, I've raised this issue of MAI, and I'm not going to get into a long discourse on it here. But when these new practices come into place, whatever we yield on today. . . .

I notice in B.C. Hydro's letter dated June 20, 1997, to Mr. Pellatt, commission secretary. . . . We have obtained a copy of their submission to the B.C. Utilities Commission, and we've read it in some detail. One of the lines suggests that: "Furthermore, B.C. Hydro believes that these issues are not foreclosed from further discussion, evolution and implementation." Yet every piece of advice I've been able to gain from people who are involved in international trade law says that if we yield now on this B.C. Utilities submission, it does foreclose our rights with respect to the protection of tariff structure in British Columbia, and it will make legal what is currently outside the terms of NAFTA.

I'd really like the minister's comments on that, because I think this is a critical question for future British Columbia interests.

Hon. D. Miller: Well, I don't think we've given away any of our rights in pursuing the course we have, Mr. Chairman. And I certainly do appreciate that the member has taken a more incisive view of this issue than the official opposition, who have, as I said, very unfortunate. . . . While there are interesting and challenging discussions to be had around these questions of trade and MAI and those kinds of things, we do know that historically the U.S. is notorious in terms of their flexing of muscle, if you like, when it comes to trade.

The best example, in my view, is the softwood lumber agreement, where after successive challenges and the imposition of countervailing tariffs, British Columbia, particularly -- I happened to be the Minister of Forests at the time and was fairly extensively involved; I went to Washington, D.C. -- fought with a lot of vigour through the binational panel established under the free trade agreement. Members might recall that those at the time who extolled the virtues of FTA said that at least -- at the very least -- we would have a dispute resolution mechanism that would provide certainty. I think a lot of Canadians bought that argument.

To our dismay, having pursued the issue with vigour through the binational panel and having won -- having the decision of the panel rule in favour of Canada and primarily B.C., which was always the target, that in fact there was no subsidy in terms of domestic harvesting -- what happened? The U.S. turned around a short while later and said: "Well, notwithstanding that, we're going to change our law. We don't care. We're going to change our law, and we're going to do it again." Those are the realities in the trading marketplace when you're dealing with the United States -- not on every commodity or every issue, but those are some of the fundamental realities.

In the case of softwood lumber, the ultimate decision was to reach a negotiated solution. I think that the general agreement across producing provinces and the federal government and the industry was that, well, at least if we negotiate a solution, we'll be saved from this perpetual countervailing action. It's regrettable that that took place, in my view, in strict, if you like, definitional terms of rights. It is regrettable, but those are realities, as well. You have to deal not only with the legalities of any particular regulatory environment; you've got to deal with the realities in front of you. Therefore, even though the member, as he posed his question in question period, was absolutely right in terms of jurisdiction, it was still our view that the modification to conform to the FERC process was achievable. And we're pursuing that course. We think the opportunity to continue can be enhanced. We still have the right and are continuing to sell surplus energy into the U.S. market, but not directly to customers, only to utilities. And we will pursue that, as are the other major Canadian utilities, Ontario and Quebec, who are pursuing that in much the same way.

G. Wilson: Two questions flow out of that. The first, which maybe I'll come to later, is that I have a very serious concern that we are foreclosing on options through this process. There are people more skilled in international trade law who have studied NAFTA and the terms of NAFTA far more thoroughly than I and who would agree with me on that. I've had an opportunity to try to at least research a bit where we're headed on this question.

But before we get to that particular question, which is a very important one, does the minister not agree that by yielding now, by allowing the Americans basically to bully us, if you want to use a word other than "extort" -- and that's the one I like -- into this position. . . . What we're now doing is tying our domestic policy and our ability to decide how we are going to regulate and develop our B.C. utility into agreements made by a federal environmental review commission, which is domestic in its structure and domestic in its jurisdiction and which provides only a domestic policy statement in the United States, which is applicable to their domestic economy.

We comply this time because it's. . . . I guess the minister is saying that that's life: we have to give in; we have to yield; we're not even going to put up a fight. What do we do when FERC changes their commissioners, which they are going to do, and then the commissioners rule and implement an even more regressive domestic policy with respect to British Columbia's capacity to have differences between rural and urban rates? Let's talk about a two-tier system. We have differentials, as the minister is well aware. We already have 

[ Page 4931 ]

differential rates in this province. We have already proven. . . . Personally, I think this idea that what was announced today runs counter to international trade law is nonsense. But I think we are going to yield into the American argument to the degree that if they change their commission -- and they will -- and they bring in even more regressive policy, we're going to be right back before the B.C. Utilities Commission, saying: "Guess what, guys. We're going to get towed along by the nose here, because what we're doing most efficiently and most cost-effectively in the interests of British Columbians doesn't suit what the Americans want." That doesn't sit well with me as a British Columbian. I really question whether or not this is not the beginning of a very, very slippery slope that we're headed down. I'd like the minister's comment on that.

[3:30]

We are going through the process with that end view in mind. As I say, from a legal point of view, the advice we have received is that we have not exposed ourselves or anything else. We still maintain that while the certificate is not required, we're making an attempt, as I've described, to obtain that.

G. Wilson: I just have a few more questions on this. I recognize that such legal advice would be a rather sensitive document. But if in fact there is legal advice, I wonder if the minister would be prepared to share that documentation. I would certainly appreciate receiving whatever the minister feels that he can, within the purview of his office, release to me so that we might have a greater comfort. The minister just said that it's the legal opinion provided that they don't require the power-marketing authorization.

In the letter that Mr. Pellatt has set forward with respect to their commission submission, it makes it very clear that the whole urgency of the matter stems from the need to gain that wholesale market access and the need to gain that power-marketing authorization. If it's the legal advice that we don't need it, then what on earth are we doing? It makes what we as Canadians are doing even less palatable, that we should say: "Okay, we recognize that we've got the right in law. We recognize that we're protected under our international trade agreements. Having recognized all of that, we're going to go to the B.C. Utilities Commission anyway and conform with American domestic trade policy." That makes no sense to me whatsoever. It's one thing to say that that's our only option for access. But if we're saying that we're already in compliance and that we don't need it, why we don't fight at the international trade tribunals?

Hon. D. Miller: I appreciate, again, the member's position as a British Columbian. We sell into the U.S. market. To that degree we're a player in that market; and we're proposing to be a larger player. They have adopted certain forms and standards with respect to those who occupy that market or play in that market -- the domestic U.S. companies. One of those deals with the transmission tariff that we're talking about.

We're not -- and this is important -- offended by the form of the tariff. In other words, it's not something that we're not prepared to do. We object to the dictation of that form, but we don't object to necessarily complying. The member appreciates the difference. Therefore, since we do play in that marketplace and think we can be a bigger player, particularly in the California market as it opens, it makes some sense to try to obtain that power marketing certificate based on the format that is standard in that jurisdiction.

I don't know that it's necessarily as complicated as it has been made out. We are taking steps to obtain that. I think the only reason we are doing that is because we are an exporter and we have a hydroelectric system that does generate surpluses from time to time. It's to the benefit of British Columbians that we can do that. To the degree that we can enhance the revenue obtained on the export side, then British Columbians will benefit.

G. Wilson: I'd like to make it really clear what the minister said, because I want to make sure that I don't misunderstand or misquote the minister. What I'm hearing the minister say is that B.C. Hydro has no objection to the terms of tariff 888-A. That's what we're talking about here in this agreement. We don't have any problems with the terms of that tariff. Is that what the minister is saying?

Hon. D. Miller: Substantially, the answer to that is yes. We don't object to the form. In other words, 888 establishes a certain. . . . The U.S. Federal Energy Regulatory Commission order 888-A outlines the U.S. regulator's most recent requirements respecting open access to wholesale transmission in the United States. It was brought down in March of this year to replace the earlier standard upon which we had developed our submission, and therefore we are making the modifications to conform to the most recent ruling. I'm advised by officials that we don't have any substantive objection to the form. The member's correct that we do object to the requirement on a technical basis. To require us, we feel, is not valid.

Notwithstanding that, I hope the member appreciates that the opportunities and advantages to obtain it and sell into that market are significant for British Columbians, and therefore we're pursuing that course of action.

G. Wilson: I thank the minister for that clarification. I clearly understand the distinction that the minister's making. I wanted to make absolutely clear what was meant by the term "form." I understand, then, that the substantive issues with respect to 888-A are done.

The second question, then, that I'd like clarified. . . . The minister has said that they have legal opinion to the effect that we are not obliged or required to have that certificate. I wonder if that is an opinion that could be shared with members on this side of the House.

Hon. D. Miller: We will share the application itself, which does deal with the question -- as opposed to any private legal opinions we may have sought on the matter. We are quite prepared to share that, and again I'll leave the member to pursue that directly with Ms. Barnett and perhaps to obtain a copy of that.

G. Wilson: Do I understand that to share the B.C. Hydro application. . . ? Is that what was referred to on that?

[ Page 4932 ]

Hon. D. Miller: The first application, just to be clear, asked for an exemption and deals with the substantive issues that we've been discussing.

G. Wilson: I think we actually have a copy of that, but if we don't, then I'd appreciate getting a copy of it.

The next question, then, is: does B.C. Hydro take that same position on the matter that is currently reserved, which is 888-B?

Hon. D. Miller: I can't give the member much on that. We are filing under 888-A. We'll pursue that, and hopefully in the very near future we'll have that dealt with in a positive way. So I can't really comment too much on B. But it does indicate, I suppose, the changing nature of the regulatory environment.

G. Wilson: It does, and it speaks to my concern with constantly complying to American domestic trade practice. That's really at the heart of my concern, apart from the whole philosophical issue. We could get into a long nationalist debate about how we should be protecting our sovereign interests and so on. Beyond that, on the technicality of the question on the matters that are reserved under 888-B, I'm not sure, frankly -- but I obviously have some opinion -- how that is likely to affect us. If we're applying under 888-A and 888-B is essentially implemented through FERC, then are we back to the B.C. Utilities Commission again, saying: "Guess what, guys. Now we're going to have to comply with this"?

Hon. D. Miller: The question hasn't been dealt with. The belief is that if we obtain it under A, we will have it. We've not really dealt with. . . . I'm not sure how the domestic utilities in the United States deal with these questions. You would think that there would be some complaint, at least, about a constantly changing regulatory environment. We know that some of the existing FERC people, as I said, will be gone by the end of the summer -- there's been some promotion, etc. We think that pursuing the application on the basis that we're doing it, in a timely way with the commissioners who are in place, is the course of action to take. I certainly agree that that is the course of action to take.

G. Wilson: I have maybe two more questions, then, if the official opposition critic will permit it. Part of the problem that we've got -- that I have, anyway -- with the manner in which FERC has implemented this domestic policy is that it is based upon a very, very different marketing strategy in the United States because of the nature of their geography and their demography. That's really what has been driving it.

British Columbia is a highly mountainous, very difficult terrain to service. We have a large population in the south and a population distributed all over the place. Therefore to get electrical power into these areas at consistent rates is a tricky business, as I know the minister is aware. One of the issues that the Americans are now trying to address is to restrict the extent to which the differential rates may be maintained with respect to rural power supply.

[3:45]

Hon. D. Miller: Again, we did address that earlier when we talked. It's interesting. We do have the Jaccard process to examine the whole question of opening the system or making it more market-based. That's one of the considerations we've asked Dr. Jaccard to consider: the retention of consumer protection and the retention of public ownership of the hydro system as a fundamental tenet.

Will there be potential changes? Who knows? We'll wait and see what the results of the process are. A bit of a caution, I suppose, because those who put all of their faith in the marketplace tend to overlook the situation of people in the far-flung regions, with small populations, high costs, those kinds of things. . . . We see, both in the transportation sector and now in telecommunications, where we're now looking at the domestic rates. . . . Never mind those who are in business and use a lot of long distance, but those who use their telephone in the old-fashioned way, as a communications device in their community with occasional long distance, will see that the prices are going up for that basic service.

It's similar in air transport. Where you've got competition on heavily populated runs, you see some pretty good fares. Where you've got people who are captive, small populations. . . . To use one example, my home town of Prince Rupert, the full fare from Vancouver to Prince Rupert and return is approaching $1,000. When I mention that to people who are not familiar with it, and they look at the fares available to fly to Hawaii or New York, where you can go for $300 or $400. . . . You can go halfway around the world, because there's competition and a heavy population base.

That's the caution I tried to give to my hon. friends opposite here about having an absolute faith in the marketplace. That's why we've been careful with the Jaccard process. We don't think this has an impact on our ability to regulate our domestic arrangements to suit our domestic needs.

I'll just close by saying that neither can we ignore the realities that are sometimes thrust upon us by a changing global environment. For example, a number of years ago the GATT ruling said that Canada could no longer have specific prohibitions against the export of unprocessed salmon and herring. That's the new reality in terms of global trading. As much as we find that it offends us, we are forced to deal with it in circumstances like that. That's why the position we've adopted is not one of trying to hide our head in the sand, saying: "We don't like what's happening out there in the rest of the world." We recognize what's happening in the rest of the world. How can we now, in anticipation of change, rearrange our domestic arrangements so that we meet, if you like, the test that will be imposed from outside B.C. but still retain the benefits of a system that has provided, arguably, one of the lowest-cost energy prices in the world and has benefited both the consumers and the commercial and industrial sectors of our economy?

It's a challenge but one we're not afraid of. It's one we're meeting in a way that I think is prudent.

G. Wilson: My last question on this. . . . I'll just say by way of digression that I don't understand that $1,000 fare to Prince Rupert. I mean, given the choice between Acapulco, Hawaii or Prince Rupert, I'd choose Prince Rupert every time. Wouldn't you? I would have thought so.

Hon. D. Miller: If you live there, I guess. It makes a difference.

[ Page 4933 ]

G. Wilson: Right. The last issue I want to raise is with respect to the recent American ruling on transmission lines and the extent to which there is now a major push to try and essentially move the transmission lines out of a monopoly position -- to be able to allow free market access. This seems to be a thrust that the Americans have as a major ambition in British Columbia.

I wonder what the minister's thoughts are. Let me just ask the question this way: does the minister have an opinion as to whether or not, by going through this BCUC application, by essentially complying with American domestic trade policy -- as pragmatic a decision as that appears to be to the minister -- that will weaken our position to maintain and to protect British Columbia's monopoly position domestically with respect to electrical production and distribution into the B.C. grid? That's question one.

And question two is: is it the intention of the minister to maintain B.C.'s monopoly position, or are there plans to essentially hive off B.C. Hydro and to allow much greater access, much freer access, for independent power producers to access the grid?

Hon. D. Miller: Those are really the challenges that I've just described that are Dr. Jaccard's tasks to deal with. FERC doesn't deal with retail access; it's a wholesale access, wholesale transmission. The member may be aware of the terms of reference that were imposed upon Dr. Jaccard and his task force, and they are fairly tight. There was some criticism that they were too tight, but to the degree that it reflected the values that we think British Columbians think ought to be considered in the process, I think it was bang on. It talked about consumer impact. Some people don't feel we should include issues like the impact on the workforce in those kinds of things. I disagree. I think it's quite acceptable to look at all of those and to have those people part of the process.

I can't predict, nor do I want to. . . . I think I've been fairly quiet on this in terms of speculating about the future, because if I were to get out too far ahead and start to proffer opinions of my own, then I don't think the process would work. People have to have confidence in it. They've got to know we're not prejudging it. I think the terms of reference we've prescribed deal with the issues that you're concerned about. The challenge is for Dr. Jaccard to, within that framework, come back to government with some recommendations. I'll look forward to that with a lot of interest.

G. Farrell-Collins: I'd like to come back to the line of questioning I had before I yielded to the member for Powell River-Sunshine Coast so that he could ask his questions. It dealt with the time frame in which Hydro has decided to amend its application to FERC.

I have the letter that was sent to the interveners on June 20 with regard to the application to the BCUC. It's interesting, because it essentially gives those interveners ten days. I don't know if the letter was faxed to people, whether it was couriered to them or whether it was sent in the mail, but just to give the minister an indication of how short the time frame was, if it had gone in the mail it probably might have. . . . What's June 20? That would have been last weekend. It probably wouldn't have arrived in people's mail until Monday or Tuesday of this week, thereby giving interveners probably all of six days or so to assemble their input.

The B.C. Utilities Commission. . . . I will quote from a letter: "In order to respond to this submission, the commission wishes to receive comments by fax or courier as soon as possible from interveners regarding the B.C. Hydro requests, but no later than Monday, June 30, 1997." So a letter went out of the Utilities Commission on June 20, advising interveners that any comments or any submissions they wished to make as interveners would have to be in the hands of the Utilities Commission by June 30.

Does the minister believe that is a reasonable amount of time for interveners to assemble their submissions and get them to B.C. Hydro?

Hon. D. Miller: The issue is being dealt with by the Utilities Commission. The minister doesn't tell them what to do with respect to this. I have already explained that the filing is a variation of a previous filing, which has been highlighted with respect to the changes. The request is for an interim approval so that we can proceed with our FERC application and so that there will be a public process scheduled for the fall of this year to contemplate a more detailed examination. Given that, I think it's quite appropriate that. . . . The matter seems to be being dealt with in an appropriate way.

G. Farrell-Collins: I will argue with the minister on this point. I believe that Hydro has known for some time that there was probably going to be a problem with their application to FERC. Certainly they became aware in December that there were significant problems with it and that they'd have to go further, make some changes and respond to decisions that had come out. Subsequent to that, a number of decisions have come along.

I guess in the spirit of fairness, I believe. . . . I'll assert that Hydro has not acted fairly towards the interveners in the amount of time they themselves took to prepare their submission. Then they turned around and demanded that the interveners put their information, suggestions and comments together in about a week -- in about seven days, including weekends. I think that's an unfair burden to place on the interveners. It's an unfair way to approach this issue. Had Hydro been more forward-looking, had it not been consumed by individuals fearing ideologues -- extreme views and ideologues, as it was put in the letter to the minister some time ago -- then perhaps they would have been looking more toward the changes as they came along and been able to respond more readily to the demands that were placed upon them by the various rulings.

At the time the decision was made, in December, I stated publicly that I felt that the government should challenge those decisions of FERC if they felt they were unfair and unreasonable. If not -- if they felt they were fair and reasonable -- then they should be prepared to comply with them in a reasonable length of time. B.C. Hydro has taken its time in responding to this.

I believe B.C. Hydro wasn't prepared and continues not to be prepared to do any sort of meaningful review of the market. They have now asked Mr. Jaccard to do a separate review, which I guess has put the review he was doing a bit behind schedule and starts a new process afresh. Certainly it's about time that Hydro recognizes that if there are changes coming in the market, it has to have a plan -- an aggressive plan -- to deal with them in a positive way rather than a reactive way.

Can the minister tell us if he is getting advice from B.C. Hydro as to what other obstacles B.C. Hydro sees potentially facing them as the industry develops and as the sector develops and changes over the next little while? Are they planning, and do they have a team in place to prepare for 

[ Page 4934 ]

that? Or are we simply going to wait until we are hit once again by some new development in the energy sector -- only to respond? Is there a team in place at B.C. Hydro that does some strategic thinking on this to prepare Hydro for the future rather than protect it into the past?

Hon. D. Miller: Yes, I do believe Hydro is well aware of the issues, as is the government, which is why we have implemented the Jaccard process -- and as is the new board that has been installed at B.C. Hydro. The world is changing, and we're attempting to try to understand where those changes are going and to position ourselves so we continue to provide the maximum benefits to the owners of the resource here, which is the public.

G. Farrell-Collins: Can the minister tell me what the structure is of the group that's giving advice to B.C. Hydro with regard to these changes in policy or in the industry? How is that committee, or whatever it is, functioning?

[4:00]

G. Farrell-Collins: Has that structure changed any in the last year or so? Or is it the same people and the same structure that has been in place for the last two years or so?

Hon. D. Miller: There have been some changes -- not major -- both in the corporate structure and in personnel. I'd be happy to forward any information relative to that to the member.

G. Farrell-Collins: I hope there have been some changes, because I don't think Hydro has been terribly well prepared for the changes that have come about in the last year or two. As I said, it has been in a reactive mode rather than a proactive mode, and I hope that will change in future. As I said a number of times, I think B.C. Hydro is well positioned with its assets -- its wealth of storage facilities, in particular -- to be extremely competitive internationally and to do very well.

I just hope we don't find that all the assets and all the pluses that B.C. Hydro has are overcome by our lack of preparation and strategic planning in preparing for changes in the marketplace. To this date, I haven't seen a sign that that's the case, right up to and including today with the announcement we have today, which I believe will run into a number of roadblocks along the way. Rather than provide what the Premier hopes it will provide, it will turn into another difficult issue for the Premier to hand off to yet another minister, who will get to deal with it. I suspect that will be the minister sitting opposite. He has had to clean up a number of messes of the Premier's in the past, and I believe he'll be well poised to clean up this one when it runs into problems. Can the minister tell us. . . ?

Interjection.

G. Farrell-Collins: I'm sorry? Oh, you'll get a chance. It's normal process. I wasn't going to stop the event for you or move adjournment. The minister will have plenty of time to respond to it.

This problem arose. . . . It didn't arise but was heightened, certainly, by industrial consumers in British Columbia when there was a sale of power to Intalco announced in Washington. That seems to have sort of sparked a bit of outrage among the industrial consumers. Indeed I believe -- and the minister can certainly correct me if I'm wrong -- that it probably sparked a bit of reaction out of Bonneville and the other various competitors internationally who would have loved to secured that contract. Can the minister tell us what the sale price was of the power to Intalco that caused such outrage among other consumers?

Hon. D. Miller: No, I can't, Mr. Chairman. I just want to comment briefly with respect to observations on corporate structure and management expertise. With all due respect, I think there are various opinions that are always available in terms of how one sees a particular entity -- whether they're efficient or the people are capable of anything or not -- and I think we are clearly obliged to listen to a variety of opinions. Equally as well, it's safe to say we have to discard those opinions that we don't consider to be valid.

I've got to say that if I have one criticism of the opposition, it's that they jump to conclusions very quickly, often without any rigorous analysis being undertaken. That is a particular fault from the administrative and structural point of view. It is evidenced most dramatically today in the issuance of a press release that had no basis in fact.

I suppose that if I were to take advice from various parties as to whether the corporation is doing well or not doing well, and if I had to be critical in return, I'd suggest that the advice I have received from the other side so far would not give me any comfort whatsoever. It's not because it's critical, believe me. It's just because, based on the way it's delivered and on what they've said over the years, I think the corporation would be in pretty tough shape were we to take it.

G. Farrell-Collins: I appreciate the minister's comments, but I would encourage him, if he hasn't yet read it, to read the B.C. Hydro IPC review by the chairman of B.C. Hydro. There's a whole section on governance, section 7, which runs to 20-some pages, where there is extensive comment -- not from me, with my very limited knowledge of how corporations should be governed. . . .

Hon. D. Miller: You liked that report?

G. Farrell-Collins: Actually, I don't like the report.

Hon. D. Miller: You liked parts of it.

G. Farrell-Collins: I just think it didn't go far enough. Certainly, if the minister does like it -- and I assume he loves the report -- I would suggest that if he went even as far as the timid recommendations of the chairman of B.C. Hydro regarding corporate governance, he would find he has a long way to go. I would say that he could start when he chooses his board of directors, because out of this whole report, there was at least one finding that was pretty clear. It was that the previous board of directors and the senior management at B.C. Hydro were remiss in performing their duties to an extreme extent.

There was a reason for that. The current chairman of Hydro talks at length about the way the board of B.C. Hydro is appointed -- this is the largest Crown corporation in the province -- and about the mess that was created by the 

[ Page 4935 ]

previous minister's appointments, and he certainly makes recommendations for how that should change. One of the findings he had was that government and the Crown corporations secretariat "did not appreciate the significance of B.C. Hydro's lack of board or management experience in entrepreneurial joint ventures and the implications that this lack of experience would have for the oversight of the project."

It goes on and on and on and talks about the board of B.C. Hydro. One of the other recommendations that went to the minister with regard to governance of B.C. Hydro was the following: "A board of directors is not a cabinet. Individuals should not be appointed to the board of a major commercial Crown corporation like B.C. Hydro for the primary purpose of representing a specific geographic area, or social or political agenda, or special interest group."

Within two weeks of this report coming out and the minister and the Premier saying that they accepted its findings and that that put an end to the issue, the minister completely ignored those findings and recommendations and appointed a board that was based -- if I had the press release in front of me, I'm sure I could find the exact quote -- essentially on their geographic area, their political party membership and the fact that they represented specific special interest groups.

I think it's intriguing that the minister, after all of that. . . . I know he doesn't want to take advice from me, and I wouldn't necessarily expect him to do that. But if he had at least taken advice from the chair that the Premier had appointed to B.C. Hydro to try and clean up the mess, perhaps he'd be a little farther forward along the path to improving the governance structure at B.C. Hydro.

I thought the minister was anxious to comment, like he did previously without a question. But I'd be glad to give the minister a question or to form my comments in the form of a question. Can the minister tell me why he rejected the findings of the Smith report with regard to corporate governance and leadership at B.C. Hydro in his selection of the current board of directors?

Hon. D. Miller: The chair of B.C. Hydro -- the author of the report -- said in a release in April, upon appointment of the new board, that he was pleased. He thought the board was one that brought a depth of experience, a balance of background and significant expertise in many areas, including business.

I think these are outstanding British Columbians. I've tried to chastise the members, albeit gently, about their characterization of British Columbians who are prepared to offer their services: Joe Houssian, president of Intrawest -- I don't know if the opposition want to personally characterize Mr. Houssian's ability or credentials or lack of credentials, or say something negative about him; Gordon Green, bachelor of forestry, graduate of Harvard Business School -- I don't know why that wouldn't be considered to be something that would be attractive to the members opposite; Gail Stewart, graduate in history from UBC and in broadcast journalism from BCIT, vice-president of B.C. Telecom's corporate communications; Jack Gerow, well-known figure in B.C. in terms of his activity as a leader in the trade union sector, in the health sector and in doing some outstanding work in the consulting field; John Stubbs. . . . Mr. Stubbs and I actually have a very close relationship. I have a lot of time for John Stubbs; I think he's a very principled man doing an outstanding job as the president of Simon Fraser University.

I could go on and read all the names, but it is a bit disheartening.

G. Farrell-Collins: Go ahead -- read them all, then.

Hon. D. Miller: Well, I will do that, then. It is a bit disheartening. I guess that's one of the things that people who agree to take these postings have come to terms with: that when they do, they know that they've got an irresponsible opposition party in this province who will stand up and resort to the worst generalized character assassination that I've ever heard, without any concern for them as individuals. It doesn't matter what you say; say whatever you want about them. Who cares? Complete and utter lack of respect. . . .

Interjections.

Hon. D. Miller: Well, I'm not used to talking; I've been trying to keep it to a minimum. I've exceeded my limit already in this answer.

Sophie Pierre -- again, an outstanding aboriginal leader in British Columbia; Bill Yee, a lawyer, a Chinese person from Vancouver, has been involved for years and years in the Chinese community of Vancouver; Ed Lavalle -- again, a guy I've got a lot of time for. Ed has done some great work as the head of the College-Institute Educators Association of B.C. and is very progressive in terms of the Skills Now agenda we put together a couple of years ago. He played an outstanding. . . .

Interjection.

Hon. D. Miller: It has actually been a very great success.

Jim Sinclair is a fellow I've know for many, many years on the executive of the United Fishermen and Allied Workers Union, a good guy in terms of standing up for the interests of fish. Gwen Johanssen, a bachelor of education graduate from UBC, with a master's in science, graduated from the University of Oregon; she is involved with the public school system. She's been involved in the Energy Council and with local government. The MLA for Kootenay, who's not here but, again, is a very practical, hardworking, outstanding MLA in the government caucus. . . . I would say there's probably not a corporation in B.C. that wouldn't be proud to have some or all of these people on their board.

G. Farrell-Collins: Can the minister tell me about the background of those various members in the energy field?

Hon. D. Miller: I told you that I did exceed my time limit when I read through the list, and I think I'll leave it at that.

G. Farrell-Collins: That's what I thought. They're all wonderfully, eminently qualified people to do exactly what they do. They're not eminently, wonderfully qualified to chair or to sit on the board of B.C. Hydro, because none of them -- with the exception of one who had a very small role on the defunct and, quite frankly, ridiculous Energy Council that the government brought in in order to give a job to one of its supporters, however briefly that took place and however unsuccessful it was. . . . There is only one individual on that entire list who has any experience whatsoever in the energy field. Can the minister tell me clearly that there is nobody in the province of British Columbia who has any experience in the energy field who could have been appointed to the B.C. Hydro board?

[4:15]

[ Page 4936 ]

I have a bit of a concern. I'm not entirely convinced that expertise in energy is a necessary prerequisite. In fact, one of the things I have become aware of is that people who have expertise in energy often hold completely different points of view amongst each other. I think the board is a very good board. I think the management, the people who are in place in the senior positions that we've installed, are very, very capable. People have a lot of confidence in them to deal with the issues that they have to.

G. Farrell-Collins: As I said, they're all wonderful people in doing what they do, and I'm sure they do it well. I'm not so sure that they're very qualified to be sitting on the board of the largest Crown corporation in British Columbia, one of the largest in the country. I think the minister -- if he doesn't recognize that -- is perhaps going down the same path that his predecessor went before him. One doesn't choose people to sit on a board of directors because they all agree. You choose people to sit on a board of directors because they have different viewpoints, because they're there to provide those different viewpoints.

There's also advice from the chairman of the board in his review that stated that there should be somebody on the board who had some experience with international business. If Hydro continues to move in that sector or continues to have an intent to participate in international contracts, there should be somebody on the board who has some background in that area. I don't see anybody there who does.

As I said, they're all eminently qualified people to do what they do. Unfortunately, though, the minister has failed yet again to learn from the lessons of his predecessor in finding people to sit on the board who can actually provide clear direction to an energy company, which is what B.C. Hydro is. There is no energy background, and with all due respect to the people that are on the board -- and some of the new people that have been brought in at the very senior levels of B.C. Hydro -- there's not a lot of experience there in the energy sector.

I think it puts B.C. Hydro at risk; it puts the people of British Columbia at risk yet again. We're heading in to some very, very difficult times for Hydro. As the market becomes more competitive, more open, it would be nice to have some people there with some background and some experience. I think it's unfortunate the government and the minister have failed to do that.

But we got sort of sidetracked with an issue as the minister was praising his changes in his leadership at B.C. Hydro. I think they've been less than stellar, but I'm sure he thinks he's done a wonderful job. I want to come back to the Intalco issue, because it's the one where I started this line of questioning. The minister says he can't tell us what the price was that B.C. Hydro was selling to Intalco. Is there a reason why he can't do that? Is it something that he intends to continue to keep top-secret? Or is it something that he just doesn't want people to know?

Hon. D. Miller: It's a confidential agreement.

G. Farrell-Collins: It's been rumoured that the price was about 1.8 cents. If that's the case, or if it were even in the ballpark, can the minister tell us why B.C. Hydro would choose to sell power at a lower rate to somebody who's setting up business across the border than the power that's being sold to our domestic industrial consumers?

Hon. D. Miller: Was the member serious when he asked the question? We've been talking all day about energy policy and the whole question of the regulatory framework, in all of those questions. Surely the member understands. He does understand; I know he does. He knows why there's a market price for energy. We talked about the whole deregulation, the regulated framework. I don't know; I'm puzzled why he would ask the question. It's elementary.

G. Farrell-Collins: Let me ask the question backwards so maybe the minister can understand it, because I know he operates well that way. Can the minister tell me why he would choose to sell power to industrial customers in British Columbia at close to twice the rate of that which he would choose to sell to an industrial consumer outside British Columbia?

Hon. D. Miller: Let's go through it slowly. The majority of generation of power in British Columbia is hydroelectric. That's where you build dams. That's where your colleagues, who know not what they speak of, come in and make these wild, unfounded claims about hydro and fish. They build dams; they have storage ponds; they generate electricity. Those dams and storage ponds fill up or go down. When there's more water, they get higher; when there's less water, they get lower.

Interjection.

Hon. D. Miller: Have we established that? We're okay so far? When there's more water, they can generate more electricity. They get to the point where they generate more electricity than there is demand within the province. At that point, you've reached what you call surplus. Therefore you have electricity to sell in the export market. Are we okay so far?

We're selling into a competitive marketplace. Therefore we sell and compete with other generators of energy. That's why we sell into the marketplace. We understand that. That's why we're now looking at the issues of deregulation of the domestic marketplace. We're doing that in a careful way. There happens to be a surplus of electricity, which has had an impact on price. There are reasons for that. Those things happen in marketplaces from time to time, and they generally have an influence on the price. That's why you do it.

G. Farrell-Collins: I didn't think the minister had that clear an understanding of how the marketplace works. I'm encouraged. My question, though, goes to the minister. Once you've generated those surpluses -- or regardless of surpluses, something his government has failed to do in six successive budgets, despite telling people they would. . . . But once one generates a power surplus, as opposed to a dollar surplus, one does have excess power which one can market to whomever, domestically or internationally.

The question arises as to why it is that we would have our domestic prices set at approximately twice the rate of that which we're willing to sell our surplus, thereby putting our domestic industrial users at a competitive disadvantage -- virtually a 100 percent competitive disadvantage -- as it relates to power. Can the minister tell us why we would set up a structure like that, whereby our people are penalized for those dams and this power company, which, quite frankly, belongs to them?

Hon. D. Miller: Again, the marketplace is one that did not always have the same price structure as it has today. I'm not familiar enough with that marketplace to go back a decade 

[ Page 4937 ]

or two decades and ask the question: what was the relative cost of power -- the price of power in the export market relative to the domestic price -- that we were charging to a variety of our consumers -- industrial, whatever?

We already know, for example, if we look at the residential base, that the price for residential is generally about a third lower than it is in some of the domestic U.S. markets: California; New England, I think, I mentioned earlier. So there's a dramatic difference between the price of power that British Columbians have to pay for power delivered to their houses compared to the price that Californians have to pay -- for a variety of reasons.

That's the nature of the marketplace. We've had an advantage in the marketplace in that our generation costs and our system have generally been low, and they will continue to be low. While we have a surplus of energy available in the marketplace now, that may not always be the case. There may be times when there's a shortage, in which case at that time we'll be in even a better position, because our costs of generation are relatively lower than other alternative generation costs.

Again, not to repeat the debate we've already had, we are looking at the opening up of market opportunities within the province. Initially we were criticized. I think there's a press release around here saying that we shouldn't have done this, being quite critical of the announcement we made today. That in fact goes to the very issue the member just talked about, which that is for the first time -- or not the first time, because since February of last year we have been providing the opportunity for RTP, greater opportunity for competitive or market-based energy prices for existing industrial customers, a move that was applauded by those industrial customers, which appears to be something the member supports. . . . We're very pleased to be able to do that and to move even farther beyond that with respect to the DSB entitlement and offer that as a component of a jobs and industrial strategy.

G. Farrell-Collins: Everyone agrees that it's nice to create jobs; everybody wants to do that. Everybody wants to have a vibrant economy and wants to have a situation in the province where our unemployment rate is low, where people are able to secure good, long-term, family-supporting jobs. Everybody wants that. Where the minister and I disagree is on how the government is intending to do that.

He believes that the government can go into the marketplace and pick winners, pick individual companies to which they're going to offer a special deal on power. Thank goodness, at least, they're Canadian companies, rather than giving that special deal to companies across the border -- although hopefully, we'll be able to open it up and have a reasonably fair structure for everybody and not pick special agreements.

The minister believes you can go in there and pick companies, organizations and industries, where the government's going to target them for special rates of power and thereby encourage them to create jobs. It's a model that you can find in economic textbooks from the sixties and the seventies. It's an economic model that I know the Premier believes strongly in. Obviously, apparently today the Deputy Premier believes in it also. Unfortunately, for the most part it has been proved to be ineffective over the long term. Where we disagree is that I believe that what the minister and the government should be doing is providing the benefits that belong to all British Columbians to all British Columbians, rather than trying to pick winners.

The Premier has been notoriously bad at picking winners in the past, whether it's people he's appointing to the various positions -- and Hydro's a good example of that -- or whether it's in designing various programs or policies. You can look at the West Coast Express; you can look at the debt built up in B.C. Ferries; you can look at the ferry line to Victoria, the Victoria Line here that goes to Seattle and the problems that have been there in the past. You can look at just about any project that the Premier has taken on and see where he has gone wrong. Look at the forest renewal plan that the government brought out a number of years ago, which turned out to be a bureaucratic nightmare. It came that close to having its entire contents raided by the government, despite the assurance of the minister.

When one looks at the track record of the government with these types of announcements and these types of policies, and looks at the ideology in which they're steeped, one can't help but raise questions about whether or not, given the track record of failures, the next announcement is going to be any more successful than the last ones.

The minister and I just fundamentally disagree on whether or not the project that he announced today is going to be successful, the right way to go. I believe the minister is wrong; he believes he's right, and so be it. But what we're dealing with here is a larger plan and a larger concept of how we're going to deal with the market for British Columbia power over the long term and, more importantly, how we're going to deal with it right away, because things seem to be moving a lot quicker than even B.C. Hydro anticipated.

We have a scenario here where B.C. Hydro was taking its surplus power and selling it to a company across the border and giving them a competitive advantage over others -- essentially skimming the power off the top and selling it to them and not making the same benefit available to the domestic industrial users. It's nice to see the government has done a little bit of that -- got their big toe dipping in the pool to check the temperature of the water. The problem is that everybody else is swimming in the pool and has been for some time. Can the minister tell us why he thinks B.C. Hydro was right to offer that surplus power to international companies before it was made available to our domestic users?

[4:30]

G. Farrell-Collins: I would suggest to the minister that this is less "vagaries" and more "structural change" in the way the energy sector is working.

As the minister himself said earlier, there have been new changes in technology; independent power producers are coming on stream with very efficient technologies and undercutting the previously high price. It's like when they used to build cars one at a time -- they were very expensive. Somebody came along and had this little. . . . There was a little blip in the automotive manufacturing sector where somebody brought in production lines -- mass production. The minister might not be aware of it, but that blip continues to this day. In 

[ Page 4938 ]

fact, Henry Ford made a change in the way cars were being produced, and as a result the prices are lower because we don't make them one at a time anymore.

I would suggest to the minister that this isn't a little blip in the market. This is a fundamental restructuring of the market, and in fact, there are significant long-term impacts on the price of power. If the minister is telling me that B.C. Hydro isn't taking that seriously and isn't preparing for a sustained period of low-cost power, then I would suggest to the minister that he's failing yet again to prepare B.C. Hydro for the long-term future.

Can the minister tell me whether he believes that the changes in the energy market are temporary or whether he believes that there's been a structural change in the energy market in North America?

Hon. D. Miller: Notwithstanding tech change and all the rest of it. . . . Look at the lowest cost of energy production today -- say, combined-cycle gas turbines. It's in the 3-cent range. The market's got energy out there for -- what? -- 1.5, 1.6? Somebody's not making the money they should, I would suspect, versus a Hydro cost of dramatically less than that.

So I'm not saying we ignore tech change. But unless there's some technology that I'm not aware of, I think Hydro, over the long haul, has a distinct competitive advantage in terms of the cost of production. The run of the river or the flow of water is constant; and as long as you can produce energy from it, you've got one heck of an advantage -- even in a competitive market. And we're moving, as I say, through a variety of processes to deal with that.

G. Farrell-Collins: I can't agree more with the minister that B.C. Hydro has a competitive advantage. It will probably always have a competitive advantage, because the upfront cost of constructing a dam -- the upfront economic, financial and environmental cost -- is done. It's been borne, essentially. We've paid for it -- paid for it all at once -- and now we have a machine, an energy-making machine, that's there for a long, long time, as long as we maintain it and as long as we don't get big holes in it. But we've got it. As a result we're in a position to always be in a competitive advantage, unless somebody develops a solar power that's available more readily and more cheaply -- which I don't see coming in the next couple of weeks. But I'm sure that if somebody came up with cold fusion, the Premier would be willing to give them a grant to develop that project here in British Columbia -- whether it was proven or not, given some of the little fiascos he's embarked upon.

But the reality is, hon. Chair, that there is a structural change that's taken place in the energy sector. And it's not just based on gas generation; that is one of the things. There is a whole bunch of things that are going on, including access to markets, freedom of transmission and more competitive bidding. There's obviously a market for surplus power that drives the price down artificially -- for some surplus power that's available on an interruptible basis; I think that that's clear.

So the minister can throw the numbers out, but the fact is that there's a variety of figures that are out there. My question to the minister remains: why was it that we were prepared to make that cheap surplus power available to our foreign customers -- or our non-domestic customers -- as opposed to making it available first to our domestic customers?

Hon. D. Miller: It's surplus power, Mr. Chair.

G. Farrell-Collins: I know it's surplus power; I said that in the question. I don't need the minister to answer my question with my question. The point is that there is power that's out there, and it is surplus power that could be made available. If we have a consistent surplus power and we have interruptible surplus power, why is it that we make it available to foreign people but not to the domestic people who may in fact need that too? I understand Hydro is starting to make that available but certainly hasn't done so for a long time; nor were they planning to do that if they didn't have to.

It's like the airlines. If I can put it this way: the minister believes that we can continue to sell tickets to our customer at the maximum rate -- whatever it is. I think if you go from here to Toronto and you pay at the gate when you arrive, you pay -- I can't remember what it is -- probably $1,100 or $1,200 if you arrive at the place with your credit card and want a ticket as the plane's leaving. However, if you book in advance, or you get -- and it's probably in reverse. . . . But if you book in advance there are some deals that are out there. What the minister is saying is: "We're not going to make any of those deals available to our domestic market; we're only going to make those deals available to people that are outside of British Columbia."

The government has started to open that up this year a little bit with the RTPs, but it certainly hasn't done that of its own free will. It's only done that as a result of pressure from the various customers.

Can the minister tell us why it is that we were prepared to offer this -- and I'll say it myself -- surplus power to Intalco without offering it to our domestic people?

Hon. D. Miller: Mr. Chairman, really, I find the question elemental. Unless there's something to it that I'm missing, I did explain that it was not that long ago when the export price was in fact higher than our domestic price. Our domestic industries enjoyed a distinct advantage. There was no clamour at that time from the domestic industries to say to B.C. Hydro. . . . We're changing as conditions change. We've canvassed that at length.

G. Farrell-Collins: We're not going to get any further on that. Either the minister doesn't understand it, or he isn't prepared to answer it. We'll leave it there.

Interjection.

G. Farrell-Collins: Who knows? There have been a few things that have qualified there.

We are currently selling power outside British Columbia. Can the minister tell me what the average price of power is that we're selling outside British Columbia?

Hon. D. Miller: There's not really an answer to that. It depends on the basis upon which power is sold, the length of time, and which markets. It's virtually impossible to come up with an average. We'll try to get some examples. Perhaps we can have some later on.

G. Farrell-Collins: I understand that. Obviously the value of the power is dependent upon how it gets there, when it gets there, if it gets there regularly or not, if it's reliable or not, if it's interruptible or not, the length of the contract, etc. I understand that that's the case, but it sure would fall into a number of categories. If the minister can give us some indication of that, I'd be glad to wait and let some of his staff come up with those numbers, if he wants to.

[ Page 4939 ]

He talks about the surplus. Can the minister tell us what the projection is for our current domestic production, excluding the downstream benefits power? When will we reach the point, without any additional production, where we've run out of our domestic supply? When will we outgrow our domestic supply? Is there some projection from B.C. Hydro as to when that will take place? If so, is there some plan to deal with that?

Hon. D. Miller: We do have some work on that looking forward to the year 2003-04. We think that at that point we will be at peak in terms of our domestic generation. I'll leave it at that. Perhaps the member has other questions.

G. Farrell-Collins: I'll ask the minister again for the figure, if I can. I'm more than happy to wait a few minutes for it, if he wants to take some time to come up with the longer answer to the question.

An Hon. Member: We were talking over here. I'm sorry; I interrupted him.

The Chair: Through the Chair, members.

G. Farrell-Collins: I didn't hear the figure the minister got. If he could give that to us again.

Hon. D. Miller: I said the current generation is about 52,000 gigawatt-hours, and we anticipate that between 2003 and 2004, demand and supply will be in balance.

G. Farrell-Collins: Does that include conservation measures? Is that merely a projection of growth in consumption or demand at this point without the conservation measures that I know B.C. Hydro is advocating? Or is that included in that?

Hon. D. Miller: Yes, a variety of circumstances are factored in, and conservation is one of them.

G. Farrell-Collins: Can the minister tell me what Hydro is doing to prepare for the eventuality of when we're actually in a power deficit in British Columbia -- a net power importer? Are there attempts to. . . ? I know there was talk about independent power producers coming on line, other resources that Hydro would like to get hold of to generate power. Can the minister tell us what the plan to supply our domestic consumers with power over the next ten to 15 years is, anyways?

[4:45]

G. Farrell-Collins: The issue of independent power producers. . . . I wouldn't say there has been a big debate about it, but it's been an issue for some time. Certainly the previous government -- the Social Credit government -- was looking at doing it, offering independent power producers the option to get into the grid, access the grid and become part of the generation base of British Columbia. The new government after 1991 put pretty cold water on that for quite a period of time. It was only recently that the government announced that, in fact, it was considering and planning on opening up the grid to independent power producers. Can the minister tell us the status of the various projects -- certainly the ones he itemized here: Elk Falls, Revelstoke, Stave Lake and Burrard -- and where we're at as far as getting them up to full capacity?

Hon. D. Miller: I've indicated the IPP at Elk Falls is proceeding; there is a final agreement now.

G. Farrell-Collins: There is a final agreement?

Hon. D. Miller: I understand there is. I could probably get a more defined progress report and send it to the member.

The Revelstoke project is in a bit of limbo. There were some fisheries issues involved in that -- minimum flows. Stave Falls is proceeding on stream in 1999; there's another IPP at Purcell. It may be possible that additional IPPs could be contemplated. In fact, I guess one of the challenges for an IPP in a deregulated market is that their generation costs are typically higher. So whether or not they can compete in that kind of a marketplace is an open question. That's not a very comprehensive report. I'll try to get staff to develop some more specifics relative to those projects in terms of their stage of completion, where they're at and those kinds of things, and have that sent over to the member.

G. Farrell-Collins: I just want to get some assurance as far as the time line. Can the minister tell me when that information might be forthcoming? Not with this minister, I don't believe, but with others I have had trouble actually getting the information after it has been offered. Maybe the minister can give me some idea of when I can anticipate receiving that information.

Hon. D. Miller: Staff indicate two weeks at the outside. I think they can do it in a week or maybe in a couple of days.

G. Farrell-Collins: Thanks to the minister. I appreciate that, and I'll look forward to receiving the information. If I don't hear from the minister in about three weeks, I'll give him a call.

Interjection.

G. Farrell-Collins: The minister is worried about getting beaten up. I guess that's one of the benefits of the job. I know that there aren't many, but I'm sure that's one of them.

I want to come back to a question I asked earlier, because I got part of it but I didn't get the rest of it. The minister said -- if I can quote him, but I want to make sure that I've got it right -- that there were approximately 52,000 gigawatt-hours of power being produced in British Columbia right now. Can he tell us what our present average consumption is, so I have an idea of what our surplus is on an average basis?

Hon. D. Miller: Approximately 47,000 gigawatts.

G. Farrell-Collins: So we've got about, on average, a 5,000-gigawatt-hour surplus at any one time. What would happen, hypothetically, if we did not have access to the American market? If we ended up in a situation where for whatever 

[ Page 4940 ]

reason -- I don't know; maybe we declared war on the United States over fish and the government of the United States decided that in order to retaliate they would instruct Bonneville to deny us access at the border and the ability to sell power to the U.S. market. . . . Can you tell me what the impact of that might be?

Hon. D. Miller: We do still retain some options of going into Alberta, but I'm not certain that would be significant.

G. Farrell-Collins: So the minister is telling me that if the American market was closed to us for any number of reasons -- I gave one example, but I am sure there are others -- we'd have no trouble selling that 5,000 gigawatts to the rest of Canada through the Alberta border?

Hon. D. Miller: I don't mean to suggest that at all. I'd say that we could sell some. I don't have a sense of the quantum into Alberta, but I'm not suggesting that we wouldn't have trouble at all. In fact, I think we probably would have some difficulty. Presumably you could accept foregone revenue, but the impact on the environment might be something. Again, I can't give you a sense of that, but certainly you'd have to spill a lot of water. The downstream impacts presumably would be the consequences on habitat, on flooding and those kinds of things. I don't know if there's a disaster plan scenario for what would happen if we couldn't sell into the U.S., but I would suspect that there would be some pretty tough consequences.

G. Farrell-Collins: I guess, given those consequences. . . . I don't want to get into an area that deals with fish, because that's already been debated in the House, but they do sound like some pretty severe consequences if they are as the minister indicates. I hope the government is taking those into consideration when they're doing their negotiations, because I would hate to see us make rash decisions for political reasons during an election campaign, not knowing what the results might be and being unprepared for retaliatory action. That's the reality. If you're going to engage in that kind of negotiation and tough bargaining, which is maybe what's required, you should always be aware of what the possible downside of that is. I'm just saying that I hope that has been taken into consideration when it takes its stance on fish, as well as others.

Can the minister tell me the approximate value of that surplus when it's sold on an annual basis? I don't have the figures in front of me. I know I've seen it, but I just don't have the figures in front of me.

Hon. D. Miller: Well, it has varied. Last year we received about $163 million. I think the year prior to that it was around $50 million. But as the member will appreciate, it's a function of vagaries, some of which you don't control -- for example, weather, or if there's a ton of water, or if you have a sinkhole in a dam and you're ordered to draw down. So those are the kinds of variations. But those are the two numbers: $50 million and $163 million.

G. Farrell-Collins: I assume that all of the surplus gets sold, unless we have some storage room and it's beneficial to store it as opposed to selling it at a rate. Can the minister tell us if, on average, we sell all that surplus in a year, or are we required to store it? I know that we've had trouble with our storage capacity over the last little while for other reasons. Have we been forced to sell even more of the surplus than we would normally do?

Hon. D. Miller: You're really going to the heart of the management of the system and the coordination agreements with others. We've imported electricity to increase storage. It's a pretty complex system, as you appreciate, in terms of managing.

G. Farrell-Collins: Can the minister tell us how many customers we have internationally? Is it 50 or 100 international customers, or is it five or two? Are we selling to a broad base of consumers, or are we sort of locked into one or two primary customers?

Hon. D. Miller: Powerex has dozens, without being absolutely precise, and we do sell some into the Alberta pool as well.

G. Farrell-Collins: Can the minister tell us -- and I'm not completely sure of this -- whether or not all the power we sell in the U.S. market is required to go through the Bonneville grid, or are we able to send it and wheel it and sell it back and forth so that we can actually and technically go around Bonneville? Are we obliged to transmit through Bonneville's grid in order to get to the American market?

Hon. D. Miller: Our sales are made at the border. That's probably the best way to explain it. If it's Bonneville, and probably it is, then it's into their grid. But our sales, currently at least, are made at the Canada-U.S. border.

G. Farrell-Collins: I understand that -- at least Hydro advocates that its sales take place at the border. I guess it's more of a paperwork scenario as far as who is actually transporting it to the consumer. Hydro advocates the position that the customer is required to provide for the transportation, and therefore it's their contracts and their problem. Whereas, I believe FERC said that that's a nice idea, but technically it doesn't absolve you of the responsibility for reciprocal agreements as far as access to grids go. But despite the fact. . . . Let me put it this way, then, to argue Hydro's case for you: if we make the sale at the border, the customer still has to transport their power through Bonneville's grid. Is that correct?

[5:00]

G. Farrell-Collins: So it would be pretty difficult for British Columbia to sell its surplus into the U.S. market without the consent of Bonneville to move our power through their grid. Is that correct?

An Hon. Member: Or Puget Sound.

G. Farrell-Collins: Or Puget Sound.

Hon. D. Miller: Well, again, it's hypothetical. There is more open access. That's the way the world is moving. We are part of the regional transmission group, along with Bonneville; we chair it. There's never been any suggestion that there would be a kind of prohibition from using their grid -- to the extent that there's a transmission tariff that they obtained, and I presume that they would want the business as well. So I can't foresee that that's a real possibility.

G. Farrell-Collins: I just wanted to get that on the record, because, you know, the Premier's already declared war on 

[ Page 4941 ]

Bonneville once and then retreated, and he's declared war on Americans over fish, and he's declared war on environmentalists, and he's declared war on somebody else -- I don't know who's next on the Rolodex -- but I'm sure it's coming. . . .

Interjection.

G. Farrell-Collins: Oh, he declared war on us, but that's been ongoing, and I don't mind that.

I just want to get on the record, so that people understand, I suppose: (1) if we were denied access to the American market, there would be some major repercussions for British Columbians; (2) they're really not enemies.

You know, there's a bit of a symbiotic relationship here. We get something out of it; they get something out of it. They get the fee for us transporting the power along their grid, we get access to their market and vice versa. In fact, despite our disagreements and our hard bargaining and our hard negotiations, sometimes the rhetoric spills over the top of the dam, if I can use an analogy, and doesn't really benefit anybody.

As tough as the Premier pretends to be with the Americans, clearly there are repercussions for both of us -- both positive, if we in fact can reach an agreement, and negative if we can't. I just want to put that on the record so that people understand the next time the Premier declares war on somebody that it's not just a one-sided thing. The rhetoric is nice, and it gives him a chance to wave the flag and act tough, but at the end of the day -- often, with the Premier -- an awful lot of it is just posturing. So I'm glad to get that on the record.

I do want to come back and talk a little bit about our generation structure and our dams and the status of them, but I know the member for Peace River South has some questions. It's the annual Williston Lake time. The member serves his constituents well by raising this every year, and I would not want to deny him the opportunity to do so yet again. So I yield to the member for his series of questions.

J. Weisgerber: Not only would my constituents be disappointed, but I'm sure those who prepare briefing material for the minister would feel that the bit of work they did in this regard would be for naught.

I guess the question with respect to Williston Lake is as relevant today as it was in 1992 and has been every year since. With the repairs that are going on at the Bennett Dam and with the amount of water that's moving into the Peace system, it looks like we very well may be at full pond in a relatively short period of time. But in the future we're going to get back down to 2,150 or near it, and the questions will continue around drawing the lake down below 2,150 feet. As the minister is aware, I believe 2,147.01 was the low point this spring. Mitigation measures that were thought to facilitate a drawdown as far as 2,130 appeared to fail or started to fail at around 2,147. There were certainly serious water quality problems that developed. There were transportation problems that developed.

Maybe a good way to start this annual debate is to ask the minister, in light of the events of this spring and the activities that were observed at 2,147, whether Hydro has rethought its desire to continue to keep open its options below 2,150. Or did the events of this year change Hydro's thinking with respect to the wisdom of attempting to draw Williston down below 2,150?

Hon. D. Miller: No, I don't think so. Just for information, I believe it's at 2,182 now. I think the difficulty. . . .

I appreciate the regional importance that comes with the drawdown of the reservoir and the impacts it has had. It's a historical problem. Your government dealt with it when you were in office; we've attempted to deal with it, as well. I guess to some degree. . . . I've been interviewed by various members of the media on this sort of absolute guarantee of 2,150. Practically, it seems to me, you have to deal with reality. In an ideal world where no other factors intrude, if you can maintain 2,150 as your minimum, then fair enough; you can do that. But if external factors come along that cause you to go below that, it can't be avoided, because we're not dealing with something that's nice and neat and kept in a box in a room. We're dealing with reality and nature and unforeseen circumstances and all those kinds of things.

So it seems to me that the work of the joint industry committee is key to that. I think that is the more critical issue than putting a number of 2,150 out there and saying: "This is sacred." What if you had to deal with less than 2,150 feet? What are the implications? That's the kind of work that I think is continuing. The mitigation facilities already put in place and planned by the companies improve their ability to operate at reservoir levels down to 2,144. Further work is planned and underway to address problems of deeper drawdowns. So that's perhaps a challenging task. But it's an ongoing task in terms of that question.

I think the people at the local level are working through the planning advisory group to develop the contingency action plan. We want to be part of assisting in that. To the degree that it's possible, we also want to maintain the 2,150, and we'll seriously attempt to do that; we take that seriously.

The member may have some viewpoints on what happened over the past year as a result of the activity at the dam and the drawdowns, but I think you have to be prepared to look at what the impacts are in unforeseen circumstances if you do go below a level that you like to define.

J. Weisgerber: I certainly recognize the difficulties in guaranteeing that the water levels won't go below 2,150. If, heaven help us, the Bennett Dam failed, the water would go down below 2,150, and there's nothing you or I or anybody else could do about it. I was prepared to argue in support of drawing the water down below 2,150, if that were necessary to maintain the integrity of the dam. That seemed to me common sense -- to simply dig in and say no. But if the decision is for economic reasons, particularly when it ties in to the discussion the minister was having with the opposition critic. . . . If for economic or export reasons, the decision is made to draw down the water below 2,150, I think it then becomes a significantly different argument.

One of the things that occurred to me today is that the minister introduced the power for jobs legislation. It would seem to me. . . . And I think that as a northerner perhaps the minister will relate to it. Here, we're saying: "Look, we're going to bring back power from the United States; we're going to make it available to corporations who will create jobs." The first thing that crossed my mind was: "Well, gee, could we use some of that power to reduce the pressure on Williston Lake, which would in turn save the jobs of pulp and paper workers and sawmill workers in Mackenzie, by not putting their jobs at risk by drawing down Williston Lake below 2,150?"

As I said before, at 2,147 -- three feet below -- problems were starting to develop, despite the best measures of all the participants: Hydro, the industry and the community. Water 

[ Page 4942 ]

level difficulties -- water turbidity, which is a big problem in the pulping process -- was starting to show up at 2,147. It was questionable, even with another foot drawdown, whether or not the employment in the community would continue.

So I know I'm going to have an opportunity to come back and talk about this again in this power-for-jobs debate, because I think it is legitimate to say: "Gee, do we only provide power for people who will create new jobs but we will ignore the contribution that Williston Lake has made, not only to jobs in the Mackenzie area but to jobs all across British Columbia over the last three or four decades?"

So that's something I think perhaps the availability of this new power should cause us to seriously reconsider where we're going with Williston Lake. People in my constituency have long looked at Burrard and said: "Gee, is the role for Burrard to provide power for export, or should it be to back up Williston Lake and the Columbia system to modify the drawdowns in those periods of time?" Should there be a bigger role for independent power producers -- again, in order to reduce the demands on Williston Lake, being one of the two major systems, as the minister knows? I don't have to tell the minister that.

As the MLA for the area and as someone who's interested in roughly 5,000 or 6,000 mill jobs. . . . I'm guessing now, perhaps the number is not quite that high, but I know there are five sawmills, two pulp mills and a paper mill that directly depend on water levels at Williston Lake. I'd like to encourage the minister, and I'll be very candid. . . . I'm not looking for a commitment today, other than perhaps a commitment from the minister to reconsider this whole question in light of the announcement today and in light of some changing dynamics within the power field generally.

Hon. D. Miller: I took the question as: "Can the DSBs be used as a buffer or shock absorber relative to the maintenance of levels?" I don't know the answer to that, but I think certain things need to be laid out in terms of this complex system.

I did go through the hydro system, the vagaries of whether that's right, water flows and the rest, the fact that you do develop surpluses not because you specifically manage for surpluses but because they occur, and the importance of Burrard in terms of playing a pivotal role in managing that system -- both in terms of supplying energy when waters are low but beyond that to allow reservoirs to refill. So it's a complex interrelationship across the system, really. That is important.

Whether or not there's more flexibility given the surplus is a question I'll have to get some answer to. I don't know that there would be automatically. I think you've got to keep some focus on the Williston contingency planning advisory group. This may not meet with the member's. . . . I don't know whether he feels this is accurate or not. According to the note I have, though, they agreed that their ability to successfully mitigate drawdown impacts is moderate to high for levels down to 2,144, moderate down to 2,140, moderate to low down to 2,135 and low at 2,130. So it appears that. . . .

You know, I just want to say that I think that work has to continue. To the degree that those may be unforeseen circumstances -- but ones that you're going to have to meet. . . .

Additionally, Hydro, I think, is sensitive. We had some fairly vigorous debate around fish and the need to manage those systems, to the degree that it's possible, for fisheries values. I don't know that anybody. . . . Although I've heard it occasionally, people trying to characterize Hydro as, "Let's just crank her up and maximize the export side," that really does not happen. We're a net importer, overall.

[5:15]

J. Weisgerber: Certainly the risk that the minister points out at various water levels is a more conservative position than Hydro has taken historically. Hydro, not too long ago and not too many ministers ago, was arguing that 2,130 feet was a level that communities should be prepared to draw down to. It seems to me, from the tone of the material, that Hydro is perhaps recognizing the very serious problems that would develop below 2,140, as an example.

I guess, then, one has to ask themselves what the real benefit is of drawing down from 2,150 to 2,144. You're working in a wedge-shaped reservoir. A foot of water at the bottom is only a small fraction of the generating capacity that a foot at the top represents. As the thing narrows down, you get less and less return as you go down into the reservoir. But I understand that at least now the committee is looking at the prospects and the risks and downsides of drawing down anywhere below 2,150. I think at least I, and more importantly my constituents, can take some comfort from that.

Aside from the problem. . . . I'm again maybe not telling the minister anything he doesn't know or bringing in any new information. But certainly on the operational side of the community of Mackenzie and the industry in Mackenzie, the water quality and effluent-carrying capacity is one issue; transportation is another. To their credit, this government helped finance, through the Transportation Financing Authority, a barge to run the full length of Williston Lake. It doesn't run at 2,147. It doesn't get far enough to throw rocks to shore, never mind download logs. You're out in the middle of the channel, and it's a long way from where you tie up.

Hon. D. Miller: Too deep a draft.

J. Weisgerber: Too deep a draft.

So that's an issue, and a big issue, particularly if that Finlay navigation system is successful in attracting new customers. The other problem is that the logging that's done on the west side of the lake has traditionally been serviced by smaller barges that run across the lower arm of the lake. They weren't running this year. The result is that logs are trucked down to the Hart Highway and back to Mackenzie, adding quite substantially to logging costs. Whenever that water drops down below where Finlay's barges can cross the Parsnip arm, logging costs go up rather dramatically. Ironically, the possibility of log-booming disappears at the same time the barging option is gone.

The result of that has been for a movement within the community to pursue, again, the notion of a fixed crossing on the Parsnip arm. I know that they are, among other things, pursuing the possibility of FRBC looking at funding a portion of that. I'm wondering whether or not Hydro has looked at that idea, whether they've been approached about being a partner in establishing a transportation link across the lake, which may well be part of the mitigation. I've heard some argument that indeed you could maintain some water behind 

[ Page 4943 ]

what would become a small dam across the Parsnip arm, serving not only as a transportation link but also improving the water quality. I'm wondering if the minister has got any thoughts on that issue.

Hon. D. Miller: I'm not aware, here, of any approaches on the bridge concept. Certainly if there are details, I wouldn't mind being informed about them. The province and the mills have spent approximately $10 million on cost-shared facilities since 1993, so there has been. . . . The member acknowledged that, and I thank him for that. Finlay has committed to spend $2 million, again to be cost-shared with the province, on their woodlands operations and water conservation measures.

Can other efforts be taken? It's kind of intriguing, just off the top of my head, in terms of some cost issues. I make the offer that if there are some further proposals on the capital side that would assist in managing this system, I'd be happy to take a look at them.

J. Weisgerber: Certainly I will pass along to the minister. . . . I don't have it at my fingertips, but there has been a considerable amount of work done in Mackenzie over the years on this idea of essentially building a fixed link with a short bridge span somewhere in the vicinity of where Finlay now crosses the Parsnip arm, with some water-holding capacity as well as trucking capacity. I will take the minister up on his offer and make sure that he gets all of the information on that.

I wonder if I could move to another hobbyhorse of mine, and that's regional power rates, particularly industrial power rates. I'm thinking about industry in the near vicinity of power-generating dams and other facilities. I've long believed that we should be prepared to offer rates for hydro that at least recognize the reduction in capital line costs that are necessary if, for example, a plant is to locate at Taylor, Fort St. John or Dawson Creek, rather than in Vancouver.

[G. Abbott in the chair.]

It seems to me that there are two significant costs in getting that power from the Bennett Dam down to greater Vancouver, for argument's sake. One is the capital line cost, and if there's any expansion in generating capacity, that becomes a particularly significant issue. The other is line loss. As the minister knows, there is a loss of power over distance when you transport electricity by overhead wires; I think it's somewhere around 15 percent. I believe that it is only good business sense to offer rates that are not subsidized, that in no way try to make the argument. "Gee, we have the dam in our back yard, and we should therefore be entitled to a preferential rate." I believe very passionately that people should enjoy the transportation savings if they've located close to a generating facility.

We have postage stamp rates for hydro around British Columbia, arguing that everybody's entitled to the same rate. Now, I know the minister is responsible for B.C. Rail, as well. Many of my constituents think that if we're going to have postage stamp rates for shipping hydro around the province, then why don't we have postage stamp rates on B.C. Rail? If you're going to ship things ten miles with B.C. Rail or you're going to ship things 700 miles with B.C. Rail, why not apply the theory of postage stamp rates if one believes in it? I expect the minister doesn't, and I'm not asking him to.

I'm saying that there's a contradiction, there's an inequity that those of us in the north. . . . If you happen to live in the north, you pay postage stamp rates on those things that are immediately available to you; you pay the going per-rate mile for anything beyond that. I've argued with the Utilities Commission, I've argued with successive ministers responsible for Hydro, and I argued with Hydro during the short period of time that I had the privilege of being the minister. It's an argument, first of all, that I don't expect to win today, but it's an argument that I think is nonetheless legitimate.

I'm not trying to jump ahead of myself with respect to this legislation. But I do believe that if we are entering a new era with respect to the availability of hydro -- the location of quantities of hydroelectricity -- that this is an issue that deserves another look. I think we should be looking in the Kootenays, and we should be looking in the Peace region. Incidentally, they are the two areas with the highest unemployment and some of the lowest rates of industrial manufacturing activity. And we should be looking very carefully and seeing if it makes sense for us not only to bring the downstream benefits back to Vancouver but also to provide no incentive, if you like, for industry to move out of an area that is relatively heated versus the rest of the province, as the minister well knows.

It is much more difficult to encourage activity in some of the regions of the province, and I think that there is a way that you can do this without subsidizing. It's absolutely important to say: "We're not going to subsidize industry for hydro in any way, shape or form, but we are going to recognize all of the costs, and we're going to sit down and seriously look at what line capital savings are there with respect to high-voltage transmission lines and what savings are there to be had in terms of line loss." Can we legitimately say, then, to a high consumer of electricity: "Gee, if you locate in an area where there won't be line loss, where we won't have to engage in this kind of capital cost, we're going to reflect those savings in your power bill."

I think that should only be industrial. I quite honestly have been persuaded over the years that there is no saving in providing electricity to my house versus the house of somebody in Vancouver. In metropolitan areas the density argument offsets the line-loss argument. So I've fought that battle, and I am prepared to concede on the argument there. I think the same argument applies on commercial. I do think that for heavy industrial uses of hydro this is an issue that needs to be considered.

I want to take these estimates as an opportunity to remind the minister, who is in a bit of a unique capacity. . . . I don't think we've had a minister of Hydro recently who was as close to the economic development portfolio as this minister is, and so I think it's important to raise this issue and give the minister an opportunity to think about it. I come with no illusions. I don't expect to walk into estimates and have the minister say: "Yup, it's a done deal." But I would, again, appreciate an undertaking from the minister to consider this issue. I have papers, stuff I've given to the Utilities Commission and others over time, and I would be happy to share them with the minister.

[5:30]

No, I won't try to give an answer to that. I appreciate that the member is. . . . He and I share some things in common, and that is that we represent northern constituencies that have peculiar issues relative to cost. They also have advantages, 

[ Page 4944 ]

quite frankly. If you look across the range of cost factors, whether they are for individuals or businesses -- housing and those kinds of things -- I'm not sure what a survey would show these days. Certainly if you were to try to compare housing costs in your region versus the greater Vancouver region, there is a distinct advantage in your region.

Anything, in my view, that can be done to address regional inequities is worth pursuing. Citizens of the north tend to be more engaged in resource extraction. They tend to be engaged in work that's a lot tougher -- working in the gas or oil fields. They tend not to have the kind of level of services on the medical and sometimes on the social side that are available to people in the more populated areas.

[W. Hartley in the chair.]

I don't say that in a complaining kind of a way, because there are some advantages, as well. I like the community of Prince Rupert. It's a small town, and it's got distinct advantages. I like walking down the street and knowing my neighbours and those kinds of things. I do think that we ought to look at those kinds of things. The member is aware that I am developing a northern economic summit, on behalf of the Premier, and I would be quite prepared to see whether or not some discussion can be mounted on this kind of question in that forum.

I think I'll leave it at that for now in terms of the specifics. If there are practical ways in which we could examine that, then I would be happy to pursue that further with the member.

J. Weisgerber: I appreciate that. Certainly there are big advantages to many people. The minister and I both enjoy living in northern communities and the amenities that are there. The reality is that we don't have a lot of industrial activity. We are involved in resource extraction and primary processing, and we haven't succeeded, no matter how hard communities have tried, to move beyond that.

I just want to reinforce that one of the areas I think we should look at is energy-intensive industry. There's not only hydroelectricity in the northeast but also natural gas, which is less regulated and which perhaps already enjoys a more regionalized rate based on transportation costs. But I will take the minister's advice, and I'll try and raise this issue again in the context of that forum. I would appreciate it if the minister would move it forward as well.

The last issue I want to talk on very briefly is the land that Hydro owns in the Peace Valley. As the minister is probably aware, when Site C was being contemplated, most of the farmland in the Peace Valley between Taylor and Hudson Hope was bought by Hydro, and it continues to be owned by Hydro. There is now, I think, a pretty broad consensus around the probability of Site C not moving forward. I don't think anyone -- even those who were strong proponents of Site C -- believes that that's likely to happen now, given the circumstances.

So the question becomes: what do we do with the land that Hydro bought and is leasing back -- in most cases to the original owners, and in some cases to those who have taken over the land since? Before I make my pitch, perhaps I could hear from the minister where Hydro is at, what Hydro's plans are. I know also that there are some environmental groups arguing that the land shouldn't be returned to the farmers but turned into some form of environmental refuge or game sanctuary, something of that nature.

Hon. D. Miller: No, I have talked to people and I have had correspondence relative to that topic, and I. . . . At this point, there are not any plans to do anything different from what we currently do, which is to lease the land -- on a reasonably long-term basis, I think -- to individuals. I don't have a comprehensive list here in front of me.

I do understand. I suppose that one never likes to completely foreclose any options for the future. I sometimes think that that is a prudent way to operate, and one that I think has been reasonable over the last while and continues to be reasonable. So we think the land can be utilized on a useful basis under lease; we are working with the communities and local planning initiatives to look at options around that. About 7,000 acres of agricultural land are currently available on three- to five-year leases. So it's productively used. From time to time the issue is raised to dispose of it, if you like, to put it in to foreclose any options for the future. We've not proceeded on that basis, nor would I recommend that we do that now.

J. Weisgerber: I think one of the concerns, aside from the question of ownership and the desire that people have to actually own land as opposed to leasing it, is that many have argued that that land in the Peace Valley is probably the most productive land ~-- certainly in the Peace -- outside of perhaps the Fraser Valley and some Okanagan areas. I think the land has a tremendous capacity, or potential, for agricultural production. But I think it's fair also to say that you're not going to get the kind of investment in land improvements on three- to five-year leases. As long as Hydro continues to make the land available on relatively short-term leases, the land will grow hay, the land will grow crops, and the land will continue to be used as it has been historically. Maybe that's a good thing.

But also, perhaps it inhibits the development of a more intensive use of that land -- which is unique because of the climatic effects of the dam, the river, the open water, the fertility of the land in the river bottom and all of those things. There's a whole host of factors that make the land, particularly on the north side, particularly well suited to farming. I haven't been flooded by. . . . I'm raising this issue, at least in part, on behalf of my colleague from Peace River North, because most of the arable land is on the north side of the river and in his constituency rather than mine.

But I do think, as we consider alternatives, and if Hydro is unwilling to give up ownership. . . . I'm a little bit disappointed. The easy thing to do is just to say: "We'll maintain the status quo. We never know; we might build Site C." I don't think any of us really believe we're going to, but again, I'm not going to dismiss it out of hand. Who knows how much demand there's going to be for electricity 50 years from now, how valuable it's going to be and how society's values may change with respect to hydroelectric generation? We may well come back here in another life and say: "We shouldn't have sold that off."

Having said that, perhaps the thing to consider is whether or not there is any appetite in the community for longer-term leases, longer-term commitments to people that would allow them to make some capital investment -- even if it be so modest as to do some aggressive, intensive fencing for cattle production, rather than have a big field. If you know you're going to have use of the property for 20, 30 or 40 years, you may decide to farm that land differently. I wonder if that's anything that Hydro has been. . . . If requests have come in, I guess, would be a good test. If nobody has ever made the request, then maybe I'm pursuing an issue that there's not a lot of interest in. But I think it's something that perhaps should be considered. Again, I'll look for the thought.

[ Page 4945 ]

Hon. D. Miller: I thought it was a pun when the member said he hadn't been flooded with requests.

J. Weisgerber: Unintentional.

Hon. D. Miller: Unintentional.

I'm prepared to do some examination of the topic without making a commitment. The member seems to be advancing the notion of getting maximum productivity out of the land. If you take that as your end goal, can that be achieved through different mechanisms than longer-term leases? I don't know; there may be some ways in which that can happen. But I would prefer that we. . . . Let us do some work on that. I don't want to make any big public announcement about it, because clearly it would be misleading. There have been people over the years who have argued for that land to be turned back over to people and sold, etc.

I'm always mindful of foreclosing options for the future, having gone. . . . When I was Forests critic years ago -- a member of the opposition reading the Pearse report and talking about land use issues -- I learned to recognize the importance of planning and using a long time horizon and the importance of what you leave for future generations. To the degree that you can maintain flexible options for the future and achieve objectives for today, then we'll take a look at that. I'll be happy to explore that question internally.

G. Abbott: Given the juncture and given the hour, I move we rise, report progress and ask leave to sit again.

Motion approved.

The committee rose at 5:43 p.m.

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