[ Page 5243 ]

The House met at 2:05 p.m.

Prayers.

K. Krueger: I'm pleased this afternoon to introduce two of the most important people in my life: my beloved wife Debbie and our daughter Keturah Krueger. Would the House please make them welcome.

Oral Questions

ACCURACY OF INFORMATION ABOUT
MAVIS FLANDERS CASE

Hon. P. Priddy: The first time I discovered that the information I had put before the House -- inadvertently but quite correctly -- was incorrect information was when the report was received from the children's commissioner.

G. Campbell: At least we know that the minister knew before she made her statement last week that the information she had given about Ms. Flanders's case was false and misleading. She knew prior to her statement last week that that was the case. I guess one of the questions that people will ask is: why did the minister fail to correct the information that she had given us when she knew that, more than simply not being the truth, it had a potential to cover up the problems which the ministry was facing in terms of protecting our children?

My question to the minister is: why didn't the minister immediately come before this House to advise us that the information she had provided us with was incorrect, was false and was misleading, and that she would get back to us as quickly as possible with the correct information?

Hon. P. Priddy: As I'm sure the hon. member knows, this was a report that belonged to the Attorney General; that report was released by the Attorney General. I had no ability whatsoever to release that report ahead of time. The reason -- and it can actually be up to a month, although the Attorney General insisted on a shorter period of time, which I would certainly have supported this time had I known that -- was that it allowed time for agencies involved, community agencies, etc., to simply do a fact correction before the Attorney General then officially released the report. There was no opportunity to do that, hon. Speaker.

G. Campbell: Hon. Speaker, I was not asking the minister why she didn't release the report. I was asking her why she didn't come and tell the House that she had misled the House and had provided us with false information with regard to this case, and that she would get back to us as quickly as possible.

It's now clear that the minister is incapable of securing the information necessary to ensure that children are the primary focus of her ministry. The Vaudreuil case, the Elijah Thomas case and now the Mavis Flanders case all show that we cannot count on this ministry telling the truth. It's time for a new initiative to get to the truth, rather than yet another internal cover-up.

My question to the Minister for Children and Families is: will the minister refer this matter to the Select Standing Committee on Health and Social Services, which has the power to subpoena and to hear testimony under oath, so that we can finally correct the cover-up culture which protects the minister first, the ministry second and children last?

Hon. P. Priddy: As I said last week and as I repeat today -- I repeat clearly and loudly and accurately -- there was no attempt to cover up any information. I do not think that I even had the ability to come to the House and say: "Guess what. There was a report out. What was in it was wrong, but I can't tell you what was right -- but stay tuned until the Attorney General releases it." I'm sorry, hon. Speaker; I simply do not think that in any way that is a satisfactory response.

I would suggest, hon. Speaker, that. . . . I don't know about the reference to the Social Services Committee, but we have had a standing committee on Gove in this Legislature for some period of time. It would seem that the Leader of the Opposition, given his current interest, might at some time have attended one of those meetings or have placed himself on the committee to show his interest.

Interjections.

The Speaker: Members, as I've said before, we will not have simultaneous conversation in addition to those asking and answering questions.

G. Plant: There is an urgent need for more facts here. The first internal investigation into the death of Mavis Flanders began March 29, 1997. Now the minister has stated that a second internal investigation into the cover-up of facts being supplied to the minister is being conducted. So my question for the Minister for Children and Families is simple: when did the second investigation begin?

The Speaker: Could I ask the member to please repeat the question?

G. Plant: The question is: when did the second internal investigation into the cover-up of facts being supplied to the minister get underway? When did it begin?

Hon. P. Priddy: There are two additional reports. One is the audit and review division report, which is done after any tragedy that happens in this ministry. That was begun within 24 to 48 hours -- I think within 24 hours. I would have to check that, but I believe it was 24 to 48 hours after the information about the mom and her son was available to us.

The second internal review, which is a different one and is not one that is typical, is one that is to look at. . . . Clearly this was the wrong information. That's not good enough for the family, that was not good enough for the child, and that, quite frankly, is not good enough for the ministry or the minister. That is the second internal investigation. I believe it began about ten days following, but I would have to check the date.

G. Plant: Well, the question is: ten days following what? Could we have a date? Are we talking about the first two weeks of April, or are we talking about some later period than that?

[ Page 5244 ]

Hon. P. Priddy: I will bring this precise date to the House tomorrow. I'm happy to do so. But when the member asks, after what? it was after the death of Ms. Flanders became known to us.

G. Plant: So the question of whether or not the minister was provided with the correct facts at the time that she made the statements in the House early in April was, as I now understand it, a question that was under investigation within the ministry as early as the middle of April, rather than a question that did not come to the minister's attention until the report came to her on June 13. The question is: when did the minister first learn that there was a problem with the facts that she had told this House, in this House, in the first few days of April?

[2:15]

The information about whether that information was correct or incorrect and the degree of that -- given, as I say, the full-time children's commissioner with five investigators -- was not available until her report was finished and, quite frankly, has been very disturbing for us, as I'm sure you are aware, and will lead to a number of changes within the ministry.

M. de Jong: Last Thursday, the minister excused the fact that this House had been provided with false and misleading information by stating that she had received false and misleading information from her staff -- specifically field staff, I think she mentioned. It was on the basis of that information that the minister says she made those detailed statements in April of this year about Ms. Flanders's attendance at various ministry programs.

If that was the case, my question to the minister is: will she make public the briefing notes that she used in April when she made her statements to this House about the Flanders case?

Hon. P. Priddy: I would have to admit to having to check about the ability to release information which may include other personal information that the freedom-of-information commissioner would not wish to have out there. But that is correct: I did base my information to this House on briefing information I received from staff in the field. That is correct.

I would have to check about the availability of releasing it. I'm not denying it; I simply don't know.

M. de Jong: Let me try to encourage the minister in this respect. The minister has said that she can't trust her staff, and that is what has led her to these present circumstances. If the minister can't believe her staff, then we are placed in a position where we can't trust any of the information the minister brings to this Legislature. If the minister was misled, then that surely will be reflected in the briefing notes she based her statements upon.

Subject to that very limited qualifier that she mentioned, what we are looking for today is her assurance that all of the relevant material, all of the information, all of the documentation that she had in her possession when she made those statements to this House back in April of this year will come before this House and be made public. Will she give us that assurance?

Hon. P. Priddy: The assurance I will give the member is that any information that the freedom-of-information officer says we can release, we will do so.

G. Farrell-Collins: The minister stood a few moments ago in the House in response to a question by the Leader of the Opposition and said that the first knowledge she had that the information she gave this House was false and misleading was when the report by Cynthia Morton was made public -- or was made available to her ministry. That would have been, I believe, June 16.

Then, in response to a question by the member for Richmond-Steveston, the minister stated that she started an investigation -- her ministry started an internal investigation -- into the incorrect information she received as early as mid-April.

Can the minister tell us when it was that she first became aware that the information she gave to this House was not true -- in mid-April or in mid-June?

Hon. P. Priddy: The information that I said I received that was incorrect. . . . My statement is still the same: it was in mid-June. But this was the first incident, certainly in my time in the ministry, where we had to -- this in particular on a weekend; but that doesn't matter, if it's a weekend, the daytime or an evening -- retrieve information from a variety of people from the field.

We certainly knew the difficulty in doing so, the difficulty in finding people and the difficulty in having people find information for us. It was as a result of that that spoke to us of the incredible difficulty there was simply in getting accurate information that I believed I had a responsibility to account to this Legislature for.

G. Farrell-Collins: The minister is avoiding the question. The question is simple. She stated in this House today two separate items. She stated that she first heard that the information she had given to this House was incorrect in mid-June. Then she stated in response to a question by the member for Richmond-Steveston that, in fact, an internal investigation had started in her ministry about ten days after the audit and review commission started its review, and that second investigation was to determine why the minister's facts were incorrect.

Can the minister tell me which it is? Was it in mid-June that she learned that what she said in this House was in fact false and misleading? Or was it in mid-April that she first learned that the information she gave in this House was false and misleading? Which is it?

Hon. P. Priddy: What I said was that what we discovered was that getting information from the field was difficult. We had to go through more people than we should have had to -- take longer than we should have. I needed to know, and I still need to know, that not only can I get accurate information from the field but I can get it in a timely way which allows me to account to the Legislature. It was not about discovering that "the information was incorrect"; it was about discovering that the process of simply getting it out of the field was not working very well, and hence the investigation.

[ Page 5245 ]

The Speaker: The bell terminates question period.

Petitions

Orders of the Day

Hon. D. Zirnhelt: I ask leave to make an introduction.

Leave granted.

Hon. D. Zirnhelt: When we have officials here slaving away helping ministers answer questions, it's not often that their families are here. We have in the gallery Shelagh Rae and daughter Katherine Friesen, the family of one of my able advisers here. Please make them welcome.

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

ESTIMATES: MINISTRY OF FORESTS
(continued)

T. Nebbeling: When we finished our session at 1 o'clock last Friday, we were in the middle of looking at what's happening with the privately owned managed forest land. I have only one or two questions left on that subject, and then one of my colleagues would ask some questions.

Just to recall, one of the reasons I brought this issue to the attention of the minister is that at the time of the introduction of the Forest Practices Code, the private managed forest land owners expressed serious concern about being included in that kind of a code, primarily because of violations of ownership rights that could have been infringed if the private forest land owners had to comply with the Forest Practices Code on a regulatory basis, rather than have that sector work their land in a manner that is environmentally responsible but still with some authority of decision-making left with the private owners.

[2:30]

As I explained to the minister, I believe that over the years the private managed forest land owners have been shown to be very responsible in how they have dealt with their ownership and their self-imposed regulatory system. In a certain sense, I believe the reason that private lands have produced a better return on investment than Crown lands is, in part, because not only do the owners have pride of ownership but they also have the power of making decisions -- for example, when they harvest the timber, how they deal with the riparian and soil needs, and how they deal with other values that we want to see protected. So that's basically where we went until 12:50 p.m., and then we adjourned.

I know that over the last couple of years, and in particular the last couple of months, there has been considerable dialogue between the private managed forest land owners and the government. Can the minister give me an indication when we will see a solution to this debate that has been going on for two or three years, and what kind of. . . ? I won't ask the minister what kinds of recommendations will come forward, because he won't share that with me. But can we expect in the very near future any solutions that private managed forest land owners can also continue to know under what conditions they are working?

Hon. D. Zirnhelt: Yes, we will very soon have a process that will hopefully lead to resolution of differences, but which will lead to some application of the values of the code to private land within six months. So we expect a process to be announced soon.

T. Nebbeling: I appreciate the answer from the minister. I regret to say, however, that I am not a supporter of trying to fix something that is not broken. As I stated earlier, I believe that in the whole forest industry, the one sector that has really shown to be very responsible when it comes to the environment but has still been able to work in such a manner that there is a decent profit for the investors, there's a decent return on the investment. . . . I think that to try to start regulating that part, as well, is unfortunate and unnecessary, and like I said to the minister last week, I wish he would consider leaving things as they are -- remain with the status quo.

Unless the minister has information that I don't have or if the minister wants to share that with me, I don't believe there are any grounds to think that that particular sector of the forest industry -- these private land owners that have agreed to an unmanaged status. . . . I don't believe there are any grounds to justify more regulations on that particular group in the industry. As I have said in the last week or two from time to time, I'm really bothered by the amount of what I consider overregulation in the forest industry, and overregulation is not only very costly for the people working in the industry but also puts us as a province -- when it comes to the forest industry -- in an incompatible position, compared to some other countries, where the operators in the harvest companies have a system where result is being judged rather than process.

Having said that, again I state that I am not happy to hear that the minister is considering putting new regulations onto a well-oiled machine called the privately owned managed forest lands. If that's the case, is the minister also contemplating imposing the same rules and regulations on private forest land owners that have not at any time been willing to cede their right of ownership of the timber that is on their land and for that reason have worked up to now in a different type of environment and in a different type of working relationship with the government than with the managed private lands? Is the minister considering imposing these new rules he is contemplating on the non-managed private forest land owners as well?

[ Page 5246 ]

Hon. D. Zirnhelt: Not at this time, with the exception that under the Fish Protection Act we will be discussing riparian management protection with private land owners.

T. Nebbeling: This really troubles me. I believe the province has ownership of 95 percent of all forest land in this province. A small portion of forest land is owned by the private sector. At one time in past history, the government made arrangements with the owners of privately held land and said: "Okay, if you as a landowner are willing to provide us with certain information on how you intend to harvest your land and if you can provide us with a plan that we can look at and be assured that you are operating in a manner that fits within the strategy that we have in the province, then we will give you a bit of a break in taxation." I think it was something like that. Assessment is not based on stumpage, but it is done by the B.C. Assessment Authority. So it is a cheaper way.

At the same time, there was another group of people who said: "Listen, we're not going to buy into this so-called government interference, even if it is based on -- not lip service -- providing some information so government knows what we are doing." These people continued to work in their own ways. They didn't get the little financial breaks. That's the difference between these two different forms of timber ownership on private land.

If the government is now going to impose further rules and regulations on these so-called managed private land owners, it will make things a little bit more complicated. When you regulate more, you make things more complicated; you demand more paperwork; you have to fill in more forms. If that is now going to be the case, as the minister said, and the other private land owners who were not willing in the first place to come on board and participate in that original attempt to get a little bit of structure in the way private forest land was harvested. . . . Then the rift between the managed private forest land owners and the non-managed private forest land owners is becoming so substantial that the little gain the managed private forest land owners were getting from being a partner with the government will really dissipate. The cost of continuing to work with these guidelines will increase because of the new regulatory system.

At the same time, the non-managed lands will continue to be harvested without these conditions, without these rules, without these regulations, thereby allowing these non-managed land owners more latitude, more opportunities to create a return on their investment. That disparity between the managed private forest land owners and the non-managed private forest land owners is going to be huge. At the time that the government got the 123 landowners who agreed to this new managed private land structure. . . . I don't think the government indicated at that time that they would change the rules arbitrarily. I don't think these landowners are very much in favour of seeing further regulations imposed on them, in a sense not only undermining their ownership rights but also making life a little more difficult and a little bit more complicated because of the paperwork.

So imposing it is wrong. That industry has proven to be effective: better managers of the land than we often see on Crown land and getting a better return from the land than we see on Crown land. We're going to regulate them even more. At the same time, the other private forest land owners -- who have a return, as well, but it is better than on Crown land in general -- are still going to have carte blanche.

Does the minister think this is fair or right? Should we maybe reconsider this whole matter and just leave things as they are, so that people can continue to work on the basis that was agreed to a couple of years ago?

Hon. D. Zirnhelt: The government's intent was clear. We intend to apply aspects of the code to private managed forest land. Nothing has changed the fact that over recent history there's been an advantage to being in that class. Yes, there is some evidence that economics have changed, and we are looking at taxation and incentives, along with results-oriented regulations, minimal administration and maximum freedom to manage. Nobody is talking about cut control, which is perhaps the most important freedom to manage that they have. So I'm saying that we are engaging in a collaborative approach with them, and hopefully we will resolve the differences there may be between the managed private land owners and ourselves.

With respect to your question of fairness, I've said that the reason for our involvement in regulation would be because there is a need to protect public values as much as we can. That's why we would involve ourselves in regulation. We believe that we have a working relationship with the private land owners, and we'll try to work out our differences.

T. Nebbeling: The minister said, "We have a need for," and then I didn't get what that need was. Would the minister repeat that?

Hon. D. Zirnhelt: I believe what I said was that there's a need to protect public values. I have given illustrations of those. Whether it's tax advantages or riparian protection of a public resource. . . . Water and fish are both public resources that do traverse private land.

T. Nebbeling: I appreciate the answer, but it obviously does not solve my concern. The rift between the two groups of private forest land owners is going to be widened.

When the minister said that there will be incentives incorporated in an agreement with the managed private forest land, the minister mentioned that he was considering things like taxation relief or a restructuring of taxation. Right now taxation is done, I believe, by the B.C. Assessment Authority, rather than being done on the product that comes off the land. How would the minister have a route into the B.C. Assessment Authority to somehow get a reduction in the value of the assessment that the B.C. Assessment Authority puts on a piece of land? Are there other taxation mechanisms that the minister can use?

Hon. D. Zirnhelt: It will be pursued as a public policy matter. Were it to become the policy of government, then all agencies of government would have to cooperate and see that it's done. Policy direction can be given to the taxation authority.

T. Nebbeling: I wasn't aware that the Minister of Forests had the authority to dictate to the B.C. Assessment Authority how to assess a piece of property. I thought that if that happened, it had to be done through legislation, just as we saw on Crown land or on B.C. Rail land, where the government indeed changed the assessment of B.C. Rail land from that of a non-paying contributor to a partial payer. I believe it had to go 

[ Page 5247 ]

through the House; it was not an arbitrary decision that could be made by the minister. Would the minister agree with that? Maybe I'm wrong, and then I would like to be enlightened, because I don't want to make a mistake on that particular subject.

[2:45]

T. Nebbeling: I appreciate the explanation. I have no doubt that this little exchange between the minister and myself is watched by some people who may have to live with the consequences of this new policy that may be introduced in the near future. I want to make sure of what we say here: what I say, and if I hear something from the minister, that I know exactly what the answer is. So if there is a tax break that still has to be part of negotiations, if there's a policy change that makes life a little bit easier and that's still part of negotiations, if further regulations get imposed on the managed private forest land sector, then that, again, is still up for negotiation. The reason I'm saying that is that the industry -- the private managed forest land group -- has strongly opposed any further imposition of control by the government through regulations, through changing policy -- whatever they come up with. They have opposed it, and at this point I have not heard anybody saying: "Well, we could accept new regulations, making our lives a little bit more miserable -- although we don't have a track record that deserves seeing our lives made a little bit more miserable -- as private land owners." There is going to be something opposite, then, to soften the kick -- if that's the right expression.

I'd like to get away from the managed private lands, then. Can the minister give me a quick rundown on how he, through his ministry, imposes rules, regulations and requirements on the unmanaged private forest lands?

Hon. D. Zirnhelt: This application of the Fish Protection Act to private land in municipalities and outside municipalities is the responsibility of the Minister of Environment. But from what I know, the Water Act, section 7, and the Fish Protection Act are the two pieces of legislation that are being discussed by government with the stakeholders.

T. Nebbeling: I'm happy the minister has brought the Ministry of Environment into the estimates debate, because I have some questions related to the working relationship between the Ministry of Forests and the Ministry of Environment.

Before I do that, I would like to illustrate my concern about the so-called unmanaged private forest land operators -- not concern about the sector as a whole, but about some of the situations that I have been aware of. One in particular, funnily enough, is because of last week's little debate that we had on this subject.

A lady from 100 Mile House called me this morning. She had an illustration of why she can't understand how it makes any sense that we impose rules, regulations and demands on one sector of the private forest lands and not on another. She illustrated her concern by telling me about a piece of land -- 700 acres -- in the 100 Mile House area that was bought by a company from outside the area. The lady said it was a foreign company, but I don't know if that is true. I should say that this was a discussion over the phone. I have no paper on it, and I'm just telling you what this lady told me, to illustrate why there is a concern.

Anyhow, this company from outside the area bought this 700 acres. This year they clearcut the 700 acres in a matter of four or five months -- according to this lady -- left a large amount of timber on the land, and the company left. How, if this is a true story. . . ?

Well, first of all, let me ask a question. Could this kind of scenario happen? Could somebody buy a piece of land, harvest the timber, take it out, not comply with the rules and regulations of how much timber you can leave on the ground, and disappear again, because it's not a B.C. company? Is that a possible scenario?

Hon. D. Zirnhelt: Yes, that can happen and does happen on unmanaged forest land.

T. Nebbeling: So here is a scenario where somebody can come in and clearly rape the land. But nobody, regardless of whether it is private land or Crown land, wants to see that kind of rape happen to the land, and certainly nobody wants to see the land being devastated and just left, the perpetrators of the devastation gone.

How is it, then, that the minister can justify -- say, "Yes, that can happen" -- that type of forest activity? At the same time, people who own their land and have been shown to be responsible have agreed to work within certain terms. How is it justified to make that group's lives more miserable and let the other group just go on, as the minister just said? I don't see the rationale for it.

If there is indeed a need for some policing and some regulations, I put it to the minister that it is much more in the area of the non- or unmanaged forest land and that some proper litigation or legislation may be appropriate in that area. But to go after the group that has proven beyond a shadow of a doubt that they are responsible harvest companies, that they actually make money compared to most companies that work on Crown land and don't. . . . Why not? Because of the overregulation. Now you're going to make the life of that responsible harvester miserable, and at the same time you let perpetrators of scandalous practices on private land go on. And you say: "Yes, that's the way it is."

I think the priority of the minister on this issue is right. I hope, considering the tone in which we speak now, that he may reconsider which group to go after. Don't go after good corporate citizens. Go after violators of all the environmental principles we believe in here in this province, which we have been trying to introduce over the last ten, 15 years -- and successfully, I may say, to a large extent.

Can the minister explain why he would not feel the need -- or does he have the authority -- to go after the second group who, I believe, are violators of our principles, rather than try to overregulate another group that is already practising many of the regulations on a voluntary basis?

Hon. D. Zirnhelt: A simple answer to the member is that the legislation only allows us to deal with managed private forest land. What the member is talking about is extending. . .he seems to be supporting the idea of extend-

[ Page 5248 ]

ing the attack to unmanaged land -- in his words, putting regulations on the unmanaged land.

Let me just explain that there has been an advantage, a financial advantage, for people being in the managed forest land classification. Those lands were purportedly being managed as forests, and we said we would include some measure of the code applying to those lands.

We did not say -- as the member suggests to private forest land owners and, by inference, himself -- that we would go after the unmanaged land. In my view, there is a lot of land that has been put in the farmland classification that is not touched and that we wouldn't propose to touch. You could make the argument of somebody who clears land and leaves it in a semi-cleared state that there's virtually no difference between rough pasture and clearcut-logged, unstumped forest land. We have set a limited extension of the code to private managed forest lands. That's the policy issue.

T. Nebbeling: I'll try to get a twist around what the minister just said. He's comparing it with farmland, where you leave some of the material that could have been harvested and nobody would think of going after that -- and I agree with him. If there were rules and regulations today on farmlands -- how wide the gullies had to be between rows of beans, that these gullies had to be free of grass or any other material and that all kinds of herbicides could not be used -- then maybe that comparison would make sense. You don't do that. It doesn't make sense at all to me, when there is a provincial system of regulation in place that is there to protect fish habitats -- which will be taken care of through Bill 19, as the minister said. But all the other values, like devastating land by leaving timber on the land. . . . This has proven to be devastating for the land in the long run. It may become habitat for beetles and may become a source of other infestations that can happen on the land, thereby making the land worthless.

We have a regulated industry. I believe that on private forest land, you cannot impose the same rules and regulations that you would impose on Crown land. I can understand that; you own that land, so you impose the rules. But at the same time, I would not think, at this time in the nineties, that any individual who happens to have a piece of land which has a forest that is harvestable can just continue to practise the practices of the forties, the fifties and the sixties. I believe that goes against the common good, and as long as it goes against the common good, then I think the government has a way of dealing with that -- or should have a way of dealing with that. However, saying we do not have that, and, at the same time, people who have been shown to be responsible corporate citizens on these so-called managed private forest lands. . . . To make demands on these lands even more stringent and more complicated doesn't make sense to me, either.

I think there is something fundamentally wrong with putting more financial pressure and more rules and regulations on the people who, in the past, have said: "Hey, we will manage our lands in a responsible manner." At the same time government turns around and says: "Yes, sure, we abhor the practices of the sixties when it came to the forest industry; we abhor the practices of the fifties and the sixties when it came to land-based management; but at the same time we're going to allow certain landowners to do exactly what they want." It just doesn't make sense to me, minister. I think that is where the real problem lies, rather than trying to make life more difficult for a group of people that have been responsible.

I don't know if you want to respond to that. My colleague from the Okanagan would like to ask some questions on the private lands, as well.

Hon. D. Zirnhelt: Just a quick response. Yes, the bad actors of the private managed forest land. . . . The good ones get judged by the bad. There are two notable examples: the Beaumont lands and the San Juan Islands -- large pieces of managed private land where people did conduct unacceptable practices. It can happen and could happen, and therefore there is a need for some regulation. I just suggest that before we make a judgment about how onerous any regulation is, we wait and see the results of the negotiation.

[3:00]

One of the things the minister mentioned that I think needs to be clarified. . . . Both of us being farmers, I think we can enter into this debate. He mentioned the difference between rough pasture and areas of logging and timber left on the ground. There is one very critical difference, and that is the difference of slope. In terms of looking at management practices for pastures left in a rough form, people who are doing an agricultural practice are not going to be doing it on a 35-degree slope most of the time, whereas people who are logging may be. I think that is the critical difference that I want to point out.

I want to bring up an issue in my riding which is directly the result of a privately owned area that was logged by the owner. I've been dealing with this problem over the last year and a bit as MLA, but I was also involved in it before. The incident started in 1994. As the MLA for the area, specifically what I have learned from this particular incident is that I have some concerns that there aren't policies for private logging that are comprehensive and that promote safety for residential property in my community. That's a very large concern in my area.

The second one is the concern of slope restriction and whether or not slope restriction, where residences are located below, should be a factor in terms of people logging on private land.

The third is strict regulation with respect to channelling and restorative work, and the need on private land for that kind of work to be done when, again, there are residential areas below the areas being logged.

The fourth one is whether or not government should be looking at some kind of legislation to control clearcutting on private land, especially when it integrates and interdigitates with the residential property of people below.

For the benefit of the minister, I'd just like to give a little bit of a rundown about this particular incident in the Okanagan-Vernon riding. In the fall of 1994, a logging site owned by a private individual was destined to be logged, and it was situated directly above a residential group of homes in an area called Lavington. Basically, there was quite a controversy over the plans to log this area. It was felt by the residents who lived there and by people who were in the forest industry that the slope was too great for it to be logged and that it should be left.

Below the area that was to be logged are about 50 residents, and they occupy private residences in a subdivision called Brewer Road. Basically, one of our local logging companies, Riverside Forest Products, agreed to take over the operation and log the property in accordance with the Forest 

[ Page 5249 ]

Practices Code. At that time, because a bona fide logging group, in accordance with the Forest Practices Code, was going to log this private land on behalf of the owner, all parties were satisfied and the land was selectively logged. Waterways were rechannelled, and roadbeds were put to rest. So in 1994, this was the scenario on the land above the Brewer Road subdivision.

The following fall, in 1995, the private owner decided that he would relog the property, and he removed all of the available timber from that piece of property -- against numerous protests from the citizens who resided in the Brewer Road subdivision. There was no rechannelling of waterways and there was no stabilization of roadbeds, and the neighbours in that neighbourhood were very fearful that they were going to have some problems with fallout from what was a very tenuous situation on a very steep slope above their residential property. What happened, very soon after the residents -- who are not foresters -- had predicted it, was a very significant mud slide into the subdivision.

One of those affected was the Richardson family, and I did visit their home. There was a very large mud slide that came up to the level of the second floor in their home, took out their balcony, their patio and several of the freestanding beams that were holding the patio up. Their children were in the basement in their bedrooms. Now, if that window had broken or had been open at the time, those children, I can guarantee you, would not be here -- and that is a very professional opinion, not my own.

These people did qualify for the provincial emergency program. But for those of us who have become familiar with that program by having to activate it, what we find is that we are liable for 20 percent of the total costs. What will happen if you have $2 million worth of repairs needed in rechannelling of waterways, etc., is that a typical family in a residence will have a very significant bill for an event that they were completely not responsible for and had in fact predicted would occur.

Basically, what happened in this area was a very significant mud slide due to logging on private land above a subdivision. The loss of home value for all of the residents who live in this subdivision. . . . There were none of these people. . . . Many of them sort of break between being young families with the first home that they built and older people who have built retirement homes there. They are now basically in a circumstance where their property value is next to nothing.

This year we had more problems, as probably could have been expected, because of the increased groundwater. What has been found in the area this year, although there has not been any slip this year, is that there is no stabilization in the slope. There are cracks on the logging roads, mud slippage, accumulation of water and all the potential for a disaster. According to Forestry personnel, when the root systems die, as they are going to over the next year or two, this will be an even more precarious time, because the root systems are now holding the area from slipping. Once we do not have any root system -- around two years after the logging -- then these people could potentially be in an even more precarious circumstance -- from the point of view of personal safety, let alone the financial ruin that many of them feel they have been subjected to.

What I am interested in are a couple of things from the minister. First of all, has the minister, either through the Ministry of Environment or through other inquiries, been aware of or ever heard of the Brewer Road subdivision and the problems in Okanagan-Vernon with respect to this particular logging on private land?

Hon. D. Zirnhelt: I have no detailed recollection. If it was brought to my attention, I think it probably preceded my term as Minister of Forests. But similar situations have been brought to my attention in the past. I am well aware of the dilemma around what happens when a subdivision is approved next to another piece of land on which the rules, local and provincial, could allow for logging. I'm well aware of the dilemma that puts us in. I'm also aware of how difficult it is, and how expensive and complicated it would be, to regulate many, many small parcels of private land.

A. Sanders: We had Mr. Ted Fuller from the Ministry of Environment out this year to look at the Brewer Road subdivision and the slope that was logged above it. He spent two weeks visiting the sites, and photos were taken of the overall condition of the hillside. There was a major increase in the width of the cracks along the roadbeds; these cracks have gone from inches wide last year to feet wide this year. Water was collecting in the landing site, and large boulders were poised to come down on the subdivision if the roadbed does give way. His instruction to us in the area was that there was very little the ministry or government could do to enforce the fixing up of the logging sites because of the conundrum of private land and the implications therein. He also said that they could do an evaluation of slope stability. But again, he could not give these individuals much promise as to what responsibility we as government have. I understand the implications of cost in the repair of such sites, and I was interested in the one that we had looked at as a model for what had occurred in Vernon -- the Chase Creek area. Forest Renewal had done some restoration of private land that had been clearcut there, and my interest here is: is this something that has been done elsewhere or could be applied to areas such as this, where we really are making private citizens face a tremendous responsibility that I think is government's? Somehow, in a moral or intuitive way, it doesn't feel right that there isn't something we can do for these people. I'm just interested in whether the minister is aware of the Chase Creek site and maybe what the difference is between the Vernon location and the slides at the Chase Creek site. Is there any comparison there?

Hon. D. Zirnhelt: Well, I don't know the difference between the Chase Creek situation and the one that you're referring to, but I can look at it and see. There may be something in the Chase Creek model that would inform a more global approach to this. But we would have to work with municipalities, because this is not just a forestry issue. It really does deal with zoning and buffers between residential land and rural uses.

Suffice it to say that where someone is negligent, it's my understanding that the law allows people to take actions against a negligent party where there is some major catastrophe like a slide. Government's role is always difficult to figure out -- where we are between private parties. I would just say that my own personal concern is that a lot more work needs to be done to empower local government to control logging practices on private land, as well, where it is in the interests of the civilized and inhabited area.

A. Sanders: Is there any will in the ministry to work with municipalities to advise them on how they could be directed 

[ Page 5250 ]

to have this power or to work with the Ministry of Forests? Is there any will or interest in the ministry at this time to look at these kinds of issues?

Hon. D. Zirnhelt: It would take will from the municipalities, as well, to get involved in that. There is certainly an interest. The amount of work that has been done on this. . . . There has been some in the past, and every time a situation comes up, a little more work is done on it. But it is a huge field. If there is an inkling of interest by the municipalities, then we would like to see it expressed in terms of some resolution or something from UBCM. I'm not aware that they have indicated an interest in being involved in the dialogue, but I think it's something we need to look at, bearing in mind all the caveats that need to be there -- that to administer some kind of regulation on all private land is problematic. It's a big, big administrative chore and has a big price tag on it.

[3:15]

I think that what is concerning me with respect to this particular issue is that we in fact put individual citizens so much at risk in the circumstance that I've described, not just from a personal tragedy point of view but also from a financial disaster point of view. To me, it seems so ironic that we have a code several metres high in paper outlining what can be done in logging Crown land, yet people can log within ten kilometres of a major town or city, right above a subdivision that has been there for quite some time. These people have absolutely no protection from us as government to really provide them with the security that they can build a house there. Notwithstanding natural disaster, government does not protect them in some way from fallout in terms of things that can occur because of land that's adjacent to them.

I would be interested to know from the minister if he would, on my behalf, look into the Brewer Road incident and see if he feels that things were appropriately handled by the various ministries in terms of the advice given to these people.

Hon. D. Zirnhelt: I would be pleased to look into it and identify problems that are there that stop agencies -- local or provincial -- from acting to prevent this sort of thing.

A. Sanders: One thing is very important, and I just want to bring it up because the minister had mentioned it. When we're looking at either class action or individual litigation against private land owners who have clearcut and caused subsequent problems to property -- I've been involved with a number of these in the Vernon area -- what I'm finding, very unfortunately, is that if the loss is not over several hundred thousands of dollars in terms of the damage done, it is so difficult to prove that it wasn't the excessive groundwater resulting from heavy snowpack or some other climatic factor but was truly the clearcut logging only.

Many of the individuals who have been in these circumstances do not proceed forward, because they are basically one- or two-income families and often would not have the financial ability to move forward on a suit of this magnitude against the private land owner who has logged the land. So although in our system we do have the ability to legitimately sue such an individual, my experience with this -- which is getting to be quite significant because of the number of cases -- is that in order to prove it, it's very difficult. These people, because of that, are often again at a loss and therefore left incapable of any kind of settlement in terms of their circumstance.

If the minister would look into this on behalf of my constituency and ascertain that things have been done to the best of the ability for these individuals, I would be most appreciative. Again, from my point of view and from what I have certainly seen in the Vernon area, I have some concerns that government at the provincial level -- either by facilitating municipalities or by strengthening provincial legislation -- needs to look into and really think carefully about the slope restrictions, the regulations for channelling and restorative work, the ability to clearcut on private land and some kind of comprehensive plan that would promote safety in residential property that would be affected by logging on private land.

I'll turn this back over to my colleague from West Vancouver-Garibaldi.

Hon. D. Zirnhelt: I think we've been debating and discussing a very complex subject area. There does need to be greater consensus amongst the population. But it is quite possible that government could contemplate enabling municipalities to do that if they feel the Municipal Act isn't strong enough. But it would require that they then, in effect, say that the land would have to be zoned for managed forest land. Then we would need a regulatory regime that's being resisted somewhat by private managed forest owners.

But I believe, when we're talking about quarter-sections or sections of land, that it's well within the person's ability to afford to manage it right by putting in the proper kind of management. It's an area where there are some powers in the Municipal Act, although they feel it isn't strong enough. But we would like to see some initiative from the local level of government. So I just suggest to you that you may communicate with them. Even in the absence of the provincial organization making a suggestion, perhaps they can.

T. Nebbeling: Two quick points. I would like to make sure it is on record that I'm not in support of putting more regulation onto the managed private forest land owners in order to have justification to come up with some new direction for how we can deal with the mismanagement, from time to time, on so-called unmanaged private forest land. I say this because the way the minister was closing could have been interpreted that I was actually supporting his intent. But I'm not.

So, that being on the record, I'd like to go into another area. That is the stumpage issue. Last week I asked the minister, considering that there's so much turmoil in this province because of cost to the industry -- to small operators, big operators, it doesn't matter. . . . We look, for example, at the situation in Terrace, where the pulp mill pays stumpage fees that are considerably out of line with the product that it brings in. They pay stumpage as if it's a high-grade log; at the same time, 60 percent of that log may well disappear into the pulp mill.

At the time that I brought this up, the minister responded to my question as to whether there was any discussion on how we could deal with this by the following statement: "I would argue that only a fool would ask for an overhaul of the stumpage system, when we just got an agreement with the 

[ Page 5251 ]

U.S. Only a fool would ask for it. And I'm not a fool, so I wouldn't re-evaluate the system." I'm really surprised to hear the minister say that. I was quite taken aback by his statement. But, you know, I have to give him not credit but the benefit of the doubt, because I didn't have that particular file with me.

But this weekend I went to my papers and here it is -- March 20, 1997, transaction-based timber pricing. The whole principle of the transaction-based timber pricing is to "implement new interior market-based log rates, change rates to reflect market value, construct database and pricing models using auction data for the Crown corporation sales, incorporate chips into the system," and all kinds of elements to refuse stumpage system. . .using either option 1 or 2. . . .

So for the minister to say only a fool would be looking at that whole system. . . . It's quite surprising to be described as a fool and then to find out that the minister is very much involved, in his ministry, in trying to come up with a stumpage system that will indeed allow companies to stay in business rather than being run out of business, as is happening in Terrace and near Rupert.

Now that I have talked to him about this draft that I have here from March 20, 1997, will the minister agree that it was not just such a foolish question to ask what the government is doing right now to bring some common sense to the stumpage system?

Hon. D. Zirnhelt: I was not about to be foolish enough to suggest that a major overhaul of the stumpage system, which implied that we would return to the days of implied subsidy, was at all on. There is continuing. . . .

The example you led with was the Terrace area, where there have been some technical adjustments to the stumpage system to reflect the reality of price and the cost of logging. The stumpage system can accommodate those kinds of technical fixes. There's a process for doing that: the interior and coast appraisal system. There are committees that advise the government on that.

I wanted to lay to rest any suggestion that a major overhaul could be accomplished without taking some time to do it carefully and do it in a way that was mindful of the fact that the Americans will look upon any change that reduces costs to the point of subsidizing and challenge it. We would not want to expose the industry to that. It would be foolish to expose industry and the people in British Columbia to that kind of possible challenge.

T. Nebbeling: My words were: "Is the minister at this time working on a re-evaluation of the stumpage system?" There was no talk about a major overhaul, no dramatic changes, no going back to the old style. It was a simple question. The only response I got from the minister was -- and he took the words back later: "I would argue that only a fool would ask this question."

Now that I've got my file here, I'd like to ask some questions on this so-called new approach. Knowing that throughout this province -- and it doesn't matter if I'm on the coast, in the northwest, in the interior, the Kootenays, or Boundary -- when you talk to the industry people there, and that includes the workers, there's a tremendous amount of uncertainty about if indeed these people will be in business or will have a job in the near future because of the excessive cost that the government has imposed on the forest industry through their system.

Whenever questions are being asked, like "Is there any way we can do something about this. . . ?" Why let whole regions go under and see thousands of people out of work because the stumpage is too high, because the Forest Practices Code is excessive? The answer is always: "Sorry, but we can't touch that. We have the softwood lumber deal and countervail, and if we touch the stumpage, there is no way that we will get away with it." And we start all over again, just as the minister said.

It should be noted that the Premier has from time to time been speaking to groups, where he, as the Premier, certainly didn't hesitate to say that there may be -- never a guarantee, but there may be -- some way of dealing with it. The Premier has from time to time said that in order to make the jobs and timber accord work, there may be a way of getting around stumpage in certain areas. I believe that prior to the jobs and timber accord, a delegation was sent to Washington to talk to the parties over there, to inform them that there may be something in the jobs and timber accord that could be construed as a subsidy, and as a consequence, the countervail softwood lumber deal would potentially be under attack again. So the club of the softwood lumber deal is the real evil. It is the Americans. They're the evil ones because they make us do it.

[3:30]

In this draft there are a number of statements that show that it can be done. Is the minister considering some changes at this point -- maybe not to be implemented tomorrow but in the very near future -- in order to see the forest industry indeed come back on a healthy footing, in part because of the stumpage being realistic and based on the market?

Hon. D. Zirnhelt: In the case of West Fraser, in the Kispiox and Kalum areas, there were technical changes that recognized the value of pulp logs, transportation conditions and points of manufacturing, but it was not a change in the system.

Any changes we've contemplated are consistent with the current system. When a delegation went to the United States, it was not for the purposes of saying that something in the jobs and timber accord might be construed as subsidy -- quite the contrary. We said that there would be nothing in the jobs and timber accord that would be a subsidy. What we are able to do is deal with marginal changes in the stumpage that make it more sensitive to market conditions. We are prepared to do that. We have done that and will continue to do that. Aspects of the stumpage calculations are always under review.

Anything more major than that would probably be the subject of the next five-year softwood lumber agreement with the United States, and at some point negotiations would have to be undertaken along that line. We're not into that at the moment, so the answer to your question is that we are always considering changes that make the system more reflective of the market insofar as that system can do that.

[ Page 5252 ]

T. Nebbeling: Could the minister, then, tell me what changes are currently used to find that relief for some companies that have not been able to operate in the past because of the stumpage?

Hon. D. Zirnhelt: Two of the mechanisms would be internal work that the ministry does in the revenue branch, where we become aware of irregularities in the stumpage system and we may introduce some changes. Those changes, for the most part, go through the normal mechanism, which is the interior and coastal appraisal advisory committees. Parties who feel that they have not been dealt with fairly and that the system has not been operated in a consistent manner can take those changes to those committees.

T. Nebbeling: When West Fraser opened again, were they not given some of these changes or given notice of what these changes were going to be in order to feel that they could operate their mill in a financial manner that was not going to cost them? They would not necessarily make a profit, but at least they would not have to put money into the operation on a monthly basis. I would like to hear from the minister that these are the changes that have been introduced into the system.

Hon. D. Zirnhelt: When that particular situation happened, there had been a long dialogue between government, West Fraser and other companies. The Job Protection Commission was involved with respect to the cut control issue. They wanted to increase employment in some of their southern licences in exchange for some relief in northern licences. They knew at the time they opened that we were looking at the manufacturing zone and selling price zone issues in those two timber supply areas. On the basis of that, they were satisfied that government was addressing the issue; they were prepared to open. As it has turned out, due process took place, and everything worked out fine.

T. Nebbeling: When the minister says that everything worked out fine, no financial concessions were made as far as stumpage is concerned, and the company is back in a good operating position and no longer has the loss that drove them to shut down in the first place.

Hon. D. Zirnhelt: What happened was that there were technical changes made which don't constitute any concession to the company. They were changes that were acceptable to the industry through the stumpage appraisal committees. We have no information at the moment about the financial situation of the company. But they are operating and undertook to operate, based on some of those technical adjustments.

T. Nebbeling: Could the minister explain what the system is today that established the stumpage rates for the coast and for the interior through the value assessment? I believe that is the term for the system. Could you give me a brief overview of what the difference is on the coast compared to the interior?

Hon. D. Zirnhelt: In both cases, Statistics Canada lumber price indices drive the prices. In the case of the interior, it's lumber prices that generate the stumpage. At the coast, there is some log market information -- a relative price of logs -- that can be calculated in, because there is a market that can be monitored.

T. Nebbeling: When the minister says that Canadian lumber prices determine the stumpage, I understand that the price of that lumber is used to come to a base assessment. But under the comparative-value pricing, there are other elements, I believe, that come into play. I really do not have a good hold, a good understanding of how that system works. I would like to ask the minister to give me the formula that has been used up to now, based on lumber prices and log prices in other areas. What is the formula that established what, today, the industry faces as stumpage assessment?

Hon. D. Zirnhelt: Well, I was hoping that there would be some easy but more complicated explanation than the one that we give, but we can offer the member a detailed explanation. The information is all public in the appraisal manuals, but it is complicated, and there are hundreds of pages involved in it. We can offer you a detailed technical briefing on it.

The mechanics of setting the stumpage rate is fairly simple. We do an average based on lumber prices, and as you know, it's measured by Stats Canada. Then the stumpage rate for each cutting permit is determined, and that is set at the average, if the permit has average timber. The rate for specific timber is higher or lower than the average, if the timber in the permit is more or less valuable than the average. Then there are mechanics for that, but they're quite complex. We could table the details with you, but there is no easily digestible explanation or summary of all the many appraisal manuals that are out there.

T. Nebbeling: I agree with the minister that it is not an easy concept to comprehend, because I've tried it, and that's the reason I'm asking if there is some simple definition that says: "Well, this is what we do. We set a target based on certain numbers, and then we can come up with an amount."

The reason I'm asking is that I think it is important for me to understand this. I am obviously very much concerned about what's happening in this province in the forest industry and about the unfair burden put on communities because of the many job losses in communities, in part because of companies not being willing to go on. They shut down, which puts people out of work, which puts families out of income. I really believe, now that I have seen a draft of a document by this government, that they are considering some changes to accommodate the lack of the role of the market today. . .to play a role in determining what stumpage fees should really reflect. When I talk about the market, I'm talking about the global market and the value of the product that gets produced out of the timber that goes into the mill.

So it is important for me to get at least some comprehension of what, indeed, the factors are and how they are used to come to those stumpage fees, which I believe are set every three months. There must be some fairly simple basis to say: "Well, we take this, we take this and we take this. These three components together make up so much, which we spread over the annual allowable cut." I don't know, maybe it's over the production of a company. I don't know where you find that data. But if something of that nature is in place, I would like the minister to at least try to share that with me. Then and only then will I be able to look at some of the other directions that may be up for consideration, and if they make sense and if they can indeed make the difference between what we see happening today and what we can't afford to see go on much longer -- and that is the undermining of the economic viability of the industry and the people working in that industry.

Hon. D. Zirnhelt: I would suggest that if the member wanted the system to go to market logs, then we would create 

[ Page 5253 ]

an era of instability where logs would flow to and from and in and out of communities in massive form and create chaos. That's why we've opted for a calculated stumpage system, a tenure system that allows for logs to be assigned to communities, for the most part, in manufacturing.

But let me tell you that the way of figuring stumpage on the coast is by taking log value and subtracting logging costs and transport costs. In the interior, we take the lumber in chip value and subtract the sawmilling costs, logging costs and transport costs, and get average figures. If their costs are lower than average, then their stumpage might be a little bit higher, or vice versa.

[3:45]

Having said that, I also believe that if we cannot ultimately come up with a concept -- and I'm not giving you the elements of the concept -- that is based on a fair assessment, an assessment that truly will reflect what that harvested log can accommodate in government costs. . . . Add to that salaries, transportation and the treatment of the log, and at the end of that process, once it is out of the mill, the product produced must have a positive financial consequence rather than a negative one, as we see now. How we're going to find that concept, I don't know.

However, I think there was some talk in the provincial government, in the Ministry of Forests. It may well have been the stumpage committee that worked on the jobs and timber accord working group strategy. In that particular committee there has been a dialogue taking place, where people are looking at options for how we can change the system in such a manner that the Americans will not have an excuse to start all over again with a countervail. That's what I'm after. I'm after some information from the minister about what has been discussed within the ministry. There has been a dialogue happening, because that's the reason there was a report on March 20, 1997, specifically and exclusively on stumpage.

I will pursue this one a little bit longer, because I think the minister must have some idea of where it is going. I think it is imperative for the people in this province who live off the forest industry right now to know that there is a little bit of light at the end of the tunnel. Up to now, it has been a very bleak, bleak summer. That bleak summer is in part because people do not have a job; it's in part because they don't know whether they will have a job tomorrow. It is up to us to make sure that if there are changes possible, we dare to talk about it and not try to keep it behind closed doors or let people suffer even more.

The people in the northwest. . . . Just think what they're going through there right now: 650 people were laid off last week in the pulp mill. In Terrace, Smithers, Hazelton, Carnaby and Stewart, they expect layoffs this week, next week and the following week. That is a total of well over 2,400 people. Why? If you talk to the companies, it's the Forest Practices Code, but the government is trying to deal with that. It is stumpage. It doesn't work.

It doesn't make any sense to me to say: "You may be going under. You may be going broke. You may be going bankrupt. You may be out of a job. You may not be able to pay your mortgage. You better bring the key to your car back to the bank." It doesn't make sense to me if the only reason is that the Americans dictate stumpage. It doesn't make sense to me. If there are answers to it, and I believe there are answers to it, I would like to see the minister start sharing that with me and, by doing that, sharing it with everybody in the province.

Could the minister give me any direction on how his stumpage group -- if it was the stumpage group that worked for a while under the umbrella of preparing the jobs and timber accord -- has been discussing new ways of how stumpage in the future can be assessed without doing the damage it is doing today, and how that process will happen to get to there?

Hon. D. Zirnhelt: I think it's fair to say that there were a number of options examined. It was agreed that something called transaction-based methods couldn't be implemented in the short term, and so it was rejected at this time.

T. Nebbeling: If it was rejected, then I don't understand why there is a short-term action plan here, from zero to 12 months, starting on March 20, 1997. Can the minister explain why there's an action plan when he says nothing came out of the discussions?

Hon. D. Zirnhelt: It seems to me that if you're suggesting some options and you look at the actions necessary, then you find out what the reactions are. Maybe based on the reactions to the actions, you don't do it.

T. Nebbeling: Who has made the decision, then, not to do it -- whatever "it" means? Here is a group that comes together and says: "Right now we have a stumpage system that's killing this province; it's killing its well-being, its people, its opportunities. It creates a lack of future for youth." We've got a system of comparative-value pricing. That's what we've got now. This group gets together -- and I take it that these are experts. . . . Maybe the first question I should ask the minister is: who were the people on the stumpage group? I would like that answered.

That group says: "Listen, there's another way of doing it. There is what we call a transaction-based timber-pricing approach. That transaction-based timber-pricing approach will give us the following" -- and there's a number of possibilities. There are some notes with it on how it will work. Because of that, the short-term plan goes on well after the 12 months. We go into the 12 to 24 months, and we achieve the following goals.

I think the minister is not giving me or the people in this province the true goods when it comes to the changes that are being contemplated. I think the people of this province deserve that. So for the minister now to say, "Well, we wrote the plan, and it doesn't work, so we don't talk about it anymore. . . ."

Interjection.

T. Nebbeling: I'm happy the minister got instructions from the House Leader. I hope the instructions were to just put it on the table. After all, had the minister not called me a fool last week, which I asked him to take back, because asking if there was something of an overview in place. . . .

[ Page 5254 ]

Hon. D. Zirnhelt: Point of order, hon. Chair. The minister didn't call you a fool. If you examine the record today, you will find out that he didn't want to be called a fool by someone else, either.

The Chair: I'm sure that the member appreciates the comments made by the minister. The minister did retract his use of phrases if there were any implication taken by the hon. member. If the member reads the Blues, that's there.

T. Nebbeling: Thank you, Madam Chair.

Interjection.

T. Nebbeling: He tried to fool me.

Anyhow, the point is that when I asked if there was anything happening in that very serious component of the forest industry: "Only a fool would ask a question like that." Now I can translate it my way. The minister indeed expressed afterwards that he had no intention of calling me a fool, and I really appreciated that. Nor did I call the minister a fool, and I want that to be on the record, as well, because I would not unjustifiably name people that.

Having said that, I still come back to the fact that the minister is working together with a group trying to change the system. He has a plan, and I'm asking him if he will at least share with the people of this province, for their consideration, through this estimate, what this plan has done. What are the components? Maybe, rather than say that there's a plan, what are the elements that the stumpage group has looked at and rejected? If I can believe the minister, because of his statement, they looked at it and it didn't do anything, so it is not there. Can the minister give us these elements that were rejected?

Hon. D. Zirnhelt: The committee that the member is referring to was a committee that looked at a number of options. We have not decided on implementing any of the options that they have recommended.

I have to say that when the member prefaces his comments before he reads from a document and suggests that the document says, "Stumpage is killing the province," or is somehow making it. . . .

Interjection.

Hon. D. Zirnhelt: Well, those were words that were said. I don't want the record to read in any way that a document that came out of any timber jobs discussions would have language like that in it. I think it's overstatement. There are parts of the industry that are in the black. There are adjustments. There are difficulties with the softwood lumber quotas, and that's creating problems. We are, as a government, responsibly addressing costs associated with the code. We are in the process of fine-tuning the stumpage system through appropriate processes. There's nothing more complicated than that.

To say there is something of a major overhaul of the stumpage system is wrong; I want to lay that to rest. I said it would be foolish to do that. I don't think I should have to repeat that. But we are looking at technical adjustments on a continuing basis. The intent of that would be to reflect where the stumpage value can take into account the market value of the products that are produced from our trees.

T. Nebbeling: I'm going to stick to stumpage rather than what has been said, how it has been said, where it was said and so on. One of the problems that really caused mills to close down in the northwest -- and the minister knows this -- was the fact that the type of timber that was harvested in that area was extremely decadent, containing a lot of inferior wood. As a consequence, it was not suitable for the sawmills. The price of stumpage that was charged against that wood was based on the assumption that the log that came into the yard was indeed a sawmill log, which means of a much higher value. Once it was determined that 40, 50 and up to 60 percent of the sawlog was pulp product, the cost of that log was still assessed as a whole log, with a high-grade sawmill stumpage.

Can the minister tell me if there is any consideration given right now to pulp logs or logs that come in that have more than, say, 50 percent of their contents in the form of pulp -- if there is indeed a different type of scaling opportunity available today to give these mills the opportunity right now to get the benefit rather than having to wait until some committee looks at this whole issue from zero to 24 months?

[4:00]

But in case people get the wrong idea, about 20 to 25 percent of the fibre in the interior comes in at minimum stumpage, at 25 cents; there's a large number of those logs that come in at minimum stumpage. So to suggest that we're overcharging for pulp logs, I think, would be misleading. Some people would suggest that the industry would be more profitable and more viable if we gave away or subsidized the cost of the logs, so they can then turn them into jobs. I think you have to be careful, when you start leading in this direction, that we're not undermining the value of the public resource to the point of it being a negative.

T. Nebbeling: Obviously, I'm not in any way, shape or form indicating that we would work towards a negative system. But the minister is saying right now that 22 percent of the timber that comes to a pulp mill comes in a salvage grade. I believe that's the point you're trying to make.

But when West Fraser gets its logs from its licensed areas, is the minister saying that 22 percent of the lumber that comes from their own licence is considered to be salvage? What would then, in return, mean a 25 cents stumpage charge?

Hon. D. Zirnhelt: I'm not sure what your question was, but let me rephrase what I said: 20 to 25 percent, between a fifth and a quarter of the logs in the interior, come in at 25 cents, which is the minimum statutory price for logs. I didn't say they were salvage logs. I said they were pulp logs. I said pulp logs are valued at 25 cents a cubic metre.

T. Nebbeling: I shouldn't have said salvage; it is pulp logs. But it is a log that is inferior and for that reason only usable for. . . . But at the same time, in that same operation up to 75 percent of logs come in that are scaled according to sawmill logs. Portions of a particular log will not be used as a sawmill log. They will be used as pulp logs, because they have to cut 8-, 6-, 4- or 12-foot sections out of that log because it is rotten. They still get charged at that high grade. So that's part of the problems, I believe, that have been caused in the northwest, at least -- serious problems with West Fraser and other operators -- because that's the type of timber they get out of their timber licences.

[ Page 5255 ]

So is the minister looking, then, at a way to increase the percentage of pulp log that comes in, by re-evaluating the existing stands that get harvested, whereby a percentage of the logs that come in are indeed not suitable for saw purposes? Is the minister looking at a system where the so-called rotten part of a log. . . ? A 30-foot log may have 12 feet of good sawlog material. It will be graded as a 30-foot sawlog, and then the rest of the log will go and disappear in the pulp mill. Is there a way to now say we will take that 30-foot log, and 12 feet will be for the sawmill, so that it gets the high grade, and the rest gets treated as the 25-cent category?

Hon. D. Zirnhelt: You really would be talking about the grading system. We do make changes to the grading system from time to time. But basically, in general terms, what you describe is the Repap proposal as I understand it. That's under active consideration right now. It isn't to change the stumpage system, but it is a technical change. I mean, it's assuming that the pulp logs come in and are chipped, as opposed to being run through the sawmill. That would make a significant change up there. But the reason it goes through committees is because what you do in one area may affect what happens in another area. So there has to be some degree of industry consensus on any change.

T. Nebbeling: I'm happy to hear that indeed the solution is in grading, and I understand. But the bottom line for me is that there will be less stumpage charged for a product that has never justified the amount collected up to now. If this is indeed part of the Repap solution, would that mean that, if this system is going to be used for Repap, it will apply to the other operators as well? Or will this just be exclusively for Repap? Or do we see a real change in the whole way grading happens in this province?

Hon. D. Zirnhelt: I named the system or the proposal because it was then Repap, now Skeena Cellulose. When we talk about the Repap proposal, any proposal. . . . That was just the origin of the proposal. Any change to the system would apply, based on the timber type. It wouldn't be targeted at any particular corporate organization.

T. Nebbeling: The reason I'm asking this is that traditionally the coast has seen different ways of assessment than in the interior. If this indeed is going to be a solution for some of the financial problems that companies in the interior are in, would this also imply that the coast would have this re-evaluation of their logs? If they have a product that is similar to what is going to be changed in assessment in the interior, would it apply to the coastal areas as well, which I think would be a great relief?

[R. Kasper in the chair.]

Hon. D. Zirnhelt: The Repap proposal we were talking about was one made to the Interior Appraisal Advisory Committee. There is a coastal one as well, and similar proposals have been made and are under consideration. Many proposals come in throughout the year, and these committees meet dozens of times to consider them. So there are always proposals underway, but it's fair enough to say that there's no one proposal on the coast that you could identify which is equivalent to the Repap proposal.

T. Nebbeling: I think it is important that we get a kind of understanding on that issue, because there is tremendous suffering on the coast as well. Indeed, this is a technical change; it's not a reduction of stumpage, but it's a technical change on how you create certain types of timber. It is based on how much of the timber is used for a valuable production line and how much of the timber that comes out of the forest is going right into the pulp mill to produce paper or other products. That same situation is creating financial hardship on the coast as well -- the lack of. . .not having that recognition. For that reason, I am asking if the coast would get that kind of scaling approach done as well. I ask that because I know there is an interior scaling system and a coastal scaling system, but there are problems.

Once that system is in place -- and it will be used at Skeena Cellulose, the former Repap operation -- there will be considerably less revenue coming from the timber compared to what there used to be. Part of the reason that Skeena Cellulose, Repap, got in trouble -- I say only part; I'm not blaming stumpage alone -- was because of stumpage fees that just didn't merit the value of the product. There will be a serious reduction in financial contribution, then, from Skeena Cellulose because of this technical change. Still, at the same time, you have a stumpage system in place that is target-driven: you want X amount of money from an area in a three-month period. If Skeena, because of the technical change, will pay considerably less -- and we're talking about millions and millions of dollars over the three-month period -- will there be a reduction in the target? Or are you going to be looking for a cost upgrade in other areas so that it still is revenue-neutral for the Ministry of Finance?

Hon. D. Zirnhelt: First of all, since we were talking about Skeena Cellulose, it's worth noting that for a large company, they paid one of the lowest stumpage bills in the province last year, and they were paying in the order of $15 million a year. Compare that to the effect of the drop in pulp prices, which took $200 million out of the company. So in orders of magnitude, stumpage is minor.

The changes on July 1, the technical changes we were talking about that benefited West Fraser and Skeena Cellulose, amongst others, were revenue-neutral to the province. Those changes were waterbedded and had a minor effect throughout the interior.

T. Nebbeling: This must be the first term I haven't heard before: "waterbedded." Can the minister explain what it means? I think it means that the savings for these two companies were spread over the other companies. Is that waterbedding?

Hon. D. Zirnhelt: There was an average stumpage set, and the average has to be maintained. That's the way we set the system: we start with an average and then average it. So if it goes up in one area, then it goes down in other areas. That was the nature of these changes. Just to remind you, it did go through the Interior Appraisal Advisory Committee.

T. Nebbeling: I hope the minister didn't take offence at that particular question, because his response was a little bit like: "Let me remind you. . . ." It was just a question.

It is revenue-neutral; it means the cost has to be picked up by other parties. If that is the case, then that is the case. I am sure that the impact -- because of the minuscule amount that it represented for that period, up to now at least -- could be picked up. I don't know if the other companies feel the same way, but how will that work in the long run, whenever. . . ?

Let me rephrase that. As I was looking for a more general approach to the restructuring, so to speak, of the scaling 

[ Page 5256 ]

assessment. . . . It will obviously benefit most companies that have inferior timber. Is this not going to cause a problem, if that indeed becomes a general practice from now on? We have to do something for the companies. Would that not have a negative impact on other operators who then have to pick up the slack so that we still have that target of income from stumpage in a certain area over a period of time?

[4:15]

T. Nebbeling: Can the minister share with me, then, what the reaction has been of the industry component that is picking up the slack? Even companies that work with different product, be it sawmill operators. . . . We have seen some pretty serious situations when it comes to the financial status of these companies. We are going to now burden them with extra stumpage costs. These companies are fighting just as hard. The only thing is that they haven't closed the door yet -- most of the time.

How are we going to continue to justify a system, then, that says: "Okay, he or she who has gone under, we will come to the rescue. We believe that the reason you are in trouble is that the market price for the product that comes out of the timber is not justifying the amount of stumpage, so we will change it. The rest of the world will pick it up in that area?" What has been the reaction from the companies that do have to pick up the slack? That's the number one question.

The second question, of course, is: would the people that pick up the slack now not have a good case to make once pulp prices go up again -- say to $500, $600, $700, $800 a tonne? Then suddenly, that stumpage becomes more affordable -- not acceptable, necessarily, for these companies, but affordable. Will there then be an adjustment made again at that time so that the companies that are in different types of milling get a bit of a break?

I'm asking this in particular because the companies that will pick up the extra cost in order to give a break to the pulp mills in this case are going to be asked to bear other burdens, including creating new jobs. They are the people that will be part of the jobs and timber accord that will provide more jobs over the next five years. There's a burden there. They will be looking at change or conversion in the mills. They will be looking at upgrading their mills. It's going to be dollars. If we now start severing these profit dollars -- if there is profit; many of them don't even make profit -- if we now start taking more dollars out of these mills, they will in a sense be forced to invest, because they're going to need conversions to accommodate the value-added objectives and the jobs objectives. Are they not going to now put one sector in trouble in order to save another?

Hon. D. Zirnhelt: As I understand it, if pulp prices go up now, that doesn't take any more money in stumpage out of the pulp companies. Their profitability would be restored. But there's nothing in the accord that takes anything away from industry. There is no additional cost burden to industry in the accord.

T. Nebbeling: The point I'm trying to make is that now, because companies have come close to bankruptcy, gone and shut down operations and put people out on the street for a period of time, the government has come to the rescue and said: "Okay, here is a way that we can give you a little bit of financial relief." If that financial relief will indeed make them kind of viable, at least to the point that they can operate again, then that's a good move. But the reason they are not financially viable right now is the fact that pulp prices are very low. It was a year or two years ago when the pulp price was a thousand dollars. At that time, I don't think for a second that government would have considered giving these companies a financial break, and taking that financial break or the consequences of that financial break -- the millions of dollars -- and putting it into another sector in that area, the sawmill operators. Today we face the situation of low prices, financial disparity and people almost out of work, so we're going to give them a break and the other companies are going to pick up the tab.

Considering that the situation is so bad with these two companies -- Repap and Skeena, and maybe more in the future -- the other companies are supposed to and they're going to take that extra financial hit because you want to be revenue-neutral. So if the call was to take $600 million out of that area in the next three months, even if some of the operators would not pay, the others would have to bring in that $600 million. I believe that is now the case -- what the minister said.

What happens when the pulp prices go back again to a thousand dollars? Is there then going to be another adjustment made, and are the pulp mills that will make a considerable profit going to somehow put something back into the kitty so that the other companies -- the sawmill operators -- can see a readjustment, as well?

Hon. D. Zirnhelt: No decision has been taken along the line of making adjustments to the stumpage system that would take into account the ups and downs of the pulp value. All I can say is that at this time there are proposals to that effect which can be considered, but we weren't able to come to any ready conclusion about that, so more work needs to be done.

T. Nebbeling: Before I hand it over to my colleague from Cariboo North, I just feel that this restructuring. . . . I'm a strong believer that restructuring is needed. Don't get me wrong. I believe that we need restructuring. We have to have a dose of reality on how much the forest industry can contribute to the provincial coffers. Whatever it's going to take, that's fine with me.

What I fear is happening now with this solution as it is presented. . . . Yes, sure, we're going to give the people that are down a break, because prices are low; that is the new routine. That break will still be there even when the prices are very high again. So now the profitability of that operation is really good. At the same time, the people in the other mills that are in a different type of product have taken on that financial liability in order for the government to still receive the same amount of dollars.

What happens if lumber prices go down and these mills can no longer afford the high stumpage prices that are now higher than they would have been if the pulp mills had somehow had a variation in how they were going to pay as well? What happens when lumber comes down? Are we then not going to see the same situation, where the lumber mills are going to shut down, and they're going to hold out until the government says, "Okay, what we're going to do is give you a break," and now we've put it back on the pulp. This is going to be a reactional thing, a yo-yo way of dealing with it.

[ Page 5257 ]

I'm asking the minister: considering that this is a reality that can happen, what is the minister contemplating to avoid that? Is there going to be a further analysis to avoid these kinds of situations? Then that would just lead to an opportunity to manipulate the government.

Hon. D. Zirnhelt: I think you've identified one of the problems if you tied stumpage to the price of pulp. It is tied primarily to the price of lumber, and if lumber prices go down, stumpage will go down. So there is a corrective mechanism on the lumber side.

T. Nebbeling: If, at the same time that lumber prices go down, the government still sets targets of dollars that they want to receive, it doesn't work. That's the problem with the system, I believe. The government says: "We're going to take so many dollars out of the industry in that area; regardless of how much timber comes out, that's our target amount." If the government is not willing to get away from that one way or another, then even if lumber prices come down and you still set your targets at that level, who's going to be safe?

I think the resolution has to lie in a different approach: government collection that is more market-driven and certainly more in line with what the product can afford. If at times pulp or lumber prices are low, you as government receive less money; but when they're high, you get considerably more. As a government, you just have to balance that a little bit, but at least you're going to keep the pulp mills open, you're going to keep the sawlog mills open, you're going to keep the remanufacturers open, and you're going to keep people working. Ultimately that is the objective that I pursue when we talk about stumpage and what we take out of the industry on an annual basis.

Hon. D. Zirnhelt: I think there's an answer to the member's query. Government sets an average stumpage rate, not an average revenue. So if prices fall, the amount government gets will also fall. In the interior over the last two years, it has changed approximately a third. Lumber prices have been very buoyant. If lumber prices are reduced, then the overall amount that government collects will go down. It's not a revenue target; it's a rate target. We've agreed on that system with the Americans. A basket of sawn wood has a rate to it, and then we have to calculate a rate based on the price. It does fluctuate, and government revenues do fluctuate dramatically with lumber prices.

T. Nebbeling: I appreciate that explanation, because that is one of the little mysteries I've been trying to get around. But that doesn't apply, I believe, to pulp prices.

My last question before I hand it over to my colleague from Cariboo North: when it comes to the small business forest enterprise program, does that mean they comply with that one as well, or do they have different forms of stumpage? Is there additional stumpage? How does that work? Maybe we should get into that later.

Hon. D. Zirnhelt: There is an upset stumpage, which is calculated on the same basis as all other licensees are calculated. The small business program has an upset stumpage, which is calculated by the same formula as any other licensee. But then it is put out to bid, and there is a provision there for a bonus bid. To tell you what happens in the 16.1 sales, the value-added sales, there are often no bonus bids. There are value-added factors that are used to base the award on, but with the log-sale type of small business sale, there usually is a significant bonus bid on top.

[4:30]

Hon. D. Zirnhelt: In the case of Skeena Cellulose, there's a very complex network of chip suppliers, including their own three sawmills and other operations to the east.

J. Wilson: If there's a problem with stumpage in this region, the problem is with the sawmills rather than with the pulp industry. The way it is designed now, the sawmills supply chips to the pulp mills, and there's really no stumpage factor tied to it.

Hon. D. Zirnhelt: There are some whole-log chippers, one in the New Hazelton area in particular. But the issue up there is one of Skeena Cellulose and others suggesting that we should value pulp logs -- logs that are essentially pulp in content -- as though they are all used for chips, as opposed to assuming that there's some lumber recovery. For the most part, that's true. So it depends: as you move into more and more stands with a high pulp log component, they want that full calculation to help average the price of the whole stand.

J. Wilson: Is that not the case at present? Is there not a percentage that goes into a grade 3 stratum, as in most regions? You factor that in, and that wood comes in at 25 cents a metre. Does that not exist out there at present?

Hon. D. Zirnhelt: Perhaps I can focus this. Right now whole-log chipping would be done at a loss, because pulp chips are so low. Now they pay 25 cents. They want a recognition that there is a negative value to be averaged over positive values on the sawlogs in the stand.

J. Wilson: That does make it a little clearer. If the industry there is asking for a subsidy to harvest this wood and chip it at a cost to some other operation, perhaps in another region, the cost of chipping must be fairly high. Otherwise, if you give them the wood, then you'd think that they could at least put it into a mill and come out ahead and not be in the red.

I'd like to ask the minister: with the stumpage that is being charged to this whole-log chipping, at this point in time is there stumpage now that is owed to the province? I guess what I'm looking for is: is the company in arrears and, if so, by how much?

Hon. D. Zirnhelt: Yes, they owe the government about $13 million in arrears, and of course, that's something that the job protection commissioner has to take into account when he goes through a restructuring. Because they haven't been forced to pay the stumpage, and therefore they're not paying the stumpage at the moment, that's precisely why we're saying that it then can't be a problem for them. Yes, repayment is something different, but they still have financial problems, so it's a much larger issue than the stumpage issue.

J. Wilson: Hon. Chair, $13 million might be a small amount. . . . Is this going to be written off, and has it been included in the calculation of income for the present year?

[ Page 5258 ]

Hon. D. Zirnhelt: There are two options, and one is that the company enter into a repayment scheme as part of restructuring. Or, if there's a transfer of the company's assets and licences, it would be payable upon transfer.

J. Wilson: But at this point in time, has no decision been made as to which avenue to pursue to collect this?

Hon. D. Zirnhelt: That's correct. The job protection commissioner is still in discussion with the banks and other stakeholders.

J. Wilson: When a company owes the government money on stumpage, what is the time frame before they are considered to be in arrears?

Hon. D. Zirnhelt: A statement is given in a short period of time after the scaling has been done, and 21 days after the statement, interest starts to kick in.

J. Wilson: At present, how many companies in the province are in a similar situation with regard to stumpage that is in arrears?

Hon. D. Zirnhelt: I'm just getting the precise amount. At June 3, 1997, the overdue accounts receivable were $67 million. For comparison reasons, last year, in May 1996, it was $38 million. There are 70 companies that are in arrears of over $100,000.

J. Wilson: Does the minister have a second list that would indicate companies that are at present in arrears but that are high-risk companies?

I realize that some of these will be paid up in the next little bit, in the next month or two or three. They are low-risk, and they are fairly stable, but there are a number that are high-risk. Do we have that list?

Hon. D. Zirnhelt: No, we don't keep a list of high-risk accounts. What we do is look at each account on its own. We may go into collection action, or we may negotiate a repayment scheme, depending on the individual circumstances.

J. Wilson: At present, then, how many companies are you considering a repayment scheme with or negotiating some form of an agreement with?

Hon. D. Zirnhelt: I'm informed that to the best of our knowledge, we would be negotiating with half a dozen companies. We can provide a list of the status of their stumpage. I could provide that list tomorrow. But suffice it to say that we are in negotiations with very few companies at this point.

J. Wilson: I would appreciate that information if I could get it.

The stumpage that is owing. . . . I would assume that this is part of the projected revenue for the government for the current year.

Hon. D. Zirnhelt: Yes. The stumpage is accrued, and then we have an assumption of a bad-debt provision, which for the end of '96-97 was $18.9 million.

[4:45]

Hon. D. Zirnhelt: The amount that's there as a bad-debt provision is, I believe, the same this year, and we don't believe that there will be any more trouble or any need at this point to adjust that. We can adjust the bad-debt provision if our information indicates to us that there will be a greater problem. But for now, we're confident that what we have as a bad-debt provision is sufficient.

Interjection.

Hon. D. Zirnhelt: Just to make it clear, I'd like to continue, hon. Chair. The bad-debt provision is taken off the projected revenue.

J. Wilson: Getting back to Skeena Cellulose, is the reduction in the rate that has been requested in place now? Or is it something that you're just considering at the moment?

Hon. D. Zirnhelt: Yes, the technical change occurred July 1, and that technical change, by itself, will not result in any overall decrease in government revenues.

J. Wilson: In this process of levelling the income to the government -- I believe "waterbedding" is the term used to describe it. . . . Which area has now been hit with an additional stumpage increase because of the reduction in this one?

Hon. D. Zirnhelt: Well, the benefits accrue to all the licensees in the Kalum and Kispiox timber supply areas. All the rest of the interior timber supply areas will notice some effect over time.

J. Wilson: Would the minister give me the figure per metre of reduction in the area in question and the overall increase that will be applied to the rest of the interior?

Hon. D. Zirnhelt: The effect of the benefit to the Skeena Cellulose operation is probably in the order of a $4 reduction per cubic metre -- from $8 down to $4 -- and it's in the order of a 25-to-30-cent increase in other areas.

J. Wilson: A 25-or-30-cent increase in other areas seems to be relatively harmless, although when it comes to dealing with a few million metres of wood, it adds up to a considerable bill. Is there anything underway at present in these other regions to change the requirements of wood that will, say, affect the stratum in No. 3 wood, this type of thing? Are there any changes underway to increase the level of 3, 4 and 5 in the stratum so that that increase is possibly not going to materialize?

Hon. D. Zirnhelt: No, there's nothing in any of the technical adjustments that have been made to this point, or that are contemplated, that will mitigate the effect of that waterbedding of those changes in the Kalum and Kispiox region.

T. Nebbeling: Before I asked my colleague to jump in quickly, I had to pick up some papers. I was trying to come away from the interior, where we have seen some action to deal with companies that were indeed in dire financial straits. We have seen some serious situations arising on the coast. We have seen job losses. We see mills that are, to say the least -- I don't want to give it the wrong label -- inadequate in relating to what the market is doing right now when it comes to the type of lumber that comes into the mill. They have very little 

[ Page 5259 ]

opportunity to convert the mills to accommodate other types of lumber that they have traditionally been using. Because of that, I don't think many of the mills are having the productivity that they should have. Many of the mills are not willing to give up their operation, because they know the moment they do, they will lose their timber allocation. There's clearly dire straits there, and there is need for financial support on the north coast.

Has the minister considered looking at this state at the coast to see if some of these remedial elements that are now being created in the interior could be transferred to the coast -- especially places like Gold River, where they still have to deal with the Avenor mill, which may well close because of financial consequences? Has the minister indicated to any parties that there may be ways of keeping the Avenor mill in Gold River open, considering some of the steps that have been done with stumpage?

B. Goodacre: I just want to take advantage of this opportunity to talk a little bit about the Skeena Cellulose situation in my riding. The last few weekends that I've been home, the matter of Skeena Cellulose, of course, was on everybody's mind. As we're going through the estimates of the ministry, it's a pretty appropriate time for us to reflect on how serious this matter is in our ridings and also to bring to people's attention that the opportunities we have up there are being wasted right now because of the huge market failure for what is an extremely large company in a small market. This company controls 37 percent of the cut in our area. When Skeena Cellulose decided to close their doors, they started telling contractors to quit bringing stuff in. As the logs stopped coming into the log yard, of course, the scalers were the next people to be sent home. As it ripples its way through, many of us, many of our friends and many of our family members are getting notification that the company is going down.

One of the more interesting things is that people up there have an abiding faith in the forest industry. They realize that at the end of the day, we will rearrange matters so that we can get back into the woods and start reviving the sawmills. Hopefully, the pulp mill itself will again be up and running so that we will have an opportunity to once again see this industry thriving in our areas. The town that I come from, Smithers, is pretty fortunate in that we've got one of the lower-impact things happening where we are.

I see the minister is back now, so I'll relinquish my position to him.

Hon. D. Zirnhelt: I thank the members for indulging me some time to prepare my answer. I would like to. . . . As in the case of the Repap proposal, which we talked about at some length, we have received various proposals from coastal operators, and many of them are under consideration.

But with respect to the Avenor pulp mill in Gold River, we're not aware of any imminent closure. All we are aware of is that they would like to reduce their workforce as a way of reducing their operating costs and making the mill more profitable.

[5:00]

The member correctly stated that contractors have stopped shipping. That means the truck drivers are staying home, the scalers don't have to work, and the suppliers -- be it the suppliers of tires or suppliers of repair material -- are all out of a job. When I started to talk earlier on about my chagrin, if I can use that word, with not having seen much proactive action taken by the government, knowing that this type of an issue was lurking under the surface for a long, long time. . . . This is not just the last three or four months; this has been going on for a long, long time. The problems were lurking under the surface; they only needed a very little touch to surface, to explode. Knowing this, because the industry has been throwing up the warning signs left, right and centre -- warning signs which have often been dismissed as just whining. . . . That we know what we're doing, and things are going in the right direction. . . . It's a sad thing to see that it had to come to this. We now see some steps taken that will hopefully still make a difference for many people. I regret to say that it will not make a difference for everybody -- we know this now. But hopefully, some people will be able to pick up and go on -- just in case there's a loss there, they can accommodate that.

Having the member speaking to that is, I think, very important, because it also justifies me speaking at length on this issue. It means a lot to me. I have been going to the member's riding, I've been going to the Skeena riding, and I've met with almost every group that has been impacted by what's happening there. It's the only way you truly learn what a shutdown does mean and how it does impact on everybody. We don't think about the person who works in the 7-Eleven store, but his or her life will be impacted by it. We don't think about the lady who sells homemade jewellery in a little store, but she will be impacted. One lady in Golden, at the time that the Evans situation arose, was interviewed on TV. She sold women's clothing and jewellery, and her total sales in that three-month period were $3.80. That's impact; that means something.

So when I see these kinds of situations arise, I quite often get not emotional about it but angry and determined to push for some change, and it is these people that I have in mind. So hearing the member for Bulkley Valley-Stikine speaking in that tone about the people who he represents pleases me tremendously.

Having said that, I'm not going to spend much more time on this. I think we've gone through it. I had to come back with it today because of not being able to get an answer on Friday as to whether there is anything happening. I'm pleased to hear that indeed there are some moves towards finding a solution that I think. . . . If we inject a dose of reality into what's happening in the industry and how much costs can be imposed on the industry, I hope that we indeed will come up with a solution that will help the industry to stay vibrant. And that's ultimately what this is all about -- nothing else. It has nothing to do with the ministers, and it has nothing to do with me. It is about the people who are in the industry and the contribution that this industry makes to this province -- the enormous wealth that it creates for this province and the enormous security that it has always created in the past for hundreds of thousands of people. So when we get back to that, then, we have done our job in whatever form -- the minister and I as the Forests critic.

[ Page 5260 ]

What I would like to do is move over into a new area that we have not been talking about. That is the small business forest enterprise program. The small business forest enterprise program has become an extremely important component of the forest industry as a whole, primarily because it has created so many tremendous opportunities for so many small business people -- be they loggers, be they small mills, be they market loggers, be they contract loggers. The small business forest enterprise program certainly is one of the elements in the forest industry that accommodates, let's say, the little guy -- or the little girl, to be gender-neutral.

I have a series of questions on the small business forest enterprise program, based on the fact that the jobs and timber accord is going to expect something to come out of that component of the industry as far as new jobs are concerned. I don't know -- well, of course I have the figures -- how many new workers are supposed to be created by the components of the small business. . . . Maybe, for the sake of debate, I can just say the small business component, rather than having to say "small business forest enterprise program" every time. The small business component of the industry will be responsible for a number of jobs in the area of 3,000 or 4,000, and that means that there will be some changes to be accommodated in that segment of the forest industry.

What I would like to ask the minister, as there is a specific role for this sector, is: can the minister tell me exactly how many jobs have to be created by that sector? Furthermore, which component of that sector will be responsible for that?

Hon. D. Zirnhelt: The 6,500 jobs that we have targeted under the jobs and timber accord is broken down into 1,500 jobs by getting out the full cut and the accumulated undercut, and that will include some primary breakdown jobs. In addition, there are the 5,000 jobs that we expect to come essentially from the fibre transfer program, and they will be value-added jobs.

T. Nebbeling: We can talk first for a little while about the 1,500 jobs, and most likely after the recess we can continue. Since I've been in the Legislature, I have been exposed to many people who, in the past, have been able to work with the small business program -- people who were able to give themselves some financial security. Just like the big boys, many of these people have, over time -- especially over the last 12 or 13 months -- been in a position where they basically had to walk away from what they were supposed to have harvested, for which they had made a bid and for which they had put down a deposit. Especially in the lower mainland, we have seen a number of examples where just because of the cost that was imposed on their particular bid, people couldn't fulfil the obligation and they walked, thereby losing the money that they had to put down.

I do not know a lot about that particular section of the small business program, but maybe the minister can tell me. . . . Could the minister briefly explain how the process that these small loggers go through works? How do they get hold of a parcel and under what conditions, and what is the payment they have to make -- the deposit or the guaranty price? I don't know what the phrasing is for that. Why is it that these people, in spite of having put money on the table as a deposit, still have to walk away? Is it the system, or are there other reasons?

Hon. D. Zirnhelt: Small loggers usually acquire their rights to cut by bidding on a sale. They know the upset price, and they will bid a bonus bid. The competitive tender process should make the rules equal for everybody. We require a deposit to ensure compliance and to ensure that people don't just acquire and speculate -- hold and speculate. There is some onus on them to get some cash flow out of selling the timber.

Given the volatility of the market and given a relatively high stumpage as a result of high U.S. lumber prices, we are reviewing the extension policy. We have made a number of extensions in the past. But bear in mind that when we do make an extension, all those other people that bid could argue: "Well, if you had given the bid to us, we may have logged it and brought in both the revenue and the fibre flow." So what we endeavour to do is make sure that the rules are understood at the time people bid, so that there is no question that they have to fulfil the terms and conditions of the award.

T. Nebbeling: Maybe the minister can explain to me who can then bid. How do people get into the system? And when it comes to the deposit, is it the percentage of the timber that they are supposed to be harvesting, or is it the percentage of projected stumpage revenue that is coming from the licence that they have been bidding on?

Hon. D. Zirnhelt: We don't have the figure here right now -- that the percentage deposit was 10 or 15 percent, or whatever, of the stumpage. I don't have that. We'll get it within minutes.

In order to qualify, a logger has to be registered in category 1 to bid on those sales. He has to be registered. To be eligible, there are fairly easy criteria. As a rule, they have to be 19 years old and Canadian citizens.

T. Nebbeling: That's all? Anybody can just walk in and bid on a cutblock based on being 19 years of age and having Canadian citizenship?

[G. Brewin in the chair.]

Hon. D. Zirnhelt: Yes. They first of all have to be registered with the small business program. In order to register, they have to show some element of experience in the forest industry and prove to the district manager that they have some experience -- that they have the capacity to do the logging.

[5:15]

The minister said category 1. Can the minister describe exactly what category 1 stands for or means?

Hon. D. Zirnhelt: Category 1 is the market loggers. There is no manufacturing facility attached to the licence, so they're free to sell it on the open market.

I just want to say that our assessment is that it's not lack of experience which is the reason for failure. It may simply be 

[ Page 5261 ]

that they called the market wrong or a business deal they thought they had for marketing may have gone wrong or they're on the wrong side of stumpage going up and prices coming down. But a log broker might bid on a. . . . He or she would have the capability of organizing the logging. So they don't have to be experienced loggers themselves; they just have to have the capacity to conduct the logging or have it conducted for them.

T. Nebbeling: I get a bit of a feeling on this one that we're going to spend some time on it. The best way of learning has always been through asking. I know the minister doesn't mind that.

When I asked if some experience is needed, I understood that sources other than experience can cause something to go wrong. But if somebody comes into an office totally green about what the forest industry is all about, not really knowing anything much about that industry, but having the ability just to put a bid in, maybe thereby outbidding a person who would have experience, and then failing in the end -- the winning bidder -- that would be of concern. But I'm sure that if that was happening in a frequent manner, that would be stopped. Does the minister mean that log brokers can actually bid for an operation as well?

Hon. D. Zirnhelt: In some form or another almost every logger brokers logs; it's just a matter of degree. A logger who has a brokerage business or a broker who has a logging business does qualify if they're duly registered.

I guess I'll just remind you that we are still getting the information on the deposit, but the deposit is an incentive against speculation. That's one of the reasons why it's there. I don't think it happens very often, if ever, that somebody totally green comes in and bids a sale, but there often needs to be an opportunity for new entrants. That's what competition is about. Maybe somebody has gained a little bit of experience and wants to go to the next step and be an entrepreneur, has found a market and wants to enter the bid process. That's why the criteria are not so stringent -- so as not to restrict access to new entrants.

T. Nebbeling: I don't want to poke fun at anything that happens in the forest industry, but for the minister to say that somebody may want to be an entrepreneur. . . . Believe me, anybody with a bit of an entrepreneurial spirit would not invest right now in the forest industry, considering what's going on.

I understand that the eligibility is rather loose because it is an opportunity for people to take a shot at becoming responsible for their own little business. Hopefully, they'll make that little business into something bigger. However, when I heard "log brokers," I was thinking more that somebody could bid on four or five parcels or lots -- whatever the terminology is -- and then actually could start trying to sell these lots to others again. They would become an in-between, thereby driving up the price again that will ultimately have to be paid by the person who goes in there with his or her chainsaw.

First of all, how old is this program? How long has this program been in effect, and what amount of timber is available?

Hon. D. Zirnhelt: The small business program has been around since 1979. In 1988 what has been known as the 16.1, or the bid proposal category, was instituted and brought in.

T. Nebbeling: At the time that it was introduced, was it created to give young loggers an opportunity to become self-sufficient? Was that the intent? Maybe the better question is: what was the intent of the program when it was introduced in 1979?

Hon. D. Zirnhelt: When the program was brought in, its purpose was to allow entrepreneurial opportunities for new entrants. I wouldn't want to leave the record suggesting that because of current conditions our industry is lacking in entrepreneurism. Slocan and Riverside recently purchased the assets of TimberWest. Those are areas that. . . . That's an investment, they're entrepreneurs, they're making investments. There is no shortage of entrepreneurs willing to make an investment whenever a bid proposal sale goes up. There are always people willing to invest and enter into the business now. There's no shortage of bids on the rest of the small business sales. There are lots of bids. There is active bidding going on.

T. Nebbeling: I'm going to stick to the estimates, still stating that when I made the point about entrepreneurs entering. . . . I'm not talking about people who are in the field already, who have the experience. To use Slocan, the biggest forest company in this province, as an example, I don't think that really reflects what the small business program is all about -- a company with hundreds of millions of cubic metres of timber allocated. That's an entrepreneurial operation, but it's certainly not an operation that I would put in line with the program.

When I said that right now, at this time, it will be difficult for many young loggers to enter that program for the first time, I believe that. When I meet with them, they can hardly make ends meet. So I don't think they have the money -- the 15 percent or 10 percent, or whatever it is -- to put into an account as a guarantee that they will indeed harvest the timber, knowing that the stumpage system today in the Forest Practices Code. . . . Implementation costs are such that they most likely will not make a profit, like the situation that other companies are in.

I don't doubt that there are entrepreneurs in the forest industry and that there are young entrepreneurs in the forest industry, and I'm sure that one day they will come forward again. But before that happens in a real way, I believe there will have to be some very dramatic changes in how the forest industry is being treated and how the forest industry will be made into a wholesome industry again. So there is no slamming entrepreneurs or people who would like to take a shot at creating their own future. The climate in the forest industry right now is not conducive to people coming forward to do that.

Therefore I believe that the bids that are being made most probably will be by people who are entrenched in the system. I don't know if log brokers can still do the bidding -- but maybe just the log brokers, who then may work for another company with a more solid base to continue. Hopefully, entrepreneurs will one day feel enticed again, because that's what entrepreneurs do. People with an entrepreneurial spirit see an opportunity and go after it. But I don't think that many believe there is a dollar to be made, with the prices, the cost of going into the forest, the restrictions, the hindrances and the regulations.

I went offside of what I wanted to ask, so I have to come back for a second. When this program was started in '79, it was in order to give some young people an opportunity. Can 

[ Page 5262 ]

the minister say how the allocation of timber was arranged? Was there new forest opened for them, or was there a commitment with companies?

Hon. D. Zirnhelt: At the time, in 1979, a number of forest licences were created. A volume was held back -- a portion -- to allow for new entrants.

T. Nebbeling: And these forest licences were created for whom? The majors? I mean, were forest licences created and then there was a holdback? What kind of holdback? What percentage? What kind of timber was made available to the program?

Hon. D. Zirnhelt: This is getting to be a fairly complex period of history. But in a nutshell, when the Pearse royal commission recommendations were implemented -- government decided to implement some of the recommendations -- instead of a lot of small short-term sales, they brought in a system of longer-term forest licences. All of the cut was not allocated; about 90 percent became allocated to forest licence categories. So 10 percent was held back for the small business forest enterprise program.

T. Nebbeling: So if I understand well -- because I'm new at this one -- at that time there were all kinds of timber forest licences that were. . . . Okay, the system. . . . How did the majors have tenure? And how did the majors have forest licences that were compatible with what we have today, like tree farm licences or long-term licences? Is that what the minister is speaking about -- that that made up 100 percent of all the licences in the province, and 10 percent of that was taken back for this small business program?

Hon. D. Zirnhelt: Yes, the 10 percent that became the small business program had not been allocated to that point in time. I said there was a series of short-term sales. There were also the tree farm licences in place. All of the allowable cut was not allocated. So in other words, there was a growing amount of timber that was available. There was more being offered. So that's where the 10 percent came out of the increase in the amount that was being offered.

[5:30]

Hon. D. Zirnhelt: We might be able to find out what Pearse calculated the cut as at the time, but I don't have that figure here. I'd have to try to get it.

T. Nebbeling: I understand that it is not fair to expect that kind of historical background, because we're going back about 20 years. Maybe we can then go on to 1988, which is a little bit more up to date. I believe the minister was in government then -- or was certainly contemplating getting involved.

I get the impression that a lot of changes were made in 1988, and more structure was given to that small business program. Can the minister maybe extrapolate a little on what happened in 1988? That seems to be a critical period in the history of the small business program. What was added onto the program that was not there?

Hon. D. Zirnhelt: Again, in a nutshell, a very cryptic description of what happened in '88: there was a new stumpage system brought in in '87, which required legislation. As part of the overall system, licensees were made responsible for funding basic silviculture. At that time -- 1988 -- when the legislative changes came in the '88-89 legislative year, there was a 5 percent takeback from all major licences. That was subsequently made available for the bid proposal system, which has come to be known as the value-added category.

T. Nebbeling: So the 5 percent cutback or clawback, or whatever you want to call it, the donation towards a pot of timber for the small business program -- is that the same 5 percent that we still talk about when major licensees give up terrain, or is this a different issue that we'll come to later?

Hon. D. Zirnhelt: Yes, I guess I did oversimplify. The 5 percent takeback that happens now when a licence turns over was brought in at the same time. So in effect, there were two 5 percent definitions. One was the wholesale 5 percent takeback from across the board; then the policy was there so that on subsequent changes of ownership of licences, there would be 5 percent taken back.

T. Nebbeling: Just to be 100 percent sure, then: that 10 percent that it adds up to is not the same 10 percent that we talked about, which became available from all the major licensees in 1979?

Hon. D. Zirnhelt: It's incremental. So, in effect, we now have basically. . . . There has been a wholesale 15 percent allocation: first 10 percent in 1979; then in 1988, another 5 percent, for a total of 15 percent, plus what's been added as licences change. That's the incremental 5 percent that comes in now, but it's only 5 percent of that specific licence. So it really now constitutes about 6 percent of the whole small business program. Six percent of the whole program now is what the takeback has accumulated up to. What's 6 percent of 15 percent? It puts the small business program plus or minus 16 percent, if you follow what I'm saying.

You don't follow? Let me try again. I don't want to complicate it. The 5 percent takeback only happens when licences change hands. There haven't been that many changing hands. I was given a figure which I'd have to verify, but I do recall the figure was 6 percent. This additional 5 percent on licence turnovers has not been a large amount to be reallocated. It's only been about 6 percent of the whole program.

T. Nebbeling: The last 5 percent -- it was a clawback at the time of sale -- represents 6 percent of the whole program. Is that. . . ? Yes? Okay.

Now, before I go into more detail on how every bit works, how the different categories are created, how the timber comes to them and under what conditions, because of what you just said, Mr. Minister, I expect that that part of the strategy is that indeed there is, over time, an accumulation of timber going into that program to accommodate growth. Is there a percentage where it would stop? Like you say -- I just heard you mention -- it's 16 percent of timber compared to the annual allowable cut in total, I suppose. Is there a level where the government said: "Okay, this is it. Now there's enough in the program to go into perpetuity"?

[ Page 5263 ]

Hon. D. Zirnhelt: No, there is no cap on it, although you do know that under the jobs and timber accord we're considering that where they can maintain and increase employment, they can hold that. If the company, for some reason, changed hands three times, they would have lost 15 percent and that might jeopardize operations. Instead, we're looking at other ways of increasing the amount of fibre to the small business program.

T. Nebbeling: That was what I was coming to, because under the jobs and timber accord, under certain circumstances that 5 percent clawback would still be available to add to the program inventory. Under other circumstances, the 5 percent will not have to be put back into the inventory of the small business program. Does that create problems in the long run with the objectives of the program? I'm saying this because once people get into these programs as companies, I suppose they would stay in the program and keep applying for new bids. It is an entrepreneurial program, as the minister said. If more people get involved and the inventory doesn't get much larger, are we not going to create a situation where the timber that will be available because of the bidding system is again going to be outpriced because so many people want a particular cutblock? There's only so much available, so people are going to drive up prices that way. It will be good for the government, but it will not necessarily work for the logging companies that are involved in trying to have control over the timber.

Has that been part of the calculation? Or is there a situation today where even the timber that is in the inventory is not picked up on an annual basis? Is that happening? I don't know.

Hon. D. Zirnhelt: Historically, there has been a small undercut that has accumulated, because the 5 percent hasn't always been reallocated. I'm not exactly sure where the member is going, but just to fill out the picture a little bit, we expect a 70 percent increase in sawn fibre to the value-added sector through the timber transfer program and then another 30 to 40 percent increase in access to round logs by reapportionment within the small business program.

With the sale of logs, we intend to target the value-added sector. That adds up to over a 100 percent increase in the amount of fibre available to the value-added entrepreneurs that are out there. There's ample opportunity for new people to get into the value-added sector. We expect that if somebody wanted to be efficient and get into the primary breakdown, there are licences that from time to time become available, and they do trade. Licences do trade. What we've done through the jobs and timber accord is create an opportunity to double the reman sector.

T. Nebbeling: At this point I would prefer that we do not get into the reman component of the small business program, because I know that will be given a substantial increase in lumber allocation. For me to get a good feel about the whole bidding system and who can justifiably be partners in that. . . .

The minister said earlier on that he didn't know where I was going to go with this or that he wasn't totally clear as to where I was going to go with it. What I was trying to find out at that point was: if the 5 percent clawback that traditionally has happened when a company sold its licence to another company went into the inventory of the small business program, thereby making more timber available, in a sense, for the participants in these bidding programs, I have no doubt that over time more people would participate in this type of activity. And the more people are bidding, the more timber should be available, if we try to keep the prices at an acceptable level. If you stop increasing your inventory and you allow more people to come in to go after the timber, because it is a bidding system, people who need that wood to work for their livelihood will be tempted to pay higher prices than they would if there were a reasonable supply available for them to bid on.

My question, or where I was going to go, is: by topping up the inventory by stopping that 5 percent clawback, do we not risk that the prices that will be bid on the timber available will go to a level where the entrepreneur may think he can make it -- but with any fluctuation in prices, he may be on the street?

In the last 12 months, we have seen tremendous numbers of people not honouring their commitments. They are walking away from their deposits. Why? Because the prices fluctuated so badly that there was just no way they could get into the woods, take that timber out and make money. They would rather give up their deposits. I was just asking these questions to make sure that in the future, this kind of situation is not going to be created -- not because the prices were not stable, or kind of stable, but because there was less inventory available to bid on and therefore higher prices.

I'm sorry that I'm thinking on my feet while I'm asking the questions, but I am really trying to get some concept of why the program was put in place. I think I understand why now: it was creating opportunities for people who wanted to take a shot at becoming their own masters, so to speak. I think that was a great initiative, and I understand how the timber was put in the inventory to support the program.

Now, was part of all that timber allocated for the market logger and part allocated for. . . ? The ministry introduced the reman sector, which will get more. Was that done upfront? Was there a formula that said, you know, 20 percent goes to a market logger and 80 percent goes to a logger who works together with the reman or goes to a remanufacturer who gets the timber because they have a mill? How was that formula established?

[5:45]

The third major category that was added was the value-added 16.1, and it was always intended that it would be treated as market logging until such point as the value-added demand picked up. It was to be expected that it would go through the bidding procedure and might end up as market logging. As the demand picked up, there was opportunity to reapportion to the small business program, because the 5 percent takeback was not immediately in demand or the uptake wasn't commensurate with the availability of the 5 percent. It was to grow. The value-added component of the small business program was expected to grow, and it has grown.

T. Nebbeling: What the minister is saying is that with the stronger demand for the value-added operations, more timber 

[ Page 5264 ]

was channelled toward that sector, and less timber was then coming towards the market loggers. Was that in '79 or '88, or is that now? I was not clear.

Hon. D. Zirnhelt: I'll be happy to respond. It was in '88 when the category of 16.1 -- we call it the bid proposal value-added, the value-added program -- was brought in. That was the point. . . . At the same time there was the 5 percent takeback. That 5 percent was taken back in order to make it available for new entrants to the value-added business, independent remanufacturers in that business. So that 5 percent was dedicated, but there wasn't an instantaneous takeup of that 5 percent. It was expected that it would grow as the demand for sales came along. It's getting close.

I'm watching the hour, but I would like to just read into the record and provide you with the information that I said I would get with respect to deposits. It is a sliding scale that timber sale awardees are expected to pay. They have to pay not less than 10 percent of the first $100,000 of stumpage, plus 5 percent of the next $400,000 of stumpage, plus 2 percent of the remaining total estimated stumpage value tendered. So it's 10 percent of the first $100,000 in stumpage, plus 5 percent of the next $400,000, plus 2 percent of the remaining estimated stumpage value tendered.

T. Nebbeling: I appreciate those numbers, because it puts a little bit more perspective on what we're talking about. Can the minister quickly, in between. . . ? I want to come back to the market logging, and I want to come back to the value-added. I would like to get an idea, when we talk about the market loggers, what the average size of a cutblock is. Can the minister also give me an indication of what an average deposit would represent?

Hon. D. Zirnhelt: We do know that 50 percent of the sales are less than 5,000 cubic metres. So 50 percent are less than 5,000 cubic metres. The range in size is everything from one truckload -- 34 to 40 cubic metres -- up to 50,000 to 60,000 cubic metres, which is not uncommon in some areas. Although I'm aware of one case in particular -- Beatle Salvage. . .long distance from markets, low-value stands in the Chilcotin, for example -- where I believe they would take proposals up to 250,000 cubic metres or components of that. We don't have a calculation right now, but we could do that math and come back and give you some. It's very difficult to get averages. We could pick a couple of typical sales and then come back and give you that information directly. We'll try to do that over the dinner hour. The officials will be able to provide some of that for us, as early as they can in the evening.

T. Nebbeling: The reason I'm asking that is to get a feel for how much money is actually invested by a young entrepreneur who tries to get into the business through the requirement of having a deposit based on this formula. If I can go by what I have seen in the Soo TSA, for example, where there is a fair amount of five-, six- or seven-hectare parcels. . . . If I take that and I take the average lumber, I wouldn't think that the deposit would be more than about $15,000 in a case like that, because the amount of timber that can come off a seven-hectare parcel is relatively small. My main concern was that if a young entrepreneur had to start and put a deposit together for which he or she may have gone to the bank or borrowed from family, because of the fluctuation in prices and the fluctuation in markets, suddenly that tough investment would have been gone. So that was really the reason for asking that particular point.

Hon. D. Zirnhelt: The member raises a very good point. In my life, both in politics and before, I've watched people venture to become entrepreneurs. Sometimes they come in with the expectation that the government should provide free access. Others know, as the member knows, that sometimes you put quite a bit at risk in getting into business. My own view is -- on the smaller sales, anyway, 1,000 to 5,000 cubic metres -- that it's certainly reasonable to come up with, if you have any assets at all. . . . It's not onerous to get into business. On the larger sales, yes, it is. Of course, with stumpage rising and if you're in an area of very good timber, it can be quite a bit, and a $30,000 deposit may be difficult to swing if you have no business record with a log purchaser, for example. But you're trading in collateral. If you've got a timber sale, you've got a right, under permit, to create some wealth. It's tradeable and it's bankable, almost, as long as there's a business record with the entrepreneur himself or herself.

T. Nebbeling: I appreciate that statement from the minister, because we were obviously looking at that issue the same way. Knowing what the average would be, I think it is a fair deposit, and if somebody has to forfeit it. . . . I think somebody who comes in small and has a small allocation gives up a little. But can I ask the minister: as the value-added sector is such an important component of the small business program -- and will become more important over time -- are the requirements for deposits identical for a value-added mill owner-operator compared to a market logger? Maybe there are other sectors of loggers that we can get to later on, as well.

Hon. D. Zirnhelt: The section of the act that I quoted from was section 7 of the Forest Act, and it applies for timber sale licences. To our knowledge, all the sales under the small business forest enterprise program are timber sale licences. So the answer to your question would be yes.

T. Nebbeling: If a log broker buys logs under this bidding system, what must be an element of. . . ? If a log broker goes for a bid, does he pay a premium because he will ultimately speculate the job itself? If he is a broker, he will buy a lot and then hope for a better return on that parcel, obviously. So are there any other considerations for job brokers?

Hon. D. Zirnhelt: The sale goes to the person who bids the most. I could only speculate that if there were a broker -- someone who was knowledgable about the market and knows of a premium market -- he might be able to bid more and thereby get the sale. So there really has to be an element of marketing. If somebody is going to make a very high bid, they really have to know the return from the marketplace. So you could make the argument that knowledgable brokers are in a position to bid more, because they've found a premium market of some kind. But I can't say that there is that pattern out there. I just don't know.

T. Nebbeling: Considering the time, I move that the committee rise, report progress and ask leave to sit again.

Motion approved.

The House resumed; the Speaker in the chair.

Committee of Supply B, having reported progress, was granted leave to sit again.

Committee of Supply A, having reported progress, was granted leave to sit again.

[ Page 5265 ]

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 5:59 p.m.

PROCEEDINGS IN THE DOUGLAS FIR ROOM

The committee met at 2:27 p.m.

ESTIMATES: MINISTRY OF
TRANSPORTATION AND HIGHWAYS
(continued)

B. Barisoff: We're going to start off by leaving the Vancouver Island Highway project alone for a bit, and we're going to move on to the Lions Gate Bridge again. The members from North Vancouver and West Vancouver are very concerned about what's taking place, so we'll call on them to get started on the Lions Gate Bridge.

D. Jarvis: First of all, I've got a couple of brief questions I want to ask about the Second Narrows Bridge. With the work going on with the McGill. . . . How is the work going on with the south side of the bridge going to affect the operation of the Second Narrows Bridge? Is it going to create more traffic flows and problems?

Hon. L. Boone: As I understand it, that's municipal work, and they're coordinating with Highways.

D. Jarvis: I was wondering how the McGill approach -- the ramp to the Second Narrows Bridge -- that is being repaired or rebuilt this summer is going to affect the traffic flowing onto or off of the Second Narrows Bridge.

Hon. L. Boone: We're doing our best to manage it. I'm not quite sure what the member wants, but if you want to wait until the MOTH staff are here, Dan Doyle would be able to tell you exactly what the plans are and if there are any plans for diverting traffic or what have you. As agreed with the critic, we're concentrating on the TFA right now.

D. Jarvis: Are there any capital expenses projected for the north end of the Second Narrows Bridge, with regard to the configuration at the end of the bridge?

Hon. L. Boone: No.

D. Jarvis: I was wondering if the minister could bring us up to date as to the amount of traffic flow going back and forth across the First Narrows Bridge, or the Lions Gate Bridge, as it's commonly known -- i.e., the number of cars going across the bridge per day and maybe on a yearly basis. How much of that is local traffic? Have they done any studies with regard to how many bicycles are going across, or is there just sort of an assumption as to the number? If there's a survey that has been done on the number of vehicles, I wonder if we could be privileged to receive a copy of that.

[2:30]

D. Jarvis: The survey on bicycles -- could we be briefed when it's finished? That would be appreciated.

The bridge safety committee gave us a briefing on the bridge about a month and a half ago. At the time, I believe they said that with accelerated maintenance, they would be spending as much as $18 million on this bridge. That's $3 million for this year, for example, and over the next couple of years, because of the bridge depreciating that much. The maintenance costs are going to go up, which is understandable. Was that $18 million up to 1999, or is it for a five-year period that they are estimating that could be the potential cost?

Hon. L. Boone: Actually, the estimate said it would be $8 million over the next three years.

D. Jarvis: Well, that's interesting. Another aspect of this potential crossing is the need for a third crossing. As the minister is probably aware, the Lions Gate Bridge is sort of an icon or a heritage site for the whole lower mainland. I want to know if 50 percent of the locals are actually using that bridge, which is pretty well the rough figures that we have been receiving. What are their decisions going to be based on? How are they going to be based? Where are all these others? The other 50 percent is coming from Whistler, is off the ferry out of Horseshoe Bay or is other Vancouver traffic that's just moving back and forth -- tourists, etc.

I want to know where the decision is coming from. Is it going to be based on what the people on the North Shore really want? That's the way it appears at this point. You've made an option to the North Shore, and you've got a $70 million deductible, say, to repair the roadbed. Are there any other proposals that you have called for?

Who is making the decision? Is it the people on the North Shore? They've got three municipalities involved. Are they going to be the ones to be able to sit down with you and make a decision on that, or is it all going to be the government's decision? Are we going to have to be affected by the fact that the city of Vancouver and other places are going to have to make their decisions as well?

Hon. L. Boone: The bridge doesn't go just one way, hon. member. I'm sure you recognize that it has to be both sets of people and that both jurisdictions are responsible. The ultimate responsibility lies with government to make that decision. I don't think you could make any decision where you would say that the North Shore people would be the only people who would be consulted, because that bridge, or whatever it is, bridge or tunnel -- has to end on the other side. Those individuals have to be consulted, as well.

D. Jarvis: I appreciate that it goes both ways. I've actually been on it, going both ways.

[ Page 5266 ]

Interjection.

D. Jarvis: Well, I've walked that thin line down the middle sometimes.

What I'm trying to get at is how the decision is made, in the sense that if it's decided that the North Shore is not growing that much -- to warrant, say, even a larger bridge -- other areas and other jurisdictions in that whole area are growing rapidly: the Whistler area, the Squamish corridor, the Sunshine Coast. I assume that with the new ferries the government is bringing in, we'll have more people coming faster from Nanaimo to North Vancouver.

We're going to need something. Whether repair to the bridge is sufficient, with this growth over the years, we're sort of burying our heads. The fact is that the time is going to come when that bridge is going to have to be expanded, one way or another. Why are we trying to set ground rules to limit ourselves to a decision to be made by January 1998 as to what's going to happen? Are we going to maintain a bridge with a repaired deck? Are we going to expand and put the bridge in there that is required, and/or tunnels, etc. -- whatever is necessary for a crossing?

We're being very shortsighted. As we all know, there are going to be hundreds of thousands of people moving into the lower mainland in the next five to ten years. Why don't we prepare for it now? If the decision comes down that we're not going to accept any of the proposals coming through, or if we're just going to repair the roadbed and spend $70 million, has the minister made any plans to look into the future and put studies forward to see what their plans are for another crossing somewhere on Burrard Inlet?

Hon. L. Boone: What you're talking about here is future policy. I'm not going to stand in these estimates and discuss something that is a long way in the future. I can tell you right now that the decisions with regard to the Lions Gate Bridge were made with regard to all the various parties there, with regard to the fiscal abilities of government -- a very strong driving power -- plus working in conjunction with the GVRD, who have established where their priorities are and where their transportation plans are, and who have clearly indicated a reluctance to see more traffic going into the downtown area.

We've heard some discussion with regard to rapid transit. The priority of the GVRD is not for rapid transit going across to the North Shore. So we take into consideration all of the governing bodies there: the parks board and every municipality around. Quite frankly, what we have offered is the best that we can do in the fiscal realities of today.

You guys shouldn't have done such a good job in making people say that the debt was a problem, because if the debt wasn't a problem, we would be able to increase the debt far more than we can right now. But the reality is that we're increasing the debt by $70 million right now with the Lions Gate project. I don't have the ability to increase the debt any more than that. I'm willing to say that we'll put $70 million into rehabbing Lions Gate Bridge, which will do the entire rehabilitation. However, if we're looking for any expanded capacity on that bridge, then we do have to look to a toll. I think that's a responsible manner. . . . I think it should be one that is acceptable to those on the North Shore who have been very, very strong in terms of telling this government to get their fiscal house in order and telling us that we have to reduce the debt.

You can't have it both ways, hon. member. You can't say, "Reduce the debt," and then turn around and say you want us to finance the entire Lions Gate project and build a third crossing at the same time. It's just not possible in today's economic climate.

D. Jarvis: That was a very interesting speech. I guess I could go into a long harangue as to the pros and cons of that, but it seems unusual that they think nothing about expanding the West Coast Express, which they're going to do very shortly, and continuing with Vancouver Island -- thinking nothing of spending money there. Our concern on the debt aspect was that they weren't getting their debt under control by encouraging investment and development in this province; they're going about it in a roundabout way and in the wrong way.

In any event, I want to say I was glad that the minister supported us in the fact that we feel that the Lions Gate Bridge should maybe not be used for rapid transit or something like that. The time will come that we have to take the traffic away from the downtown core of Vancouver. Therefore we're going to have to go with a tunnel in the centre of Burrard Inlet and take it out through Clark Drive or on the other side of Vancouver. That's the only way it's going. . .because we're going to have unbelievable expansion in the north. The minister better be aware of it; that's happening. After she's out of government, she might want to come down and visit us.

There are a couple of other questions I want to ask with respect to the bridge. If it is decided to reconstruct -- to, say, put two levels on it -- or if something along that line was agreed to from the proposals coming forward, and/or if it was just repairing the deck, how long an environmental review would be involved?

Hon. L. Boone: It's our intention to work with the federal environmental appeal so that we are doing them simultaneously. It would be between 12 and 18 months for the environmental appeal.

D. Jarvis: I assume, then, that if the decision to repair and/or expand a crossing is made in January of '98 -- I think that's sort of the guideline we were informed of -- we'd be looking at close to the year 2000 before any sort of actual work is done. So if we're now looking at three years before it's done, does the maintenance cost still hold true -- that we're going to look at about $8 million in maintenance for those three years?

Hon. L. Boone: I'm going to say a qualified yes, because one never knows. I mean, you know that you could have something that happened as a result of it. I know that last year it was a million dollars and this year it's $3 million. All our estimates say that it's going to be $8 million, but I would never want you to ever say that I said something to you that was an untruth in this House. So a qualified yes to the $8 million.

D. Jarvis: Well, I have never heard the minister ever say anything that wasn't true in the House yet. However, there's always a first time.

In any event, I am confused about the $8 million, because as I say, your safety and traffic group that came through showed us charts that showed that the maintenance of the bridge was going downhill at such a degree that although it was $3 million this year. . . . Within the next couple of years they had it up to approximately a maximum of $28 million.

I was wondering if your staff could clarify why we're thinking of $28 million versus $8 million over the next three years.

[ Page 5267 ]

Hon. L. Boone: As we understand it, the charts that you're talking about dealt with a five-year period, not a three-year period. The information that we have is that it's $8 million over three years. It could be more if it was over five years, but we're certainly. . . . I wouldn't be surprised if it's slightly more than that. I mean, things happen on that bridge.

D. Jarvis: On the way to Victoria this morning I saw the drilling rigs out all through the park. I was wondering if the minister could sort of bring us up to speed on this geotechnical study that they're doing now, or the information received.

We were informed -- or we were under the understanding -- that when this all started, the question of this new government bringing in a new bridge or calling for proposals for a new bridge, back in '92. . . . Over that period of time -- '92, '93, '94 -- there were studies done in the lagoon and all through the park, the causeway area. How come all of sudden now we're seeing new drilling rigs in there? Was the information not obtained two years ago?

Hon. L. Boone: Well, I can't really answer for what happened back in '92, but I can tell you what's happening right now. There was a release that was put out on June 11, indicating: "The geotechnical study to begin Thursday, June 12, will involve drilling holes in Stanley Park near the causeway to supply proponents with geotechnical data crucial for the construction of tunnels or bridge foundations. The drilled holes will be small in diameter and will not harm the environment."

So I guess we're looking to getting information that would be there, ready for future construction. I know that in '92 they hadn't determined the alignment or any of those things. So right now they're trying to get that information to be prepared.

[2:45]

Hon. L. Boone: It is part of the $70 million. It's staff that are doing it, so we can get you the figure as to what the breakdown would be on that.

D. Jarvis: Following up on that information the minister is going to give us, I heard $70 million: $40 million was for the bridge and $30 million would be for repairing the causeway. Am I correct in those figures, or will you give us those figures when you have them?

Hon. L. Boone: To expedite this, we can get that information to you. Is that all right, hon. member? Thank you.

D. Jarvis: I want to know if the minister has heard from the district of North Vancouver's transport and advisory committee, which was formed in early May with regards to the bridge. It's called the transport advisory committee. Ever heard of it?

Hon. L. Boone: Could you repeat the name and when this committee was formed?

D. Jarvis: Sorry, I didn't bring my file in because I have another appointment to go to. I just have my notes. I understand that it is the transport advisory committee, which was formed in May 1997.

Hon. L. Boone: I would assume that you may be talking about the participants' process -- the stakeholders that we've pulled together to assist us in forming the request for proposal. That's the only committee I know of that would be that one. Those seven stakeholders are the GVRD, the city of Vancouver, the parks board, the Squamish nation and then the three North Shore municipalities.

D. Jarvis: A couple of quick questions on tolls. I was wondering if the minister has any sorts of charts or figures available that would be of assistance to us in ascertaining what a $2 toll is worth. Is that worth $100 million, or is that worth $200 million over a four-year, five-year or ten-year period? Do they have any charts that relate to, say, a $2 or $4 toll?

Hon. L. Boone: A $2 toll would cover $165 million to $250 million of debt.

D. Jarvis: Is that for a two-year period, a five-year period, a ten-year period or a 20-year period?

Hon. L. Boone: Thirty years.

J. Dalton: I believe my colleague has to go off and do an MLA report. Who knows? He might talk about some of this stuff. I have one or two questions I also want to ask about this geotechnical study that's going on. I think there are two givens here. Firstly, we're not going to get rid of the Lions Gate Bridge. It's not just a regional and a local icon; it is a national icon. In fact, I would suggest that it's an international icon. Secondly, with the $70 million the minister has advised us of, I don't think it's feasible that we can tunnel underneath Burrard Inlet for anything like that kind of money -- nowhere close. So I would like to know. . . . If this examination of the causeway and drilling into the subsurface invites the possibility of either tunnelling or trenching the causeway, wouldn't that add to the $70 million figure?

Hon. L. Boone: This is for the four-laning, and it's for the tunnel under the causeway. Obviously, if it's determined that we are not going to be proceeding with four-laning or any sort of tolling, then we would stop doing the drilling. But right now we are still proceeding and still optimistic that the major stakeholders would prefer to see an enhanced bridge with four-laning and a reduction of traffic through the park, with a tunnel one way -- or both ways, in fact. So we are working in preparation so that we can get the necessary information, so that we can proceed with that. However, as I said earlier, we're very hopeful that we will get agreement on the terms of reference for the call for proposal. But if it appears that it's just not going to happen, then we would obviously stop that.

J. Dalton: We know, of course, that the baseline is $70 million, no tolls. I think we still need a few questions answered about what that package actually gives us, as my colleague has asked for and as the minister has kindly said would be forthcoming -- whether that would be $40 million for the bridge and $30 million for the causeway expansion or repair. Given that one of the participants in this exercise is the parks board and that they're clearly on record as saying that 

[ Page 5268 ]

they would like that surface returned to greenspace, in the best of all worlds, is that factored into the cost -- and the fact that the parks board is one of the decision-makers? I need some clarification on that issue.

Hon. L. Boone: If it's $70 million, I'll give you the breakdown now: $57 million for the bridge rehab and deck widening, and $13 million for causeway rehab and widening. If it is determined that we are not going with a four-laning of the bridge, then there would be no tunnel through the park and no reduction in lanes through the park. We would maintain the existing three lanes, but they would be widened and resurfaced, and that's all. There would be no reduction of traffic through the park with the $70 million capital expenditures for rehab.

J. Dalton: I thank the minister for that, because I think we're getting a little clearer picture now.

I have a couple of questions about the major participants in the consultative process. I asked a couple of questions the other day about Mr. Hibbins's letter of June 24, I think it was, to me. I shared the information with Pat Boname, the mayor of West Vancouver. As the minister may recall, I pointed out that when I received this information by mail, I called Pat Boname. She had not been made aware of this process at that point; at least she didn't have the documentation -- it's two pages -- which I have with me.

The city of North Vancouver has just written to my colleagues and me. June 27 is the date of this letter. They're talking about the major participants in the consultative process, and, of course, they're identified as one of the decision-makers. The city of North Vancouver is on record, through a motion that it passed at a June 23 meeting, as saying that they're going to participate as an observer in this process. Can the minister explain to me -- I haven't had a chance to call the mayor; I just got this today -- what "observer status" would mean in this process?

Hon. L. Boone: Obviously, I guess, they don't want to have any input into the decisions. I would think if they were there as an observer, then they would have no opportunity to bring their point of view to the table. They would be strictly observing and would have no opportunity to influence the decisions that were being made. I find it hard to understand why the city of North Vancouver would take such a stand, given the fact that they have a lot at stake here. Obviously they would like to have an influence as to what takes place. If a decision is made that is not one they like, then I assume that as an observer they would be open to criticizing that. From my perspective, it's far better for them to be at the table and to try to influence the decision rather than being a critic of the decision afterwards.

J. Dalton: Certainly my reaction is basically the same as the minister has just expressed. As I say, I haven't had the chance to follow this up -- which I will do right after I've asked these questions.

Can the minister explain this consultative process to the committee? For the sake of argument, if we eliminate the city of North Vancouver for the moment, we still have about seven others who are participants.

Hon. L. Boone: Six.

J. Dalton: Six others -- okay, fair enough. How will we arrive at any decision -- whether it be on tolls or double-decking or tunnelling or whatever? Will that be through a voting process? Is it by consensus, or does the biggest win out? The city of Vancouver, of course, has more people and more taxpayers than any other. Can the minister assist us with that?

Hon. L. Boone: The city of Vancouver has no weighted vote; there's no weighted voting there. In fact, I don't anticipate that there would be a vote. I've always been very reluctant to use the word "consensus," because to me consensus means that any one party can virtually veto something. I think this is a very important decision, and the reality is that out of this, you are never, ever going to get consensus on what should take place on the Lions Gate Bridge. I'm sure you understand that probably as well as I do, because you live there and you understand what's going on. But I've also stated that there needs to be general agreement, so I would like to. . . . If there was tremendous opposition to one proponent from the entire North Shore, obviously it would not be able to go ahead. If there seems to be a proposal that has the approval of a major. . . . I'm not even going to say "a majority," because that could just be 50 percent plus one. If the major groups agree that one particular proposal is the way we should go, then that's what we will do.

This is a difficult decision. It is, as I stated to individuals when I made the announcement to the municipalities, probably the most difficult decision that most people will ever be involved with, because there are so many different points of view. Everybody is approaching it from a different perspective: you have people who want more capacity, and you have people who want less capacity; people who want to save Stanley Park, and people who would like to see more traffic going through Stanley Park; some want to save some neighbourhoods, and some don't want to save some neighbourhoods. It is very, very complex. But we will be making a decision based on what I consider to be what the majority of people -- and the majority of people in that area -- would like to have happen. But as I said, the city of Vancouver is not going to have a weighted vote just because it has the greatest population.

J. Dalton: I guess, as a resident of North Van district, obviously I'm happy to know that I'm not going to be overwhelmed by my neighbours across the water.

One of the participants in the process is the Squamish nation. Previously they have expressed interest in putting in a proposal. In fact, through SNC-Lavalin, they do have an initial proposal on the table. If I recall, it's either one of two: either they widen the bridge to four lanes or they have twin spans, one going each way. Does the minister see any difficulty with one of the participants in this decision-making process already having expressed some initial interest in being a proposal-presenter?

Hon. L. Boone: Well, yes, and that's one of the reasons why the Squamish nation hasn't actually participated yet. In fact, they haven't attended a meeting. I've met with them, and I expressed very clearly to them that at some point in time they have to make up their minds as to whether they are going to be a proponent group or a stakeholder group. And because they have not formed their own decision yet on that, they have stayed away from the table.

J. Dalton: Can the minister advise us as to how many meetings have taken place to date under Mr. Hibbins's consultative process?

[ Page 5269 ]

Hon. L. Boone: Three.

[3:00]

I want to move on to one question about polling. I've got the whole document here, but I'm not going to go through it all. It's obviously caused some sparks of interest, and I see Mr. Mahood is ready to participate. It's question No. 4 on page 11. This is the Viewpoints survey, for those on the committee who don't have this document -- Viewpoints Research, May 14, 1997, page 11.

Question 4 is the one I want to ask about. I'll just read it into the record; it's not very long: "There are a number of ways the government could pay for the upgrade or tunnel construction. One would be to borrow the money and have all taxpayers in B.C. pay for it." Now, just as a side note, that's one of what is described as "a number of ways." "Another would be for people who actually use the facility to pay for it by paying a toll and for the government to ensure tolls are collected efficiently." Now, unfortunately, there are only two ways that are expressed in this question, even though the question says that there are a number of ways that could be used. So I think the committee can probably see where I'm coming from here -- this is a loaded question. And it ends: "Which option do you think the government should consider?"

Before I invite a response. . . . Given that this survey was conducted on 1,500 people, I believe which is a very wide survey -- all around the lower mainland. . . . In fact, I imagine people from Mission and Langley -- not Oliver or Osoyoos, I'm sure, but. . . . Given that people other than the immediate users on either side of the bridge were asked and given that there were only two choices, I think it doesn't take a rocket scientist to figure out that -- guess what -- an overwhelming 72.2 percent said: "tolls."

Well, I as a North Shore resident wasn't invited to make my comment, and I don't think. . . . If I was given that question, the first thing I would have said was: "That's a loaded question; I'm not going to answer it." We've had professional pollsters pick on that very question -- the one I read into the record -- and say that it is misleading. Can the minister assist us as to whether that question -- the way it was formed and the broad survey around the lower mainland -- was a fair way in which to conduct a polling exercise on a very important financing issue?

Hon. L. Boone: I'm not a pollster, so I don't even pretend to know how to make up a question. I wouldn't even attempt to do that myself, but I do know that one-third of the respondents came from the North Shore, and 217 out of 1,500 were regular users of the bridge. If you have another option that we could put in there that you'd like to suggest to us, I would really like to hear it, because I'm not sure what an alternative method of financing is. We're certainly willing to look at any way we could finance items. So if you've got a rich relative over there who would like to finance the whole thing as a gift to the North Shore, then please come forward, because we would really like to see that. But I don't know of any other means of financing such a large bridge as this.

J. Dalton: I don't mind jumping in right here. Just as an amusing aside. . . . I quite regularly discuss this and other North Shore issues with Derek Humphreys, who is the father of our Sergeant-at-Arms. Derek, of course, is both a former mayor of West Van and a freeman -- or whatever the current expression is -- of the district of West Vancouver. Derek and I, quite independently of each other, came up with the brainwave that we should call the Guinness family and have them come back: "Look, you did it once, maybe you can. . . ." But that's not the source I have in mind. One of the minister's colleagues, the MLA for Burnaby-Edmonds, is on record as favouring a 2-cents-a-litre gas tax, specifically designed for projects such as the Lions Gate Bridge. So there's a suggestion from one of the NDP caucus.

I don't want to dwell on the polling-and-the tolling issue; we could go through this whole document. But I think we can recognize, particularly when the minister answered that only 217 of the 1,500 surveyed were regular users of the bridge. . . . Again, I would suggest that that supports this being a loaded question. Obviously the people who aren't going to use this bridge will say: "Great, let them pay for it. Let the guy who drives over the bridge every day pay for it."

Well, I can tell you, as somebody who's driven over that bridge. . . . In fact, I was born in St. Paul's Hospital. My first visit to the North Shore was over the Lions Gate Bridge, and I grew up there, so it's been a long time for me. I've been paying as well as using it for over 50 years. I think it's time that any government -- not just this one. . . . This bridge was sadly neglected by the previous Harcourt government and by the Socred governments before that, way back into history.

One other thing I want to raise about heading into inviting proposals to come forward. . . . I believe it's correct that this month is when these initial requests of interest will come forward. Is that correct?

Hon. L. Boone: That's the time frame that we're working toward, yes.

J. Dalton: My colleagues and I have met on several occasions with representatives from both national and international construction consortiums and firms who are expressing interest in this crossing, because they recognize that if they can get the Lions Gate issue resolved, it will obviously invite other projects both in this province and in other parts of North America, which are also, of course, expanding. One firm in particular -- I won't identify it -- met with us to try to sort out the politics as well as the process part of this, as much as anything.

They suggested that they might be interested if private firms such as themselves were granted the rights to the project. They then would go ahead and conduct the public process, the discussion of financing and all the other things surrounding the project, and be the decision-maker. Now, that doesn't mean the government is out of the picture, obviously, because the government, as the minister has commented, has to have environmental studies and anything of that nature done.

Could the minister comment, if she cares to, on such a proposal -- where the private firm would take the project under its wing, make the public process, including the environmental studies, available to everyone, make the decision and get on with it? Quite frankly, I think the message is very clear that people who are truly interested in the Lions Gate project, and others, don't want undue government interference, whether it be from this minister's government or a future Liberal government, if there might be one, or the previous Social Credit government. I think they would just like to feel comfortable getting on with a project of this importance.

[ Page 5270 ]

Hon. L. Boone: I recognize that all companies that are interested in this would very much like to get on with the business, and certainly we would, as well. But the information we have is contrary to what you were talking about. In fact, companies have come to us and said that they want us to make a decision, and I don't know that any company. . . . I mean, why would any rational human being want to put themselves in the position of having to make a decision such as the ones we have to make right now -- getting flak from everyone? If government is there to take it, why would they want to take all the -- I'm trying to think of a nice word to say -- garbage that's going to come after this decision? Let's face it: no matter what decision is made, there are going to be unhappy people out there. So from my perspective, I think it's government's job to take that -- to make those decisions, whether they be ones that people respond to well or not so well. I think it's up to us to make those decisions, and the private sector that we've talked to want us to take that responsibility.

J. Dalton: I have no doubt that some people in the private sector may have expressed that. I'm just citing an actual viewpoint of a renowned international construction company which has done suspension bridges and tunnels all over this planet. They have operated more or less as most business people do. They're prepared to take the risk, because that's what free enterprise is about: taking the risk. Admittedly, there are many risks in something such as the Lions Gate, given the politics as well as the process. That's another viewpoint that has been expressed to us, and I'm hoping that perhaps when and if we get down to the real hard crunch of making decisions on the Lions Gate -- if they are still prepared to come forward -- such interest will not be rejected because they don't sort of fit the model that this government may have in mind.

I'm not saying that we cannot collectively do the right thing, but many people, who are very concerned about the politics as much as anything that's involved in such an important project as the Lions Gate Bridge, are approaching us in the opposition.

There is just one other thing I would like to have clarified, and then I think I am done for now. I'll rush off and phone the city of North Vancouver and others, and see what they're up to.

In the best of all worlds, can the minister, with the assistance of her staff around her, see when we might be in a position to identify an actual proposal that will fit whatever criteria we set out? The important thing that we all recognize is that the life span of this bridge deck is rapidly wasting away. In fact, the millennium may arrive after this bridge is closed, heaven forbid, because the bridge deck is in such unusable shape -- and we know that that is not an overstatement of the facts. So can the minister perhaps assist the committee as to when she might see an actual decision, whether that be the $70 million without tolls -- as I've described it somewhat facetiously sometimes, fixing the potholes -- or something else that might be a little more widely encompassing and that some of us, certainly on the North Shore, would like to see, and when we would be in a position to actually start digging holes and expanding and getting that project underway?

Hon. L. Boone: We hope to have a decision by January, and that's why we're pushing very hard to get our request for proposals in this month. I guess the time is coming when we're going to have to. . . . The crunch is coming with regard to what the North Shore is willing to support. If they're willing to support a toll on that bridge, then we could be putting out a request for proposals very quickly. As I said, January is my time frame to get our proposals in and have decisions made so we can get on with the job. Clearly the time has come. We can't wait any more. We've got to make some decisions, and that's what we're doing.

J. Dalton: Just one final question, and then whoever is ready to jump up next. . . . Given that we know that the city of North Vancouver seems to have opted out of the decision-making process -- but we have to clarify that, and I will try and do so; they'll be at the table as an observer -- and given that the Squamish nation may be in a conflict of interest if they're still interested in putting a proposal on that same table, can the minister advise us as to when the next meeting is, if one has been set? Will all the other participants be at the table in one form or another for that next meeting?

Hon. L. Boone: Wednesday at 9 a.m. They've all been invited. Whether they'll be there, I can't tell you; that's up to them. But they've all been invited.

B. Barisoff: Just a couple of questions while we're still on the bridge. Has a limit been set by the ministry on the amount that the private sector could charge as a toll?

Hon. L. Boone: No. We haven't put a limit on that. We want to leave that for them to work on so that they could work within the time frame and determine how much they need to cover their costs.

[3:15]

Hon. L. Boone: It would be the term of the public-private partnership that we would be joining into with the private sector.

B. Barisoff: So would we be looking at a fair return for the private group that builds the bridge on the amount of money that is expected to be put into the bridge?

Hon. L. Boone: Yes.

B. Barisoff: Who would make the decision on what's going to be a fair amount of money for the return on their investment? I think that my hon. colleague next to me indicated -- and I was at the same meeting, where we had an international bridge firm indicating to us that they would be prepared to look at building the bridge but they would want absolutely zero money from the ministry -- that they would rather do it lock, stock and barrel and not ask the taxpayers for any money other than the toll that might be set for X amount of years. Would the minister entertain a project of that nature?

Hon. L. Boone: What we determined was putting in some dollars so that we could keep the toll down to something that would be acceptable. If you went to a $10 toll, then obviously you're going to reduce the numbers that are going across this bridge, and you really are going to drive people to 

[ Page 5271 ]

the other bridge. What we need to determine, and what the companies need to determine, is what they think is an acceptable toll to get a return for their dollars and their investment. But you also have to take into account at what point you get diminishing returns. You may have a higher toll, but they're not entirely captive drivers, and they can go elsewhere. So at some point in time you reach a limit as to what you could put a toll on. That would be determined by the TFA board, and then cabinet, with regard to the proposals.

What I have stated is that the request for proposals. . . . Once the proposals come in in January, I would be looking to the partners -- the stakeholders -- to assess those proposals and to bring some recommendations to us so that we can make our determination based on what the stakeholders see as in their best interests in those areas.

B. Barisoff: Would it be fair to say, then, that -- in the public-private partnership that we're going to put forward here -- if we were looking at whatever toll it might be, the residents of North Vancouver, West Vancouver and Vancouver would have almost a public document that would show the amount of tolls that are collected and -- when this is said and done and paid -- when the toll will no longer be? "If we pay $5, it will be paid off in ten years. If we pay $2, it will be 25 years" -- or something of that nature. Is this going to be something that's going to be looked at, where the residents will have that option or the private partnership part of this agreement has that option? Will these documents be public so that all the residents of British Columbia can in fact have a look at when this will be paid for and when they can foresee not paying a toll on that bridge?

Hon. L. Boone: Well, we certainly will be making all the documents public. As I said, it's my intention to enable the stakeholders there to actually have a say as to what takes place.

Lions Gate is like no other bridge around. You know, usually you've got a bridge with one or perhaps even two municipalities involved. But to have that number of municipalities and then -- just to make things a little exciting -- to throw in the parks board, the GVRD, the port corporation, Fisheries and Oceans -- you name it. . . . There are probably only three people in the province that aren't interested in this bridge, and those interested all want to have a say.

From my perspective, we've tried to make this process as open as we could. We've tried to make it as inclusive as we could and tried to take into consideration everybody's concerns. So all of those individuals -- all the stakeholders I mentioned earlier -- will actually have a say in the assessment of the proposals that are coming forth. The documents and all the proposals will be public information for anybody to see at any time.

B. Barisoff: Considering the number of stakeholders that are involved in this process, it would probably be almost impossible to make sure that we even get some kind of consensus. Would it be fair to say that at a certain point in time somebody -- whether it's the TFA or whether it's the minister -- is going to say that the bridge has to be built, it's going to be build at this cost, and tolls are going to be set here?

I would imagine that, considering the briefings my colleagues from North Vancouver, West Vancouver, the ministry and people from TFA went through, that bridge can't go on for an endless amount of studies or the kind of consensus-building that the minister might be looking at in trying to make this an everybody's-happy kind of thing -- we're all going to be singing and dancing when it's done, and whatever else. I would suspect that this isn't going to happen. No matter how many meetings we have or how long we meet together, there's always going to be somebody that's going to say that it should be $5 over ten years; it should be a $1 over 50 years, or whatever it might be; it should be underground; it should be overground; it should be four lanes; it should be this. . . . When can the residents of North Vancouver, West Vancouver and Vancouver expect that the minister will actually say: "Listen, this is the way it's going to be, and there are no ifs, ands and buts about it. This is the direction we're going to take"?

I think the concern I have was mentioned at that briefing -- that probably the worst that could happen is that a tire would fall through the decking of the bridge. I can't imagine, if somebody's tire fell through the decking of the bridge, the kind of commotion and the accidents that might create, considering there're 69,000 vehicles crossing there every day. I'm just wondering if this is going to be sort of procrastinated, by saying: "We're going to get proposals here in July, and then we're going to look in January. . . ." Are we just going to be looking at this on and on and on? Can we have some real definite time lines for exactly when this is going to take place and when the minister is going to make some actual decisions, to say: "This is what's going to happen, this is when it's going to happen, and this is how it's going to happen"?

Hon. L. Boone: You must have had a long weekend, because I already said that to you here, hon. member. January is when we'll be making a decision. That's why I pushed the time frame. Let me tell you, there's a lot of people that say, "It can't be done" and that, but we're going to push them to do it anyways, because we need to make a decision on this.

I've also stated: "I'm not looking for consensus. I know we can't get consensus; that will never happen." But I'm looking for some sort of a general feeling, a general agreement. If we get that -- a feeling as to what is the most acceptable -- then we will proceed with it. We will proceed with full knowledge that there are going to be some out there that are complaining and some out there that aren't happy, but we have to act. We can't not act on this issue any longer.

B. Barisoff: I can only wish for a long weekend. I think it was my colleague next to me that actually even prayed for a summer holiday, and that was a couple of weeks back.

It wasn't that I wasn't paying attention to what the minister was saying. I think I wanted to make sure that she would reassure all of us and be very certain that her decision would be made in January. Come January 31, I'm sure that all of my colleagues now listening to this a second time will be saying: "We'll go back to Hansard and say: 'Listen -- the minister said that definitely there will be a decision made by. . . .' " And I'm giving you the leeway of all of January, to January 31, to make sure that we have lots of time to spare, so that we don't have to worry about the New Year or whatever else.

At this point in time I think I'd like to turn it over to one of my other colleagues for some other questions.

I. Chong: Just a very few quick questions on the Island Highway project. Although it's not in my riding, certainly people in the greater Victoria area and my riding do frequently use the highway, and I have a lot of neighbours throughout the greater Victoria area. It's come to my attention that there have been some problems with the project in the 

[ Page 5272 ]

area of blasting. I'm wondering whether the minister can provide or share with me any information she has received to date, or whether she's even been made aware that there are concerns regarding some blasting that has affected some of the homes bordering the project.

Hon. L. Boone: The only problems that I'm aware of are ones that were about a year or so ago -- nothing in recent months. We've tried to deal with those as best we can. We've put nets up, I understand, and we're dealing with those individuals that had problems there. I'm not aware of anything in recent months, but if the member is aware of something, could you please make us aware of it? Then we can look into it and get that information for you. Right now I'm not aware of any recent problems.

I. Chong: I wasn't intending to set the minister up; I just wanted her, first of all, to share with me so that we could get to the heart of it.

The issue that's been raised through my office is that in fact there are a number of neighbours that have been concerned about blasting that has been taking place on the Island Highway project. In particular, what has occurred -- and I'm not certain as to the specific issue -- in terms of resolution is that they haven't been able to receive any. It has to do, I suspect, with liability.

I think there has been recognition that there is a problem, but no one seems to take responsibility for it. Being that this is an Island Highway project and being that the general contractor, I believe, is JJM, which has perhaps subcontracted out work to a blasting contractor, these homeowners don't. . . . They're getting the runaround; that's what I understood from them. I'm not sure wherein lies the responsibility. When you build a home, for example, and one of your subtrades is not satisfactory, you can always go back to the general contractor or the owner, as it is.

In this case, some of these private homeowners are wondering the same thing. If the blasting contractor is not accepting responsibility and is saying that it's up to the general contractor, who's again deferring it to the subcontractor. . . . But then, it ultimately lies with the person who's issued the particular contract, which is the Ministry of Highways. . . . I'm looking for some mechanism, some procedure that is in place for capital projects of this nature when a complaint actually occurs.

Hon. L. Boone: I need to know more specifics, but generally, we hold the contractor responsible. There may be some cases where we're still negotiating with people. . . . I'm not even sure if there's litigation involved, which means that I'd be very reluctant to discuss this.

If you've got specifics and you can get that information to us, we can then get that information back to you. We'd be happy to do so. At some point in time later on, if you want to give us the specifics of the exact location, etc., then we can get the information to you.

I. Chong: I appreciate the minister's efforts to resolve this issue.

More generally, I would like to know, for other contracts that are going to be let, whether or not there is some procedure in place -- in particular, performance bonds, for example. Are there holdbacks that deal with liability issues? Are there performance bonds which are also held back for a certain period of time, until all possible complaints are resolved? Is that a procedure that the ministry deals with? Is that something that the ministry does with all its projects of a certain size? If so, has there been, for contingencies, a buildup of these moneys in the ministry purse for some time?

Hon. L. Boone: There are holdbacks from the general contractors, and WCB licenses the blasting.

[3:30]

Hon. L. Boone: The contractors have liability insurance. We make sure that they have completed the job, but we wouldn't actually see if they have a charge against them by some individual out there. But they have insurance that would cover those things. They are paid out if in fact the job has been completed, but their insurance costs would cover any of the other issues with regard to damage done to property.

I. Chong: That raises an interesting question. Certainly I would expect all large contractors to have liability insurance for damages and that sort of thing. But if in fact there's a dispute -- especially when it comes to a property owner who has very few resources available to fight, shall we say, and litigate with the large contractors. . . .

Is the minister saying that there is no opportunity for someone to go to the ministry office and say that they've not been dealt with fairly by a contractor? I'm not saying this particular one, but in any capital project. Do residents not have any appeal process or any mechanism to go through to the ministry and say: "Look, you've paid them all out, and now they've gotten their money. I'm still not satisfied. I'm just a little guy. I don't have the money to fight this huge contractor"? Clearly they would come to the MLA and say: "Surely government would do something to protect the little guy." What is in place, if anything, or has this ever been an issue?

Hon. L. Boone: If there's a specific case, we will assist the individual and work with the contractor to try to assist that person to get paid. We would not want to assume the liability, because that is what the individual has the insurance for. They're bonded and all of those things. From our perspective, I think we would do what we could to try to work the situation out, other than assuming direct responsibility or liability.

I. Chong: At the conclusion of a project, does the ministry request from their contractor a list of possible people who may be coming forward for complaint? If, in fact, during construction a number of people have come forward and they have not been resolved, does the ministry feel that it should at least have an opportunity to look? If there were a hundred complainants, for example, on a particular project, and the minister said, "Oh, the job's done; here's your cheque; we've done the 45-day holdback period," and then you got all these homeowners trying to deal with the contractor and not being able to get satisfaction, would the ministry not feel that there 

[ Page 5273 ]

was perhaps something lacking in that process, that they should ensure that before they release their final holdback there aren't a number of outstanding issues with the average private home owners or people involved?

Hon. L. Boone: I appreciate the points you're making. We will, as we will with a lot of these things, take some of those things into consideration. We'll get you a copy of the exact contract so that you can actually see what the contract states. That may assist you in determining some of these things. But we'll take some of your suggestions into consideration.

I. Chong: I certainly appreciate that. We never know whether or not we can improve the system until we ask, and I appreciate the minister's cooperation.

I'll just get very quickly back to this issue. Again, I don't have the specific details. This issue was brought to my attention only about a week ago, and it has to do with the Island Highway project. I will get the minister the specifics, but generally what has occurred is alleged damage to some homes in the Langford area, in that part of the project -- perhaps staff is more aware of that -- as a result of blasting being conducted by JJM Construction.

What the complainants, the homeowners, have said is that they've spoken to the Ministry of Highways, and they said: "Well, blasting is taking place on private property." Again, this is a bit confusing -- why blasting would be taking place on private property if it's a Highways project. So that's why the ministry staff have said they're not responsible or directly involved or liable.

A ministry engineer spoke to one of the homeowners, I think, and said that any performance bond that has been posted by JJM or any money still owed to them -- and I guess what he's referring to is holdbacks -- could be withheld pending resolution of the matter. That's why I ask the questions about the possibility of holdbacks. It was a ministry engineer who proposed that, who recommended that, who made that suggestion.

The issue of the blasting contractor also seems to be another, I guess, quirk in this whole problem, in that the blasting permit is provided through the Employment and Investment ministry and the mines inspector, I understand, for the Ministry of Employment and Investment. So there's a question as to why they would be given a blasting permit if, in fact, this is occurring. Therefore why is this subcontractor being permitted to carry on work with the general contractor, which is then the general contractor for the Ministry of Transportation and Highways?

Further to that, when the residents approached JJM, they continually denied any responsibility for damage. This is why the homeowners are getting very frustrated. They're getting quite a number of hurdles to overcome. At this point, this is where the problem is. No one is clear as to who is doing what. They're concerned about the fact that JJM has dealt with the blasting contractor who, firstly, was blasting without a permit until they got their permit in place, and that nobody is following up with any kind of process of responsibility for the homeowners.

This is in the Langford area. I don't know how many homes are affected, but I hear that there are a number of them. One person contacted our office on behalf of them. I can and will get the specifics to the minister in the hope that we can get this resolved. My concern, as well as the accountability aspect of this, is that if there are areas of dispute, that responsibility has to be taken care of.

The ministry is what the individuals ultimately see, because it is a Highways project. They don't see that they should be going to a blasting contractor or through the general contractor, and they feel that there should be something. The line of questioning I have is simply to try to ascertain what kinds of mechanisms are available in terms of accountability back to the ministry from the contractors they hire.

Hon. L. Boone: What you describe there is a very complex situation, and I'm not quite sure how much was actually a Highways responsibility. They talk about perhaps blasting on private land with regard to gravel. If you can get the name of the individual who came to you, then we can get somebody from the ministry to actually talk to this individual and try and get some of the information. Sometimes, when you get so many people feeding information in there, it gets a little confused. They can talk directly and try and get some information from them to try and assist them through this whole process and figure out exactly who is responsible. Okay?

I. Chong: Again, I very much appreciate the minister's concern and her attempts to deal with this.

One last issue that was a part of this -- again it has to do with the blasting, and I'm just checking my notes here -- is the fact that when a permit was provided for the blasting, it was conditional on the ministry being informed prior to each blast because of the proximity of residential housing. The residents are apparently saying that at no time did JJM or any of its blasting subcontractors fulfil that requirement.

Again, it is a complex issue. Clearly, if there's something lacking in the process and if there's no one on site or through the ministry staff who has been told that these kinds of things are happening, that's again where the public outcry comes. I'm sure the minister would like to find a solution to that as well, and I bring it forward for her attention at this time. I thank the minister for her assistance, and I will get the information to her in the hopes of clearing up this matter.

B. Barisoff: I have a couple of question along the same lines as my colleague's. Is contractors' liability mandatory for all contractors and subcontractors who work for the TFA?

Hon. L. Boone: Yes.

B. Barisoff: That covers any subcontractor who happens to work for the main contractor. Can the general public be assured that if, say, Emil Anderson has the contract to build a section of road, anybody that he's hiring to do any sub work has contractors' liability?

Hon. L. Boone: Our contract is with the main contractor, and the subs would be covered by the general contractor. Our contract is with the main contractor, not with the subs at all.

B. Barisoff: I think this is probably where the concern lies with my colleague. Sometimes what takes place -- and I know it took place on the Island Highway project, where we had subs of subs of subs -- is that people are not getting paid. When the liability comes into force, I guess it should ultimately go to the original contractor, but a lot of people somehow get passed down from one to the other. Maybe something that the minister should look at is some kind of criteria to make sure that everybody is concerned.

The other point is that I know the Ministry of Highways has a declaration of payment. I don't know if the TFA has this. 

[ Page 5274 ]

When the contract is finished, the main contractor must sign a declaration with the ministry to make sure that after so many days, everybody is paid. I'm wondering whether this also applies to TFA.

Hon. L. Boone: Apparently, with each payment they get, we require a statutory declaration indicating that they have paid their bills. That has been a change. It used to be at the end of the contract, but now, with each payment they receive, we request such a statement.

B. Barisoff: What you're telling me is that this applies for TFA and probably also for Highways, so that as they get an advance, nobody can be held -- excuse the term -- out to lunch for payments they haven't received, whether it happens to be fuel, wages, repairs or whatever. Subcontractors of the main contractor can actually file. Is there a time frame? How does that work? Maybe you could just give me a quick explanation of how that works, for individual contractors who might be reading Hansard or for my own benefit when people call me. I knew that it happened at the end. Is there a certain amount of time that they have to submit something or do whatever?

[3:45]

But just to make sure that the main contractor was giving us the. . . . We don't do an audit. We're not going to go in and look at his books. It's just to make sure that, in fact, we're getting the right information. If a contractor is having difficulty, then I think they could now advise us that they have not been paid. Unfortunately, that wasn't in place before. I do know that there is a situation we're still trying to work through, and we're trying to put in place some procedures and some methods of ensuring that the subs do get paid.

B. Barisoff: When you refer to "before," how new is this? I know that the statutory declaration for payment has been around for a long time, because I've been involved in that. I'm wondering how long this has been new -- that something has to happen immediately upon receipt of an advance or whatever it might be.

Hon. L. Boone: These are some changes that have taken place. The statutory declarations -- the stat decs -- were last. . .in 1996. As of this construction season -- and this was in the past couple of weeks -- we've also put in place dispute resolution, subtrade bonding, written contracts and payments in trust to try to deal with the unfortunate incidents around some of the sub-subs, which I'm sure the member is aware of. It's unfortunate, because it doesn't help them; but, hopefully, we've learned from that experience and can try to protect some of the others.

B. Barisoff: Well, I've got to commend the TFA for doing something like that, because I think that has been a real concern throughout the industry for a long time. I guess there's probably a downside. Actually, after estimates I'm going to take the opportunity to sit down and have it explained to me fully, because there are some detail things that I'm quite curious to see how they work. I don't think it's an appropriate time to ask them here.

I must again commend the minister for doing something like this, because if there was any. . . . The major amount of complaints that I got was not usually about the lack of quality of work or whatever; it was just simply about the lack of payment -- somebody not going broke. I'm sure that this sounds, to me, like a very ingenious situation to make sure not only that we're getting good contractors, but that everybody is getting paid for what they're doing. I don't know if that's gone beyond the TFA, but I would recommend to the minister that she look at doing something like that within the Ministry of Transportation and Highways and maybe other ministries that exist, because that's something that would be a very positive directional change for the construction industry all over.

With that, I'm just going to turn this over to a colleague to go down another road with some other problems.

L. Stephens: I have a few issues that I want to talk about that affect Langley and our community. I've talked to the minister on a number of occasions about some of these issues. I just want to touch briefly on the most important one, because the minister has met with the township council, myself and the member for Fort Langley-Aldergrove recently, and I think she has made some progress towards the resolution of the 200th Street interchange. Rather than put words in the minister's mouth, I would just like to ask the minister, for the record, to reiterate the happening that is in progress for 200th Street for this '97-98 year.

Hon. L. Boone: As the member knows -- you were at the meeting -- it was, I think, a very good meeting and a very positive one, where I suggested to the municipality that perhaps they would like to take some of the money that they were going to put into 208th Street -- which was not being perceived too well within the community. . . . If they took some of those dollars and put them towards 200th Street, then we could probably expedite the 200th Street crossing. They were very receptive to that, and we are currently negotiating some cost-sharing on that project. As I stated earlier, there is planning going on right now, and we hope to have in-depth plans by March of next year. Hopefully, construction can start there next year.

So I think it was a very good meeting. I'm really grateful that the municipality has seen that we can both see this as an advantageous position to take. We can proceed faster with the 200th Street crossing, and they do not have to proceed at this point in time with the 208th Street. What they do with 208th Street is up to them; that's not my problem. But I would think that they wouldn't want to do it right now, anyway, given the opposition that they have.

L. Stephens: One of the issues that was talked about was the predesign and functional design amount of $579,000 that has been allocated in the '97-98 budget to come up with a plan in late fall for construction in late fall. Could the minister verify that that is the amount of money that's going to be spent and that that is the design that will be looked at in March of '98, with construction to begin around the fall of '98?

Hon. L. Boone: Yes, that's correct. As the member knows, we have some work to do to determine what the design will be, what it will look like and all of those sorts of things. So 

[ Page 5275 ]

that's right, $579,000, and that would give the functional design. Then hopefully, once negotiations with Langley are completed, we will be proceeding with construction next year.

L. Stephens: Just to be clear, the $579,000 allocated for the pre-design and functional design is being paid by the ministry. The actual construction work is where the ministry would be looking to the township, for some kind of a partnership arrangement for the actual construction and completion at some point in late 1998.

Hon. L. Boone: Yes, that's right.

L. Stephens: I know the minister is aware that this particular issue is one that has been of great concern to the residents of Langley for some time, and it keeps getting more acute as we keep expanding the number of people who are coming out to Langley to live. The township has designated Willowbrook-Willoughby, which is between the freeway and Langley city, as the next development phase. This is really going to add more people to that particular roadway. Of course, Surrey is developing, as well, to the west of us. North of 200th Street is quite a large industrial complex, as well. I will say that we're going to be diligent in pursuing the minister and the ministry on this particular initiative.

I want to move on to some of the other areas in Langley. If we stay with the overpasses, the Freedom to Move study identified 216th as another overpass area that, at some point in the future, will need to be looked at for our area -- hooking into 16th Avenue on the south near the border. I wonder if there has been any recent updating or any looking at that particular transportation corridor or link. Is there an update on the 216th overpass and also the 16th Avenue? If I remember correctly, it was slated to be four lanes at some future date.

Hon. L. Boone: In this year's rehabilitation projects, we are constructing raised channelization and signal modifications on Highway 1A at 216th Street to improve safety. That's cost-shared with the developer. As to the four-laning of 16th, that is not on our agenda right now.

L. Stephens: The Fraser Highway and 216th Street upgrading has been completed. That has been a big help, particularly at that area. It is the freeway overpass that I'm referring to. That was one overpass identified in Freedom to Move that would be needed at some point in time: that's the freeway and 216th. Is that one moving along at all, or is that in any of the foreseeable future plans?

Hon. L. Boone: It is not in the plan right now.

L. Stephens: I want to go back to 16th Avenue for a moment. That one runs south along the border, as the minister knows. It has really become a little bit of a freeway, a speedway. We have large gravel trucks that travel that road quite regularly, and there has been a lot of concern expressed around the fact that they are there and they are speeding, and that it's not a provincial highway. Again, when I was looking at the plans, it looked like this particular road was one that was going to be put into four lanes to hook into Highway 99 to serve as a southern corridor for the southern part of the province from up the valley. I wonder if that particular notion has changed or if there are any plans in the foreseeable future for 16th Avenue, for either upgrading or for some kinds of improvements to that particular piece of road.

Hon. L. Boone: I understand that it's not our. . . . It's the municipality of Surrey that's studying that right now; we are not studying that at this particular time. As I understand it, it's not in keeping with the livable region strategy, so right now it's not on our agenda.

L. Stephens: The other issue up in that area of Langley is the cottonwood corridor -- the bridge crossing between Maple Ridge and Langley. Has that moved forward at all? Have there been any plans that other interested members in the House would care to have some knowledge about, as well?

Hon. L. Boone: We've identified three possible crossings around those areas there. We'll be doing some work to determine which is the best crossing, but there won't be construction on those for a long time.

[4:00]

Hon. L. Boone: We're just at the planning stages right now. We'll be doing the planning to determine which corridor we would be using to protect some land in that area, but construction is ten to 15 years down the road.

L. Stephens: Ten to 15 years down the road is a fair amount of time. Is there any consideration of a larger ferry service between Maple Ridge and Langley? It's backed up on both sides of the river for quite some distance, particularly during summer hours. I wonder if the minister is thinking of somehow alleviating that or making it much easier for people to access both sides of the river in the meantime.

Hon. L. Boone: We don't have plans to expand that service right now, but if we had the dollars and the ability to do so, we wouldn't be averse to it.

L. Stephens: In the city we have the road-rail grade separation issue, which is really starting to come forward again because of the development at Roberts Bank. With the two new terminals that are going to be coming on there, that means there's going to be more rail traffic through Langley, and, as the minister knows, we've got five rail crossings. There was a study done in '91 by N.D. Lea Consultants that recommended a number of changes be made to the downtown to try to get some of these road-rail grade separations. Has the ministry any studies or any plans to make some decisions around this problem?

Hon. L. Boone: I guess the short answer is no. Some of those crossings might be in the municipality, so it wouldn't necessarily be our jurisdiction. But I guess it's fair to say that to a large extent, a lot of our problems are restricted by dollars. We just don't have the money to do everything that we need to do. This is not to say that it's not an important project or one that shouldn't be looked at. We'll be looking at everything we can do with the dollars we've got, but at this particular time we're not doing that.

L. Stephens: Have there been any studies done with the city around those cost-shared arrangements between the province and the city for 200th Street, Glover Road -- 56th, I believe, is the other one? Have there been studies of any kind done to identify areas where there could be some improvements made?

[ Page 5276 ]

Hon. L. Boone: We haven't done any studies on that. But as I keep saying to people, if there are areas out there where people -- whether it be the private sector or whether it's the private sector plus municipalities -- are willing to cost-share something, then that gives it a much better advantage over other projects. That is not to say that we would find the money, but certainly if there is. . . . If you know people who are interested in participating in this, please put them in touch with the TFA, because we are really anxious to see if we can lever our money a little bit further. If we can take our dollars and cost-share them, then that makes them stretch a lot further along, and it's to everybody's advantage to do that.

L. Stephens: I will take that suggestion back to the city, because I know that the city is very interested in coming up with some kinds of solutions to at least alleviate a couple of points that are becoming quite congested. Perhaps that is something that city council would be interested in talking about, too.

Our area is growing quite rapidly, and I know the minister knows that. Transportation and the whole issue of urbanization -- that is, as you know, transportation and air quality and water quality and residential and commercial construction -- are all issues that affect us. There's the Transport 2021 plan I'd like to ask the minister about. I'm wondering whether or not that is proceeding, and if so, if there are partnership agreements between the GVRD municipalities and the ministry to facilitate some of these developments.

Hon. L. Boone: Transport 2021 is part of the livable region strategy, and that's been accepted by the province and the GVRD. You may or may not be aware that that was announced a few months ago, I guess -- I think it's longer than that. The province is currently negotiating with the GVRD on funding, and we're in the process right now. So whether or not we're going to be able to come to an agreement as to how we fund and how we decide what transportation takes place within the GVRD. . . . But clearly, I think, it's in all of our interests to try and get the GVRD more closely aligned with those decisions, so that it meets their plans and their desires for what takes place in the GVRD. As I said, no decision has happened yet. I'm very hopeful that we're going to come to an agreement on that, because there are some issues that just make no sense at all. There are roads in Vancouver, for example, as in Surrey, etc. . . . I think half of Scott Road is in North Delta and half of it is in Delta. There's Boundary Road. I mean, you've got roads in Vancouver and Burnaby and New West that cross all of those jurisdictions. So there needs to be a plan and some means to deal with all of those things on a GVRD basis, and we're currently negotiating that.

L. Stephens: My understanding is that this particular agreement is looking at funding and governance issues, not actual transportation facilities or roads. Is this pretty much what it's restricted to?

Hon. L. Boone: Well, yes, it is funding and governance. But I think governance would be deciding as to what took place: whether a road is upgraded or not, where the road goes and what the priorities of the GVRD are -- transit lines, for example. Should the province be making decisions as to where transit lines should go, or should the GVRD be making those decisions? Those are the things that are currently being negotiated.

L. Stephens: In the medium-range transportation plan for 2021 that talked about establishing a cycle of regular reviews to check that the region is developing according to plan, could the minister comment on whether or not that is in place? I guess a more appropriate question would be: what role is the province playing in the GVRD's Transport 2021 and in their cycle of regular reviews? Is the ministry working in conjunction with the GVRD to make this happen in a cooperative sort of partnership way?

Hon. L. Boone: There is an intergovernmental advisory committee that meets quarterly. The Deputy Minister of Municipal Affairs, my deputy minister, the president of TFA -- who has two hats -- and the senior administrators from the municipalities meet quarterly to discuss this. But this plan was only adopted last fall, so it's a little early to do any real review of. . . . I don't imagine plans have changed too much, although the way things are growing in some of the areas there, you may need to revise it pretty quickly, because it is growing so fast.

L. Stephens: Just to make sure, I understand that this particular group is looking at coordinating transportation and land use in the region, making sure that what happens in North Delta and South Delta is all in a coordinated manner and there's a whole plan for the region that fits, instead of some municipality going off and doing their own thing, that the municipalities have bought into this and that there is a master plan in place to facilitate land use and transportation planning for the GVRD.

Hon. L. Boone: I think it's a big job to guarantee that all of those people are going to work together, but that's what they're trying to do. Whether or not they achieve that is another question. But they are certainly trying to work that out, and it's a start. They hadn't done any of that before the livable region strategy came in, where they tried to determine where the transit lines should go, where roads should go, where roads shouldn't go, where they don't want population growth -- all of those things. That's been done through the livable region strategy. By bringing these people together, hopefully they can come up with some sensible solutions to some of their problems.

L. Stephens: Part of this whole study talked about demand management as well. Is the transportation demand management moving along nicely? What stage is that at?

Hon. L. Boone: The transportation demand proposal had some controversial ones, and the only one that we have participated in is the trip reduction. But there are parking managers, kilometre-based vehicle insurance -- that's a very controversial one, if you think in terms of the whole province -- road pricing, tolling that's. . . . I have had great arguments with George Puil, the chair of the GVRD, on systems tolling as compared to project tolling. So we're working at it, but I can't say that the province wholeheartedly endorses all the recommendations that come out of the transportation demand plan.

L. Stephens: I want to go back a minute to the Langley area and some of the primary roads that are in and out of there -- 16th Avenue and 200th Street. That particular plan talks about moving people and goods in and out of the regions and improving and upgrading some of the secondary roads to facilitate that so that not everybody is on 200th Street, on the freeway or on Fraser Highway. So I wonder if the minster could talk a little bit about whether there are plans to improve and upgrade some of the secondary roads to allow people and goods to move more freely around the regions rather than concentrating everyone on these major roads.

[ Page 5277 ]

Hon. L. Boone: We'd only be looking at Highway 10 as to seeing if there are ways around that. The rest of them are secondary highways and are municipal responsibilities.

[4:15]

Hon. L. Boone: No. If there had been anything, you would have been advised of that when we made the announcements. They are studying it right now, and that's all. But there's nothing in the capital plan for that in the very near future.

L. Stephens: That concludes my questions.

R. Neufeld: I have some brief questions, first to do with "Going Places," which is referred to in the TFA manual. I'm going to read a few paragraphs out of "Going Places" and ask for the minister's response in reference to them.

"My government believes transportation investments in B.C. must be governed by a long-term overall plan to guide the decisions of the province's transportation agencies, as well as to inform B.C. businesses and the public. That's what Going Places does. It establishes the logical basis for decisions and planning, and shares that vision with British Columbians. The public investments recommended in this publication will be made only with careful consideration and public consultation."

Hon. L. Boone: I'll try to do my best. This was in 1995, so it was a couple of years ago. The public consultation that I guess we try to take places. . . . Lions Gate, where the public consultation on that. . . . I guess we've had public consultation on the Okanagan bridge. The south coast transportation -- have we had some public. . . ? Okanagan Valley transportation? No, we haven't had public meetings. If the member is asking whether we have had public meetings in his area and around, no, we haven't had those public meetings up there. Our consultation so far has been a more or less project-specific consultation.

R. Neufeld: I refer to "Going Places" because you referred to it in your opening comments on the BCTFA in 1995-96. That's why I'm assuming I can go back to "Going Places." That's a document you referred to, and you quote from it.

The minister didn't respond. Does she still agree with the statement by the then Premier, Mr. Harcourt, about what her government believes about transportation investments?

Hon. L. Boone: Are you asking me about the specific statement that you made there, or do you want me to read the whole thing?

R. Neufeld: The one I've read out will be okay.

Hon. L. Boone: Yes, I certainly agree that we should be doing things in consultation with the public.

R. Neufeld: I can only assume, then, that that part about public consultation is one that your government has decided to leave by the wayside, listening to the minister's own comments that you haven't done that. Would that be correct, then?

Hon. L. Boone: No, I've said we haven't had public meetings around. . .but we have certainly consulted the public on specific projects. That's what we have done. I'm aware that we haven't been up to your area -- but you represent your area so well that I don't think we need to have a public meeting up there. We all know that the roads in the Peace are in a deplorable state, and we're doing what we can up there. It's not necessary for us to hold public meetings, because you do it all.

R. Neufeld: Well, I thank you very much for that comment. There are some up there who don't think I do it all, I can tell you that.

Anyhow, I appreciate what the minister has said, and I can gather from her comments that projects which are initiated by the TFA under their own will or desire, or the government's desire, are the ones that you really do public consultation on, and there's no desire within the government to have public consultation around the province. I'm not talking specifically about my constituency or Peace River South; I'm talking about rural B.C. as a whole, because when I look at many of the projects, most of them are in the lower mainland.

I'm just wondering how we get out to the rest of the province -- I guess I should say to rural B.C. and specifically Peace River North, because that's what I'm asking about -- to find out what the public wants. Maybe I'll qualify that. I know they always want lots. I'm not trying to say that we should respond to all the wishes, because there certainly isn't that kind of money around, but what the public thinks is important in their area would probably be a better way to phrase it.

Hon. L. Boone: We depend an awful lot on district managers and regional managers. I want to advise the member -- I can do it now, because today the release went out -- that there will be an economic summit -- a northern development economic summit or whatever -- in Prince George at the end of October. We will be getting representatives from across the north going there to discuss economic development.

I have made the Premier and the ministry know quite clearly that we have got to be front and centre there, because I'm hearing loud and clear, from a number of municipalities in the north, that highways and roads are a problem for them. They see this as central to their economic development. We'd like to hear from them very clearly as to what their needs are. I know what they want, but we need to hear what their needs are. Then we have to try and figure out how we can best address their problems.

I've made it clear to you on the radio -- and with everybody else -- that I'm not particularly happy with what's going on in rural British Columbia, whether it be in the Peace or up in the Stewart area -- or the Kootenays, for that matter. We do have some areas that are in extremely bad condition. We're doing what we can to address those concerns within the fiscal funding area that we have. Quite frankly, that's why I keep telling these guys from the North Shore that they can only get $70 million and that we're not going to fund the whole bridge -- because we don't have enough to put in there. We wouldn't have any money for the rest of the province.

I'm well aware of that, and I would invite the member to participate in that economic development summit in Prince 

[ Page 5278 ]

George in October. Hopefully, we can get some good ideas from there -- I know we will get some good ideas from there -- as to what the needs are throughout the north.

R. Neufeld: Yes, I was aware of the northern economic summit that is going to take place in Prince George. In my discussions with one of your colleagues, the Minister of Employment and Investment, he assured me that northerners shouldn't come to that summit with a shopping list because that's not what we're looking for. I hope that the minister. . . . After confirming what she has said, I hear a bit of a different tone -- that maybe shopping lists won't be accepted but that we have to start looking at what we really have on the ground and the state of our infrastructure, that being roads and rail. You're not responsible for rail, but roads we have to look at.

There are some very good points, actually, in "Going Places." I was a bit disturbed with "Going Places" when it first came out, but some of the statements that "Going Places" makes do fit in well with what I've been arguing for, for a number of years. I will quote a few more of them. It says: "Transportation is critically important to the people, communities and businesses of British Columbia. It provides people with access to goods, services, jobs and recreation. It is a key factor for the competitiveness of our industries." That's something that I've tried to stress through a number of ministries.

Another statement it makes is: "Transportation-intensive resource industries are facing increasing international competition and must reduce their costs to remain competitive." Those are all good statements that I can fully agree with -- or "provides efficient access for industry to goods, resources and markets." Those are all places that the government of the day, when they printed this book, wanted to get to.

Yet when I go through the book -- and this is the disturbing part. . . . When I find the headings in "Going Places," it talks about "Population Growth and Congestion" -- that's the lower mainland -- "Urban Sprawl and Air Quality." It talks about international competition in the southern part of the province. It talks about the action plan for buses in the lower mainland -- high-occupancy vehicle networks, improving transit services in the lower mainland.

And when I look at page 18 in "Going Places," it talks about the Vancouver Island Highway project; improving ferry service -- again, that's down south here; lower mainland transportation priorities; a new partnership for rapid transit. It doesn't matter where you go in this book. When you finally get to the map of British Columbia and look at it, it's no wonder that nothing is happening in the north. Everything is congested in the lower mainland.

I appreciate that most of the people in British Columbia live in the lower mainland, but there are people who live in the rest of British Columbia. There are people who supply an awful lot of things that people in the lower mainland need and use on a constant basis. I think about hydro. Of all of B.C. Hydro's generation, 40 percent comes from the North Peace. All of British Columbia's natural gas comes from the North Peace. All of British Columbia's oil -- which we're almost self-sufficient in -- comes from the North Peace. I can go on and on. Yet when I look at the map of the North Peace or the northern part of the province, I find very few little circles or legend items that I can refer to, that something's going to happen. In fact, I see that the community of Fort St. John is not even on the map. It's no wonder that when you send out this kind of document to people across the province, away from the lower mainland, they get a little discouraged.

On one page, the government talks about financial limitations, and I appreciate that. I know it's difficult, so I'm not trying to say that that's an easy process. I don't care who's in government. They're going to meet the same problems that you are. Your government says that we must meet our transportation needs but that we must take steps to minimize costs and to develop non-tax sources of financing. Could the minister elaborate on that a little more and tell me what she would say are non-tax sources of financing for huge infrastructure projects in the province?

[4:30]

We're looking to anything we can find. I mean, it's easy to go out and. . . . It's not easy; it's impossible now, because we've got legislation. I was just going to say that it's easy to go out and raise taxes, but we can't do that anymore. We've got legislation saying that we can't raise taxes, so if we're going to find some dollars, we have to find them through innovative means. We have told the private sector that we are open to discussion on any means they have, if they want to suggest dollars coming to us.

If the city of Langley can, for example, come to the table and bring some money to the table that can help us get the 200th Street overpass done faster than what we had anticipated, then that's great. If there are people out there who are interested in assisting us and if there's a road that needs to be built and they want to build it, they can try and find ways that we can finance this in a way that's not going to raise taxes and raise the provincial debt level. Then we're willing to talk to them about it.

I wanted to mention this to you when you were talking about the northern economic summit. I'm not encouraging people to come with a shopping list. What I am encouraging people to do is come and talk about the importance of the road system to northern development, as you have done, and how important it is that we have decent roads for people.

These are roads for tourism purposes, for your infrastructure needs, for your industries -- whether it be your oil patch industries or your forest industries -- and there's a need for us to have a decent system in place so we can shift the grain through to the Prince Rupert port, if necessary. It's all those connection things -- transportation as a whole.

I think we need to make sure that we've got the information and the data there, so we can make proposals and make government see that this is part of an economic strategy and is extremely important. I'm not saying you should come with a shopping list in terms of what your pet road might be, but I certainly think you should come to this economic summit with a well-thought-out strategy as to how important roads are and why, how we could and should finance them and what the most important things are -- whether it be the rail lines and the linkages there or what have you.

As I told the member before, we are currently working with the federal government to see if we can get some more 

[ Page 5279 ]

dollars from them to assist us because of the changes we've made in the grain area up in your area. We are working to see if we can get some dollars to assist us in moving grain through, so we are doing what we can on that level, too. We are trying to get federal dollars as well. Our doors are open. If you've got any ideas out there, send them down to us, because we're willing to think of anything that can get us dollars.

R. Neufeld: I've heard that comment before from a lot of people. You're interested in getting all the dollars you can down here, but I say that just as a matter of interest.

Hon. L. Boone: To give them back to you.

R. Neufeld: Yes. I appreciate that.

I understand that there are some areas where we can do public-private partnerships. I guess Mount Washington is one of them. There is Finlay Navigation, which the minister mentioned, and Quinsam Coal. In the end, what happens. . . . I know what's going to happen to Sierra-Desan. It's the industry that pays for the whole process, and it's BCTFA that's the vehicle, so really it's the industry that's paying for it.

I guess what I was trying to get from the minister was whether we are now at a point in British Columbia where we think every project in the province has to be financed that way. I can only assume that if you have large traffic volumes like those down in the lower mainland, maybe across the Lions Gate Bridge. . . . By the way, I don't think you should be doing anything with the bridge at all. I think you should be sending the money north, like that press release I saw one time had stated.

In any event, there must be some broader picture as to how we're going to get around to funding some of these roads in rural B.C. In my own constituency, I can think of about 4,000 kilometres that are in terrible shape, and they're getting worse day by day, year by year. There's no way you can put a nickel toll on them or a 25-cent toll or whatever. They serve a whole host of different people, not just one specific industry. They service all industries and all kinds of people, whether they're rural residents or whatever.

Surely there must be some other way that the ministry is looking at financing some of these roads. You're asking for ideas, and I don't have any ideas on how you're going to do that, because that's just one constituency. I know that the member just south of me has about the same number of kilometres of roads in his constituency, much of it in the same shape, and those are only two constituencies out of 75.

I guess that where there are lots of people, it's possible to put on tolls or to work with municipalities. But in effect, when you're partnering with Langley or whoever, it's still the taxpayer who is paying it in the end. Is it not really the responsibility of the Ministry of Transportation and Highways to be looking at a lot of that through the vehicle they have in place now, the BCTFA?

I guess the second part of the question is that if we're looking for all kinds of partnerships like this to do everything else in the rest of the province, why aren't we tolling the most expensive project in the province for the last decade or so -- the Island Highway -- and starting to get back some money out of that just like you have out of the Mount Washington road or the Sierra-Desan road? Those also service a whole host of people and industries. Are we looking at doing something like that to generate some money? That's maybe where we can generate some money to pay for some of these other things needed in the province.

Hon. L. Boone: Well, I'll be quite clear. If we were looking at starting that road today under my leadership, yes, we would be looking at tolling it, because we would be there. When you have actually opened the road, it's very difficult to turn around and put a toll on it halfway through or to put a toll on a portion of it. It's hard in that respect.

As for the dollars, the big problem we've got is. . . . It is a concern of this government to keep the debt lower. We have a debt-management plan in place, and we have bonding agencies looking over our shoulders that are judging every move we make with regard to the debt. We literally have our hands tied when it comes to how much more debt we can pile onto the taxpayers. Given that the only other avenue we have is to increase taxes and given that we have a bill that actually prevents us from increasing taxes, we have no alternative other than to live within the existing dollars we've got -- whether that be through Treasury Board or through the BCTFA or through rehab for the ministry -- or to look for alternative means of financing.

The problem that we have, of course, is that everybody else is out there trying to get dollars from Treasury Board, as well. Even with an increase in Health and an increase in Education, they're still complaining that they don't have enough money. So when you've got those two competing forces eating up so much of the budget, unfortunately, it's our roads that suffer, and we are not going to be able to sustain that. I keep telling the Minister of Finance that this level of funding will not be something we can sustain for any length of time, and we will have to see dollars coming into this. I guess we're looking to see if the economy improves. If the tax base improves, then hopefully we can see some dollars coming back. But as long as Health and Education have such a voracious appetite and eat up so many of our tax dollars, it means that we have to live with less than what I think we need for all our areas.

We're trying desperately hard to make sure that those dollars get to you. I bent over backwards and actually put some extra dollars into your area, and I got a very nice letter today from one of your constituents, saying thank you so much and how she really appreciated the extra effort we were putting into trying to deal with roads. And we'll continue to do that. We'll continue to try and focus some of our efforts on dealing with the situations you've got in your area. And member, I can tell you that had I been the minister. . . . You know, you can tell why she went over to the PDA. This would have never gotten out of my hands without having Fort St. John on this map -- never.

R. Neufeld: I guess I'll leave that up to your party to deal with -- where some of your previous cabinet ministers went to.

I guess a good indication. . . . The minister will know that I wrote a column in the newspaper thanking her for the extra money she did direct to the North and South Peace. People do appreciate it; there's no doubt about that -- although the number of projects there and the amount of work that has to be done is horrendous. The minister is aware of that, and I appreciate that.

I would say to her, when she talks about health care and education taking up so much of the budget -- I appreciate that it does, out of an ever-shrinking budget -- that the fact 

[ Page 5280 ]

that we have to pull school buses with four-wheel-drive tractors in the constituency of Peace River North to get the kids to the school certainly doesn't lead one to believe that we can continue to leave the infrastructure the way it is and continue to educate children. That doesn't lead very well either, and that's just a good example of how difficult it is. If I recall correctly, even in one of the Prince George ridings -- I'm not sure whether it's yours or that of your colleague the Minister of Education -- they were laying planks on some of the rural roads to get the buses down them.

So saying that Education and Health are going to take it all. . . . I think there is another portion we have to look at really closely if we're going to be able to afford the health and education that we have today. That's just a good example, because all the commerce and all the industry that happen to be part of the revenue that comes to the province come from vehicles that travel up and down that road with goods and services. Whether they be oil or forestry products or anything of that nature, they travel on the same roads when they're capable of doing so.

I'd like to get from the minister: who is on the TFA board? It used to be the now Minister of Agriculture -- I would assume that you replaced that person -- and the Minister of Employment and Investment. Is it still the Minister for Children and Families? Would that be correct?

Hon. L. Boone: It's the Minister of Municipal Affairs, the Minister of Health, as she's the minister responsible for B.C. Transit, the Minister of Employment and Investment, myself and the member for New Westminster as a board member of B.C. Transit. That's it.

R. Neufeld: Again, following along with the "Going Places" theme in the BCTFA annual report, there's a statement in there ensuring that all regions of the province benefit from economic expansion and diversification. It's a fine statement, but when you open the book and look at the provincial transportation plan and the multimodal corridor plans, the BCTFA has laid out the groundwork with the south coast transportation system plan in partnership with the Ministry of Transportation and Highways. The BCTFA has also initiated work on an Okanagan Valley transport plan. Could the minister tell me, by chance, how. . . ? I'm assuming that that's how you get your oar in so you can get some attention paid to some of the projects in the regions of the province. We've dealt with two: the south coast, which is the lower mainland, and the Okanagan Valley transportation plan. How would the northeast, for instance, get into some kind of a plan with BCTFA in the same system? We can start working on trying to develop what the minister and I have been talking about -- that is, the essential routes and the roads that have to be rebuilt or brought up to standard.

[4:45]

R. Neufeld: I'm a bit confused by the answer. I'm not going to read the whole explanation of the south coast transportation system plan and the Okanagan Valley transportation plan. I'll just read one: ". . .an assessment of requirements and options for further highway improvements between Pitt Meadows-Maple Ridge and the rest of the GVRD to complement the recently introduced West Coast Express and upcoming Pitt River Bridge counterflow lane improvements." When I read that, I think to myself that this is not to do totally with new projects but with improvements for the transportation plans in those two areas. So that's why I was asking the question of how we get the northeast involved in something like this, so we can start assessing some of the needs we have. Maybe I'll just bring one to the minister's attention; I'm sure she's aware of it. The road going down into the Alaska Highway, going down the south side of the Peace -- there's a cost estimate of some $40 million or $50 million to do it. I think those would be things that would be integral to these kinds of discussions.

So in fact, when I read all of the explanations, they all talk about improvements. They're not talking about. . . . I guess there's an assessment or requirements for options for a north-south highway, so there are a few. But most of it is improvements. So maybe the minister could further explain to me what she means, actually -- what happens with those two groups that work in those two areas.

Hon. L. Boone: As I said, those are rapid-growth areas that are growing the fastest. There are things such as interchanges, how you can connect up to highways and how you can make traffic flow better around those highways. So it's improvements in terms of getting better traffic flow going through there. That doesn't necessarily mean they have another new highway going in. But if you have an overpass or an interchange or underpass -- I'm not sure what they all are, you know -- they're different ways that they can improve it, so you can improve the traffic flow in those areas.

R. Neufeld: I assume, then, that it's some kind of a strategic plan for those two areas. I see a head nodding over there.

You know, I think that for far too long in the northeast we have gone without a strategic plan of what we're going to do and how we're going to improve the road system so that actually there's no need to rebuild all 3,000 kilometres of road. I mean, if we rebuild the right ones, which service the areas that are highly used -- and there are some that are highly used -- that would be the way we would go. But is the minister telling me that for those kinds of things, then, there is another way or another model that we could use, so that we can start some discussions with BCTFA?

Hon. L. Boone: If the member is looking at trying to determine what order things should be, what's the most important road that should be redone and those sorts of things, we'd be happy to sit down with him or with the municipalities. Dan Doyle went up there and spent some time, 

[ Page 5281 ]

sat down and talked to the municipalities -- and I assume he talked to you as well -- to determine where the dollars right now should be directed, so that we're putting the money into where people really feel are the most important areas.

But if you believe we should be sitting down and doing that as a ministry, we'd be more than happy to sit down and work with municipalities, with yourself and the member for Peace River South to determine what are the most important roads to be done. If there's a way, you know, we can do those things, we'd be happy to do that. But to go through a whole process and do a large study costs a lot of money. I don't know that it's necessary to go through a huge study in order to determine some of the things, the priorities that you could probably help us with.

R. Neufeld: I understand now what the minister is saying. What you're saying is that, through Highways, we should set up some kind of a consultation process with the users of the roads in the north, with the Highways manager -- that's, I might add, one manager for one-third of the province -- and other interested parties to decide more of a strategic plan and then bring it and find out what we need. Then we would go this route to BCTFA, to be able to start spending some money. I know I'm jumping ahead a little bit quicker than maybe the minister anticipates. But you never know; she may agree with me. But would that be correct to think or to explain?

[S. Orcherton in the chair.]

Also, just on the issue of the deputy minister or Mr. Doyle coming to the north and talking to the communities -- and I do have to get this on record, because I got into a bit of trouble -- Mr. Doyle did not contact the people in the rural part of. . . . He contacted the mayors of the major communities, who, to be quite honest, hon. minister, don't have anything to do with the rural area around my constituency, which is huge.

We would like to see some kind of a consultation process -- as I started out with in the estimates, in my questioning -- going with those people, not in the communities so much. They have their specific needs, and you still have to deal with them. But when you get into the rural area, there are representatives from the regional district who are highly qualified and quite knowledgable about the area -- in fact, a lot more than me, in a lot of cases, on which roads should be done. So would that be the correct way to assume that we should be going? I guess I should really be doing this through Highways estimates. But because we're on the issue, could I get some kind of a time frame that the minister would look at favourably, so that we can start that process?

Hon. L. Boone: I think that's an excellent thing to do. I know, coming from the Peace, that you're probably not in favour of spending a lot of money on studies any more than I am and would prefer to just actually hear from the people as to what their needs are. I think we can talk in terms of trying to get some kind of a process set up as soon as possible, so that you can start to talk to some people, some individuals.

I do apologize if Dan didn't get to see the regional district. But he went up there on very short notice, when I sent him up there. I think he was gone the next day. So he obviously missed it. But I'm sure, you know, that the next time around, obviously, we need to get in touch with the regional district, with some individuals and the grain growers, etc., so that we can try and work out some plan as to how we can address some of your concerns up there in a planned manner and which are the most important ones, so that we're not in fact doing something that is not seen as being the important area. So we'll work on this, probably in the fall. Okay?

R. Neufeld: To the minister, I thank her very much for that. We'll keep in touch to decide when is best for the minister. I think the rest of us can make our time available when it fits with the minister's schedule.

Just so I don't get into trouble with Mr. Doyle, Mr. Doyle and I had some discussions about that, and I appreciate him coming there and talking to people. It's just that some of the people that we should have been talking to got missed. Had I known the day he was leaving, maybe I could have arranged a little bit for him. But that's fine. It's done, and we live with that.

I want to ask the minister. . . . In '95-96 -- page 17, actually, "Communications" -- the BCTFA prepared a newspaper supplement outlining the benefits of the Vancouver Island Highway project and cosponsored a three-month program of television and newspaper advertisements for the VIHP in partnership with the Ministry of Transportation and Highways and the Ministry of Employment and Investment. Could the minister tell me the cost of that, please?

Hon. L. Boone: There was $300,000 for the TV ads and $50,000 for the brochure, but we did not pay for any of the brochure. From the TV ads, TFA paid $50,000. MOTH paid some -- but I'm not sure how much it is because we don't have the financial end here -- and the rest was paid from MEI.

R. Neufeld: Can the minister give me the rationale behind spending $350,000 to advertise a brand-new, four-lane highway on Vancouver Island when the rest of the province is in dire need of dollars? In dire need of dollars -- I cannot stress that too much. I know that $350,000 is not going to go far, but it seems ridiculous to me that we would even contemplate spending $350,000 to advertise a new highway. I mean, all you have to do is have it fixed up and let people drive down it.

[5:00]

Hon. L. Boone: This was in 1995 and January of '96. I wasn't even around then, so I can't give you the rationale behind it; that would be very difficult for me to do. As I said, it was only $50,000 that came from TFA. The rest of it was from MEI. I can't give you the rationale behind that, either.

R. Neufeld: I'll leave that and go back to the cost recovery agreement with Mount Washington ski resort. Have you dealt with that? No. Okay.

You say that at least 50 percent of the project cost will be recovered through a levy on lift tickets. Actually, in the Mount 

[ Page 5282 ]

Washington deal that the TFA has, the general taxpayer will pick up 50 percent of the project and the people that are going skiing will pick up 50 percent. How that compares to the Sierra-Desan road, where 100 percent of the cost will be picked up by the users. . . .

Hon. L. Boone: The Mount Washington road services a provincial park, so the province actually has a partial interest in the road, in addition to the ski lift.

The Sierra-Desan road services strictly the oil and gas industry. There's nobody else out there, so there is no provincial interest in terms of that area. But the deal on the Sierra-Desan is not done yet, so it hasn't actually been approved at this particular time.

R. Neufeld: I appreciate that. Are you confirming that on the Mount Washington ski resort we're going to pay 50 percent because there's a park at the end of the road? I have a number of parks in my area. I'm just trying to think if there's a park. . . . In fact, there's one anticipated on the Sierra-Desan road, and it doesn't just service the oil and gas industry. It services a native reserve, it services all kinds of hunting and trapping for the natives, it services a bit of tourism, it services the forest industry, and it services the general public. We're not able to close the road at different times of the year, because it's a public road. I'm just wondering about the rationale. If it's just a park that's needed at the end of the road, I can come up with lots of parks. Would that be a fair comment?

Hon. L. Boone: No.

R. Neufeld: I didn't think so, but you've got to try everything. One never knows what small word might get snuck in that you can use at some future time to your benefit.

The next one is the Quinsam Coal Corp. You state in there that improvements constructed by the BCTFA will be paid through in an assessment per tonne of coal produced. Can you tell me: is that just added onto the price of coal that Quinsam has to sell, or will that be removed out of the royalty per tonne of coal?

Hon. L. Boone: It is the cost of production to Quinsam.

R. Neufeld: Then there will be no reduction of royalties to the province for the coal that Quinsam Coal produces?

Hon. L. Boone: We have a disagreement here. We will sort out our disagreement, and we'll get that information to you. Okay?

R. Neufeld: Okay. We'll let that one go for a while. It's interesting. If there is a reduction in revenue to the province, then I'd to pursue that a little bit further.

Also in "Revenue Strategy," on page 12 it says: "Future revenue sources may include the further transfer of existing provincial taxes. . . ." There are a number of comments in here. Could the minister explain which existing provincial taxes are anticipated being transferred to the TFA for revenue purposes?

Hon. L. Boone: When the TFA first came in, it was 1 cent a litre, and now it's 2 cents a litre. That was planned for last year's budget, and it just came into play.

R. Neufeld: So I would assume that the only transfer of existing provincial taxes is the 1-cent-per-litre increase that was increased when we weren't supposed to have any new taxes. Is that correct?

Hon. L. Boone: There was no new tax. It's just that we get an additional 1 cent from the tax base that exists.

R. Neufeld: All right. I understand that. You're right; you didn't have an increase in taxes. Like I say, you never know.

A further comment is on the introduction of dedicated project tolls and project-related regional fuel taxes. Can you maybe just expand on those two: the introduction of dedicated project tolls -- are there some tolls that you're projecting that you're going to put in? -- and project-related regional fuel taxes?

Hon. L. Boone: Well, the project tolls. . . . The Lions Gate would be the one that we're looking at.

The project-related fuel tax was an anticipated fuel tax that was to help pay for the Island Highway, but it got caught in the freeze, so we don't have the fuel tax for the Island Highway. There was going to be a regional-based fuel tax on the Island to pay for the Island Highway, but since the legislation was passed, that has gone by the wayside.

R. Neufeld: Was that anticipated, or was that an actual oversight?

Hon. L. Boone: It was something that we anticipated, but then it got caught in the tax freeze, so we don't have it.

Do you mean: was it an oversight by the Ministry of Finance or by the Legislature? I don't think so; I think they deliberately put in place a tax freeze, recognizing that this would be caught in it. It's unfortunate. I know that the member for Burnaby-Edmonds would dearly love to see that tax in place -- as would some others -- which would enable us to do some more projects. But without amending the legislation, it's impossible for us to do so.

R. Neufeld: I don't mean to sound devious, but I think it was something that was planned: "We'll quickly put in a bill so that we can't tax the people on Vancouver Island, and the whole province will pay for it."

Getting to the grant programs for the cycling network grants, I understand that they're cost-shared between the province and the communities that request them. I don't have any problem with cycling routes; I think they're great, especially in the cities, where there are a lot of people that are starting to cycle, and it's difficult to cycle in heavy traffic.

When you look at the $2 million that's being spent -- and I think part of this is partnered with the Canada infrastructure grant -- is there something for rural B.C., rural communities that don't have the luxury to spend money on cycling paths, to do some other kinds of work that would match these grants? I'm saying that it is a bit unfair. Number one, we put in a cycling network grant to communities, and there are communities. . . . Your community of the city of Prince George would use them. But specifically such communities as Fort Nelson or Fort St. John would have a hard time convincing their voters even to pay a third of the cost of a cycling lane.

We have a tremendous number of sidewalks -- for instance, in the community of Fort St. John and some in Fort Nelson -- that are in such terrible disrepair that people can't 

[ Page 5283 ]

get up and down them if they have wheelchairs -- because there's no money available. Is there something that we could do to kind of offset one against the other a little bit, taking into consideration that not every community in the province can utilize cycling networks? Even if we could up north, it would only be for a part of the year.

Hon. L. Boone: The cycling network is a very small amount of money; you mentioned $2 million. The purpose of it is to try, in many cases, to provide an alternative means of transportation. So if we can get individuals out of their vehicles and onto bicycles, then that will alleviate some of the congestion in the lower mainland and some of that pollution that you see as you fly into Vancouver.

The reality is, though, that there are some smaller communities that have participated in the cycling network: the city of Nelson, a one-kilometre separated waterfront bike path between Lakeside Park and Cottonwood Creek; Radium Hot Springs, a 200-metre separated bike path between Revelstoke and Columbia avenues; Valemount, the 5th Avenue bikeway, a paved 700-metre shoulder from Highway 5 to Dogwood Street; the district of Cranbrook, a separated bike path, 460 metres, from Highway 3/95 to southwest of town. So there are a number of different individual groups that have actually applied. Mackenzie, in Peace River South, constructed a 12-kilometre gravel, separated bike path from the town centre to various BCR industrial sites. So there are communities that have applied for bike paths and that are utilizing them, because it makes it a lot safer for them to ride on and a lot healthier way for them to drive, as well.

[5:15]

R. Neufeld: I don't have any more questions other than that I would be remiss if I didn't comment on the capital investment summary and, again, why people in rural or northern B.C. feel a bit disenfranchised. I know there are some projects that have to do with Fort St. John, for instance. There are the finishing of the Beatton crossing, which was $7.3 million, and the Alaska Highway-107th and 97th-Centre Street.

But if you look at it -- priority corridor programs -- it's $244.3 million. Of that, $234-point-some million is spent right here on Vancouver Island. The lower mainland congestion relief program is $90 million, and the major highway performance sustaining program. . .if you go through that, you find quite a few that deal, again, with the lower mainland. So it's no wonder that people in rural B.C. feel a little bit left out, when you see that the total program is just under $400 million, I believe -- yes, $399 million. So if you add it up, the lion's share of it certainly is all taken up on the lower mainland.

Again I only stress, on behalf of the constituents of Peace River North, that I think it's time that we started looking at the province as a whole, that we started living by what's in the document about "Going Places," that money spent on highways and infrastructure is for all British Columbians, not just for a select few. And I go to the TFA role and responsibilities: ". . .ensuring that all regions of the province benefit from economic expansion and diversification." I think it's time we started living up to those. The numbers certainly don't demonstrate that we're even starting in that direction.

That being said, I still want to tell the minister again that I appreciate the extra money she did send north. I'm not trying to make light of that. But I am trying to stress that we do have to look at the rest of British Columbia in a much more accepting matter, that we have to really look seriously at it and start developing and spending some money on its infrastructure, so that it can stay solvent.

S. Hawkins: I have questions about several projects in my constituency of Okanagan West. I guess the first one that comes to mind and one that's been on the top of everybody's mind, at least in the last six years that I've lived in Kelowna, is the Okanagan Lake Bridge. I wonder if the minister would give us an update on how that's coming along.

Hon. L. Boone: We continue to work on a partnership with the city. We're hoping we can have an announcement on some of the Westbank improvements within a few weeks.

S. Hawkins: I believe the option for the bridge project now is the four-laning of the bridge. Am I correct in assuming that?

Hon. L. Boone: I think it's fair to say that it's the preferred option, yes.

S. Hawkins: Before I get into the costing of it, I wonder if the ministry is aware of other floating bridges around the world that have been added to. What were the consequences of adding lanes onto those bridges?

Hon. L. Boone: Well, they widened the one in Seattle, and it sank.

S. Hawkins: That's reassuring.

Hon. L. Boone: That's why we're studying it very carefully, to make sure that it doesn't happen here.

S. Hawkins: Well, let's hope that there's enough study going into it. But as the minister knows, this bridge has been studied, and the residents in my constituency say that it's been studied to death. It's certainly been studied over the last six years I've lived there, and it's probably fair to assume -- the minister can correct me if I'm wrong -- that it's been studied for at least the last ten years. From the report that I'm looking at -- and I may not be reading it right -- which is the BCTFA annual report for '95-96, I understand that almost a million dollars was spent on the bridge in '95-96. Was that just with respect to the planning? Can the minister correct me on that?

Hon. L. Boone: Yes. I'm sure the member can appreciate that what we are doing is trying to drive the cost down, because the cost estimate right now is at $86 million. You heard the member from the north complaining about the fact -- maybe you didn't; you weren't here at that time -- that we need to spend more money in the north. We need to spend more money in every other part of this province, and $86 million is an awful lot of money. So those are the problems we have right now.

S. Hawkins: I understand the reasons behind waiting. It is a lot of money. But the people in that riding have been 

[ Page 5284 ]

waiting a long time, and it comes to the point where you either tell them it's not going to happen or it is going to happen and that you're going to put the money towards the project. It gets very frustrating year after year after year watching money being spent on planning, and it almost comes to the point where you ask: "Is good money being thrown after bad?" We're spending all this money on planning, and we're getting -- well, so far, it seems -- nothing in return.

I wonder, as well, if there is a toll being proposed for this bridge, because there are rumours around town that this is one of the proposals.

Hon. L. Boone: It does not actually fit with the criterion, unless we change the criterion. The criterion that has been adopted by this government is that you have a free alternative. But if it meant that we could get it through sooner, we might want to look at those things if that community felt that it was possible. But right now it's not being contemplated. It doesn't fit with the criterion; there is no free alternative means of crossing.

S. Hawkins: I wonder if the minister can give me a ballpark figure on how much money has been spent, say, in the last five years on planning -- or if you have lost ten years planning for this bridge -- just so we have an idea of how much money has gone into this project.

Hon. L. Boone: Since '94-95, when the project came under active study, it's $1.2 million.

S. Hawkins: I don't want to dwell on the bridge that sank, but given the fact that the minister has brought that up, what have we learned from that? What kind of studies, then, have been undertaken on our bridge to assure that this won't happen? Is that where most of this planning money is going?

Hon. L. Boone: It's in-depth engineering. Specifically, this summer they're looking at the underwater pontoons to make sure that if there's any question by the engineers that this is not feasible, then obviously we won't be proceeding. But we will be looking at taking into consideration all those things.

S. Hawkins: I hope I'm correct in understanding that the minister says there will be an announcement, hopefully in the next little while, that there will be something done to this bridge -- either four-laning or whatever. I wonder if the ministry is contemplating keeping the bridge open for the duration of time that the bridge is being expanded. Is that the proposal?

Hon. L. Boone: If we choose to do the four-laning, then obviously we do have to keep it open. We'd do it one lane at a time or whatever. I'm not sure how the traffic management would go, but obviously we would have to do it in a way that would keep some traffic going through there.

S. Hawkins: I heard the minister mention a ferry just prior to this. Is that our backup plan in case anything happens to that bridge?

Hon. L. Boone: No, there are no active plans for a ferry.

S. Hawkins: How much is budgeted for the bridge for the '97-98 year?

Hon. L. Boone: It's $500,000.

S. Hawkins: I just want to get onto another project, then: the Glenrosa intersection in Westbank -- Highway 97. Can the minister give me an update on that, please?

Hon. L. Boone: We're reviewing the design and doing property acquisition: $2.2 million.

S. Hawkins: Sorry, I don't mean to jump back and forth, but back to the bridge just for a minute. I understand -- and I wish the minister to correct my numbers if I'm wrong -- that there's a disparity between the money that the ministry is able to provide for the bridge and what the actual cost of the bridge is. Can the minister tell me what the difference is?

Hon. L. Boone: The project budget is $64 million, and the current estimate is $86 million. That's why we're trying to reduce the scope to get it within the budget that we have.

S. Hawkins: Is the minister able to comment on what kind of proposals are being looked at to meet that target?

Hon. L. Boone: We're meeting with the regional district and the city, and those are the things that we hope to be announcing soon.

S. Hawkins: Has the minister set a time frame for this, or is this something that's going to be prolonged?

Hon. L. Boone: Within the next couple of weeks.

S. Hawkins: Thank you for your answer on the Glenrosa intersection, as well. When can we expect it proceed, then -- the actual construction?

Hon. L. Boone: Next year.

S. Hawkins: I wonder if the minister can tell us what the budget for the intersection will be or what it's budgeted for in total.

Hon. L. Boone: The total project budget is $11 million.

S. Hawkins: How long does the ministry perceive that it's going to take build this? When will it be up and running so the residents can use it?

Hon. L. Boone: Completion is for the year 2000.

S. Hawkins: I don't know if this is the place to bring up another issue. It's with respect to Westside Road. I'll just take the minister's advice on whether I can bring up that project proposal at this time.

Hon. L. Boone: If you're looking at capital, that would be here. But we don't have any plans for that particular road at this particular time.

S. Hawkins: I want to thank the minister for her answers. I'll bring up the other couple of issues I have, then, when the Ministry of Highways is here.

[5:30]

[ Page 5285 ]

Moving back to the Vancouver Island Highway project, the environmental consultant's independent study. . . . Can the minister discuss the findings of the SHIP environmental consultant's assessment on damage resulting from the Island Highway project?

Hon. L. Boone: Seven streams were identified and studied. Six of them identified some damage to the stream. We are doing remediation on those, and we're making sure that we're taking some of the ideas and concerns that have been raised and are trying to address them for future projects.

The reality is that we've spent $25 million trying to make sure that streams are protected on the Island Highway, but on a project with the magnitude of this one, it's going to be impossible to not have something happen somewhere along the line, given the climatic conditions that we've had -- the heavy rainfall -- and just the fact that this is a huge project. There's going to be some damage done. The project management team is making sure that they do whatever they can to try and prevent any damage, and when there is any damage, they make sure that we fix it when that happens.

B. Barisoff: Can I get details specific to what's actually going to take place on these streams that have been damaged?

Hon. L. Boone: Sure. I don't know exactly what is going to take place, but we'd be happy to arrange for you to talk to somebody from the TFA. We can give you a tour of the projects, if you want to see what's actually taking place. If you just want to have somebody update you on them, we'd be happy to do that.

B. Barisoff: I would welcome a tour to see what has happened there. Could we get the kind of cost that's involved in fixing up the streams that have been damaged?

Hon. L. Boone: We're just starting to implement the recommendations there right now, so we don't have the cost. So far we've spent $25 million in total, trying to make sure that this project is as environmentally sound as possible. As you know, it's never possible to construct anything without doing some damage there. When there is a problem, we're trying to fix it, but right now we don't know how much the actual cost is going to be.

B. Barisoff: Are the repairs going to begin immediately? What is the length of time it's going to take to have this done?

Hon. L. Boone: They're taking place as soon as possible. They want to have as little impact on streams as possible, so as soon as we know that there's a problem, we're doing what we can to fix it. In many cases, it's a very small amount of remedial action that is necessary.

B. Barisoff: Were there any other environmental studies conducted prior to this? It just seems that on a major project like this, with the sensitivity of the streams we have within the province, it would be something that would probably be of the utmost concern. I'm sure it is of the utmost concern to the minister. What kind of environmental studies were done prior to getting into this?

Hon. L. Boone: Wildlife studies, fish habitat studies and numerous different environmental studies have taken place. If the member wishes, we'll get you copies of all of them.

B. Barisoff: Thank you, because my next question was going to be: who conducted them, and where could I get hold of some of the findings? Another thing: how much did these assessments cost originally?

Hon. L. Boone: That's all within the $25 million: the assessments that we've done, the remedial action and trying to make sure that we keep this project as environmentally sound as possible.

B. Barisoff: Just moving on to a few other items, I know HCL is an area that the minister and I agree to disagree on, and we probably will for a long time to come. I just have a few questions on HCL. A report by Shasta Consulting Group for the CLAC claims that $9.6 million in government pension contributions was never paid to workers. What will happen to this money?

Hon. L. Boone: There was a review done of this by the pension standards branch of the Ministry of Labour. I'm just looking at the bottom line here. . . . Actually, this is very complicated, because it goes into great detail here about the whole process. The bottom line, though, is that the study that was done by CLAC draws its conclusion from outdated information about the pension standards. Workers are protected by new regulations brought into force by this government in 1993 that reduce minimum vesting periods. Regular employees with HCL are enrolled in good pension plans, and all plans conform to the Pension Benefits Standards Act. Vesting periods vary from union to union. With some unions, a worker only needs to be employed for ten weeks and two consecutive years to earn a pension. With other unions, vesting is immediate.

The bottom line is: "The report concludes that pension plans are unlikely to deliver pension benefits to employees who were not affiliated with a council union before their date of hire with HCL. For the reasons set out above, it is our view that this finding of the report is fundamentally incorrect."

The report from the pension benefits standards branch indicates that the report that you are talking about was incorrect. But I would be happy to get you a copy of this report from the pension benefits standards branch, which will outline all the issues and why they come to that determination.

[W. Hartley in the chair.]

B. Barisoff: I think my concern still lies in the fact that from what I can gather from this, we have $9.6 million that -- I shouldn't say is unaccounted for, but it's. . . . Somewhere, something has got to happen to this $9.6 million that workers have paid into this pension plan. My concern is where this money is going to go and what is going to happen to it. From what you're saying, it still seems to be up in the air as to what's going to take place with this money, and I think that's the concern of people that have paid into that fund. It's got to go somewhere and something has got to happen. It's got to become accountable in some kind of books somewhere, where it's going to take place.

Hon. L. Boone: As I stated, the letter that came from the pension benefits standards branch indicates that the report that you're talking about is incorrect. The report is wrong. I will get you a copy of this report from the pension benefits standards branch. It's clearly a bit too much in-depth to go into all that stuff here, but I can give this to you. Then you can understand exactly why the branch found that the report 

[ Page 5286 ]

you're quoting from is in fact incorrect and that when you talk about that $9 million not being there, that's not correct. So I'll give you copy of this report so that you can understand that.

B. Barisoff: I think that's probably the best way to at least get somebody else to. . . . I'm sure the TFA have probably have gone in-depth to find out what's happened to it. Maybe I could ask the minister whether we've had anybody actually audit that. Or is the report that we're claiming is incorrect. . .and we've got another report claiming something else happened? Is there some way of correlating all this material together to make sure that what's taking place is something that we can all agree upon is the correct answer to what has happened to this money?

Hon. L. Boone: It's not TFA that's saying that it's incorrect, and it's not HCL that's saying that it's incorrect. It's the pension benefits standards branch. They administer the pensions. They have reviewed this and have indicated that the report that you are talking about is incorrect. So the pension benefits standards branch says that the pensions adhere to all the requirements of the Pension Benefits Standards Act. As I say, I think it's best if I get the copy of that report to you, so that you can read exactly how they have come to that decision.

B. Barisoff: I understand -- and I think I've canvassed this a little bit -- that HCL will be moving from Vancouver Island to the mainland, two projects over $50 million. I wonder if any deals were made with the B.C. Road Builders Association and HCL that HCL would only be used on the Island. Was some kind of deal made in the past?

Hon. L. Boone: Are you asking me if there was an agreement when HCL first went onto the highway that it would be expanded into other areas? If that's the case, then no, there was no deal made at the initial outset of HCL on the Island to say that it would go anywhere else; there was no deal made with any of those to say that it would be expanded. This was a decision that we made in the past year after reviewing the record of HCL in terms of safety and training, and the advantages to local hiring, etc.

The Chair: Noting the time. . . .

B. Barisoff: Listening to your statement when you say "we," I imagine you are referring to the government of the day. My concern is that a deal was made with the B.C. Road Builders Association that it wouldn't go off the Island, that it would stay on the Island. I think my concern was whether there was a deal made that it wouldn't go, that it wouldn't leave the Island, that it would be done here.

[5:45]

B. Barisoff: I move the committee rise, report progress and ask leave to sit again.

Motion approved.

The committee rose at 5:46 p.m.

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