(Hansard)
TUESDAY, JULY 29, 1997
Morning
Volume 7, Number 11
[ Page 6485 ]
The House met at 10:05 a.m.
Prayers.
CHILD, FAMILY AND COMMUNITY SERVICE
AMENDMENT ACT, 1997
(second reading)
Bill 24, the Child, Family and Community Service Amendment Act, is the latest step our government is taking to improve British Columbians' child protection system. The bill proposes seven significant changes to our child protection and family support legislation, the Child, Family and Community Service Act, or CF&CS Act.
Four of these changes were recommended by the Gove inquiry into child protection, and two were recommended by the transition commissioner appointed to oversee the implementation of Gove's recommendations. The seventh was initiated by our own ministry.
This bill also contains a number of technical amendments, best described as sidepieces, I guess, or spinoffs from the central amendments. These are essentially changes to wordings and definitions in various parts of the act that refer back to the core amendments.
Generally, the changes we are proposing will give social workers more flexibility to protect children in the least disruptive way possible, to protect children and families who challenge ministry decisions about their lives and to encourage a greater level of service integration with a clearer focus on prevention. I want to talk about each of these areas today.
I'll start with those amendments that directly affect our ability to protect children from abuse and harm -- the four amendments recommended directly by the Gove inquiry.
Protecting children. Let me talk first about the summons procedure. Under the CF&CS Act, social workers are guided by a principle that says that the family is the preferred environment for raising a child -- we would all agree -- and if, with available supports, a family can provide a safe and nurturing environment, then support should be provided for that to happen. We have a broad range of options for supporting and strengthening families to ensure that children are safe -- everything from residential programs for young moms and their babies to parent mutual support groups.
Obviously there are times when children must be removed from their homes for their own protection. However, at all times, our staff are directed to ensure a child's safety and well-being in the least disruptive way. For example, a child may be at risk because their parent lacks skills and experience. We don't all come with the same set of parenting skills. In that case, the best approach may be to send a trained professional into the home to help the parent or parents become more self-sufficient.
As I've said, we do have many options for keeping children safe within their families. One of the most effective options is the supervision order. Formalized by the court, it lays out terms and conditions the family has to meet -- to attend drug or alcohol counselling, for example, or to complete a parenting or conflict resolution course or whatever that might be.
The supervision order also indicates how often and in what way the minister will monitor the family's progress, and if the terms and conditions aren't met, if the child continues to be at risk, our ministry can take the child into care. As I've said, the supervision order is often a very effective tool. Used properly, it helps families to build on their own strengths, to become more resilient and to develop the skills and resources they need to keep their children safe and healthy.
It also gives our front-line staff another opportunity to work with families to set concrete goals and to measure progress towards them, which is something we are working very hard to have integrated throughout the ministry.
However, under our current legislation, the only way to get a supervision order is to first remove the child from her or his home. I think that members here all understand how traumatizing it is for any child to be taken away from their family, from everything familiar. Essentially, we change their world; we turn it upside-down. It is indeed equally traumatic for the family. So it's a step we should take only as a last resort, when we can't protect a child's safety any other way. Bill 24 recognizes that and allows the ministry to seek a supervision order by applying to the courts, eliminating the need to first remove the child from their home and then go to court to get the supervision order.
In other words, it would allow us to supervise a child's care and protect their safety and well-being without breaking up the home or without traumatizing the home. It's a way of offering services to support and strengthen the whole family through a child protection lens focused on eliminating risks to the child in the least disruptive way possible. This amendment was recommended directly by Judge Gove, and I believe it will have a significant impact on our ability to strengthen families and least disrupt them.
In addition, we propose to increase the maximum length of a supervision order from six months to 12 months, which seems to be fairly typical across the country. Experience has shown that 12 months is a more realistic time frame for families to meet the kinds of goals laid out in most supervision orders.
The next one I'd like to speak of is continuing custody. A second change around time frames proposed in this bill involves applications for continuing custody. Under the current CF&CS Act, social workers can't apply for continuing custody of a child in need of protection until 30 days before a temporary custody order expires. Judge Gove found, and we in the ministry agree, that in many cases 30 days isn't enough time to plan for a child's long-term care. So we propose in this bill to expand the time frame from 30 days to 60 days. That would give us more time to plan for children's long-term care and ensure they aren't returned to high-risk situations if there is an unavoidable court delay.
The third piece I want to speak to is informing people or community agencies. The third amendment in this bill proposed by Judge Gove involves information-sharing in child protection investigations. Under the current act, our ministry
[ Page 6486 ]
must make all reasonable efforts to report results of these investigations to the parents involved, to the children themselves when they are able to understand that, and to the people whose reports of concern prompted the investigation.
Judge Gove has recommended broadening this list to include any other person or community agency serving the child or family, when this information is necessary in order for the child to be safe or protected or to receive additional services. This change supports our efforts to be more open, to work more closely with the broader community, to better coordinate services and to better serve children and families.
At the same time, we cannot -- we must not -- lose sight of the fact that this is intensely personal, sensitive information. A child who has been abused has already suffered so much. The last thing they may want is for a whole range of people in their community to know about it. So with that in mind, the amendment we're proposing here goes a step beyond Judge Gove's recommendation. It qualifies and clarifies the intent of information-sharing by adding the clause: "
[10:15]
I would also like to add that anyone who gets this very personal information will be bound by exactly the same stringent privacy provisions that apply throughout the entire CF&CS Act, because at all times -- at all times -- we must balance the need to share information with the need to treat children and families with the dignity and the respect they deserve.I want to speak to the next part, which is the family conference. The fourth amendment recommended by Judge Gove involves the family conference. This is one of several new approaches to resolving issues outside the court system that will be available to families under the CF&CS Act. In a family conference, the child, the parents, other family members and anyone else who has a meaningful relationship with the child can come together with an impartial coordinator to work out the best possible plan for the child's care.
This section of the legislation isn't in effect yet, but the way it's written now, it says that the ministry must offer a family conference in all child protection cases. In this new amendment act, we recognize that that may not always be appropriate. There may be circumstances in specific cases where it's in the child's best interests not to hold a family conference. Frankly, social workers will need some time to work with this new approach to learn exactly what those circumstances are or may be. That's why we're proposing in this new bill to make the offer of a family conference discretionary rather than mandatory, as recommended by Judge Gove. Details of when and how to offer a family conference will be spelled out in policy and regulations, and over time, as we gain experience with this approach, policy and regulations can be tailored to ensure we use them in a way that best serves the interests of children and families in British Columbia.
Just a couple of more pieces. In sections 25 and 26 of the legislation I want to talk about an amendment that reinforces our commitment to serve children and families in the best and most effective way possible. That means that if we're doing something wrong or not doing it as well as we could be, we need to hear about it so that we can do it better. We are encouraging all of the people we work with -- including children, by the way -- to come and talk to us any time they disagree with one of our decisions or feel they've been treated unfairly. This amendment basically protects children and families from any kind of retaliation when they do that.
We are committed to building a child-centred integrated system that promotes and protects the healthy development of children and youth, and a system that builds stronger families and communities. To make that work we must ensure that children and families not only have the power but know and believe they have the power to challenge our decisions when they disagree with them. To a child in care or a family in crisis, our ministry can probably appear huge and all-powerful. That is, or can be, extremely intimidating. So we feel it's vitally important to explicitly state: "If you challenge one of our decisions, you will not be punished for that." And that's for both caregivers and for children and families.
Under this amendment, anyone who does try to use the ministry's power against someone will be committing an offence, punishable by a fine or jail time. This provision is just one of our broader efforts to make sure that the people we serve know their rights, know what to do if they feel their rights have not been respected, and know they will be treated fairly.
We are also developing a new, more effective process for resolving complaints at the community level, a process that will apply to all of our services, not just child protection and family support. It is part of our commitment to make the system more open, accessible and accountable.
Just briefly on integration and prevention. The last two significant changes proposed in Bill 24 concern the service delivery principles set out at the very beginning of the Child, Family and Community Service Act. These principles guide our work under the act, and I'd like to just state them again now for members who may not be familiar with them or who may not have memorized the entire act. I'm sure that most people have, of course.
The principles state that families and children should be informed of the services available to them and encouraged to participate in decisions that affect them. Aboriginal people should be involved in planning and delivering services to aboriginal children and families. Services should be planned and provided in ways that are sensitive to the needs and the cultural, racial and religious heritage of the people we serve. The community should be involved, if possible and appropriate, in planning and delivering services to families and children.
These are some of the fundamental principles that underlie our whole approach as a ministry generally. With this bill we propose to expand them to emphasize two other key priorities: integration and our growing focus on prevention and early support. To that end, Bill 24 would reword the fourth service delivery principle -- the one about community involvement -- to emphasize that services must be integrated wherever possible and appropriate, so that all services come together to make reasonable, sensible decisions with a child and family.
It would also add a fifth principle, restating our commitment to community involvement and adding the phrase "including preventative and support services to families and
[ Page 6487 ]
children." These two amendments were recommended by then transition commissioner Cynthia Morton. They also reflect the spirit of the Gove report. They are also things, as people know, that are very near and dear to my heart.
In closing, the amendments proposed in Bill 24 would move us closer yet to full implementation of Judge Gove's recommendations and closer to our ultimate goal of making British Columbia the best place for children and families to be.
M. Coell: I am pleased to stand and offer some comments on Bill 24, Child, Family and Community Service Amendment Act, 1997. I view this as a very positive act. I can honestly say that the opposition has been asking for all seven of these recommendations. And as I said, I view them in a very positive light. I would offer some comments on the bill in general and then have some questions for committee stage later.
One of the reasons that I ran for provincial politics was an interest the Liberal Party had in the protection of children and in the development of a ministry specifically for children. In my professional life and in my own life, that was of interest to me and was one of the reasons I ran. I realize that the government is moving in a direction that is in agreement with the opposition, but I think what's important is that the government is moving not just in agreement with the opposition or themselves; it's what British Columbians want for the safety of children. That's very important, because of all of the things that a legislature can do in a province or a country, it can make its areas, its streets, its families, safe for children. What we see here is progress. We're not there yet, but I see continuing progress through the act last year and through the amendments to the act this year.
One of the most important things, and the minister stressed it, was building strong families and supporting families that need support. One of the main problems with the safety of children are the skill levels of parents and the support they have for dealing with lives that may be frustrating. Also, they may be living in poverty, which adds to the stress and frustration that a family will experience while trying to raise children. I see this very much as supporting those families that I have mentioned.
The family is the preferred environment for children to grow up in, not in the custody of government. I think we would all like to work to where some day there will be no children in the care of government, and families will have the skills and the finances and the ability to raise children. That isn't always the case, and government has the power to apprehend and to assist in the upbringing and raising of children. This act clearly supports families. It clearly makes the family part of the solution and not, as I think many families have seen, part of the problem, where the government steps in to fix that problem. This act now allows the families to be more a part of the solution, and I think that's very positive.
The supervision order that the minister speaks of, the terms and conditions
The family conference that the minister mentioned is an extremely important first step, once difficulties have been found by the government or by a family. Too often, families get tied up in the court system. If a family is having problems with stress, lack of skills, lack of finances, being thrown into the court system first off probably only adds to the dysfunction of that family. So I would encourage the ministry to use the family conference and to use it more than once if indeed it fails the first time. The minister alluded to, when it's appropriate, trying again, because the more you can keep families and children out of the court system, the better, in my opinion.
The protection and retaliation is affected by this bill in that if someone disagrees with the government, if someone has a fundamental disagreement with the government
That may have happened in the past. Many times people have disagreed with the government, and the government has acted and changed their opinion. But I think there were enough people out there who felt intimidated by the system that this change is warranted. I think that's a very positive change.
I know the slang for this is "whistle-blower clause." I don't view it as that. I view it as someone who cares about their children and cares about the position they're in, and they disagree with the government. I think this signals that the government will tolerate disagreement. They may not agree with the person, and the long and short of it is that the government's decision may prevail. But it allows someone to question government without retaliation or, what's more important, without fear of retaliation. I think in many instances that is more to the point than the retaliation itself.
Integration and coordination of services. This bill continues that goal. The ministry, I think, wants the
The ministry has gone through incredible change. This is a new ministry, and I think at this point it is reacting to change. Through changes to the act, as Bill 24 does, the ministry will start to react in a more positive and productive atmosphere and to create its own solutions rather than have to have solutions created for it.
I am speaking very much in favour of the changes here. I think they add to the safety of children in this province. I know that the Leader of the Opposition has a tremendous interest in the protection of children and has encouraged all of the opposition caucus to be interested in this issue. I know that he and this caucus support Bill 24 and encourage the government to continue to make changes that protect the children of British Columbia. I thank you, Mr. Speaker, for the opportunity to address these brief comments to Bill 24.
Hon. P. Priddy: I appreciate the member's beginning comments about why he ran. We all might describe it differently, but I think if you ask everybody in this Legislature about why they are part of the political system, it would in some way -- although perhaps described differently than he and I might -- have to do with the health and the well-being
[ Page 6488 ]
of children and families in communities in this province. We might all describe it differently, but I would suggest that it's probably the reason that every single one of us is here. I very much appreciate his comments on that.
[10:30]
I also appreciate the comment on the fact that it's often called "whistle-blower." That has huge connotations to it. This isn't intended toI now move second reading of Bill 24.
Motion approved.
Bill 24, Child, Family and Community Service Amendment Act, 1997, read a second time and referred to a Committee of the Whole House for consideration forthwith.
CHILD, FAMILY AND COMMUNITY SERVICE
AMENDMENT ACT, 1997
Sections 1 and 2 approved.
On section 3.
M. Coell: Section 3 requires the director to report results of an investigation into a child's need for protection to any person or agency. We discussed in second reading the types of agencies and the reasons for referring results from an investigation. I wonder if the minister could tell me the time frame that is proposed for the investigation results to be shared with community groups or, if there isn't a time frame, confirm for me that it's ongoing.
Hon. P. Priddy: We would expect this to be a continuous process, hon. member, where -- if it's an agency or teacher or whoever we're working with -- whenever information comes up, that that would happen. So we consider it a continuous process.
Section 3 approved.
On section 4.
M. Coell: This section regards applying for a supervision order without removing the child. I very much agree with that concept. It puts a lot of burden on the protection worker to make sure that that child is safe in the home, but it does allow for direct supervision. Would the minister confirm for me that this supervision order could be dealt with in a 24-hour period -- that once the child protection worker visits the home, that supervision order could be in place that day?
Hon. P. Priddy: No, it could not or would not be done within 24 hours. There still needs to be application made to the court. Currently we have to be in court within ten days. It would be the same time frame for this.
B. McKinnon: This question is mainly for my own understanding on this supervision order. The way it reads here is that if he or she has a reason to believe the child needs protection, a supervision order would be adequate to protect the child. How is just a supervision order adequate to protect a child? This is just for my own understanding.
Hon. P. Priddy: If I don't answer the member's question, I know she will help me a bit more. In that supervision order -- obviously depending on the circumstances of the family -- would be laid out the conditions of whatever those family circumstances might be. It might be daily or twice-a-week drug and alcohol counselling; it could be having someone come in to teach parenting skills three times a week, or some combination thereof. But the conditions are laid out in the supervision order, which would work to ensure that child's safety.
V. Anderson: If the social worker or the protection worker feels that the child is in need of some protection and is applying for the supervision order -- which, if I understand correctly, means that under the court order, the director has some opportunity to participate in the family care of the children without taking the children out of the home -- what is the situation from the time the social worker believes that care and intervention is needed until the court order is brought forward and put into effect?
Hon. P. Priddy: What would happen is that the social worker would work with the family for that ten-day period to work out a voluntary series of steps that might very well be the same ones that are approved in the supervision order. But that would be voluntary. If you then had a family that refused to participate in any of that, you might have to relook then at whether that child is in a situation where they are unsafe, but they would do it in a voluntary way. I think that if you would talk with parents, there are many parents who would say to you that they would agree to that, because their child stays home.
V. Anderson: Just to understand that, if the family was willing to work in a voluntary way and was willing to continue, would that indicate that the supervision order would not necessarily be necessary and therefore might not be taken out? What I'm trying to get at is an understanding of the social worker being in a position of going to a family and saying: "There are really three choices: (1) you work with us voluntarily; (2) we will take the child from you; or (3) we will bring the supervision order." What I'm trying to do is to make it helpful to the social worker and to the family, so it's not coming as a threat but on a cooperation basis.
Hon. P. Priddy: Yes, member, I say it is possible that if the family agreed to certain things -- whatever those might be; I've used a few examples -- on a voluntary basis, the social worker might choose then not to follow through on the request for the supervision order.
But I really have to stress here that it's very individualized, and it's very much about the level of risk that the social worker determines the child is in. But yes, it is possible. If it's something like parenting courses twice a week, it may be that the parents agree and that gets followed and the supervision order isn't necessary. But if we're talking about a higher degree of risk, then it may still be. But yes, it's possible.
V. Anderson: Following up, does the supervision order give extra powers to the director at that point? Are there specifics in that order, perhaps, that the supervisor might recommend to the court, and does it bring into play new
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resources or new opportunities? What I'm trying to get at is: are there advantages or disadvantages to the court order that would make it different from a voluntary plan?
Hon. P. Priddy: Part of this is also dealt with a bit further on in the act. We'll answer it now, but it also may be referred to later.
What the supervision order does, then, is give the director of child protection the actual right to do this. So it's the right to be able to enter the home; it's the right to be able to supervise whatever the conditions of that order are. It's not that it necessarily provides different resources, but it does provide a legal right to be able to enter the home, see the child and ensure that those conditions are being met.
Sections 4 to 12 inclusive approved.
On section 13.
B. McKinnon: I'm just curious. This section 13 ends with two "ands." It says "child and, and." Why are there so many "ands" in this particular
[10:45]
Hon. P. Priddy: I'm relying on staff for this because, of course, I don't know intimately the drafting regulations of all pieces of legislation.If you look at (b), that language is about subsection (b). The "and" at the end of that, which is boldface, means not only do you have to do (b) but that "and" -- in bold -- you have to then do the next section as well.
Sections 13 to 17 inclusive approved.
On section 18.
M. Coell: Section 18 allows the director to apply for an extension of the supervision order or temporary custody order. This is required because a supervision order can be made under the procedure without removing the child. I would be interested in hearing from the minister what time frames, again, are on this item. Previously, we had a 30-day time frame moved to 60 days. Is it possible now for the director to apply for a second one, up to 120 days, or what would be the procedure for changing from a supervision order to finishing with that order when the director feels that no further supervision is required? I'm looking for the total time frame in there.
Hon. P. Priddy: You can apply to extend; that's correct. But the entire length of time can be no more than 12 months in total.
Sections 18 to 21 inclusive approved.
On section 22.
M. Coell: Sections 18 and 21 have the times for custody orders. I'm a little confused. Is the Under continuing custody orders, it's: "
Hon. P. Priddy: If I understand the question correctly, what the six months -- which is an extended length of time -- allows the ministry to be able to do
M. Coell: Does this section presume that that would finish it for the order, or would
Hon. P. Priddy: This particular section only applies when we are seeking continuing custody for the child.
M. Coell: I thank the minister for that. I found it a little vague. So you actually have two systems going in tandem, rather than one overlapping. I appreciate the clarification.
Sections 22 to 24 inclusive approved.
On section 25.
M. Coell: Section 25 is of interest to me in that it protects children and people from reprisals -- and usually, I would imagine, from administrative reviews. I'd be interested in hearing how the ministry intends to govern this particular act, as you now have 20 regions and 20 managers. How is this going to be coordinated so that people throughout the province feel that what's in this act actually relates to their region?
Hon. P. Priddy: I appreciate the member's question; it's a good one. Probably in four different ways: one of them is the fact that there will be a complaints process in every region. It is our responsibility, and we need to make people aware of what that complaints process is and that they have the freedom to use that, so we certainly have a responsibility to do that; through the quality assurance framework that we talked about last night; through training; and also -- I mean this quite sincerely -- through a strongly reinforced message that comes from both the minister and the deputy minister that people are expected to ensure that people know this information and know how to use it.
Sections 25 to 27 inclusive approved.
On section 28.
B. McKinnon: Section 28 deals mainly with recommendation 1 of Gove, which is that the family group conference should not be used for children who are in need of protection. I believe that children in need of protection need this recommendation if a family member is abusive in the home. But only a small change is in the amendments -- from "must" to "may" -- and this does not give any structure or guidelines to how the group conference should be used. In my opinion, guidelines are what Judge Gove really recommended. Also, this change was done in a section of the bill which is really not in force. What does this mean? It's in the supplement part, so it really does nothing. I can't see that anything is actually really being done in this section. Could the minister please explain that?
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Hon. P. Priddy: I think I can, actually -- a little lesson this morning.
This part of the legislation will be brought into force by order in council this fall. There will then be policy and regulations that surround it.
Sections 28 and 29 approved.
Title approved.
Hon. P. Priddy: Hon. Chair, I move the committee rise and report the bill complete without amendment.
Motion approved.
The House resumed; the Speaker in the chair.
Bill 24, Child, Family and Community Service Amendment Act, 1997, reported complete without amendment, read a third time and passed.
Hon. D. Streifel: I call committee on Bill 47.
FORESTS STATUTES
AMENDMENT ACT, 1997
(continued)
On section 51.
Hon. D. Zirnhelt: I'd like to move an amendment standing in my name on the order paper.
[SECTION 51, by deleting section 51 and substituting the following:Amendment approved.51 Section 9 (2) to (5) is repealed.]
Section 51 as amended approved.
[11:00]
On section 52.T. Nebbeling: This section requires that a higher-level plan contain a transition statement if any provision in the plan will not be implemented when the plan is established. Can the minister explain what the intent is? If there was a higher-level plan component, I thought that would come into action immediately after approving the permits.
Hon. D. Zirnhelt: This amendment is intended to ease the transition difficulties that have been associated with the implementation of higher-level plans. Some existing plans have been established with requirements that cannot be complied with because the sections were implemented prematurely. They were depending on something else happening which may not have happened, over which there was no control, for example.
T. Nebbeling: Is this to deal with existing higher-level plans during this transition period and not a new plan with new components?
Hon. D. Zirnhelt: New higher-level plans, not existing ones.
T. Nebbeling: Then what does happen to the existing higher-level plans?
Hon. D. Zirnhelt: We will work with the existing higher-level plans as they are. This provision grandparents them.
T. Nebbeling: Just to be totally clear, existing higher-level plans that do not have a transition statement will not be amended, and requests will be made to include that in the higher-level plans.
Hon. D. Zirnhelt: Over time, the intent is to amend plans, if they're needed for purpose of clarification. The idea is that if we are going to amend, we have to bear in mind that we need transition plans built in.
Section 52 approved.
On section 53.
Hon. D. Zirnhelt: I move the amendment to section 53 standing in my name on the order paper.
[SECTION 53, by deleting the proposed section 10 (1) (c) and substituting the following:Amendment approved.(c) it must specify
(i) in accordance with the regulations, and to the extent required by the regulations, silvicultural systems and harvesting methods that will be carried out within the cutblocks, and(ii) measures that will be carried out to protect forest resources;.]
Section 53 as amended approved.
Section 54 approved.
On section 55.
T. Nebbeling: First of all, going towards a results-based silviculture prescription process is something that we certainly support and have been pushing for. However, could the minister give an overview of how the plan will be monitored, so that it actually fulfils its objectives, once it has been put in place, and who does the monitoring during the period of the plan?
Hon. D. Zirnhelt: Standards will be put in the silviculture plans that will be proposed by the licensees and approved by the district managers or approving officers. It will be monitored by the regular Forest Service staff including, if necessary, compliance and enforcement staff.
T. Nebbeling: These standards are actually done by the proponents of the silviculture prescription. Does that not open the door for various standards in various areas? Or is the minister actually giving guidelines as to how standards could apply to certain lands?
Hon. D. Zirnhelt: There are many guidelines that deal with how the standards have to be proposed. If the standards that have been proposed by a licensee don't adequately conserve forest resources, they can be rejected.
Section 55 approved.
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On section 56.
T. Nebbeling: As the situation is here, the funding of this backlog will be primarily coming from Forest Renewal B.C. That is not really a company that can be targeted if the process is not complying with the standards as set out in the silviculture prescription. How does the ministry intend to deal with a situation where violation of the prescription happens and the agent is actually a government agent that is involved in providing the service to deal with these backlog silviculture programs?
Hon. D. Zirnhelt: The work would be undertaken either by licensees -- even though it might be funded by FRBC -- or contractors, in which case the violations would be dealt with by the normal procedures. It isn't government people undertaking this work.
T. Nebbeling: When we go through all the rules
It can come back, especially if I look at the whole appeals section that we will deal with later. It clearly states that ultimately the main contractors will be responsible for any remedial work to be done afterwards or any penalties that will be imposed on the main contractors. How would that work?
Hon. D. Zirnhelt: I'll refer the member to section 107 of this bill coming up, where it amends section 118. It says: "If a senior official makes a contravention determination against (a) an agreement holder
[11:15]
T. Nebbeling: Quickly, then, to finalize this sectionSections 56 to 61 inclusive approved.
On section 62.
T. Nebbeling: I would like to see this whole process explained. It provides the forest development plan for a person or a company that intends to carry out Forest Renewal B.C.-funded road activities. How does the financial transaction take place? The person can be a company. Is the company going to be docked the stumpage that it is paying to the government, for example, in order to come to the road it is going to construct under the program with funding from FRBC? Can the minister give me an overview of the financial transactions that happen to complete that deal?
Hon. D. Zirnhelt: This section doesn't have anything to do with the financial transaction. The way it will work is that there will be a contract between FRBC and the licensee, for example. The dollars will flow from FRBC to the licensee for the road work.
T. Nebbeling: This is not a case where the contractor, the licensee, would actually take on the cost and then deduct the cost of that work from stumpage that they will pay -- like in the small business plan program, for example.
Hon. D. Zirnhelt: No. It will be strictly a payment for the services and the work undertaken. It won't be deducted from stumpage.
J. Wilson: The ability of companies to involve Forest Renewal dollars on road work
Hon. D. Zirnhelt: The district manager decides what roads are eligible. It wouldn't be roads going to cutblocks where there's active harvesting going on, for example, but it would be old roads that might be upgraded in order to get to an area to do some backlog silviculture or some other kind of silviculture treatment.
J. Wilson: Do we have the ability here for a major portion of road construction and maintenance to be handled by FRBC rather than at the expense of the licensee?
Hon. D. Zirnhelt: The intent here is for the funding to go to old Forest Service roads, not roads for which the licensee is maintaining an active responsibility.
J. Wilson: I'm not sure what the criteria here are for an old Forest Service road. Say a road is not used for a period of a year or two. Would that qualify it for FRBC funding of any maintenance on that road? We have some major roads in the interior that are Forest Service roads, and they aren't used at all times, on a year-round basis. In a lot of cases they remain unused for a period of time. Some wood may come out of an area that's harvested, and then it might be another few months or a year before any more wood is extracted. Will those roads qualify for FRBC funding, for maintenance?
Hon. D. Zirnhelt: If the licensee has a road permit, they are obligated to carry on maintaining that road. If they have no road permit, then it could be subject to this kind of an agreement.
J. Wilson: Has there been a cost saving to the licensees calculated as a result of this new funding program?
Hon. D. Zirnhelt: There should be no savings to licensees in this. This is simply a matter of being able to allow FRBC to do its own work. They are the Crown's roads, the Crown's assets, and the Crown absorbs the cost.
J. Wilson: At present, is the cost of road construction and maintenance not the responsibility of the licensee rather than the Crown?
[ Page 6492 ]
Hon. D. Zirnhelt: If the company has a road permit, then they are responsible for the cost. If there's no permit, they are not responsible for the cost.
J. Wilson: One of the things that a company likes to do is get rid of that permit as fast as it can because it absolves them of any liability out there. Once that is accomplished, then I guess the maintenance of that road will become the responsibility of Forest Renewal. I see a potential here for some savings to the licensees. Once the Crown takes over the responsibility of the road, then anyone can go back in and access timber on this road, can they not, without having any need for a permit?
Hon. D. Zirnhelt: Let me try this. Once the licensee gets a permit, they can't get rid of the permit until they have deactivated the road. So it's not a question of them just transferring responsibility. If they don't need it anymore, then that judgment will be made. If it is needed by FRBC for a project, then FRBC would pick it up. Of course, there are going to be some grey areas, where part of a road might be used or whatever, but that will have to be some kind of a negotiation between ministries and the licensees.
Sections 62 and 63 approved.
On section 64.
T. Nebbeling: Considering that the whole intent is not only to eliminate paperwork but also to reduce time, I question this section because of just the very simple words like, "some holders of road permits" may be required by the district manager
By being vague again, are we not in a sense putting the burden on the district manager to make decisions that he or she may not want to make at the time that it would be most prudent to do so? So to have this section in there
Hon. D. Zirnhelt: Major licensees don't require
T. Nebbeling: What I was looking for was an example. I tried to eliminate the need for a district manager to have to go through the process where he or she will have to determine if indeed a logging plan will be required. The whole intent of the bill is to remove that kind of need for judgment calls, so that the district manager can base his or her decision on facts rather than saying, "Well, under these circumstances I may have to require another plan," which will then go back again to the applicant. That is just going to create more time and thereby more cost as well, which is another purpose -- trying to reduce the cost of the Forest Practices Code to small and large companies.
If there are no clear reasons given, then I really question if it should not just be eliminated, because the "some" occasions may be very rare. So far, five people from the ministry have not be able to come up with one example of why this section would be needed. This would be a section that will only frustrate and hamper a district manager making decisions.
[11:30]
Hon. D. Zirnhelt: Let me try to explain this a little more clearly. The rule will be that there is no logging plan for major licensees, but in exceptional circumstances it can be required -- for example, if there is significant environmental risk. But the small licences to cut -- that is, non-major licensees -- still may be required to submit a logging plan.Section 64 approved.
On section 65.
T. Nebbeling: Here is another example where the guideline in the bill states that it "provides limited circumstances in which a holder of a small business timber sale licence may be required to prepare a silviculture prescription." Again, it's so vague that it's difficult to understand which limited circumstances would apply and cause the request for a silviculture prescription. Again, this is a time issue and, of course, also a cost issue. So could the minister maybe briefly explain what he means by limited circumstances?
Hon. D. Zirnhelt: This provides for the issuance of a timber sale licence and requiring the licensee to prepare the silviculture prescription rather than having the Ministry of Forests prepare it ahead of time.
Section 65 approved.
On section 66.
T. Nebbeling: Just a brief clarification. There's a requirement that a person who is required by their licence, or who intends to carry out a backlog silviculture activity under a funding agreement with Forest Renewal B.C., must prepare a silviculture prescription. I understand that. What I've been trying to find out in previous sections is whose responsibility this is going to be. Is it the work agency that will identify projects, create projects and then support financial projects and allocate staff to them? Are they responsible for providing this silviculture prescription, or will it be an organization that takes on a contract? If that is the case -- if it is an organization -- then how would we deal with projects that are exclusively run by the work agency for displaced forest workers? Would a small company be formed for that particular situation where these displaced forest workers actually have to provide the silviculture prescription?
Hon. D. Zirnhelt: Normally it would be a licensee who is undertaking the backlog work. But if it isn't the licensee, there will be prescribed, by regulation, a list of people who would be qualified, and it may provide for a list of bona fide contractors.
T. Nebbeling: From what the minister just said, could it also be that the work agency could actually hire consultants to put it together for them and then use that prescription for projects where displaced forest workers are working, not necessarily an outside contractor taking on the project?
Hon. D. Zirnhelt: As I said, the government would prescribe, by regulation, who could be a contractor if it isn't
[ Page 6493 ]
the licensee, in which case it's possible that a group of displaced forest workers might qualify themselves to be in a position to undertake the responsibility. If there is some default and if it's FRBC-funded work, ultimately FRBC would have to accept responsibility for malperformance.
T. Nebbeling: That is exactly what I was looking for. I take it that the work agency would then actually be responsible for the default. If that is the case, then I come back to the previous section where I had the same question. How would we find justice dealing with the job agency? It is really at arm's length from government but is very strongly directed by government or FRBC, which is a government body.
Hon. D. Zirnhelt: There is no provision right now for the forest worker agency to take on the responsibility. It remains the responsibility of the funding agency, and then it would provide for contractors. But it's possible that that could happen. Were it to happen, then there would be regulations that would prescribe how they would become qualified.
Sections 66 to 69 inclusive approved.
On section 70.
J. Wilson: Could the minister detail what the purpose of section 70 is?
Hon. D. Zirnhelt: This provision amends section 27 to give the district manager the ability to require all known information from Range Act agreement holders if the district manager is preparing a range use plan for the holder.
J. Wilson: Does this take away the ability of the holder to draw up their own range use plan and put it into the hands of the district manager and make it the district manager's job to prepare all the range use plans?
Hon. D. Zirnhelt: No, it doesn't. It helps district managers who are having trouble getting information from holders to do the plan. The district managers agreed to do the plan, but the range holders aren't providing the information to them, so it requires that they do. They could still carry on and do their own, if they want to do it.
J. Wilson: I assume this would be a done through a dialogue between the holder and the district manager. There are a lot of details and information that go into a range use plan, and they vary considerably between one range management unit and another. There is a lot of discrepancy here as to what material may be necessary to complete a plan.
Does the manager provide the holder with some type of details or questions that answers are needed on? Or is it something that is just done verbally and the district manager would ask the holder questions that they thought were pertinent, and vice versa?
Hon. D. Zirnhelt: The way we would expect it to happen is that in the dialogue between the district manager and the range permit holder, it would become apparent that certain information is necessary. In that case, this section makes it a requirement that the range holder provide the information to the district manager.
J. Wilson: Without some type of format to follow, it becomes quite difficult for the holder to supply the district manager with what can be very pertinent information. In some cases, both the district manager and the holder may overlook things that are critical in that plan, yet neither party would think about that information. It's just something that can be overlooked. I'm wondering if something is being put together as a guideline for the holder so that they can try and avoid the situation, and to supply the district manager with all the pertinent data.
Hon. D. Zirnhelt: There is a guidebook that gives guidance to both the holder and the district manager. But if there is some information that was overlooked by both parties, then the next time around they would pick it up. If it became clear in administering the plan that they had missed some information that was necessary to carry out the plan, in that case the parties would have to agree that they would have to provide it. The simple answer is the guidebook, which is there to assist.
[11:45]
J. Wilson: I hear what the minister is saying. One of the things that most range use plans are lacking at present is flexibility, unless the thing is brought out and it becomes an issue and the holder has the foresight to work flexibility into the plan. Sometimes correcting it the next time around could beHon. D. Zirnhelt: I'm informed that if it's clear that somebody made some kind of mistake or that either party made a mistake in developing a range management plan and there's some technicality that makes it look like they're off base, an amendment can be made. The way out of it would be to make an amendment.
Section 70 approved.
On section 71.
Hon. D. Zirnhelt: I move the amendments to section 71 standing in my name on the order paper.
[SECTION 71 (a), by deleting the proposed subsection (1.1) and substituting the following:The first one, section 71(a), establishes a new section 28(1.1), permitting district managers to exempt FRBC project proponents from the requirement to prepare a forest development plan if one is not required.(1.1) Unless the regulations specify otherwise, the district manager may exempt a person referred to in section 19.1 from the requirement for a forest development plan if the district manager determines that any construction, modification, maintenance or deactivation of the roads that will take place does not affect the public in a material way., and.
SECTION 71 (b), in the proposed subsection (2) by adding "or (1.1)" after "Despite subsection (1)".]
Section 71(b) corrects a drafting oversight by adding a reference to the new subsection 28(1.1) in section 28(2) of the act.
Amendments approved.
Section 71 as amended approved.
Sections 72 and 73 approved.
[ Page 6494 ]
On section 74.
J. Wilson: Could the minister explain what the purpose of 74(a) is?
Hon. D. Zirnhelt: This paragraph is amended to require that persons holding certain operational plans not carry out operations on the areas of the proposed amendment rather than on the entire operational plan area.
J. Wilson: Would this include the effect of a logging plan on a range use plan for such things as when you remove natural barriers? Would it include the construction of drift fences and that type of thing to prevent cattle movement from one area to another? Is it the intent of this to give the range tenure holder a little bit of comfort so that they don't have to worry about their range unit becoming more or less open to adjacent users, or their cattle drifting out? Is this in this part?
Hon. D. Zirnhelt: The idea behind this section is to stop actions only on the area where there's a problem, not on the whole plan area. I guess if somebody had a problem with removing a natural barrier and it was seen in part of the plan, then it could require that they stop removing the natural barrier because it violates the range use plan in that spot. But they wouldn't have to shut down the whole operation for the whole area -- just the specific area, in effect.
J. Wilson: That being the case, would the onus then fall on the licensee to remedy the situation through some type of improvements? Would that funding have to come from the grazing enhancement fund, or would it become the responsibility of the range user? Where would the responsibility lie for any remedial work that would be necessary?
Hon. D. Zirnhelt: This section doesn't affect that, but the answer to your question is that the licence holder is responsible for any removal of natural barriers. We would not expect the grazing enhancement fund to pick it up.
Sections 74 and 75 approved.
On section 76.
J. Wilson: I have a question on section 76(d). Could the minister explain what this is about?
Hon. D. Zirnhelt: This section permits a district manager to request a new silviculture prescription if the holder has not been issued a cutting permit within three years of approval of the silviculture prescription.
Sections 76 and 77 approved.
On section 78.
T. Nebbeling: This is an important section, because here the economic test is actually incorporated in the approval process for the first time. At the time we did section 42, we talked about the preamble, and this is the first time I see it incorporated in a section. I would like to ask the minister, as it is the first time, to give me a quick rundown on how the economic test will be implemented in the process and what the components are for the district manager to consider.
Hon. D. Zirnhelt: An example would be that if there is a higher-level plan that seeks to promote economic diversification through the establishment of a special management zone for a tourism venture
The Chair: Minister, are you prepared to move your amendments?
Hon. D. Zirnhelt: I move the amendments to section 78 standing in my name on the order paper. There are three amendments.
[SECTION 78 (a), in the proposed section 41 (1) (c) by deleting "resources," and substituting "resources".SECTION 78 (b), by deleting the proposed section 41 (6.1) and substituting the following:
(6.1) If any portion of a forest development plan or amendment requires the joint approval of the district manager and a designated environment official under subsection (6), the district managerAmendments approved.(a) may approve as a forest development plan any part of the forest development plan that does not require joint approval, orif the part meets the requirements of subsection (1) and the district manager is satisfied that the part of the plan or amendment being approved will adequately manage and conserve the forest resources in the area that requires joint approval., and.(b) may approve any part of the amendment that does not require joint approval
SECTION 78 (c), in the proposed section 41 (7) (c) by deleting "resources," and substituting "resources".]
On section 78 as amended.
T. Nebbeling: In the first part of the amendment, there is a situation where the district manager could approve part of a plan that does not necessarily need the environmental official's approval, as well, in that particular district. However, at the end of the day, when the final plan has to come up for final approval, how does the opinion of the environmental official, who may have a different opinion on the decision than the district manager
Hon. D. Zirnhelt: The purpose of this is to take out only that part of the development plan over which there may be joint approval necessary and allow the district manager of forests to approve the developments in all the other areas. So it expedites approvals in the other area and isolates the area over which there is joint approval. The way it works is that there has to be joint approval, and until there is joint approval the conflict goes on. But I guess that's where protocols between the ministers and so on can expedite it. They can talk about the terms and conditions for approval.
T. Nebbeling: I can go on. I've got quite a few questions on that section. Or would you like me to move the committee rise and report progress? I just did.
Motion approved.
[ Page 6495 ]
The House resumed; the Speaker in the chair.
The committee, having reported progress, was granted leave to sit again.
Committee of Supply A, having reported resolutions, was granted leave to sit again.
Hon. D. Miller moved adjournment of the House.
Motion approved.
The House adjourned at 11:58 a.m.
The committee met at 10:10 a.m.
ESTIMATES: MINISTRY OF
EMPLOYMENT AND INVESTMENT
(continued)
C. Hansen: The only matters that we have to finish up in terms of the estimates of Employment and Investment are two issues. First is the community development branch within the ministry itself, and second, the Four Corners bank.
I'd like to start with the community development branch. Specifically I would like to ask the minister what the total budget is for that unit. I understand that it falls under corporate services within the estimate. I'm wondering if the minister could tell me the budget that is allocated for that unit specifically and how many staff are working in that unit currently.
Hon. D. Miller: The budget is $394,300 -- four FTEs.
C. Hansen: As of a year ago we were dealing with some specific projects that the unit was involved with. One of the projects was Four Corners Community Savings. There was the Bladerunners program, which I understand has now wound down. There's the Main and Hastings housing and employment project, the Woodwards' project, a proposed redevelopment project at Tofino, and the United We Can container recycling depot. Could the minister advise us if those are still active projects, and what other projects might be added to the work of that unit at this point?
Hon. D. Miller: Yes, they are active. Bladerunners is active, as well. Just running through the projects quickly: Four Corners Community Savings; Bladerunners; the Main and Hastings housing and employment project; the Woodward's project, although other ministers have responsibility, as well; Save Our Living Environment; United We Can container recycling; and the Bent Nail construction materials recycling and job training in Victoria.
C. Hansen: The one that the minister didn't mention is the Tofino project. Is that still an active project?
Hon. D. Miller: It's active, but there's no funding. So while it's still notionally a project, nothing is happening.
C. Hansen: I'd like to ask specifically about the Bent Nail project and United We Can. They strike me as being training programs. Is that an adequate category to put those two projects in? We've got the Bladerunners program, United We Can and the Bent Nail projects, which are all training programs. Is that the essence of what those programs are all about? Or does the minister see them as broader than that?
Hon. D. Miller: It's training, yes, but it's broader in terms of the purpose of the project, whether it's recycling in the downtown east side bottle depot or material recycling in Victoria.
C. Hansen: I'd like to ask with regard to those training programs
Hon. D. Miller: Training takes place across the province in a variety of circumstances involving a variety of players: the private sector, government. I don't quite follow the question.
C. Hansen: Looking at the overall mandate of Employment and Investment, as we discussed earlier in this estimates debate many weeks back, I see these as projects that fit more logically into Education, Skills and Training, and not Employment and Investment, given its mandate. Given the mandate of the Ministry of Employment and Investment, how do these projects fit within that mandate?
[10:15]
Hon. D. Miller: The projects are in the ministry through the community development unit. We can speculate forever about why, but that's where they are.C. Hansen: The minister mentioned that the Bladerunners program is still active. My understanding is that it had been wound down. I'm just wondering if the minister could explain what the active elements of that program are.
Hon. D. Miller: The Bladerunners program does provide training for people who are employment disadvantaged, with an emphasis on youth -- work experience, training in construction trades. Funding for the program comes from the B.C. 21 special account. It will place 84 participants on construction-rated projects around the province, with a total cost of $803,000.
The coordinators are located in three development regions around the province. In Victoria there are 12 participants and in Nanaimo 12. There's a coordinator in each location and five senior participants in Victoria and Nanaimo. In the lower mainland there are 36 participants, ten senior participants, two Bladerunners coordinators and one regional coordinator. In Region 3, Kamloops, there are 12 participants, five senior participants and one coordinator. In Vernon, 12
[ Page 6496 ]
participants, five senior participants, one coordinator. We're trying to create some local, meaningful work experience that will result in long-term attachments to the workforce.
Contracted delivery. In Victoria it's the John Howard Society of Victoria, and in Nanaimo it's the Nanaimo Youth Services Association; it's SkillPlan in the lower mainland; in Kamloops it's the Kamloops and District Elizabeth Fry Society; and in Vernon it's the Community Futures Development Corporation of the North Okanagan.
C. Hansen: I understand that this is a wage subsidy program. Could the minister advise us if there is a formula for that wage subsidy? Is it a 50 percent wage sharing, for example, as many of the other employment programs are?
Hon. D. Miller: The employer pays $7.50; we top up to $10.
C. Hansen: With regard to the Woodwards' project and the Main and Hastings housing and employment project
Hon. D. Miller: Just as a general statement, moving into areas like community development
C. Hansen: I guess the whole process of estimates is one of looking at the efficiencies of how government is spending taxpayers' money. In this case, I see a series of programs, and we have ministries set up to deal with those probably more efficiently than the Ministry of Employment and Investment is set up to administer these types of programs. I guess I would argue that this entire unit does not belong in Employment and Investment. We've got $394,303 that is being spent in this ministry for some purpose other than the effectiveness of administering government programs. We've got existing staff in the Ministry of Education, Skills and Training who deal with training programs. We've got staff in B.C. Housing and staff in Municipal Affairs and Housing who could more adequately deal with the housing projects that are involved under this unit.
I look at this whole unit and feel that it's somewhat of a make-work program for one particular individual, because we have existing staff in other ministries who could adequately handle these, probably without any increase in staffing. Those existing ministries could handle the administration and coordination of these projects. Here we have an overall budget of $21 billion, but somewhere in that budget is $394,303, much of which could be saved if we were to have these programs administered where they might logically belong: within the mandates of existing ministries other than Employment and Investment.
I have one last question on the community development unit. Actually, I often make the mistake of saying "one last question," and then that suddenly leads to others. Within that $394,303, could the minister give us a breakdown? We certainly don't have the STOBs for that kind of detail. Could he give us a breakdown as to how much of that is in salaries and benefits, how much is related to other costs and what those other costs might be, other than salaries and benefits?
Hon. D. Miller: Similarly, I always hate answering that one last question, because in my experience, it always leads to some more. Anyway, I'll take my chances.
Salaries, $233,500; benefits, $4,000; service contracts, $49,000; travel, $38,000; office supplies, computers, etc., $7,800, $2,000 and another $1,000; contributions and grants, $65,000; and some recovery, $10,000 -- for a total of $394,300.
C. Hansen: As the minister suggested, sometimes it does lead to other questions.
In terms of contributions, what kind of contributions would be made from this particular unit?
Hon. D. Miller: They are small grants given out to a variety of organizations -- United We Can and some small ones and community groups. I don't have an absolute breakdown. I think there was a $10,000 grant to Tofino. They are very small grants.
I'd like to correct the record, Mr. Chairman. The $10,000 to Tofino was last year.
C. Hansen: Just to clarify one number, when you talked about salaries, you said $233,500, and for benefits I think you said $4,000. It's probably $40,000. Is that more
Hon. D. Miller: Actually, it's $4,000 and $49,000.
C. Hansen: Contracts are $49,000.
Hon. D. Miller: All I have is a list of STOBs, so my staff person has written in the breakdowns -- in other words, what the STOBs represent. So service contracts are $38,000, and that would be benefits
F. Gingell: We'll have our annual waltz on
As members of this committee realize, we are dealing with this issue somewhat late, because we were waiting for documents and information. I understand from a casual conversation that the whole lot was caused by needing to get some issues cleared up between the bank and FICOM. Could the minister advise the committee if that is the case, and if it was, what the issues were?
[ Page 6497 ]
Hon. D. Miller: Clearly the mandate is to have the business plan in January, I believe. That wasn't done. We take some responsibility. I think the board expired in early February; they weren't reappointed until March. So those circumstances led to the late production of the business plan.
F. Gingell: So I take it from that response that there are no disputes, differences, issues -- issues is a better word, I would think -- between the B.C. Community Financial Services Corporation and FICOM?
Hon. D. Miller: No. I'm advised that FICOM just did a review, which was described as very satisfactory. For the record, I should also indicate that while it is referred to as the Four Corners community bank, in a strict, technical sense it is a Crown corporation and not a bank. The federal people, I understand
F. Gingell: But this bank or Crown corporation, or however you wish to refer to it, is subject to regulation by FICOM.
Hon. D. Miller: That's correct.
[10:30]
F. Gingell: When FICOM did their recent review of the affairs of this organization, they gave an absolutely clear report -- i.e., there were no issues that required the organization to take corrective action.Hon. D. Miller: The only issue
F. Gingell: I can appreciate the taxpayers being concerned about the lack of deposits. The original business plan proposed that there be a target or goal set of $21.4 million. As of the end of March '97 there was only $4.7 million -- a long, long way behind -- which is the reason for the financial results being substantially behind the plan. But why would FICOM be concerned with that issue? Or were they concerned with the manner in which the Four Corners bank is seeking deposits?
Hon. D. Miller: I don't profess to be an expert on banking or FICOM or those kinds of issues, but I understand it has to do with capital requirements. I also am advised that the deposits are now at the $22 million level.
F. Gingell: Thank you. That is quite a change. So from March 31 to June 30 or July 29 -- how time does fly -- we've gone from $4.7 million to $20 million.
I appreciate that it's not appropriate for the minister to respond to questions about depositors with their names, but the financial statements and projections do classify them within certain organizational groups: pension funds, union pension funds, public bodies, charitable organizations, private depositors. Could the minister give us that breakdown, as to this $20 million and where these deposits come from?
Hon. D. Miller: The characterization
F. Gingell: Now I know why these estimates are being held on July 29. You were waiting until you got $20 million in the way of deposits.
Hon. D. Miller: I think you're suspicious, Fred.
F. Gingell: Suspicious, yes. The target set out in the business plan for '97-98 is to add another $20 million to it. How does the management of the bank feel about their ability to get to this next step?
Hon. D. Miller: There is a plan to continue to pursue deposits. There will be a new person retained, an account manager. As well, the new members of the board have extensive connections on both the union and business sides. Obviously their job is to pursue the mandate very vigorously and attempt to fulfil it.
F. Gingell: In the categorization of accounts, you described the major item as public bodies. I presume that none of these are directly Crown corporations or departments of government -- i.e., there aren't any funds deposited into the Four Corners bank that have come through treasury.
Hon. D. Miller: That's correct; they're not through treasury.
F. Gingell: When one looks at the financial results for 1996-97, one can congratulate the bank on having suffered no loan losses. That's very good. One could be critical of the bank if they hadn't made any loans, too, so it's very difficult to lose money.
When one looks at the investment policy, it's a very stringent type of policy. Not being a banker myself, I don't know how that policy would compare to commercial banks. It would seem, looking at the conditions under which the Four Corners bank will make loans, that their conditions are more strict. But I would have assumed that the bank did want to get into the business of assisting people starting up, getting into business in the particular geographic area that they service.
Can the minister advise the committee what the approach or the attitude of the bank is towards making loans? Is the fact that there have been no loans given to this point the result of no applications or no one being able to meet the conditions laid down in the lending policy? Thirdly, has anything changed since March 31? Are there any loans on the books now?
Hon. D. Miller: There is a plan with respect to moving into loans. But I should say -- and I go back to the origins here -- that this is not something that is normal in our society. We intended to leave these questions to the private sector, but there was a conscious decision by government to try to work with the downtown east side community, modelled after some examples in other parts of the world.
F. Gingell: Chicago.
Hon. D. Miller: Chicago. And that is an entirely laudable goal. How do you deal with inner-city problems? There is no
[ Page 6498 ]
standard recipe or formula for success. It requires trying things that aren't conventional. In the development of the Four Corners financial institution -- establishing the institution and the primary issues of acquiring a site, renovations, setting up shop, getting into business -- securing depositors in that area was a significant challenge, and one that I think the institution has dealt with quite well. We are now up to 3,300 depositors. You will appreciate that these are people who, quite frankly, are using this institution in the most rudimentary way to simply put their cheques or their savings in -- whether they be welfare cheques or whatever -- and to use the institution daily or weekly. That's fundamental.
What seems to be fundamental as well is securing the confidence of the community in the institution. I'm advised, for example -- and you can see from the growth in the depositors -- that that is happening. On a Welfare Wednesday, for example, there is a long, long lineup that stretches around the bank and down the alley, which indicates to me that there is a growing sense in the community that in fact this is an institution that is there to serve their needs. Lots of little things happen.
I haven't been over there myself; it's simply a function of my ability and time to do that. Hopefully, I will get an opportunity, and I encourage others members as well to do that. Perhaps the member has. But it's not an easy place to conduct business in a conventional sense. It requires a lot of dedication on the part of the staff to deal with the kind of situations that you find in the downtown east side. That's surely encouraging that they've managed to obtain 3,300 accounts.
We've got to move forward in terms of developing a lending policy of the bank. Those issues are being dealt with through Treasury and FICOM. That's not quite in place at this point in time, but it will be.
F. Gingell: The minister touches on the issues that we have always supported this organization for: the need for people to have a petty-cash box that is downtown so they don't have to walk around with cash in their pockets; they don't have to go to the beer parlour and cash their cheques; they can pay for their rent with a cheque and have a record that it was paid -- so that government can use its influence to assist these people just in their day-to-day living.
But, as the minister knows, it was the position of the opposition that it was a very perfunctory effort that was made by government to talk to credit unions. There were two specific credit unions within that community and when we talked to them three -- or four years ago, I guess it is now
[10:45]
In the business plan, there is a proposal that, commencing this year, you will have a service charge of $1 per month for each account. The wording in the business plan doesn't indicate whether $1 a month is an average or whether it is a flat charge. I wonder what the proposal was, and I wonder why the income from that doesn't appear in the budget. I presume that it would appear as non-financial income.Hon. D. Miller: It would be an actual charge per account. Again, you're right: we're not here to refight old debates or to redo them. There are some successes here that are, in my view, quite modest initially: for example, the B.C. Benefits client deposits are $217,000. That tells me something. It's pretty difficult to quantify any saving on the social side. You could probably do some analyses and come up with some numbers, but that does indicate to me instinctively some savings and some social benefits as a result. Over time it has to be much more than simply a place to use as a cash account. For some people it will never be anything more, but for the community it could potentially fulfil a larger mandate.
F. Gingell: A further question that I asked was: has the income that the bank will earn in this current year been reflected in the budget? I couldn't find it anywhere.
Hon. D. Miller: It's under "Other Financial Income."
F. Gingell: I would have thought that you would have put it under non-financial income, financial income always being the result of interest charges and those kinds of things. Am I wrong in my categorization of that? I then presume that that is the item that is shown, in the proposed budget for the year ending 1998, as $10,000. Now it's going to be more like $40,000, isn't it?
Hon. D. Miller: I am advised that it could be between $10,000 and $15,000.
F. Gingell: The officials and I multiply differently: $1 a month, $12 a year, 3,300 accounts, 40
Hon. D. Miller: There is a requirement for a three-month notice of intent to post it to service charges.
F. Gingell: Has that three months commenced yet? Has it ended yet, or has notice been given?
Hon. D. Miller: It has not been finalized by the board.
F. Gingell: In one of the areas when one looks back and compares previous budgets with current results, there are two or three items that jump out at one. One is wages. When you look back at 1996-97, the bank did substantially less business than had been anticipated. Instead of there being $21 million in deposits at the end of the year, there was only $4.7 million or something. Yet wage costs were substantially over budget -- not just a little bit, but a lot. One would have thought that with those circumstances, the wages would have been less.
Now, I appreciate that the minister and I had some disagreements last year about which budget and which business plan. It seems to me that you do a business plan, and if it doesn't work out, you tear it up; then you write another one and pretend the first one did not exist. But I think we got on to a steady start at this point that
[ Page 6499 ]
But with business down substantially more than budgeted, wages had been budgeted at $236,000 and came in at $275,000. That was 17 percent over, and you would have expected it to be 17 percent under, I would have thought. You didn't hire an investment officer, which you had previously planned on doing. Any comment?
Hon. D. Miller: There was an exceeding of the forecast attributed across the normal range of issues. One is the whole training issue, the balance between full-time and part-time, given the number of accounts -- which has exceeded target, I believe -- and the hiring of an administrative assistant and an in-house accountant.
In looking at some of the issues around the institution, my thinking hasn't been solidified with respect to some of these questions. It's fairly recent, but I need to do some more work. I'm not convinced that we should have given some more resources external to the bank when we put this thing in place.
Typically when I deal with other companies -- budding companies, for example -- in other sectors of the economy, one of the issues they have to face is the training costs, particularly if it's a high-skill kind of enterprise. We will quite consciously bring training dollars to the table as part of an investment package. The Avcorp deal is a case in point. I think in that case around $5.5 million came from the Ministry of Skills, Training and Labour through existing training institutions to complement what Avcorp was doing in terms of setting up an expanded business at a new location -- in Delta, I might add.
So we're spending a fair amount of the taxpayers' money in a directed effort to work with the private sector. Clearly, having a skilled labour force is one of the key ingredients in that aerospace industry. So I'm being very general here; I'm not being specific. I hope the members appreciate that. I want to do some more work in terms of the kind of training needs, the human resource needs of the institution to see whether it is appropriate and possible to provide some external resources to assist this institution in becoming successful. That's a very general statement. I haven't boiled it down to specifics, but it's an issue that I want to address.
F. Gingell: Our understanding relative to staffing was that the bank would go out and hire some trained, experienced staff, and one would then be involved in all of the backfill being people who require training. I don't think anyone disagrees with that concept; that's a very worthwhile exercise.
When one reads in the review of the business plan as to what went wrong in 1996-97, part of the reason given is a substantial reduction in the funds that were to be available -- I presume through your ministry -- for communications and a marketing effort. I think it's described under the word "marketing." Only $10,000 was available out of, from my memory, an original $100,000 proposal. That was cut off when the government suddenly had this bright light which told them that there hadn't been two surpluses in a row; they were in fact deficits and they hadn't been accurate in their financial statements. It was closed down.
Without getting into that issue, are there any other external support arrangements to assist the bank in fulfilling its mandate that do not appear in the accounts of the Four Corners bank? I would presume that this $10,000 that was spent on the marketing plan does not come through the accounts. That was spent as a program cost in Employment and Investment or some other place. Have all of the costs of the training programs that have gone on been borne by the bank, or have they been part of a program cost in some other ministry? It's not that these things shouldn't happen; it's just important for citizens and legislators to have a clear understanding of what is being spent. Could the minister deal with the issue of the costs to support and promote the bank and its mandate that do not appear in the accounts of the Four Corners bank?
Hon. D. Miller: The initial training was done through the PRIDE centre, and I gather that was debated in estimates. This year there's no external support; it's all internal, in-house. I should also point out that notwithstanding the variation on the labour side -- the cost of people who work there -- the actual results of the bank are $10,000 less than the forecast. So when you go through all the categories, it seems to me that they have performed.
I was really speaking more generally. I think there are resources that ought to be available that are non-cost resources, whether that's through individual corporations or individual people who want to take it upon themselves to provide the kind of service that I know the community -- the broader business community, particularly -- is capable of providing. The bank has received offers of support from other financial institutions with respect to support for training and those kinds of things. That's something they're working on; I have nothing to report on that question.
Just as a general statement, if you're going to nurture something that's new, different, unique and that has a goal that's supported generally, then you've got to make sure that you stay on top of it and try to bring in the resources that are required to make it work.
[11:00]
F. Gingell: First of all, I didn't quite catch the statement that was made about the results being only $10,000 different from plan. I thought the plan was a $490,000 loss; it was in fact a $605,000 loss. That's $115,000. On top of that $115,000, you should add another $50,000 for the non-cash amortization of leasehold improvements and equipment, which had been included in the budget that produced the $490,000 at $140,000 and actually was only $77,000. So there's another $64,000 there. So in my own mind, I have the bank about $180,000 worse than plan.Hon. D. Miller: On the operational expense projection, the bank was forecasting $875,000. In fact, the actual was $865,460, so there was a difference to the positive.
F. Gingell: I see. So you were dealing only with costs, not with revenues -- not with net income.
Interjection.
F. Gingell: I appreciate that they may be confusing, but we do come from different backgrounds. Some of us look at the bottom number and say the bank had a plan in which they anticipated to lose $490,000. Now, the corporation capital tax was $8,000 less than expected because they had been losing more money than they expected to. That brought their capital tax down by $8,000, so we'd expect the loss to be only $482,000. Then there were some differences in depreciation. I don't know what caused this, because it doesn't look like a timing issue. It either looks like a change in write-off policies
[ Page 6500 ]
or a miscalculation in the 1996-97 plan. The difference is some $64,000, so you take that off, because it's outside the control of the bank. You had a budget that anticipated to lose $418,000 and you lost $605,000 net -- at the bottom, after all revenues and all costs. So we would think you're out almost $200,000 rather than $10,000. I know you can pick and choose, but you pick and we choose to find out what these differences are.
When you spoke of the PRIDE program, which cost roughly
Hon. D. Miller: No, it's not correct.
I'd begin by going back to our earlier discussion. Perhaps I was misled, but I was certain the member was focusing on the operational budget in talking about the difference between forecast and actual on the labour cost side. Therefore my response was based on the operational side. These business guys, Mr. Chairman -- they hop all over the map. No wonder it's hard to keep up with them sometimes.
F. Gingell: I must admit I've lost my place mentally. We were discussing the operations. The minister thinks, though, that you're only out $10,000 on the costs. I think in the numbers at the bottom that it's the net cost to the taxpayers after the income the bank has earned. We're not going to accomplish anything by furthering that discussion. I'm right, the minister's wrong, and there you go.
Hon. D. Miller: I was wrong once.
F. Gingell: You remember that, do you?
In the way the financial statements have been presented, when you compare this year's draft financial statements -- which I assume are not going to change -- you have shown financial expense separately. I presume that that is the interest paid on term deposits. It does not appear as an item in any of the previous budgets. So I presume that it had always been netted with financial revenues. Is that correct?
Hon. D. Miller: Yes.
F. Gingell: When one looks at the comparison of expenses, plan versus actual, one of the numbers other than this difference in
Hon. D. Miller: The depreciation schedule, as I understand it, is something that is recommended by the external auditors, and I presume that is where the difference is.
F. Gingell: But the minister doesn't have in his briefing notes an explanation of why
Hon. D. Miller: Yes, if there is a difference, I'm sure there is an explanation for it. These are auditors. Don't ask me to answer for them.
F. Gingell: On some things I guess one just gives up. But they are not just auditors; these are financial statements that are the accountability process from this bank to the citizens of this province who finance them. It's taxpayers' money. I know it is only a minor item, but I just wondered if there had been a change in policy or whether there was a mistake made in the previous year. If you look at what is budgeted for depreciation and amortization in the coming year, clearly the $141,000 that was in last year's budget is a wrong number. I wonder if the minister has any further information or if we should just move along.
Hon. D. Miller: Look, I'm sure this is an important point, and I certainly
F. Gingell: Yes, I see. Before I pass on from the issue of wages, we had a discussion earlier -- it didn't come to any useful conclusion -- about why when you had had less activity than one anticipated in the bank, your wages were over budget. I never really did get a response from the minister. He spoke about who the bank intends to hire in this coming year as their level of activity increases. I appreciate that this year's plan or budget includes an increase in wage costs roughly in the region of $70,000, I think. Has that been reviewed for this year's plan in light of the overexpenditure from last year? Or has this plan expenditure for 1997-98 been based on the false numbers or the unmet goals of 1996-97?
Hon. D. Miller: With all due respect, if most businesses were faced with the kind of rigour that we see here
This was a projection based on the business plan and what kind of business the bank plans to do. I think it's a tribute to them that they're up to 3,300 accounts. That's presented a significant challenge, because it takes a lot to service them. The traffic pattern alone presents a challenge, in that you get a lot of people coming in all at once. I referred to Wednesdays. The bank is looking at how the operational side can deal with the cost side, the labour side. For example, the installation of an ATM presumably provides more flexibility in terms of handling the customer base that they have. But these are developmental issues, and I think the forecasts are prudent and realistic.
F. Gingell: I'll just go back to the question. If I used the word "false," I subsequently changed it to "unmet goals." That's exactly what it was. There were certain assumptions made and budgets set for the years 1996-97. It has turned out that in the final result for 1996-97, the costs were understated by some $40,000. We're $40,000 over budget. The question I asked was this: has the plan for 1997-98, which is the purpose of this discussion, been taken into account? Has it been based
[ Page 6501 ]
on a progression from what actually happened in 1996-97 or from what was planned for 1996-97 -- the goal or the budget -- which was $40,000 less than the amount that was spent? I'm just trying to assure myself that in preparing this year's budget, the managers at the bank have taken into account the reality of what the real wage costs are, particularly now that you're up to 3,300 customers. I'm sure the level of customers has a dramatic effect on the level of wages.
Hon. D. Miller: Again, I think the forecast is based on the experience of the bank, on their projections and on the business plan. I did indicate that there were additional hirings -- an administrative assistant, the accountant. So if you look at some of the contracted services prior and add that into the wage actual, you'll find that it's not terribly out of line. Again, I think these are minor issues in the scheme of things.
[11:15]
F. Gingell: Moving on from wages, one other expense category that's been substantially over budget is professional fees. Professional fees are normally used to describe both accounting fees -- audit fees -- and legal fees. I am interested in how large a portion of these fees is for legal fees and whether anything untoward has come up that has caused the bank to require legal services and advice on issues that were unanticipated and have been outside of the usual items that any of us would be concerned about.Hon. D. Miller: No, there was nothing untoward at all.
F. Gingell: One of the provisions within the act is the creation of an advisory board, which is an elected board. Can the minister bring the committee up to date on what the current status on the advisory board is?
Hon. D. Miller: The additional advisory board was appointed. It requires a regulation from cabinet with respect to the election, and that has not been completed at this point.
F. Gingell: Sorry, I'm not sure I got all of that. Would the minister mind just repeating it? Have the elections gone ahead?
Hon. D. Miller: No, it requires a regulation, and that's not been done or completed by cabinet. Once that is done, there will be an election.
F. Gingell: The intention is that it will be done and that the elections will move forward.
The commercial banks have moved strongly into the ATMs -- machines through which you can bank. I wonder what the community bank's plans were in this area. You haven't budgeted very much for technology for this coming year. I wonder what those proposed technology expenditures are on and what your position is on putting in machines which may be convenient to customers but do reduce staffing requirements.
Hon. D. Miller: I was in error when I talked about ATM earlier in terms of describing that as the need for the machine at the bank. Really, the issue is access to the bank via the ATM system. In that sense, the bank is dealing with the credit union in terms of accessing the exchange system. There's a cost of about $10,000, and there's a user cost per transaction of about $1.40. The board has not yet approved that, but that is in play.
F. Gingell: For this current plan, the cost of making the ATMs available is included in your costs and revenues, but there is no suggestion -- at this moment in time, I take it -- that it will be user paid. The bank will absorb the $1.40.
Hon. D. Miller: No, in fact it is user paid.
C. Hansen: We asked earlier about the delay in the business plan and not meeting the requirement of the end of January. I guess my colleague asked whether or not that was as a result of some of the FICOM issues. I gather the answer was no, but I don't think we did get an explanation as to why the business plan was delayed. To me it's not an issue of when the board was appointed, because the old board didn't expire until after that deadline had passed. I just wonder if the minister could advise us.
Hon. D. Miller: I gather that the prior board didn't want to commit the new board. There was a new board, seven new members, so that resulted in the delay. You always end up making excuses for these things, but it was late.
C. Hansen: Given that the business plan that we have is marked "draft," could the minister advise us as to when the final business plan will be available?
Hon. D. Miller: I did provide that so that we could have this discussion. The issue is before Treasury Board and ultimately cabinet. So once that's done, it will be approved.
C. Hansen: I noticed that we were provided with both the business plan and the financial statements a week ago. They were, in both cases, marked "draft." Does the minister anticipate that there would be any changes to either the business plan or the financial statements before they're finalized?
Hon. D. Miller: I learned long ago not to predict what Treasury Board might do to any file I bring to it. Again, the member appreciates that I did provide the working documents ahead of their discussion by Treasury Board and cabinet so that we could facilitate this discussion. I don't anticipate any change.
C. Hansen: I would like to ask the minister to undertake to provide us with final documents if there are any changes. Assuming that we don't get documents in a final form, we'll assume that the drafts go forward unchanged. Is that a fair request?
Hon. D. Miller: Certainly there will be a final. I don't anticipate changes from the documents that you have. If there are, we'll certainly make you aware of them.
C. Hansen: In the business plan, on page 18, it talks about marketing and communication strategies that came out of last year's business plan. It indicates that initially the Ministry of Employment and Investment, as the ministry responsible for the Crown corporation, indicated financial support of up to $100,000 to promote Four Corners Community Savings. Only $10,000 was spent before the implementation of the funding freeze. I wonder if the minister could advise us where, out of the ministry's budget, this $100,000 was to have come -- where the $10,000 came in terms of the ministry accounts.
Hon. D. Miller: The communications budget.
[ Page 6502 ]
C. Hansen: Could the minister advise us
Hon. D. Miller: No.
C. Hansen: In terms of this year's budget, the 1997-98 budget, are there any funds that may be transferred from the Ministry of Employment and Investment to the bank for things like marketing?
Hon. D. Miller: The moneys are not, if you like, transferred to the bank. It's an expenditure from the ministry to assist on the marketing side. I believe that we notionally have around $60,000 earmarked for that purpose in this fiscal.
C. Hansen: So just to get clarification on this, are these moneys that would not be spent by the bank but would be spent by Employment and Investment to promote the bank? What would the $60,000 go to, if the minister could elaborate?
Hon. D. Miller: It goes to assist in the marketing plan of the bank. I did talk in a general way about external resources that are required. It's fairly modest in terms of assisting the bank. The fundamental job is theirs, and it appears that in the last while they have done fairly well. They're now up to $22 million. We want to assist them in achieving the projected deposits that are part of the original business plan.
C. Hansen: I would like some clarification as to how the $60,000 would be allocated. Are we talking about printed material? Are we talking about contracts to individuals who would go out and market the bank? Where does that kind of money get spent?
Hon. D. Miller: It's spent across a broad base of activities which are focused on increasing or attracting those kinds of deposits. That business plan is being worked on. I don't have anything in front of me that I could go through in any kind of absolute detail. There is not a lot of money in the communications side of things, quite frankly, but no doubt some will be for publications and all those kinds of activities that would be associated with this campaign.
C. Hansen: The minister indicated that a business plan was being worked on. Is that separate from the business plan that we have here? Is there another document out there?
Hon. D. Miller: There are probably about ten million other documents out there. We have allocated some resources from the ministry's communications side to assist. That is something that is being worked on between the communications branch and the bank in terms of how that would play out, where the money would be spent, etc., etc.
C. Hansen: There was a press release that came out of the Ministry of Human Resources on October 1 about electronic banking, which sounded like a very good initiative from my quick read of it in the press release. But it indicated that application forms are available from ministry offices and at the new Four Corners Community Savings bank in Vancouver, which again I applaud as a service that the bank could provide. Is the bank compensated by the Ministry of Human Resources for that kind of a service?
Hon. D. Miller: No, it is being used -- we don't have a number of the accounts; it's difficult to tabulate them -- and it apparently works quite successfully.
C. Hansen: I would like to ask the minister: are there any other government ministries, agencies, commissions and Crown corporations that are assisting the bank in its operation both in terms of revenues that would come into the bank for operations and also in terms of funding projects to promote the interests of the banks, such as this communications plan? Are there any other aspects of the provincial government that are assisting in the development of the Four Corners bank?
Hon. D. Miller: The answer is no, but in the course of business, particularly the kind of business they are in, they are in discussions with some other agencies of government. The electronic banking initiative is one from Human Resources. I gather there is some discussion taking place there, but there is no other
[11:30]
C. Hansen: I want to shift to another issue that was covered in the business plan, which was touched on just briefly by my colleague, and I want to ask a few more questions about it. That's the deposits. The minister indicated that there was $12 million on deposit from public institutions and government, I believe the category was. In the business plan, on page 25, we talk about public sector depositors. It says:"Local, provincial, federal governments and agencies will be approached for deposits. Initial discussions with other provincial Crown corporations have been positive, as the rate of return is competitive and the deposits are secure. Crown corporations have already begun the process of depositing funds at Four Corners and will be encouraged to continue."I gather that some of this success with Crown corporations is obviously reflected in that $12 million, and I'm wondering if the minister could give us an indication as to which Crown corporations may be involved in deposits at the bank.
Hon. D. Miller: No, unfortunately I can't.
C. Hansen: Is the minister saying that he doesn't have that information available or that he is not willing to provide it to us -- or both?
Hon. D. Miller: I'm following time-honoured procedures with respect to the operation of a financial institution. I would be derelict were I to breach those time-honoured traditions.
C. Hansen: Could the minister advise us: of the $12 million that is in that category, does any of it involve local or federal governments? Is this $12 million all involved with provincial government, Crown corporations, agencies, commissions and ministries?
Hon. D. Miller: Actually, the feds are not a bad idea. We should maybe get the feds to try to be supportive here, as well. I'm not going to reveal any names of corporations. You couldn't go to any other financial institution and ask that question. You'd get the same answer: no.
[ Page 6503 ]
F. Gingell: It would be perfectly appropriate for us to go to B.C. Ferries or B.C. Hydro and say: "Do you have any funds on deposit with the Four Corners bank?" Seeing that this minister is the minister responsible for Crown corporations, perhaps he can answer that question on behalf of those Crown corporations, rather than the bank.
Hon. D. Miller: I'm standing here as the minister responsible for the bank. I have an official from the bank and one from the Crown corporations secretariat. The question was: would I reveal who the depositors are? The answer is no.
F. Gingell: We were wondering whether the minister could change hats and answer it as the minister responsible for one of the Crown corporations. I appreciate that it would be most inappropriate for the minister to disclose that he personally had an account there or that I did or a private company did, but we're not asking the question about private companies. We're asking the question about government organizations. They belong to all of the taxpayers, and I must admit that it's a reasonable question. To use this as an excuse not to respond to the question is really looking for some reason not to respond rather than encouraging frank and open discussion about the way in which the Four Corners bank is moving towards its goals and objectives.
Hon. D. Miller: We can't call it a bank; it's a financial institution. I have to say that these questions are curious to me because my instinctive question to myself in the face of these questions is: why? I don't quite understand. I see nothing wrong, for example, if Crown corporations want to make these deposits. In fact, I'd encourage them. If you want to go around and ask them if they've got any money in here and ask them to tell you what it is, go ahead. I'll go with you. I'll phone them up and tell them to be as open and candid as they feel they can be, but we're not going to do it here.
F. Gingell: I'd be happy to tell you.
These organizations may very well, in the normal course of events, put their money over to the provincial treasury for investment. That's what this bank does. It puts its money to the provincial treasury for investment.
Interjection.
F. Gingell: Well, not too much. Most of the Crown corporations are restricted in what they can invest and are required to invest any excess funds through the provincial treasury. What you have here is that instead of the Crown corporation investing the money directly with the provincial treasury and getting X percent rate of return, they do it through the Four Corners bank, and they get X minus 0.2 or 0.3, whatever the spread is. That, of course, is the assumption that anyone would make. Maybe that isn't correct. Maybe the minister can advise us that there isn't a spread being taken off between the rate that the provincial treasury would pay and what they are receiving.
Hon. D. Miller: Well, you know, any deposits are earning market rates, and I think we've exhausted the subject.
F. Gingell: Then perhaps the minister could advise the committee if this increase in deposits that's taken place since the end of June, this additional $16 million roughly, is all earning for the bank the anticipated spread that banks would normally earn.
Hon. D. Miller: The deposits are not since the end of June; the deposits are since the end of March. The spread on the deposits: the large ones, between 0.10 and 0.17; and on the smaller deposits, between 0.75 and 1.5.
C. Hansen: Actually, am I not right that the anticipated spread from the bank was to be 1.8 overall?
Hon. D. Miller: That's in anticipation of the lending policy, and we did discuss earlier where that is.
C. Hansen: I want to come back to this issue that my colleague raised earlier about the election of the advisory committee. The minister mentioned that it requires a regulation by cabinet. I just want to ask the minister when we could anticipate that regulation. I'm assuming that it's coming out as an order-in-council regulation. Does this set up the process by which the election of the advisory council takes place?
Hon. D. Miller: No, I expect that reasonably soon.
Just to correct the record, I am advised that the member was wrong in terms of referring to 1.8. In fact, the number should be 0.8.
C. Hansen: Again, in terms of the election of this advisory council, the minister said he anticipates this very soon. Does this regulation just trigger the process, or does it in fact set up the process whereby the advisory council is elected?
Hon. D. Miller: It establishes the process.
C. Hansen: I'll wait and read the regulation when it comes out, but I want to ask the minister about the bank's ability to contact and give notices to the members, to the depositors. I notice that there is no significant amount set out here for mailing costs, so I am assuming that the bank uses notices posted or handed out at the bank itself. Is that accurate?
Hon. D. Miller: Yes, through notices and pamphlets. Mailing may be a particular problem with respect to people moving around. You're sending out confidential information in some areas, so you have to do it prudently. So it's through notices and pamphlets.
C. Hansen: Does the minister have an indication as to what percentage of the depositors they anticipate being able to reach through that method of communication?
Hon. D. Miller: Seventy-five percent. It's a close community within the city.
F. Gingell: When you were originally thinking about the bank
Hon. D. Miller: You're not thinking clearly because it's the end of July.
F. Gingell: No, I was thinking about this. I woke up in the middle of the night thinking about the Four Corners Community Bank.
Hon. D. Miller: Some things are worth waking up in the middle of the night for. That's not one of them.
[ Page 6504 ]
F. Gingell: That's not one of them.
But you must have had some measure of what you saw as your potential market. It is interesting that you've gone from almost zero to 2,800 in the first year, when your original target was 1,000. Then you've moved that up to 3,300 account holders at this point. All the business plans talk about getting up to the magic number of 5,000. The way you've been going the last little while, one would hope you'll leave 5,000 behind pretty soon.
But I was wondering if you have a feel or a measure for whether the original report done by
Hon. D. Miller: Yeah, the community is about 15,000. It was Ross Montgomery, I think, that did the original study.
I believe the target this year was for 2,026. In other words, for illustrative purposes, with a goal over five years of 5,000, this year we're at 3,300. So it's succeeding on target. I did talk about the problems that that engenders with respect to the operational side. So it clearly indicates a degree of support -- I think a very strong degree of support -- in the community for the institution.
C. Hansen: Just to return to the advisory council. I think it's probably the last issue that we'll have time to deal with.
I gather that there was an initial advisory council appointed, and now a second advisory council has been largely reappointed. There may have been some change in players until such time as we get to the election. I'm wondering what the minister's authority is for reappointing the advisory council, because my read of the act is that it only provides for a one-year term for the first advisory council, and that from there on there must be a process of election.
Hon. D. Miller: Yes, the initial one was appointed, and they continue to serve. There was no order reappointing. They serve, I presume, in an unofficial capacity, but they are continuing to serve in that capacity.
C. Hansen: But I gather that they have now served a one-year term. By definition, I would imagine that that council is now expired. So is there an active advisory council in place now, or is it awaiting the election of the next advisory council?
[11:45]
Hon. D. Miller: No, as I did indicate in my answer, they continue to serve on a volunteer basis. We're getting close to getting the authority required for the election.An Hon. Member: Illegally.
Hon. D. Miller: Some things happen in this life, Mr. Chairman. It's hard to believe, I know, but people actually do things on their own volition, without the express approval of the state and all the paper being in place. It's amazing how life goes on in that respect.
C. Hansen: I notice in the business plan that the administrative assistant is going to be charged with some of the tasks of overlooking what's required in the act, and we certainly applaud that and wish that individual well, because it will obviously be an important role to play.
Unless my colleagues have anything
Hon. D. Miller: I'd like, as well, to thank the members for the discussion this morning. We do have some pamphlets. I'd perhaps ask the Clerk to pass them over to the members.
Happily, Mr. Chairman, I call vote 24.
Vote 24 approved.
Vote 25: ministry operations, $127,054,000 -- approved.
Vote 26: Crown corporations secretariat, $1,000 -- approved.
Vote 27: Information, Science and Technology Agency, $33,672,000 -- approved.
Vote 28: resource revenue sharing agreements, $810,000 -- approved.
Hon. D. Miller: I move the committee rise, report resolutions and ask leave to sit again.
Motion approved.
The committee rose at 11:49 a.m.