DEBATES OF THE LEGISLATIVE ASSEMBLY (Hansard)
TUESDAY, APRIL 21, 1998
Afternoon
Volume 8, Number 22
[ Page 7035 ]
The House met at 2:05 p.m.
Hon. L. Boone: In the gallery today are some important people who met earlier with my staff, and I'd like the House to help me greet them: Peggy Boon -- no relation to myself; Boon without an "e," I might add -- from the Delta Association for Child Development; Cathy Gilbert of Delta School Readiness; Heather Leech of the Surrey Association for Early Childhood Education; and Karen Olive of the Step-by-Step Child Development Society. They are here with 20 other parents and children from the lower mainland to indicate their support for an integrated service delivery model for children with special needs. So would the House please help me welcome them.
Hon. S. Hammell: Hon. Speaker, I'd like to introduce some special guests that have joined me today to launch the awards program and to mark Prevention of Violence Against Women Week. This new awards program will pay tribute to organizations, individuals and businesses across B.C. for their work on prevention of violence against women. Tracy Porteous is with the B.C. Association of Specialized Victim Assistance and Counselling Programs. She is one of my partners. Also with her is Greta Smith, the executive director of the B.C. and Yukon Society of Transition Houses -- another partner. With them are Kathy Skovgaard and Coreen Douglas, Bruce Brown of the Western Communities RCMP, Mayor Jean Brown of the town of Lake Cowichan, Carole James of the B.C. School Trustees Association, Nancy Poole from the B.C. Centre of Excellence for Women's Health, Janet Rabinovitch from the Prostitute Empowerment Education and Resource Society, and Kirsten Nadiger and Mark Sudeith, the youth delegates to my January symposium on prevention of violence against women. Would the House please make them welcome.
C. Clark: I have three quick sets of introductions to make. The first one is of someone I noticed in the gallery, Ann Wicks, who was recently elected to the Young Liberals executive. I hope the House will make her welcome.
I understand that the mayor of Anmore, which is in my constituency, is also in the precincts -- to speak to the Minister of Environment about the expropriation of land that will be happening as a result of Bill 25. I hope the House will make the mayor of Anmore welcome.
Third, I would like to add my welcome to the parents of special needs children who are here today. We welcomed them in our caucus room earlier, and they met with the Leader of the Opposition. I know the minister hasn't had time to meet with them herself, but she did welcome Karen Olive, who is also from my community. I'll add Joanna Knowles, who is also here from the Step-by-Step Child Development Society, which is facing imminent closure as well. I hope the House will make them welcome.
G. Robertson: In the House today we have Councillor Bill Harrison from Campbell River and also Ken Sumanik from the B.C. Mining Association. Would the House please make them welcome.
L. Stephens: It's a lucky day for me today. I have two more constituents from Langley in the gallery today: Carl and Sherri Kottmeier, a husband who is working in the mining industry and a wife who is concerned about the future of mining in British Columbia. Would the House please make them welcome.
Hon. I. Waddell: We have a number of people from the cooperative housing movement here today in the House: Mark Acheson, who is the president of the Cooperative Housing Federation of British Columbia; Christopher Wilson of the Cooperative Housing Federation of Canada; Merrilee Robson from CHF Canada; Pat Fenner, one of my constituents, from CHFBC; John Overbeck from the Vancouver Island Cooperative Housing Association; and Gary Panagiotidis, president of the Cooperative Housing Federation of British Columbia. Would the House please make these cooperative people welcome.
F. Gingell: I would like to introduce some young people who are in the building today, some special needs children who, because of their needs, are not sitting in the gallery but are in a special viewing room: Maggie, Dorothy, Carl and William Gilbert, children of Cathy; and Tessa, who is the daughter of Kim Spangberg, who is also here in the gallery. I ask you all to please join me in making them most welcome.
J. Weisbeck: It is my pleasure today to introduce a number of students from Camosun College and the University of Victoria student societies. They are here today to meet with me to discuss the current situation in post-secondary education, to give their comments and concerns. Sitting in the gallery are Sonia Bujan Fernandez, Ann Wicks, Larry Lewis, Jason Noble, Kathy Loewen, Hamish McArthur, Chris Gehrig and Derek Madson. Would the House please make them welcome.
The Speaker: I recognize the Minister of Fisheries.
Hon. D. Streifel: Oh, finally.
Interjections.
Hon. D. Streifel: Hon. Speaker, the folks across the way should know that it's poor form to heckle during introductions.
I have the pleasure today to introduce a very, very good friend of mine who is travelling over to Victoria for a few days with her travelling companions, Molly and Mildred. I'd like to introduce to the House my wife Linda. Would the House please make her welcome.
G. Campbell: I'd like to recognize Dan and Rina Berkshire, who are both here from Campbell River -- very active proponents of the mining industry in British Columbia. I hope the House will make them welcome.
Hon. M. Farnworth: In the gallery today we have visiting the consul general of Mexico, Mr. Gabriel Rosales Vega. Would the House please make him welcome.
Hon. J. Pullinger: It's my pleasure today to introduce four groups of people who are here. First of all, I would like to introduce some constituents: Leona and Mike Paton and Alice and David Pearson, who are in the members' gallery. They've come down to see how this Legislature works and have lunch at the Legislature, and I'm delighted they're here.
Secondly, I have an employee from my ministry, Valerie Hollett. Valerie, bless her, has been working in my office to help out for a short time, and I'm very, very happy to have her there. I'm very grateful and also very happy that she's here today. I would ask everyone to make her welcome as well.
[ Page 7036 ]
Thirdly, I have Jean Brown, who is the mayor of the town of Lake Cowichan and a friend, who I'm delighted to see is here with the Minister of Women's Equality. Also here is Kathy Skovgaard, also a friend and the head of WAVAW, Women Against Violence Against Women, in Duncan. Both of them have done a great deal for women and to end violence against women.Last but not at all least is my executive assistant, Doug Creba, who is sitting in the members' gallery. Would the House please help me make all of these people very welcome indeed.
Hon. J. Kwan: I too would like to ask the House to welcome the mayor of Anmore, whom I will be meeting with later on today. In addition, I'd like to extend a special welcome to Merrilee Robson, who is a strong community activist in our community, especially in the area of women's issues and housing issues. Would the House please make them feel very welcome.
A. Sanders: In the gallery today is Mr. Archie Stroh. He is a constituent and the senior vice-president and general manager of Kal Tire. Would everyone please make him welcome.
G. Hogg: There are a number of persons present today who work with and receive services from the Surrey Association for Early Childhood Education, SAECE. They are here to discuss service delivery to special needs children. I'd like to introduce Heather Leech, Elayne and Leo Brenzinger and their son Alexander, Brian and Trish Ward-Hall and their daughter Alisha, Julie terLaak and her children Anya and Lara, Renee Groome and Colleen Elgood. Would the House please make them welcome.
K. Krueger: In the precincts with us today is city councillor Dr. Russ Gerard, a prominent Rotarian in Kamloops, where he is affectionately known as Dr. Dog. Would the House please make him welcome.
R. Thorpe: Most members of the House will recognize this as
The Speaker: No props.
[2:15]
R. Thorpe: No props? This is not a prop. It's for the Okanagan Wine Festival, which is held in the spring and in the fall. One of the key volunteers of this very successful event is in the House today, Alison McNeil from Kelowna. I ask the House to please make her feel very welcome.Hon. A. Petter: In the precincts today is a very lively group of students from Cordova Bay Elementary School in my constituency. They were peppering me with comments and questions on everything from federalism to bicycle trails, so their interests clearly correspond to my own. I ask the House to make them very welcome.
Hon. D. Zirnhelt: Visiting us today in the precincts from the town of Williams Lake is the manager of Gibraltar Mines, a very important employer in the Cariboo, Tom Milner. Please make him welcome.
P. Nettleton: Please join me in welcoming someone who is no stranger to this House, a great mayor from a great town: Frank Read from Vanderhoof.
F. Randall: In the gallery I notice Paul Stevenson. He is here with the mining group, and he's with Booker Gold. Also I notice Myrna Kitchen, who I spent a lot of time with last year arranging the first Mining Day in British Columbia. I know that she's leaving the Mining Association and going to work with Greystone, but I just want to acknowledge the excellent job that she's done with the association. She's a great organizer. Would the House please make them welcome.
APPOINTMENT OF COMMISSIONER OF INQUIRY
INTO LEAKY CONDOS
G. Farrell-Collins: My question is to the Minister of Municipal Affairs. Last night, on BCTV, a woman by the name of Dawn Schumaker raised serious concerns about a substandard building that she and her child live in. It turns out that this building was constructed through the British Columbia government's low-cost housing program at the time when Dave Barrett was the Premier of British Columbia. This is one citizen who made it clear that she would be uncomfortable making a presentation to Dave Barrett as the commissioner looking into the leaky-condo issue, because, in her words, she felt that he had a conflict of interest and may not be willing to come to the conclusions that are necessary. The minister in this House has continually assured us that Mr. Barrett will hear the views independently and that the people will feel comfortable presenting to him. Well, hon. Speaker, here is at least one individual
The Speaker: Hon. member, your question is?
G. Farrell-Collins:
Hon. J. Kwan: I'm very glad that the member opposite raised the issue. In fact, in 1975-76 there were indeed a number of projects developed under a developer called the Dunhill group. That group, under Dave Barrett's, the former Premier's, leadership did a lot of social housing across the province. The project that the hon. member across the floor mentions is in fact a project that was built by Dunhill. The only exception is that shortly after the project was developed, it was sold to a private developer. The private developer then made the project available on a rental basis and then, subsequent to that, sold it off to different people through a strata type of arrangement.
Of course, the important point here is this: of all the projects, the thousands of projects that were developed in that period
The Speaker: The Opposition House Leader for the first supplementary.
G. Farrell-Collins: I think the minister highlights the whole issue here, in that it's not just builders; it's not just developers; it's not just management companies; it's not just architects. There's more than enough blame to go around here. The point of the question is this: despite what this minister assured us of earlier, we have an individual who is uncomfort-
[ Page 7037 ]
able presenting her case to Dave Barrett as the commissioner, because she feels that he has a conflict of interest. His government is the government that built that project. She lives in it. She feels uncomfortable because of, in her words, Dave Barrett's conflict of interest and his unwillingness to get to the bottom of it. Will the minister admit that in addition to his bias, Dave Barrett also has a perceived conflict of interest by the very people who may want to present to him?Interjections.
The Speaker: Order, hon. members.
Hon. J. Kwan: If there is a bias on this issue with the former Premier, the current commissioner, that bias would be that he is intent on getting to the bottom of this issue and that he is biased towards the victims in this issue. He wants to make sure and I want to make sure
I wish that the members opposite would stop playing politics and come forward and work with the government and work with the commissioner to put an end to this question.
The Speaker: The Opposition House Leader on his second supplementary.
G. Farrell-Collins: If the government doesn't want to play politics with this, why don't they just act on the recommendations they've had for two and a half years? If the government doesn't want to play politics with this, why did they appoint the most prominent NDP politician to grace British Columbia in the last century?
The Speaker: Hon. member, is that your question?
G. Farrell-Collins: No, hon. Speaker, I'm getting there.
Interjections.
The Speaker: Order, hon. members.
G. Farrell-Collins: I know the Premier is offended that he is not the most prominent NDP politician. He may be the most infamous, but he's certainly not the most famous.
Hon. Speaker, my question is for the Minister of Municipal Affairs. Ms. Schumaker has made her case clear. She does not feel comfortable presenting to this political appointee who is heading up the commission. Will the minister replace him with someone who is independent and prove that she has no intention of playing politics but would rather look for real solutions for the people who have been victimized?
Hon. J. Kwan: Hon. Speaker, I know that the members across the floor know very well the actions that this government has taken on the issue of leaky condos. They know very well that we have been in consultation with industry on this issue for the last number of years. Many recommendations were in fact brought forward by industry, and to date, no agreement has been reached with the industry on these issues. I have appointed an inquiry to get to the bottom of this issue and to prevent this from ever happening again.
More importantly, to date, none of the reports talk about how to deal with the problem now. A lot of people have been saying that maybe we can do this and maybe we can do that. But nobody has sat down to seriously look at this issue, and we must get down to it. That's what the inquiry is intended to do.
NEGOTIATIONS WITH BCTF
G. Wilson: Hon. Speaker, my question is to the Premier. Who authorized Mr. Penikett, Mr. Pratt and Mr. Avison to bypass free collective bargaining and negotiate directly with the B.C. Teachers Federation?Hon. G. Clark: Nobody bypassed free collective bargaining. BCPSEA, the public sector school trustees component of the bargaining, was bargaining with the B.C. Teachers Federation for over a year. They resolved very few issues, and they had reached an impasse. Both the BCPSEA and the BCTF asked the government to intervene to assist in collective bargaining. That development took place over the last few months. Intensive negotiations took place between the government and the B.C. Teachers Federation to arrive at what is truly a historic agreement -- one that I'm very proud of. It comes on the heels of increased funding and portable reductions, full funding for enrolment and inflation, new funding for technology and now significant additional resources to reduce class sizes in K-to-3 and hire 2,500 new teachers in the classrooms over the next three years. That is leadership from this government and this caucus to show that education is a priority in working with our teachers to accomplish something for the public good.
The Speaker: The member for Powell River-Sunshine Coast on his first supplementary.
G. Wilson: Hon. Speaker, my question is to the Minister of Education. What the intervention of the Premier's Office has done is demonstrate that the experiment in provincewide collective bargaining by this government has been an unmitigated disaster. Can the Minister of Education tell us two things? How much money has their experiment in provincewide bargaining cost us in an attempt to get a collective agreement that was unable to be achieved by their negotiating process? Secondly, does the collective agreement that is before the teachers today include additional dollars for capital expenditures that will be required as a result of additional teachers?
Hon. P. Ramsey: I'm pleased that this issue has finally been raised in this House. We're now in the twentieth day of this session. Finally we have a question on education, and it doesn't come from the Liberal opposition.
What government's decision to get involved with negotiations with teachers has accomplished is a significant landmark agreement with British Columbia's teachers to put additional resources where they are needed: into the classrooms of this province. All British Columbians who have children in school will benefit from this agreement. It means that whether your child is enrolled in grade 2 in Fort St. John or in Saanich, he or she will have the same class size, the same support from counsellors, the same support from teacher-librarians, the
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same support from special education resource teachers outside the classroom to make sure that every child gets a good start. That's what this agreement is about, and I think all members of this House should support it.
SPECIAL NEEDS DAY CARE POLICY
C. Clark: At least one special needs day care in British Columbia has already closed, and there are many, many more on the verge of extinction as a result of this government's policy. The parents of those children are here today to talk to the minister, and she has refused to speak to them. They've taken the day off work; they've gotten sitters for their kids. They've dragged their kids all the way over to Victoria so that they can meet with the minister, and she said no. So I want to ask her todayHon. L. Boone: It's too bad that the hon. member didn't bother to call me and find out what was actually happening, because my staff met with these parents today. In fact, we've been working very hard with this community to deal with this issue.
Supported child care is something that has been brought about, with the support of the parents, to actually empower parents to make decisions as to which day care they go to. Money is put into the hands of the parents so that they have those choices. Yes, I recognize that there have been some problems around some areas. Some have actually moved into supported child care on a regional basis, and it's going well.
There are areas where supported child care is not proceeding as it should be. I recognize that; I knew about it in my own area before I became minister. I've met with parents, and I've met with care providers in the past. We have today advised the parents that we are extending the time to March 1999, and we are putting in a team
[2:30]
Interjections.The Speaker: Thank you, minister.
Hon. L. Boone: Hon. Speaker, the member opposite asked me a question, and then she doesn't even listen to me. And we have
Interjections.
The Speaker: Order, hon. members.
Hon. L. Boone: We have a team that is going in
Interjections.
The Speaker: The minister is replying to a question.
Hon. L. Boone: Well, hon. Speaker, obviously the opposition doesn't even want to hear the answer. But I'm sure the parents here recognize that we are giving them until March 31
MUNICIPAL BANNING OF SLOT MACHINES
G. Plant: Gambling. Last week Supreme Court Justice Leggatt upheld the bylaw banning slot machines in Surrey. He said there's basically no difference between a slot machine and a video lottery terminal. In fact, he said this: "There are no distinguishing features between the machines other than the use of a television-style picture tubeHon. M. Farnworth: I'm not going to comment right now on the issue of the opposition's gaming policy because, as we've seen, it's one thing one month and another thing the next month. The fact of the matter is that we are aware of the decision that came down on Friday, and I can tell you that our attorneys are reviewing it. We will be making some announcements on that in the very near future.
But what I am concerned about, and the opposition doesn't seem to be concerned about, are the 86 jobs which are at stake in Surrey. They talk about jobs all the time. But when it comes to their own political advantage, they're willing to sacrifice 86 jobs for political expediency. I say shame on the opposition. Shame on them!
There'll be more to come in the next few days, so I ask the opposition to stay tuned.
Interjections.
Hon. M. Farnworth: The red light is on, hon. members.
Leave granted.
Hon. J. MacPhail: In Committee A, I call Committee of Supply. For the information of the members, we will be debating the estimates of the Ministry of Agriculture and Food and perhaps the Ministry of Human Resources. And in this House, I call Committee of the Whole to debate Bill 2.
BUDGET MEASURES IMPLEMENTATION ACT, 1998
(continued)
On section 13.
G. Farrell-Collins: First of all, I didn't get a chance to do it this morning when we started so I'll take the opportunity
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now. I just want to thank the minister for making her staff available for a briefing for the members of the opposition, and I'd like to thank the staff for attending. In their comments and in subsequent phone calls they've been most helpful, and I'd like to just offer my thanks for that.One of the questions I wasn't able to get answered -- but I actually managed to figure this one out on my own -- was the concern I raised in second reading yesterday about the old section 3(6) of the Insurance Premium Tax Act with regard to the possibility of a new tax applying to medical plans. In doing further reading of the act, I found that the way you've gotten around that is in the definition section. That clears up my concern with regard to that section. I know that the member for Delta South has some questions on an additional section, so I'll just remove my reservation that I raised in second reading yesterday.
Sections 13 to 24 inclusive approved.
On section 25.
F. Gingell: I would like to start the discussion on section 25 by reading from Hansard of May 2, 1995, when this government brought in the Securities Amendment Act, 1995. The then Minister of Finance was the member for Oak Bay-Gordon Head. In introducing the bill in second reading, she stated: "The two key features of the bill are: first, the commission will be a Crown agent and all revenue received under the Securities Act will be paid directly to the commission rather than to the consolidated revenue fund
So here we have come to this point almost three years later and the Securities Commission is being stripped of the reserve fund that it has. Now, I have the financial statements for the Securities Commission up to March 31, 1997; I haven't got them for the year that has just ended. But at that point they had roughly $12 million in reserves. Did the minister discuss with the B.C. Securities Commission what their priorities are? What are the things that they haven't done, would like to get done and now may be restricted from doing in the future because these funds have been stripped from the commission?
Hon. J. MacPhail: No, I have not yet met with the Securities Commission directly; my staff have. If I could just clarify, because I'm sure the language of the member opposite is intentional, to be a bit provocative
In all of the contemplation of the Securities Commission, it was not ever estimated that a surplus of almost $17 million would build up. In fact, because of the bull market that we've been experiencing over the last couple of years, the surplus has been generated since 1995 when they became autonomous. So such a surplus was never contemplated in 1995; nor was this kind of surplus necessary for the plans that they wished to carry out. The surplus did come about because of the record level of filings, the securities financings and the registration of securities market participants as a result of the bull market.
Discussion did take place among staff about the transfer of the maximum amount, not to exceed $12 million. That does still leave a fund of $5 million. At no time has the commission ever anticipated needing more than that. Even though in the consultation there will not be agreement, I don't
F. Gingell: As we all know, the bull will get chased out by the bear, and times will change. Just the same way that the economy of British Columbia has gone from number one to number ten, the level of the volume of transactions and approvals and filings through the commission will change. If one goes back to the original concept in 1995
I am sure we all recognize that the Securities Commission has a whole series of priorities. One of the priorities that we have discussed in this House, particularly during estimates in the last two years, has been the issues surrounding cooperation with the Royal Canadian Mounted Police in relation to the fraud squad, which the commission is committed to fund up to a total of $1 million per year. In discussions in estimates a year ago, we got the very clear impression that this exercise has been a failure, that the results have been dismal. This has been caused by one thing: the inability of the RCMP to hire people with the right skills. You appreciate that the securities industry is a very highly paid industry, so the Securities Commission or the RCMP -- and the RCMP is subject to some constraints -- has to offer salaries that are competitive and that will get these people.
[2:45]
Recognizing the importance of having a fraud squad that both detects and prosecutes criminal fraud, has Treasury Board or the minister's office in the past put any restrictions onto the Securities Commission, either in the number of people it may hire or on the amount of money it is allowed to pay them? I think that's the question.Hon. J. MacPhail: I wonder if the member is thinking of two issues, perhaps wrongly. But I'll see if I can address the concern in my comments.
The issue around the RCMP and the money that they are paid is unaffected by our government guidelines or compensation package. It's a separate issue. But to address the separate issue of compensation for the B.C. Securities Commission, they do have financial autonomy and they are outside the Public Service Act. We have granted them that by legislation. But as a Crown agent, they are still subject to the Public Sector Employers Council guidelines, as is every Crown agency. However, I have been informed that the commission is submitting a compensation package to PSEC for consideration shortly, and it will be considered.
F. Gingell: Has the minister's staff, then -- I understand that you haven't had an opportunity yet to meet with the commission, from what you say -- received any submission
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from the Securities Commission to get a feel for their priorities? The reason I bring this up is that I've just touched one issue: fraud detection and prosecution. The lack of success in the arrangements that were previously made has been, in my opinion -- and I've done a little research on the issue -- the result of restrictions placed on the Securities Commission by Treasury Board, or whoever, in the amount of money they may pay and the people they may hire. The purpose of setting up the commission as a separate Crown agency in the first place was to free them from these restrictions, so that they can respond to pressures of the marketplace.Hon. J. MacPhail: It's an interesting point for legislative debate, but I will address it. I will raise that issue with the Securities Commission when I meet with them. To date, it's my view that Treasury Board decisions have not hampered the Securities Commission. But I am particularly interested in the evaluation of the fraud project and, as you have rightly outlined, its lack of success. That's why the evaluation must continue, even if the project does -- to see what we can learn from it and to see what the next method has to be by which we detect fraud. I will certainly explore the concerns directly with the commission and report back to you, if you wish.
F. Gingell: There are some more priorities that I'm afraid will get swept under the table because of this financial exercise. I must admit that, to an extent, I use your intention to strip $12 million from the Securities Commission as an opportunity to bring up some of these issues.
I would like to get onto the record the fact that in trying to put together a national securities regulation regime, one of the major stumbling blocks has been the province of Ontario, which has looked at the Ontario Securities Commission as a cash cow. They have made substantial profits, or revenues, for Ontario's provincial consolidated revenue fund from the operation of the Securities Commission. When it came to pulling them all together into one organization, the province of Ontario was suggesting to the federal government that they should receive a major capital sum to compensate them for giving up their income stream.
British Columbia, on the other hand, was critical of Ontario for doing that -- for taking that position -- because in British Columbia you had established that the Securities Commission was self-funding. It wasn't going to be used as an income stream for the provincial government. That was all clearly stated in the debate when Bill 5 was brought in and the Crown agency was set up.
Now, finally, Ontario is beginning to come on side. They have agreed, as I understand it, that they shouldn't expect to receive a capital sum, and they are making the changes necessary to allow the Ontario Securities Commission to be self-funding, to maintain their own bank accounts and to keep those revenues for the purpose of delivering services. It seems to me that British Columbia is going in the opposite direction.
I appreciate that this bill, in section 25, deals only with a one-time deal. But the minister knows, as I do, that taking $12 million from the Securities Commission can become habit-forming, and it's a nice place to look for funds. Is it possible for the minister to give the Legislature assurance that as well as Bill 2 indicating that it's only a one-time deal, it isn't the intention of this government to bring in section 25 on a regular basis?
Hon. J. MacPhail: No, the legislation clearly is a sunset piece of legislation. You see that the sun sets in 1999 and that this is a one-time transfer. Just to clarify what did happen in Ontario very recently, the change was to a self-funded model. Actually, the legislation in Ontario also allows exactly what you don't want to happen here, which is regular transfers of excess funding as determined on a yearly basis by the Minister of Finance in Ontario. Perhaps your comments would be appropriate for Ontario but not here. This is clearly a one-time transfer with a sunset clause.
Sections 25 to 30 inclusive approved.
On section 31.
G. Farrell-Collins: I'll give the minister a moment to have her staff come in. I don't have a great deal of questioning on this. I just want the minister to clarify and confirm for us that what this section does is close a loophole in the tax system that allowed people -- particularly, I would expect, businesses -- to lease vehicles from another jurisdiction and then operate them in British Columbia without paying the tax that somebody would have to pay if they were to lease the vehicle from a B.C. company. Is that correct?
Hon. J. MacPhail: Yes.
G. Farrell-Collins: Does the government have any explanation for why businesses may choose to lease their vehicles in other jurisdictions as opposed to British Columbia?
Hon. J. MacPhail: I want to be clear. I expect that you're suggesting -- I may be anticipating you wrongly -- that business is being done outside, in Alberta, in order to avoid what you would call a high tax regime in British Columbia. I wonder if that's the nature of your question. That's not the case; that's not what's behind this amendment at all. It's for people who move into the province who had formerly held a lease outside of the province.
G. Farrell-Collins: Just so I'm clear, let's say, for example, I lived in Alberta or Saskatchewan, and I purchased a vehicle there -- not leased but purchased. If I moved to British Columbia and I was going to register that vehicle here, would I be required to pay the social service tax on that vehicle? I've never done that -- not for 20 years. I'm not sure if that's the case or not.
Hon. J. MacPhail: I'm sorry, did you say purchase a vehicle?
G. Farrell-Collins: Yes.
Hon. J. MacPhail: Oh, all right; I was just wondering. That's not addressed in this section, but the answer to the question is yes.
G. Farrell-Collins: I just wanted to know that. I'm surprised. I guess that's another debate for another time. Given that that's the case, this merely ensures that the same thing applies to leases. Is that correct?
Interjection.
G. Farrell-Collins: Yes -- thank you.
F. Gingell: I'm not sure that this question is relevant, but I was listening to the exchange. Recently I have had a constitu
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ent who has been involved in a problem where they had leased an automobile in Ontario. Their job had moved them from Ontario to British Columbia. Because the company from which the automobile was leased was not registered in British ColumbiaHon. J. MacPhail: Let me offer the member this: that is not addressed by this issue, but it sounds like a good piece of casework -- I'm desperate for casework -- that I'd like to take up on your behalf.
Sections 31 to 39 inclusive approved.
On section 40.
G. Plant: Could the minister tell me what it was about the transitional refund provisions that required clarification?
Hon. J. MacPhail: Clarification on the amendments?
Interjection.
Hon. J. MacPhail: Whatever. I'll just comment, and then you can decide supplementals.
[3:00]
The amendments clarify the transitional refund provision established on March 31, 1993, when the social services tax rate was changed from 6 percent to 7 percent. The 1993 provision provides a 1 percent tax refund in cases where a purchaser entered into a contract to purchase goods before the tax rate increase was announced, but who paid the higher tax rate because the goods were delivered after the increase. The amendments in section 40 of this bill are retroactive to March 31, 1993.
G. Plant: The use of the term "clarifies" in the explanatory note suggests that there was something unclear before which is now being made clear. I guess my question is: what is it that was unclear that now has to be made clear?
Hon. J. MacPhail: Subsection (1) of section 40 establishes that the 1 percent refund is not available unless the contract requires the purchaser to take delivery of a specific quantity of a tangible personal property before a specific time. That's the clarification.
Now I'll anticipate your question about why. Let me just say that the wording of the refund provision has been interpreted broadly by businesses with long-term agreements for the supply of energy, as a specific example -- both electricity and natural gas. These contracts guarantee delivery of up to certain amounts of energy, but they don't commit the purchaser to buy any specific amount. So adjustable tariffs are set to reflect the amount of energy actually used. The agreements extend indefinitely. Several businesses applied to the province for the 1 percent transitional refund. Allowing the refund under such circumstances would provide these businesses with a lower rate of tax in perpetuity, a tax concession not available to any other businesses in the province. That was clearly not the intent of the refund provision. The taxation branch denied the refund claims, and this denial was upheld on appeal to the minister.
One of the businesses appealed the minister's decision to the Supreme Court of B.C. earlier this year. The court ruled that such contracts satisfied the conditions of the refund provision and that the business was entitled to the 1 percent refund. As a result of that decision, several other businesses have since submitted refund claims for similar contracts, and to date, those claims total over $13 million.
What this amendment in section 40 does
G. Plant: I thank the minister for that explanation. It's not uncommon for the courts to interpret a taxing provision in a way which is contrary to the apparent intent of the government in enacting the taxing provision. In terms of whether or not there was confusion that should be cleared up on a going-forward basis in order to ensure that the bill and the provision does give effect to the original intention, I don't think there would be that much cause for complaint. But I think there is cause for complaint when the intention of the amendment is to operate retroactively, in effect taking away from those who have litigated the point the victory that they have earned by dint of their effort and their expense in the courts of British Columbia. The word "expropriation" gets used in lots of contexts, and I think it could be used not unfairly here.
I guess the issue that I would leave with the minister is: why in this particular case has she seen fit to put forward a bill which not only fixes the problem prospectively and not only fixes the problem retrospectively, but operates in the purest sense retroactively to take from taxpayers moneys that a Supreme Court judge has effectively said are theirs? Why is it necessary to go that extra step? I suggest -- and I'm sure the minister would agree -- that that is a relatively draconian step. Taxpayers rely on the advice they get from their advisers about the meaning of taxation provisions. When they think they have an entitlement, they go to the trouble of litigating it.
The way our legal system works best is, of course, when the decisions are respected. Here, the government is obviously unhappy with the decision of the judge, and rather than pursue an appeal -- which would be another alternative, I suppose -- the government is using the extraordinary powers that it has by virtue of a majority in this House to take a step beyond that which, taking all public policy interests into consideration, is reasonable. Maybe I could leave the minister with the opportunity to once again explain why it is necessary to not simply clarify the thing working prospectively, working forward, but to undo the judgment of the court in the case that she referred to.
Hon. J. MacPhail: Actually, the company that applied for the refund waited until the very last moment of 1996, three years after the transitional period had been introduced, to even ask for the refund. They had in the interim booked the extra cost of the taxation. Their shareholders had already paid for it and the charge had been accounted for. All of the costs of them complying with the intent of the legislation were in place up until that point, which would be a pretty solid indication that they knew the intention of the legislation and that the intention of the legislation was clear. They, I guess, saw what could be interpreted -- and I have no malice of intention -- as a windfall for them in this, which was clearly outside the intent of the legislation. They would have had a windfall that
[ Page 7042 ]
no other company would, and that was not the intent of the legislation, and it's not the intention of taxation policy. There is a often a call in this House to level the playing field and to make sure that the playing field is fair and available in an equal way to all. That's what the intention of this is.G. Plant: The minister's comments raise two issues in my mind. The first is that while it is possible to speak -- and we do speak in this House -- about the intention of legislation, obviously the intention, ultimately, is fundamentally a product of the words used. In this case, we have the word of a Supreme Court judge -- who I would think has a generally more reliable word than the word of most legislators in this House -- as to what in fact the statutory intention was. In this particular case, the judge said that the intention was other than that which the minister has expressed. Fair enough. I think we all read the government's press releases, and we know what the government thinks it's intending to do. The issue always is: do the words actually achieve that intention? I'm still troubled by the fact that when we do have a Supreme Court judgment interpreting a taxing provision, the response of the government is not simply to correct the problem going forward -- which is typical -- but also to reach back into the past and, in effect, claw back the outcome of the judgment.
That takes me to the second concern and my question. The minister spoke a few minutes ago about the potential risk to the provincial treasury of claims in the order of $30 million. Was that
Hon. J. MacPhail: It was $13 million.
G. Plant: Oh, $13 million. That's helpful, first of all. Given the lapse of time and whatever limitation provisions may or may not operate with respect to making these claims, is the minister saying that there were, in fact, some $13 million in claims out there that would have been timely and could have been made consistent with the judgment of the court in this case? I'm only aware of claims in the order of a total of something less than $1.5 million. Is there really another $11.5 million out there where taxpayers could have relied on this judgment to obtain release?
Hon. J. MacPhail: Yes, the government has received claims for that amount. But due diligence still has to be done on the claims.
Sections 40 to 49 inclusive approved.
Title approved.
Hon. J. MacPhail: I move the committee rise and report the bill complete with amendment.
Motion approved.
The House resumed; the Speaker in the chair.
Bill 2, Budget Measures Implementation Act, 1998, reported complete with amendment.
The Speaker: When shall the bill be considered as reported?
Hon. J. MacPhail: With leave, now.
Leave granted.
Bill 2, Budget Measures Implementation Act, 1998, read a third time and passed.
Hon. J. MacPhail: I call committee on Bill 3.
INCOME TAX AMENDMENT ACT, 1998
The House in committee on Bill 3; W. Hartley in the chair.
[3:15]
On section 1.G. Farrell-Collins: We said pretty much everything we needed to say about this bill in second reading. There are essentially, for all intents and purposes, three parts. The first five sections are really the changes to income tax as it applies to personal income tax, small business income tax and subsequent amendments. The other section, the second part of the bill, is the anti-avoidance provisions, which we don't have a big problem with. The latter portion of the bill is the changes to income tax as it applies to the television and film industry -- the government's incentive program which, again, we spoke on in second reading.
I'll say a few words about section 1, and perhaps the Chair will forgive me if I spill over slightly into the other sections. Then I'll just leave it at that, and we can do this part. I don't need to rehash -- at least I hope I don't need to -- what I said yesterday in second reading. Members on this side of the House spoke at length about the requirement of the government to make some significant changes in the income tax structure in this province to give individuals and small businesses the opportunity to participate more readily in the economy, to give individuals a break in their taxes -- a fairly onerous tax burden which continues to be the highest in western Canada, with the highest marginal income tax rate in the country. Those tax breaks for individuals in particular should have been implemented sooner rather than later. We on this side believe that we should have significant tax cuts on income for individuals and that the marginal income tax rate is part of our problem in developing the high-tech sector in particular and other areas where we have highly trained, highly experienced and highly educated individuals who we need to contribute to the economy. We made those points at length yesterday; I don't need to make them again today.
The only other points I might add are the comments we made yesterday also with regard to the income tax for small and medium-sized businesses. Again, we on this side of the House feel the need for a significant change of direction to be made by the government to encourage those small and medium-sized businesses to do what they do best: get out there and create jobs.
On all of those points I would say that at least in words, the opposition and the government tend to agree. Where we differ is on the magnitude of the changes required to actually have an impact on the economy. Certainly we feel that we need a far more significant break. We need a far more significant tax cut for small businesses than what we see here. But that's only part of the problem. In estimates and other debates, we will certainly be talking about the regulatory regime, which needs to be addressed. But we did speak about all these items yesterday.
I'll restate and reaffirm my comments in perhaps as strenuous and as vigorous a manner as I did yesterday without having to actually do it. I'll just state that we believe that there should be some significant cuts in taxes to get the direction
[ Page 7043 ]
clearly stated out there to individuals and small businesses that this is a good place to do business and a good place to live. You can come and build your business here; you can create jobs and opportunities for others. Once you do that and work hard, you will be able to keep a little more of that money and use it for things like providing for your family and yourself and participating in the economy as a consumer.With that, I will take my seat. It looks like the Minister of Small Business has something to say. We are on section 1, but I have no problem with him addressing those issues all at once if it's fine with the minister.
Hon. I. Waddell: I thank the member for his remarks. I have a few remarks I'd like to make on that. With respect to small business, it is the engine of job creation in the province. We should always remember that 96 percent of jobs are created by small business and that 99 percent of the businesses in this province are small businesses, and they create jobs.
I got a letter today on a small project. I visited an exhibition of small business projects by entrepreneurs who had been encouraged by the ministry and who had some ideas. A fellow had taken some alder -- wood that is normally discarded -- and he started to make picture frames out of it and do things with it. I bought one; it cost me $12 for the picture frame. It's really interesting, and it's a nice design. Here was this useless wood being ground up, which he's now using. But the important thing in the letter was that he said: "My wife and I are working at this job, and we had hired someone part-time. That part-time person has become full-time, and now we are hiring two other people." There's three jobs from one little project. That's pretty good. If you can do that over and over and over again, you can create jobs for British Columbians.
I heard the member in question period say a few things, like that in January, B.C. had lost 19,000 jobs. But, you know, in March we had a job gain. So we're moving. It's not easy, but we're moving, and we're creating jobs.
What the ministry and the government did was consult with the small business community. My predecessor went out -- and she should get credit for that -- and spent a lot of time consulting with the small business community. And we acted in the budget in a number of ways. There was a commitment to a reduction in taxes for 40,000 small businesses. That's pretty good. Another 10,000 small businesses will get tax relief from the corporate capital tax, because we raised the ceiling on that. There's another tax relief for small business.
Then we made a commitment to cut red tape. Just today the Minister of Highways and I announced that
The Chair: Minister, I might just remind you that we are dealing with a section of the bill in committee here.
Hon. I. Waddell: All right. Let me just say that you'll see that this bill deals with having consulted people and listened to them. We dealt with the film community this way. You'll see in this bill, specifically, measures to help Canadian film-makers, and members should look carefully at that. We listened to them, and we've delivered on that. You'll look and you'll see a basic tax credit of 20 percent for eligible labour costs here in the bill. You'll see a regional incentive, and you'll see a training incentive. So that's mainly
The Chair: Thank you. That's very interesting, but we are dealing with this section of the bill. I would urge all members to address their remarks to the bill.
Sections 1 to 6 inclusive approved.
On section 7.
G. Farrell-Collins: There's a whole bunch of stuff here which is an amendment to the act. Really, the issue that I want to raise is just this one. It's on page 11 of the bill. It's section 82, not of this act, but the act that it amends. It's the training tax credit for this particular industry. As it applies to this industry, it sounds wonderful. I know there are lots of other industries out there, particularly in the high-tech sector and probably others, who would love to have similar training tax credits. Can the minister tell me if there are any plans to have this type of legislation apply to any other industries? Or are we leaving it just with the film and TV industry alone?
Hon. J. MacPhail: Well, actually, even though it addresses future policy, I don't mind answering it. We're not considering it at the moment, but certainly we'll be monitoring this very carefully. If it works, it could be a model to guide us elsewhere. We do have ITAC to advise us on such matters.
Sections 7 to 9 inclusive approved.
Title approved.
Hon. J. MacPhail: I move that the committee rise and report the bill complete without amendment.
Motion approved.
The House resumed; the Speaker in the chair.
Bill 3, Income Tax Amendment Act, 1998, reported complete without amendment, read a third time and passed.
Hon. J. MacPhail: Committee on Bill 4.
CAPITAL FINANCING AUTHORITY
REPEAL AND DEBT RESTRUCTURING ACT
On section 1.
G. Farrell-Collins: Given the comments of the member for Delta South yesterday, with his unreserved support for the bill, I don't have any particular questions. We've had a brief
[ Page 7044 ]
ing; the member for Delta South has asked all the questions that he needs to. We're comfortable with what the government is doing, and we'll pass it.
[3:30]
Sections 1 to 20 inclusive approved.Title approved.
Hon. J. MacPhail: I move the committee rise and report the bill complete without amendment.
Motion approved.
The House resumed; the Speaker in the chair.
Bill 4, Capital Financing Authority Repeal and Debt Restructuring Act reported complete without amendment, read a third time and passed.
Hon. J. MacPhail: I call Committee of the Whole to consider Bill 5.
BC-ALCAN NORTHERN DEVELOPMENT FUND ACT
The House in committee on Bill 5; W. Hartley in the chair.On section 1.
R. Neufeld: In section 1, the definitions "Alcan" and "fund" are fairly straightforward. The definition "Northwestern British Columbia" includes the Nechako River basin and other areas prescribed by regulation. Can the minister tell me, first off, why we would have "other areas prescribed by regulation"? Is there some other area of the province this could apply to, other than the Nechako basin? For my clarification, the Nechako basin covers how many regional districts?
Hon. D. Miller: As I said in second reading, it will be those areas that have been impacted by the original development. Nechako River basin is clearly part of that, not all of that. There have not been any regulations promulgated with respect to the bill.
There have just been some unfortunate resignations from the advisory board. I say that because the individual I referred to the other day, Mr. Blattner, who was the chair, I thought would be outstanding. Unfortunately, his wife has suffered a serious farm accident and he's not able to continue. So we're in the process of adding some new members to the board. We will take the advice of the advisory board, but it's clear from my remarks and I think, from the remarks of my colleague that the fund is aimed at those areas that have been impacted by that original development.
R. Neufeld: Just clarify a little bit more for me, if you would, "other areas prescribed by regulation." I know there's no regulation put forward yet, but what would other areas encompass? Are we talking about Prince George? Are we talking about Prince Rupert? What are we actually talking about, other than the Nechako basin, which I guess is probably pretty easily defined. What other areas would be affected by this claim? If you're talking about other areas that are affected by it, there are hydro developments that have to take place to be able to supply hydro for Alcan. Would it mean some of those other areas it would be transferred to around the province? Or is it just specifically the Nechako basin?
The second part of my question was: how many regional districts does the Nechako basin cover?
Hon. D. Miller: I haven't added them up, so I don't know the answer to that question, but I don't think there are many. Regional districts tend to be fairly large. I'll just give you one example of where a specific impact was brought to my attention, and that's in Kitamaat Village, where the power transmission line has gone right through some areas of what was an aboriginal community. They feel -- and on the face of it, I think it's a very realistic and credible argument -- that they have been impacted. So in general they are saying: "We've got some ideas around economic development. We want to make sure that our area will be considered by the advisory board." I quite deliberately spoke to that in second reading, to give that assurance in a speech in this House, and we're conveying that as well to the Haisla, who have yet to appoint a representative. We want a representative from the Haisla to be on the advisory board.
So the answer is very clear. It's those areas impacted in northwestern B.C. -- impacted by the original development.
R. Neufeld: Then we could rest assured on this side of the House that it will be northern British Columbia that will have the effect of this bill -- and no other part of the province.
Hon. D. Miller: Yes, I give my assurance, and quite frankly, the title is apropos with respect to that question: the BC-Alcan Northern Development Fund Act. So, absolutely.
Sections 1 and 2 approved.
On section 3.
R. Neufeld: In relation to what the minister just talked about, Kitamaat Village was impacted. When we talk about the purposes of the fund, it talks about sustainable economic development in northwestern British Columbia; it talks about investment in new or existing businesses, creating new employment or stabilizing existing employment. This is not intended to be any kind of a compensation or anything, is it? When you talked earlier about the Kitamaat Village and how it has been impacted, will there be compensation given out of this fund? Or is this strictly to try and get new businesses going in that area to complement employment for those people?
Hon. D. Miller: Yes, precisely. In fact, that's exactly the kind of tack taken by the Haisla in our discussions -- without getting into any details. Quite frankly, it's very, very important that the advisory board do their work properly, that the people in northwestern B.C. have some confidence in the advisory board and that they take the time to work out ways in which they think the funds should be utilized. That's exactly the premise that was put to me just last week -- that there are some ideas around business development. Mostly, in those kinds of ventures, it's access to capital. Clearly the fund can be used in a variety of ways -- loans, you name it -- with respect to how the funds can be utilized in the most effective way.
P. Nettleton: I wish at this time, if I may, to refer to a couple of documents which I think summarize, in a rather
[ Page 7045 ]
concise fashion, the concerns of the residents of the Nechako region. I'm certain that the minister is quite familiar with many of those concerns, but I think it's helpful, certainly from the point of the residents of this region as well as for the minister, to be reminded, as I say, in a rather concise fashion of the concerns of the residents of the Nechako region.
The first document that I would like to refer to is a position paper on the northern development fund, which was presented by
The Chair: Excuse me. The minister on a point of order?
Hon. D. Miller: Yes, Mr. Chairman. Again, with all due respect to the member, I'm prepared to listen to arguments in favour of the fund and its application in the region. This is simply enabling legislation to allow the fund to exist and be utilized in a manner that I'm sure the member would support. I don't wish to pre-empt anything the member is advancing, but it was starting to sound a little bit like a second reading debate to me -- with all due respect.
The Chair: Members, if we could stick to section 3 rather than the principle of the bill, which we discussed in second reading.
P. Nettleton: I'm certainly disappointed that the minister appears to be taking the position that he's not prepared to hear a suggestion. As I say, it is a rather concise document which summarizes rather nicely the concerns of the residents in relation to Bill 5, the BC-Alcan Northern Development Fund Act. What I will do, if you like, is actually skip down to
The Chair: Excuse me, member. I'm having a little difficulty hearing, but what I would like the member to concentrate on is section 3, the purpose of the fund.
P. Nettleton: I will just say very briefly, then, that the concerns of the residents of Nechako region as outlined by the Vanderhoof Chamber of Commerce and the district of Vanderhoof are that
The other matter, of course, in relation to taxation is raised by the regional district of Nechako. They would like to see the minister address the whole question of taxation in relation to the impact on the Bulkley-Nechako regional district. So what I will do, then, is table these two documents for the benefit of the minister and, at some future date, discuss in some detail with the minister these documents and the concerns raised in these documents, and relay the response of the minister to the constituents of the Nechako region.
The Chair: That can be done by leave. Do members give leave?
Leave granted.
D. Symons: I would like to read section 3(1), because I want to make a point about it. It says: "The purpose of the fund is to promote sustainable economic development in Northwestern British Columbia." I guess my concern here is that when we jump down to 3(2)(c), it talks about "supporting other goals that are consistent with subsection (1) and that the minister considers desirable."
I'm not moving it at this point, but I'm wondering if we were to omit that particular section, to amend the bill by leaving (2)(c) out
Hon. D. Miller: The bill is simply drafted to reflect the fact that we do have an advisory board. They are beginning their work. There may be ideas that we had not contemplated. It simply gives some flexibility in terms of the bill so that the funds are allocated in an appropriate manner. But I want to continue to give the assurance that it would be sheer folly for the government or myself as the minister to deviate from the recommendations of the advisory board, which is made up of people from around the region with, I think, good representation. It just gives the added flexibility to utilize the funds in ways that northerners think are appropriate.
[3:45]
D. Symons: The purpose of my question is the bit about the "minister considers desirable." We have something called Forest Renewal. When it was explained in this House, Forest Renewal was going to be used just for incremental points in the forest industry. We found that incremental very quickly changed into basically whatever the government wanted to do. I would like some guarantee or something of that sort from the minister that the sort of thing that happened with the Forest Renewal funds -- which were described to us in this House one way but ended up over a period of time changing to quite a different way -- will not occur because of this particular part of this particular bill.Hon. D. Miller: What the member says, in fact, buttresses my argument. But let me read from the schedule, which is the agreement between the B.C. government and Alcan. We have lifted the language from that "purpose of the fund" under schedule 5. I'll be happy to make a copy, but the member probably has a copy. You'll see that, in fact, the language -- "to support such other goals consistent with the purpose of the fund" -- is exactly what's contained in the agreement. So it's reflected in the bill.
I could get into a very interesting debate about Forest Renewal, but I'll resist the temptation at this point.
R. Neufeld: I have a couple of questions on subsection (2)(c): "
[ Page 7046 ]
Hon. D. Miller: Although ministers can make decisions on their own, I would say that they're subject to the processes -- Treasury Board, cabinet and those kinds of things. But yes, in fact, the final authority and responsibility for expenditures does rest with the government. To support the government and to ensure that we reflect the views of people in the region, we've established the advisory board, and their advice will be taken very, very seriously.
R. Neufeld: It troubles me some that
So I do have some trouble with that part of the bill. I'm just wondering if there's some comfort we can get in that, other than maybe just having an amendment to remove it completely.
Hon. D. Miller: Until these things are done
I hear what the member has to say. I have given assurance on a number of occasions that it would be folly to try to ignore the advice of an advisory board, and I have absolutely no intention of doing that. So I'm sure that things will be fine.
R. Neufeld: I don't want to belabour this too long. I'm not trying to indicate that we don't support this. It's important to northerners; it's important to British Columbia what's taking place. I know that this is a small component. The other $50 million that was in the press release of August 5 is still waiting for some kind of an adjudication.
I am in favour of the bill; I spoke to that in second reading. But I did say that we had some concerns about how that money was to be expended. In the bill, we started out talking about even taking in other areas, as prescribed by regulation. That leaves it open quite a bit. We're now down to saying that it's what the minister considers desirable. He talked eloquently about northerners making the decision around this $15 million, and I appreciate that. I just remind the minister that when his leader, the Premier, was in Prince George, he made a remark to northerners -- and that would have included people from the Nechako and people from all across the northwest. He said: "It cannot be bureaucratic. It has to be designed by northerners, driven by northerners, located, directed and managed in the north." Those are the Premier's own words. So when I read that, I assume that that board, which is going to make the decisions that surround the $15 million over three years, is going to be what the minister is going to do. But the minister has clearly said that this is an escape hatch, so the minister can put money into things that the government considers desirable, because they contribute to the fund. I appreciate that they contribute to the fund -- Alcan and the minister. If we think about Alcan putting in their $7.5 million over three years, they only have two people on the board who can hopefully direct that money that would benefit the whole region. The rest is pretty well directed by government. So I don't know why the minister needs to have that kind of a sentence in there. Subsection (c) would be fine up until "subsection (1)," and after that I think it gets just a little bit too overbearing and too specific to the minister.
Hon. D. Miller: I am tempted to explain why the bill is constructed this way. This is the normal way in which legislation is constructed. I don't think the member should try to read things into it that are not
With respect to the comments you made and quoted, those pertain directly to another topic, which is the establishment of a northern commissioner's office. It's not part of this bill; it hopefully will be part of another piece of legislation, which we will be able to discuss in the House at the appropriate time.
This is the way legislation is drafted. I think that if you check through legislation, you'll find lots that have references to the minister. I'd try not to take it personally. It's just the way
R. Neufeld: We'll let that one go. I think we could probably stand here and argue forever and not get anywhere.
Section (2)(b) says: "
Hon. D. Miller: Anything may be possible.
To go back to this mission of the member himself, I repeat: we want the advisory board to consider these questions and then report to the minister on the best way the fund can be utilized to achieve the objective. I don't want to pre-empt that work. I don't want to start imposing my views on that. I have some general experience, I suppose, with respect to funds and what ought to be avoided. You don't want to immediately be seen as a bank. It's been my experience, as
[ Page 7047 ]
well, that as soon as you announce that you've got some money, there's no end of people beating a path to the door, knocking on the door and making what they think is an outstanding case to get some of that money. I mean, you could probably spend it all in a week if you weren't careful -- which means being careful, talking to peopleInterjection.
Hon. D. Miller: Or even in a day.
Interjection.
Hon. D. Miller: I could. It's not hard to spend $15 million in a day.
An Hon. Member: Or $329 million.
Hon. D. Miller: No, that was a bit more challenging. It's actually a fascinating story, which I may share one of these days -- long after these members are out of politics. Now I've lost my train of thought.
I think you generally have to be careful with funds, because people always see them as: "I'd like to get a piece of that." You don't want to supplant the ordinary financial institutions, for example. If someone comes to you because they think it's easier than going to a bank and meeting tougher criteria, then maybe you ought to send them back to the bank and say
R. Neufeld: I just wonder which bank the minister was going to send them back to. As I understand, they're not too sharp as operators.
I guess part of what bothers me about subsection (b), "stabilizing existing employment," is that it gets pretty broad. I recall very clearly the Forest Practices Code and what it was really designed to do when it was initially put into place, and that was to enhance the forests. Even with a board, I think that fund has got to the point where it's really not totally directed at what it was intended to be directed at from the start. Those are some of my fears when I see some of those comments in legislation, and I guess time will tell whether that's going to take place or not.
Section 3 approved.
On section 4.
R. Neufeld: Section 4 relates to the August 5 press release saying that $2.5 million will be put into a fund by both government and Alcan for three years. Can the minister tell me if that fund is actually up and running? Has Alcan contributed its $2.5 million, and has the ministry contributed its $2.5 million? Could I ask if there's a bank account number for that fund? How will it be administered? Will it be invested? And will interest from that money be paid back into that account and not into general revenue?
[4:00]
Hon. D. Miller: The answer is that in January we did receive $2.5 million from Alcan. Those funds are in an investment trust account with the provincial treasury. Once the special account is established under the legislation -- once the legislation is proclaimed -- Alcan's contribution plus any interest earned in the trust account will go into the fund and the interest contribution will be matched by government, using funds set aside in the MEI budget for '98-99.An Hon. Member: Has it been put in?
Hon. D. Miller: No. It will be put in. The rate of interest is currently between 4.5 and 4.7 percent. Once the special account is established, the fund will earn interest according to government's interest offset program, currently at prime minus 1.75. Prime is currently 6.5 percent, just for your edification, and the interest offset is 4.75 percent. Provincial treasury obtains competitive rates for the short-term investments, and these returns are certainly better than bank rates.
Sections 4 and 5 approved.
On section 6.
R. Neufeld: Just a quick question on section 6. This could be normal procedure with lawyers and drafting legislation, but part of the last sentence says: "
Hon. D. Miller: Yes, it's common practice.
Section 6 approved.
On section 7.
R. Neufeld: The appointment of the board, which took place in January
I think that now, if I remember the press release, there are 13 on that board other than the ones that resigned, but it could be a huge board if we just continue appointing people. Maybe the minister could enlighten me a little bit as to why that was done, taking into account (2)(f), where only two persons would be nominated by Alcan as its representatives. They've limited that, but the rest is open.
Hon. D. Miller: It came out of the agreement with Alcan.
R. Neufeld: Is the minister telling me that Alcan recommended that you have unlimited appointments made by government to this board and that it could get up to 30 people if he so wished? Is that correct?
Hon. D. Miller: No, the construct came as a result of the negotiations with Alcan.
R. Neufeld: I have a friendly amendment to that section, if the minister would accept it. I should read the amendment into the record.
[ Page 7048 ]
[SECTIONS 7(2) and 7(3), to amend as follows: delete 7(2)(a), (b), (c), (d), (e), (f), (g) and to replace thereafter:This friendly amendment actually mirrors what you have in the Columbia Basin Trust Act. That's a bill brought forward by the government of the day. It really doesn't change anything significant in the bill, other than limit the number of persons that should be appointed. Like I say, we actually fashioned it after what comes out of the Columbia Basin Trust Act, and I'm sure that was put in place for a very good reason also.7. (2) (a) two must be appointed by the board of each of the regional districts within the Nechako River basin and other areas prescribed by regulation;
(b) one or more first nations representatives;
(c) two persons nominated by Alcan as its representatives;
(d) six must be appointed by the Lieutenant-Governor-in-Council.
And to replace section 7(3) with the following:
7. (3) The chair of the advisory board shall be elected from among the members of the advisory board.]
On the amendment.
Hon. D. Miller: I would argue that the amendment, however friendly -- and I recognize that it is friendly -- is inconsistent with the wording of the legislation. With all due respect to the members of this House -- because they are supreme with respect to legislation -- this specific agreement with Alcan is mirrored
I think the proposed amendment, however friendly, is inconsistent with the agreement we've reached with Alcan. I would argue that I don't know why an amendment is required. It's very straightforward. The representation by various people is set out very clearly. I think the member is trying to change the construct to one in which the regional districts would have some controlling interest. I don't think that, quite frankly, is something that would sit well with people in northwestern B.C. That means no disrespect at all to the regional districts, but they are a duly constituted body under the Municipal Act. They have a specific purpose, and I don't know that to overlap that and give them dominance with respect to the fund would be appreciated.
We have appointed citizens from across northwestern B.C., with absolutely no bias with respect to those appointments. We are trying to encourage further representation from the aboriginal community, and I would sincerely ask the member to consider my remarks and to support the bill as it's worded.
R. Neufeld: Well, I can obviously tell that the minister's fairly determined not to accept this friendly amendment that actually mirrors some of their previous legislation.
I wonder if I could ask the minister to provide to me the agreement written by Alcan that you say mirrors this piece of legislation. I don't specifically need it immediately, but if I could have that -- copies of that agreement, where they actually specify that this is how the board should be set out -- then maybe I'd be a little bit more comfortable.
Hon. D. Miller: I would be happy to provide that.
Just perhaps a nuance with respect to the way that the member stated it: this agreement is as a result of negotiations between the B.C. government and Alcan. So two parties were engaged in putting this agreement together. Whether one dominated with respect to the language or wording in any particular section is something for conjecture, I suppose, but it is an agreement between the two parties. But we're happy to make it available.
G. Farrell-Collins: I just want to point out -- I think the minister sort of touched on it himself -- that despite the fact that the government goes out and negotiates an agreement, if that agreement requires a change in legislation -- or creation of new legislation to implement the agreement -- as the minister said, this House remains supreme. We are not forgoing
I just want to reassert the right of this House to ratify, to amend, to change and to send any particular government or minister back to the negotiating table if the provisions of the negotiation are unacceptable to the members of this Legislature, who are elected. I just want to make that clear, because I think it's a tricky situation we get ourselves into if we negotiate these agreements and then say that they're ironclad, and we can't go back and change them if this House so deems. So I just want to clear that up. In this case it's not a big issue. But it is an important principle.
Hon. D. Miller: Well, I would certainly support what the member just said. In this particular case, I did say in my remarks that parliament is supreme with respect to legislation -- absolutely right. But in this case, in a practical sense, we now have a fund. We're entrenching that fund in legislation. We wouldn't be dealing with this had we not gone and negotiated with Alcan. It is new legislation, not an amendment. But I certainly appreciate what the member has said. That's why we have governments. That's an interesting topic as well, but I'll leave that for another day.
Amendment negatived.
Sections 7 to 9 inclusive approved.
Title approved.
The Chair: Shall I report the bill without amendment?
An Hon. Member: Aye.
Motion approved.
The House resumed; the Speaker in the chair.
Bill 5, BC-Alcan Northern Development Fund Act, reported complete without amendment, read a third time and passed.
Hon. M. Farnworth: By leave, I call Committee of the Whole to consider Bill 6.
[ Page 7049 ]
BRITISH COLUMBIA HYDRO AND POWER AUTHORITY
RATE FREEZE AND PROFIT SHARING ACT, 1998
On section 1.
G. Farrell-Collins: I have a couple of questions on section 1, but one of them is particularly brief. When the government announced the so-called rate freeze -- and the Minister of Employment and Investment, I guess, is the one whose name appears on the press release -- they talked about
"These initiatives ensure that B.C. Hydro customers share in the financial and operating successes of the Crown-owned utilityThe issue here is a rate freeze. If the minister had done nothing with this freeze -- what he calls a freeze -- and hadn't brought this piece of legislation in, as far as hydro rates go, can the minister confirm that under the existing legislation Hydro would have been unable to increase its rates?. . . . It also means we can now move to immediately respond to concerns of the business community and the broader public with regard to the economy and creating jobs. Today's measures are part of the government's response to those concerns. By working with businesses and consumers to improve business competitiveness, we can improve the economy and create good job opportunities throughout B.C."
[4:15]
Hon. M. Farnworth: The rates were capped for residential customers only, but not business and commercial rates.
G. Farrell-Collins: What it says in the act as it stands
Hon. M. Farnworth: That is correct, except for the fact that the period was extended. So if you didn't extend the period, there would have come a point where the freeze would no longer have applied or the cap would no longer have applied.
G. Farrell-Collins: So if the minister had just brought in a section that merely extended the date of the freeze, he would not have had to do what he does in this section 1, which is actually provide a floor for the rates. In the act as it presently exists, it says: "
Hon. M. Farnworth: I guess the issue here is whether you look at residential consumers independently of industrial and commercial consumers or whether you look at the whole group in a total picture. That's what happened; we looked at the whole picture, the total picture, as opposed to this group versus this group versus this group. The issue became to move from a cap on residential to a freeze for the entire range of users of Hydro's system. What that did was bring some stability over the next number of years. That is what people want -- some stability. They want to know that their rates aren't going to go up, and that's what's going to happen. The fact is that they also get a rebate. Everybody wins.
G. Farrell-Collins: Nice try, hon. minister. What happens is that everyone does win a little bit. The only problem is that the government wins a heck of a lot more than the little guy wins.
Let me ask this question of the minister. If the goal of this legislation was to cap everybody's hydro rates, then why doesn't this section merely do that? Why doesn't it just extend it for another year but keep the cap on residential rates and just put a cap on non-residential rates? Wouldn't that be the best way to achieve a cap and achieve some stability so that Hydro customers know that their rates won't increase?
Hon. M. Farnworth: I understand where the hon. member is going. Where we will differ is on the fact that we've taken a broad-based approach, which is to look at the needs of everybody and say: "Let's deal with the issue for the range of consumers, not just on the basis of a good year but on the basis of what happens over a period of two or three years, and go forward from there." So the issue doesn't really matter, whether you want to deal with where the hon. member is going -- which I'm sure will be the next few questions down the road
G. Farrell-Collins: Let me ask the question more clearly. If the minister's intent was to ensure that on a broad range nobody's hydro rates go up, for whatever length of time the minister wishes, why doesn't this legislation just say that they can't exceed the rates that were charged for everybody in this period of time?
Hon. M. Farnworth: The answer to that question is pretty much the same as the previous answer, except that I'll be a little more clear. Each year you can't predict what the rainfall is going to be. You can't predict what the water levels in the reservoir are going to be. Accordingly, Hydro's revenues fluctuate. What this does is bring stability in terms of where revenues are and what customers can expect to pay in terms of rates. Then it takes into account the fluctuations that occur for Hydro, which are due to whether the reservoirs are up one year or down the next year.
G. Farrell-Collins: Can the minister give me a scenario? If he had done what I suggested, which is to cap the rates like
[ Page 7050 ]
the government did in 1996 -- on a broad base, as he says -- for a certain length of time at the pre-1996 rates, can he provide me with a scenario where under that provision, a residential, industrial or any other customer would have actually had their hydro rates go up?Hon. M. Farnworth: Due to the rather technical nature of that particular question, what I'm willing to do is to go back and look through the formula that's calculated back to pre-1996 -- because this is now 1998 -- and I will get the information the hon. member wants.
G. Farrell-Collins: There's nothing technical about it. The fact of the matter is that this government said it was putting on a rate freeze, and what it said in its documents is that it's going to stop hydro rates from increasing. But what it's actually doing in this section is not that. They don't need to bring in this section in this way to achieve that. This section goes much, much further. What this section does is actually provide a floor. What this section is designed to do is to ensure that hydro rates don't go down. What this section is designed to do is not to protect the consumers from a rate increase; what it's designed to do is to protect the government from a rate decrease, so Hydro will have the money to feed off into general revenue.
If the minister is trying to achieve a rate cap, if he's trying to ensure on a broad basis that no individual or consumer or customer -- whether industrial or residential -- is going to see a rate increase, all he needs to do is to provide for a cap, saying that the rates shall not exceed those that were in existence at the time the original freeze came in in 1996. That's all he'd have to do. Can the minister tell me why it is that he chose not to go that route? If what he is really trying to do is to ensure that no rates go up, he could have done it that way. I would probably suggest that we amend this section, then, if that's his goal. If his goal is to ensure that rates don't go down, then perhaps he should talk to us about that right now.
Hon. M. Farnworth: Again, hon. member, what this bill does is lock in the rates and ensure that there's no fluctuation or comparison of rates between good years and bad years and that there's stability for the customer, whether residential or industrial. The other thing is that we're locking in at the lowest rates of any hydro or power utility in North America, after Manitoba. The customer in this province is getting the cheaper
Interjection.
Hon. M. Farnworth: I said with the exception of Manitoba. Within North America, B.C. Hydro and Manitoba Hydro are the lowest-cost power producers on the entire continent. The fact is that the citizens of this province benefit from that.
G. Farrell-Collins: The fact of the matter is this: energy rates right across North America are dropping. As a result, B.C. Hydro's rates should be dropping also. This press release and backgrounder that the government put out in the minister's name is full of how well B.C. Hydro is doing and all the money B.C. Hydro is making -- the hundreds of thousands and millions and millions of dollars that B.C. Hydro is making in profits.
In the normal course of events, what would likely have happened if this government hadn't brought in this bill -- and in particular this section which we're debating right now -- is this: one of these days this government's Crown corporation called B.C. Hydro would have found itself at the B.C. Utilities Commission defending itself against the likes of Dick Gathercole and his friends, who would be arguing for a residential rate decrease. Because if Hydro makes surplus profits
[4:30]
What this government is doing with this sectionIn fact, industrial users had gone and applied for a rate decrease. The B.C. Utilities Commission was in the process of deciding that. We were likely to see rate decreases in the area of 7 percent. Who knows what the Utilities Commission would finally have decided? We were likely to have seen some significant rate relief for customers. So what the government did was step in and say, "Hang on a second; you can't do that, because if you do that, Hydro won't make all these extra hundreds of millions of dollars, and we, the government, won't be able to go into B.C. Hydro and raid those surpluses and put them into general revenue," as they've done with the other special directions -- 2, 5 and 8, I think.
What's happened with the section isn't a cap. They're not holding rates down; they're holding rates up. They're artificially stepping in, getting rid of the Utilities Commission, the independent rate-setting body, and holding the rates up. When our hydro rates would have gone down, they're holding them up. So the people of British Columbia are being told by this minister and this government that they're getting a really good deal; their rates aren't going to go up for the next number of years. But what they're not telling them is that in all likelihood, had the B.C. Utilities Commission, the independent regulatory body, been allowed to set the rates for B.C. Hydro as it should, their rates would have gone down. They would have had a significant reduction in their hydro rates.
Hon. Chair, the motive for section 1 in this bill is contained in section 3, which we'll get to shortly. It shows exactly what the government's motive is for holding those rates up. It talks about draining the dividends into general revenue.
So despite what a wonderful pirouette the member has done, despite the triple axel, despite all the skating he's done on this issue in answering the questions so far, what he should
[ Page 7051 ]
really do is stand up, say what the bill is really about, take a bow, go collect his flowers and wait for the judges to give him their decision.Hon. M. Farnworth: Well, if we're going to take a bow for freezing rates to the lowest in North America, I think we will. We shouldn't be adjusting rates on the basis of one year's water supply. The fact of the matter is that this bill is about freezing rates. That brings stability to residential customers, industrial customers, commercial customers; it's about bringing stability over a number of years.
It's about rebating some of B.C. Hydro's profits to the consumers of power in this province on the basis that last year was an extremely profitable year for Hydro for a number of reasons: the hole in the W.A.C. Bennett Dam, which created a huge drawdown on the reservoir and produced a great amount of surplus power that was sold off; and the fact that reservoirs throughout the province were at their highest level in decades because it was the wettest year in this province's history. That's what this is about: rebating some of that money back. And that's all.
G. Farrell-Collins: Let me ask the minister this question, then: if the idea was to ensure that Hydro's rates remain stable over the longer term -- i.e., not go up -- would it not have been wiser for the government to leave that surplus with B.C. Hydro so that in bad years when there is a demand to push rates upward beyond the cap, Hydro would have money to use at that time? Why not leave those funds with B.C. Hydro to offset any demand for a rate increase at that time?
Hon. M. Farnworth: Well, in response to the member's question, I think the fact that we're doing what we're doing takes into account the point he's trying to get at. What's going to happen in the future is that when you have those good years like we had last year, then we in fact will be able to do another rebate and rebate more of the money back. So the freeze will work. It will protect consumers, whether industrial or commercial. But at the same time then we'll have the opportunity, if we wish, if we get another year like last year -- which, quite frankly, I hope we don't
G. Farrell-Collins: I don't know about the minister, but I've been in this House every summer. I don't know what summer is like anymore, it seems.
Interjection.
G. Farrell-Collins: We're working on it.
If the minister can tell me, then
Hon. M. Farnworth: The rate structure is based on average water flows, okay, and has generated so much revenue. Last year we had excess rain, if you like, and the hole in the dam generated what some call excess revenues, part of which have been rebated. Now, in terms of what happens in the future -- which is where the hon. member, I think, has generated his number from, because he's extrapolating that forward -- that's hard to say, because you can't predict what the weather is going to be like, what the
Interjection.
Hon. M. Farnworth: That's variable, because it's a combination of snowpack, rain and weather conditions in different parts of the province. Last year was very much outside the ordinary. So to suggest that that is going to carry forward is something that, you know
G. Farrell-Collins: What I would like to ask the minister, because I'm looking at what's happened in government
If you look at those excess revenues that Hydro has that it's rebating back to the government, and compare it to the amount of the rebate, there's a pretty shocking difference. What I'd like to hear from the minister is what the excess revenues are and what the rebate is. I mean, these numbers are here; they're in his press release. I'd like to hear the minister tell me what the excess revenues are and what the rebate is, in millions of dollars.
Hon. M. Farnworth: We've talked about fluctuations in rainfall, generating capacity, sales, and what have you -- however you want to look at it. The rate structures in place allow us to take into account fluctuations and to generate a certain amount of revenue to the province. That money goes to roads and hospitals and schools and services that the public of British Columbia want. Occasionally, in excess years like last year, almost a superrevenue is generated. That's why the rebate takes place. We can't predict what happens in the future, and there may not be the same revenue-generation as last year, in which case we won't be in a position to give a rebate. We may be, but that's for the coming year to tell. But if you look back over the last five years, the rate of return that the government has received from Hydro is in fact less than what the Utilities Commission has allowed.
G. Farrell-Collins: I look at the budget figures for B.C. Hydro and the amounts that are returned and will return to the government in the government's own budget documents: $198 million in '94-95, $114 million in '95-96, $279 million in '96-97, $369 million last year and $373 million projected for this year -- hundreds of millions of dollars. After Hydro has paid its bills, after it has got its 14 percent return and all that sort of stuff, it's got all this money. Hydro gets these hundreds of millions of dollars after it has paid its bills and charged its customers and got its revenue. After all of that, the amount that goes back to the customers in one of these "super" years
[4:45]
[ Page 7052 ]
So let's take '96-97 as an example, when $279 million went to the government. In '97-98, $369 million
They are making an extra
If the government wanted to provide stability and to ensure that these people were treated fairly, it could cap the rates -- as it did -- but allow the rates to fall. If you want to protect them from rate increases, if you want to provide stability so they can plan for what their maximum hydro rates are going to be, then cap them. I mean, I think it's a fictitious cap anyway, because the trend is down, not up. But if the minister wants to cap it, then cap it. If you cap it, you'll ensure that the rates don't go up without ensuring that they don't get the rebate and without stopping them from getting the rate reduction that they deserve.
There is no justification in anything the minister has said here today -- nothing, not one iota of justification for a rate floor. Every argument he makes is for holding rates down, and there's nothing that he said that would make the case for holding rates up, which is what he's doing with this section. Let me ask the minister this: is he concerned with keeping rates down, or is he concerned with keeping rates up? Which is it?
Hon. M. Farnworth: We're concerned with keeping rates competitive and keeping rates the lowest in North America.
G. Farrell-Collins: In doing so, is the minister concerned with keeping rates down, or is he concerned with keeping rates up?
Hon. M. Farnworth: We're concerned with keeping the lowest rates in North America, which they are, and in keeping stability. Stability can be defined in a number of ways, through certainty to residential customers so they know what to look forward to two or three years down the road, through certainty to industrial customers so they know what to look forward to two or three years down the road, through certainty through new forms of power production from independent power producers, for example. There's a whole host of groups that can look forward to the lowest power prices in North America, and at the same time, there is stability and a rebate going back -- money back in the pockets of the consumer. I don't think that's happened anywhere else in North America. At the same time, there's hospital services, educational services and roads being provided. There's all the things that everyone wants to have provided, including, on occasion, requests from the opposition benches. It's all being done in a way that ensures the lowest power prices in North America.
G. Farrell-Collins: Well, let me do the translation. The translation is this: the government needs more cash to spend on other projects -- legitimate or not, but they need more cash. So what they've done is hold rates up and they've called that stability -- meaning that the rates won't go up or down over the next little while -- and as a result of holding rates up, they get a windfall of cash that they can put in their pockets for other things. Now, if that's what the government is doing, then go back to your office, get on the typewriter, hammer out a press release that says that, and take the hits for it. If that's what you're going to do as a government, do it, and we'll argue about that. But at least tell people what you're really doing. I mean, is it so hard?
Does the minister think that the people can't understand? Does he think that they can't take the bad news, that he can't make the case for what he wants to do? If he wants to go out there and say: "No, look, we need money for all these things" -- which he just listed -- "and in order to do that, we need more money from B.C. Hydro. We've had a couple of good years. We're going to hold the rates fixed, even though you're entitled to a decrease. But you say you want all these services, so we're going to hold the rates up there. We're going to keep rates high. We're going to take the excess windfall, and we're going to put it into those things that you want."
Hon. Chair, if that's what the government wants to do, then do it, and we'll have the discussion about that. But tell people that. They're not stupid. They can get the argument. They'll decide whether they agree with it or not, but they can make that decision. Instead, the government hides behind this fake freeze. I don't know what it is. Whenever the government is confronted with a choice between telling people the facts and the truth or issuing a press release for a press conference, they choose the press release for the press conference. Why not just tell them what you're doing? They can figure it out; they can decide whether they agree with that or not.
The fact of the matter is that this bill is designed to do what I just said. The minister said the same thing but in different words. It's designed to hold rates artificially high, higher than they would likely be if the B.C. Utilities Commission were to exercise its powers, cream the excess cash off and use it for other things -- legitimate or not. That's what this is about. The minister should just stand up and say it in plain English so that the people of B.C. know that that's the case.
Hon. M. Farnworth: I think it's a real stretch to say that the lowest rates in North America are artificially high when they've been frozen since 1993 and will be frozen for another few more years. During that entire time, they're not increasing, and with the effect of inflation, they're in fact going down.
G. Farrell-Collins: I think we've made clear what's actually happening here. The minister can say what he wants. He can call it what he wants, but it's clear. The government is artificially holding the rates high, higher than they would be in the normal course of justice and if the B.C. Utilities Commission had been allowed to do its job. The rates are artificially higher. There's a windfall profit that results for B.C. Hydro, and the government is taking that profit and using for other things and telling people that they're doing them a service.
They're not saying it in those ways, but that's what's happened. We know it, the minister knows it -- whether he'll
[ Page 7053 ]
actually say it in the House -- and I think the public is about to know it too. With that, I think we can move on to another section.Sections 1 and 2 approved.
On section 3.
G. Farrell-Collins: This is the other section of the bill. The other one was the get-the-cash, and this is the spend-the-cash part. The first section is the one that artificially held the rates high and generated the revenue. This section is the one that, when the minister goes to B.C. Hydro, says: "Thank you very much for all the money. I'll put it into general revenue, and have a good year next year too, despite the rain."
I 'd like to read into the record what this one allows the government to do: "Despite the Utilities Commission Act" -- again circumventing the B.C. Utilities Commission -- "the Lieutenant Governor in Council" -- that's the cabinet and the minister, more appropriately -- "may issue directives" -- or orders telling the authority in a fiscal year that they have to pay the government an amount specified by the minister, by the Crown, by the government. There's also the stuff that requires them to pay a rebate. In this case, as I said earlier, it's
This is the section where all becomes clear, where the motive behind the government's desire to hold rates artificially high -- artificially higher than they would be if the Utilities Commission was allowed to do its job -- happens. This is the section where the motive is laid out in clear terms. This is the grab section.
Can the minister tell me if he intends to take more of the money for general revenue? There's a lot of leeway given here for the minister. He can take some of the money himself for the Crown, for the government, or he can give some of the money back in the form of rebates as a result of these artificially high rates. Can the minister tell me what the proportion is likely to be? Is it going to be sort of 90-10, 50-50, 60-40? What's it likely to be? How much is the government likely to get, and how much are the customers likely to get back with these windfall profits?
Hon. M. Farnworth: Well, the power to direct revenue to the government from Hydro is already there, and this is now allowing the power to direct revenue to be paid back to the customer, which wasn't there before. I guess in terms of what happens later this year, next year or two or three years down the road again depends in large part on the weather and if we have a hole in the dam, which I sincerely hope we don't. Then at that time it would be looked at.
G. Farrell-Collins: I realize that the dollar figures obviously will be determined at a later date. But certainly the minister has in mind, maybe, you know
Hon. M. Farnworth: It comes back to, again: what will be is what will happen over the course of the year.
An Hon. Member: Que sera, sera.
Hon. M. Farnworth: No, no, no, hon. member, not que sera, sera. But in terms of what happens with the weather, of what happens with the amount of money that's generated, of what happens in power generation and how much is generated, that's something that will be known later, towards the end of the year. You'll be able to see whether in fact you're having a record year compared to last year.
Two things. Hydro should be earning a rate of return comparable to other investor-owned utilities; if that's the case, that's fine. If it's over and above that and there is a surplus and that is deemed to go back to customers in the form of a rebate, then at the appropriate time those decisions would be made -- not by myself, not by Hydro, not by the Minister of Employment and Investment, but in conjunction with the Minister of Finance. So to say whether it would be done on a 90-10 split or a 50-50 split, I think, depends (1) on the type of figure that you're dealing with, and (2) on exactly what the number is.
[5:00]
G. Farrell-Collins: If I heard correctly what the minister said -- and I'll have to check Hansard later -- he said that B.C. Hydro is entitled to a rate of return commensurate with what other utilities return to their shareholders. I believe it's 14.1 or 14.7; I can't remember the exact figure. And if there's any money over and above that, it should be returned back to the customers. I'm pretty sure that's what the minister said. Can he confirm to me if that's what he said?
Hon. M. Farnworth: No, I didn't quite say that. I said what you have to do is look at whether
G. Farrell-Collins: I'll go back and read what the minister said the first time, because I think it was a little different. But the reality here is this: there is a rate of return that should go to B.C. Hydro, as the minister said in his first response. That's the principle which the B.C. Utilities Commission operates on. The rate of return to the B.C. Hydro shareholder, which is the government of British Columbia, should be commensurate with that which is done in the free market or with other utilities of that size. And there's a comparison, there's a whole bunch of ways that they calculate that. But the minister said that for amounts over and above that, the government will decide what to do with them.
So what the minister is telling us now, with the second answer to the question, is that instead of returning those excess revenues to the customer, which would normally happen under the B.C. Utilities Commission, the government is now going to decide how it's going to divvy them up. He doesn't know what that divvy up will be. He doesn't know what percentage will be going to the government and what percentage will be going to the ratepayers, but that excess revenue will be divvied up somehow between the government and the ratepayers. Is that correct?
Hon. M. Farnworth: I understand where the member is coming from. The fact is that there is a target rate of return for Hydro that last year, for example, was exceeded. There's a rebate that's taken place which in part went back to the public.
[ Page 7054 ]
Whether or not there's a rebate in the future depends on what happens in terms of the rate of return and on what conditions happen over the coming year.As we said, last year was a record year in terms of rainfall and in terms of power generation due to the hole in the dam. You then have to look at what's going to happen in the coming year. Over the last five years, for example, Hydro has not reached the target rate of return. So you can't necessarily say that that's where it's going to end up. You can't automatically say that (1) there's going to be an excess, or (2) that that should automatically go back. That's something that has to be decided towards the end of the year, and I don't think it's something that can be decided strictly on the basis of a formula.
G. Farrell-Collins: The minister tells me that this year B.C. Hydro has exceeded that target rate. Can you tell me two things: (1) whether that's a BCUC-set target or a government-set target; and (2) what was the target and how much did B.C. Hydro exceed it by?
Hon. M. Farnworth: The utility rate of return for Hydro, set by the Utilities Commission, is a target compared to what B.C. Gas earns on its return. That's where the comparison with a privately owned utility or an investor-owned utility takes place, and B.C. Gas is the one closest to Hydro. The rates are then set on an average water-year basis. So on that basis, last year was an extraordinary year -- for the reasons that I've listed before, which are high snowpack, record rainfall and the hole in the dam. That generated revenue, which is why we are rebating the money to the public. We're doing that in the context of maintaining and having the lowest rates in North America.
G. Farrell-Collins: You answered my first question, which is that it is a target rate set by BCUC.
Can the minister tell me the answer to my second question: what was that target rate of return, and how much does B.C. Hydro exceed it by?
Hon. M. Farnworth: The past year it was 17.2 percent. That varies. That's the return rate for B.C. Gas, and that would vary, in part, with what happens with the rate of return for B.C. Gas.
G. Farrell-Collins: The other part of the question, which is another part of the previous question, was: how much does B.C. Hydro exceed that by -- percentage-wise, if you've got it, but more importantly, dollar figure-wise?
Hon. M. Farnworth: Hydro did not exceed its goal, based on average water rates.
G. Farrell-Collins: The minister has just been telling me for half an hour that Hydro had a great year -- windfall profits -- and now the minister is telling me something
Hon. M. Farnworth: This is rather technical, but the short answer is: based on the materials submitted by Hydro to the commission and based on the practice of the commission, the rate of return that was earned was well within what was allowed by the commission and would not have been deemed excessive.
[5:15]
G. Farrell-Collins: I don't get it. Either Hydro had excess profits, as the government is telling us in their press releases and their backgrounders, or it didn't. Either it had excess profits, or it didn't. Did Hydro have a great year last year with excess profits?Hon. M. Farnworth: Hydro's rates are set on the basis of average years. I think where the hon. member is coming from is that last year was an exceptional year. That's all. You can't judge it on the basis of one year; you've got to judge it on the basis of a number of years.
G. Farrell-Collins: All the gobbledegook and bureaucratic whatever aside, the question is this: did or didn't Hydro have a great year last year? Yes or no?
Interjection.
G. Farrell-Collins: I hear the member for Esquimalt-Metchosin say that every corporation in British Columbia had a great year last year. He obviously hasn't been outside of Victoria, because the forest sector has been devastated, quite frankly, by a lot of the policies that member brought in as Minister of Environment.
Well, hon. Chair, the question to the minister responsible for B.C. Hydro is clear. Did Hydro have a good year or a bad year? Did they have excess profit or not? Is there money to be returned to the government in the form of excess dividends, and to the ratepayers in the form of rebates, or not? I mean, you can't have it both ways. You can't. I'm sorry. Either Hydro had a great year, and they've got all this extra money, and they're turning a bunch of it back to the government and a bunch of it back to the ratepayers, or they didn't. Which is it?
Hon. M. Farnworth: Hydro's rates are appropriate. They're set on the basis of the annual average rate of flow. They deliver the lowest-cost power in North America. Last year, within that rate structure, they generated a great deal of money for Hydro. Some of it went to schools and hospitals and services that people want, as we said earlier. The government rebated some of it back to the public. That may or may not happen again. It will depend on what happens in the coming year, what happens in the next year.
In terms of the rate structure, it's appropriate and has been in place for seven years. Nowhere else can a utility say that.
G. Farrell-Collins: The minister misses the point entirely. He just entirely misses the point. We can go back to the debate we had an hour ago, where the minister confirmed for us -- in very clear statements in Hansard -- that Hydro had excess revenue last year. He said
If they're doing that, the only answer I'm trying to get from the minister is: how excess were they? Put a number on it. Obviously you must have known that there was more than what you anticipated, more than what you expected. If it was a good year
[ Page 7055 ]
entitled to. So all I'm asking the minister is: how much is that? How much more was there? Was it $90 million? Was it $40 million? Was it $120 million? Was it $310 million? What was the figure? How much extra money did Hydro get last year that they weren't expecting?The Chair: Members, the Chair needs to caution in regard to repetition of debate.
Interjection.
Hon. M. Farnworth: I'll get to the hon. member the exact figure difference between what was projected and what was actual. Suffice it to say that at the end of the day the government deemed that $31 million would be an appropriate amount to refund to the citizens of British Columbia.
G. Farrell-Collins: Well, that is the worst non-answer I have heard yet. It's either an amount of money or it isn't an amount of money. If the minister responsible for B.C. Hydro -- a minister of the Crown -- can't tell this House what the excess profit was for B.C. Hydro last year, then who can tell us?
Interjection.
G. Farrell-Collins: He says he wasn't the minister last year. He's a minister now. If he wants to go get the minister from last year, who has the got the answer, I'll wait. If he wants to go make a phone call, I'll wait. I'm just trying to find out what the figure is. What was the excess profit last year?
For the minister to say that there was some figure out there but they don't know what it is, and that they deemed from above that it should be $31 million that goes back in the form of a rebate, that doesn't answer the question. How did the government determine that? Here in this bill we're about to give this government the powers to take revenues or dividends from B.C. Hydro -- something they already gave themselves -- but, more importantly, to provide rebates, and the minister can't even tell me how they figure that out. He can't tell me how much. He can't tell me what percentage. He can't tell me if there's a formula. He can't tell me what happened last year.
It would seem to me that if the minister can take the time to put his name on a press release that talks about $31 million -- not $30 million, not $29 million, not $43 million but $31 million exactly -- actually, it's $31.4 million, if you look later on in the document
If he knew that, if he knows it's $31.4 million that he can give in a rebate, how did he come up with that figure? How did he know that he could afford that? He must have known that the surplus revenues were something more than $31.4 million or was exactly $31.4 million -- or it was $82.3 million or $110.4 million. I don't know what the number is. The minister should know. What I'm trying to determine, before we give the minister the powers, under section 35 of the Hydro act, to take dividends and to offer rebates to British Columbians, to bypass the B.C. Utilities Commission process, I think he should be able to explain to this House how it works. I'm not about to give the minister power to do something when he doesn't know how to do it.
If the minister can tell us how that figure is determined
Hon. M. Farnworth: I told the hon. member, in terms of the exact figure for last year, that I would get him that number. In terms of the $31 million, it was arrived at on the basis of it being a 2 percent and a 1 percent cut, or rebate benefit, to the consumers. It was done on the basis of 2 percent to residential and commercial and 1 percent to industrial. That's where the $31.4 million figure came from.
Next year it may depend on what happens in the coming year. It may be nothing; there may be no increase. Revenue projections may not materialize. It may be less, but if it's more, then any decision that's made will be based on how much over projection we are if there's a surplus. They'll be done in the discussion with Finance, not necessarily by a formula.
G. Farrell-Collins: That is exactly why the B.C. Utilities Commission should be the one making these decisions and not the government. The minister doesn't have a clue what the formula is; he doesn't have a clue what the amount is. The rebate is arbitrary; there's no rationale for it. It's just an arbitrary figure picked out of the air to stick into a press release so they can talk about a rebate. It's the smallest figure you can get. It's 2 percent, because if you get any smaller than that, you get 1 percent, and they didn't want to give the residents less than what they gave to the industrials.
This is arbitrary, it's politically motivated, and it's designed to put into a press release, not for good government policy. There's no rationale; there's no calculation. There's no formula; there's no figure. There was no determination made, and that is exactly why this House should not give the minister the powers that he's asking for in section 35. He's not entitled to it, and it's not just him; it's the whole government. They're not entitled to this, because they can't explain how it works.
They don't know how it works. There's no public policy behind it. It's an arbitrary decision on behalf of the minister to say: "Gee, we're freezing rates up here when they really should be getting a rate decrease, but if they catch on to that, they'll be angry -- so let's promise them a rebate. Let's give them a small, tiny piece of it. And we'll run ads. We'll run TV ads, radio ads, print ads. We'll spend millions of dollars on advertising, telling people what a great deal we're doing before we even figure out how we got there."
That is exactly the reason why the B.C. Utilities Commission was brought into place: to avoid this kind of arbitrary, political, unthought-out public policy decision that affects millions of people and costs millions and millions of dollars, not to mention jobs.
How many jobs could be created in the mining sector? Today is Mining Day. How many jobs could be created in the mining sector if they had a 7.5 percent reduction in their hydro rates? Five thousand? Two thousand? One thousand? Ten thousand? I don't know. Did the minister think of that before he determined that he was going to skim this money off and put it into general revenue and not put it into rate decreases? I doubt it.
We know that when the Premier goes out and signs a deal with IBM and creates 200 jobs, he knows exactly how
[ Page 7056 ]
many jobs it's going to create, and he tells everybody about it as many times as he can. But here we have a government making a decision to take money away from the ratepayers and put it into general revenue, with no study or impact assessment done on what jobs could be created if that money were allowed to flow back to the residents or back to the industrial consumers. There's been no assessment of that.When the B.C. Utilities Commission sits down, they don't just do this on the back of a napkin. They don't just plunk themselves in chairs in the Finance minister's office and say: "Okay, let's put some dollars in a hat here and pull out a figure." That's not how they do it. They do analysis; they do studies. They hear representations from individuals and from businesses. They look at what goes on in other jurisdictions. They look at projections for B.C. Hydro. They grill B.C. Hydro and question them about what they're doing. They question them about their expenditures. That's how an independent body regulates a government-held monopoly.
When you do away with that independent body, you get just this kind of policy: half-thought-out, hare-brained, no rationale for it, arbitrary, and politically motivated. That's what you get. For the minister and the government to have the gall to come in and ask for these kinds of powers, sidestepping that independent body without being able to explain the rationale behind it, without even being able to tell us how he already did it
[5:30]
He can't even tell us what the calculation was. He can't even tell us how much money was involved. He doesn't know. He's asking us to authorize him to have sweeping powers in the order of hundreds of millions of dollars at his whim and at the whim of the Finance minister to go to the business community and the residential ratepayers, or to go into government revenue -- and not just this year, but for every year in the future from now on. From this day forth, the B.C. Utilities Commission will have absolutely no power to set the rates or the rebates at B.C. Hydro, or to tell the government that they are taking too much out of B.C. Hydro -- no power whatsoever. Nothing! It will all rest with the minister, who doesn't know the figures, and a Finance minister who doesn't know them either.Any member of this House, including the former minister responsible for B.C. Hydro, would be remiss in offering that to a government minister who can't answer the simple questions that I've asked. I know that he wouldn't stand for that if he were the minister; he would have the figures. I know the Minister of Finance would be looking for those figures too. Why is it that this government and its staff don't have an answer for the question? You'd think that the minister, with all the powers of government, could find those answers. I think that what the minister should do is stand down this section and come back to it at a later date when he can answer those questions. If he wants to do that, we can move on. We can do some other stuff in the Attorney General ministry estimates; we can deal with the children and families commissioner; we can go on. Otherwise, we're going to come back tomorrow and do this again. We're going to keep doing this until 6 o'clock, until we find the solutions, because to this point the minister has not been able to explain how this works.
I've asked the minister a specific question about dollar figures, and he hasn't been able to give that to me. Can he tell me what the process will be? Forget the dollar figures for now, because he says he'll come back with that. Can the minister tell me what the process will be? The B.C. Utilities Commission has a very involved process: it takes months. There are hearings; there are representations; there are documents; there are public hearings. There's all that stuff that goes on to determine what those figures are. Can the minister tell me what process his ministry put in place to determine what those amounts will be?
Hon. M. Farnworth: I repeat: I'll get the number for next year that the member wants. I am very sorry that I don't happen to have last year's budget numbers at the tip of my fingers.
However, having said that, the powers that are being asked for, which this section deals with
G. Farrell-Collins: In fact, the legislation does a little more than that. Section 35 as it reads now says that "the Lieutenant Governor in Council may issue directives directing the authority in a fiscal year to pay to the government an amount specified in the directive." The new section 35 says: "Despite the Utilities Commission Act, the Lieutenant Governor in Council may issue directives
What this is doing is overriding the ability of the B.C. Utilities Commission to be involved in there, to have that be part of how they set rates -- and whether or not they feel that the public is entitled to a rebate. It's all linked together; that's why it's all in one section.
The fact of the matter is that this section that we're about to amend -- the new section, as opposed to the old section -- has some significant changes in it. That's why it's in there; that's why we're amending it. So it's not just business as usual. It's a significant change, and it requires significant, detailed answers.
The minister highlighted sort of an ad hoc process that will be in place with the government, within cabinet, to come up with how much money the government should take in the form of a dividend and how much, if any, it should rebate to the public, to the ratepayers. Can the minister tell me what role there is for public input in that? Are they planning on having public hearings? Is the Legislature going to be a part of that? Is the minister going to hold public hearings? Right now the B.C. Utilities Commission has public hearings, and in fact, there is intervener status. There is opportunity for people -- ratepayers -- to get together collectively to get intervener status. Maybe I'm in error, but I believe that under one of the former ministers -- the member for Esquimalt-Metchosin -- they actually decided to fund intervener status at the B.C. Utilities Commission.
All of that was put in place to increase the democracy, to increase the public involvement in setting those rates -- to
[ Page 7057 ]
hear what the public has to say. They own the company. I mean, the government doesn't own the company; the minister doesn't own it; the public owns it. They should have a say in what those rates are; they are the ones who pay them. Can the minister tell me what process is in place to allow the public some input in setting these rates? Are there going to be public hearings? Is the Legislature going to deal with it, or is one of the committees of the Legislature going to deal with it? What avenues are there for the public to have their input under this process that we're about to give the minister?Hon. M. Farnworth: The member is correct in that there is a public process in place for dealing with rates. That's in abeyance over the next two years because of the freeze, but that has nothing to do with what happens in the meantime. If, for example, there was a repeat of a year like last year, this allows the government -- if the government wants and if there is in fact a surplus or revenues or excess or whatever you want to call it -- to rebate that back to the general public. It has nothing to do with rates; rates stay exactly the same as they are. They've been frozen since 1993. This is strictly about being able to rebate revenue if we have a year similar to the past year.
[5:45]
G. Farrell-Collins: Well, I hope the minister doesn't believe that. The fact of the matter is that the public hearings don't say: "Oh, sorry. You can only talk about the figure of the rates; you can't talk about what Hydro is doing with its profits. You can't talk about a rebate, and you can't talk about the dividends that are going to government." I mean, that's just not reality. All of those topics are up for discussion in the public hearings. That's how you determine what the rates are. They are all determining factors in what the rates are going to be, whether the rates are unjust or unreasonable or not. That's what the B.C. Utilities Commission is going to do. "The commission must have due regard, among other things, to the setting of a rate that is not unjust or unreasonableInterjection.
G. Farrell-Collins: It is up for discussion, hon. Chair, because the B.C. Utilities Commission is being overruled and overridden by the section that we're about to pass. Its powers are being jettisoned, thrown out the door and replaced by a minister who doesn't understand the process and doesn't care about public involvement and by a government that is more intent on getting cash than it is on giving people fair hydro rates. That's what this section does. It overrides the B.C. Utilities Commission. If they hadn't done this, the B.C. Utilities Commission would go out there, and they'd talk to people. People could band together; they could get intervener status. Under this government and the former minister, the member for Esquimalt-Metchosin, they could actually be funded. They could actually get money to represent their case. They could get money to hire lawyers, hire spokespeople, hire people to come before the commission for them and represent their interests as a group. All of that natural process of monitoring a government-held monopoly has gone out the door.
Instead, we've replaced it with a minister responsible for B.C. Hydro and a Minister of Finance sitting around the coffee table with a cup of tea, lobbing hundreds of millions of dollars back and forth at each other and deciding what it's going to be. Where is the right of the public to have any input? Surely the minister isn't going to set the dividends and the rebate rates based on that; surely the minister has some plan to involve the public; surely there are going to be public hearings. Isn't the Crown Corporations Committee even going to go out and hear what the public has to say about dividends and refunds, rebates and rate structures?
Have we gone from a government that was proud to pay for intervener status to a government with two interveners who are going to be the Minister of Finance and the minister responsible for B.C. Hydro? This is a government-held monopoly. These people can't go to another producer. They can't say -- like they can with gas, for example
Hon. M. Farnworth: Two points. First, this section does not deal with rates. This section deals with the rebate, if there is any, on the basis of a year comparable to last year. Second, this section does not deal with rates that have already been set by the BCUC, and they're not going to change. The hon. member talked about whether this government cares about the rates that the consumer is charged or the hydro bill that the consumer gets in the mail once a month. The fact of the matter is that this government has frozen rates since 1993, and consumers in this province pay the lowest rates anywhere in North America.
What this does is bring some stability for the next few years to industrial consumers, to residential consumers and to commercial consumers. What it deals with is what happens if there's a year like the past year, and it allows a rebate to take place. It doesn't change rates; that's not happening. Utility bills are not going up. They're staying the lowest in North America. When you factor in inflation over the last seven years, they've gone down again. They've declined in comparison with everywhere else.
This section is not nefarious; it doesn't usurp anything. It allows the government to redirect or to rebate some money. It's not changing the rates, which are staying in place. It's not changing the fact that the consumers, as I said earlier, have the lowest-priced electricity on the continent.
G. Farrell-Collins: I would argue with the minister. This does usurp something. It usurps the right of the B.C. Utilities Commission to set those rebates or to set the dividends. If it didn't, it wouldn't be in the wording of the section. If it wasn't usurping the right of the B.C. Utilities Commission, it wouldn't say: "Despite the Utilities Commission Act, the Lieutenant Governor in Council may
[ Page 7058 ]
usurp something. It usurps the right of the B.C. Utilities Commission to be involved in the setting of dividends and rebates.How does the government know that the public might not want to come to a public hearing around rebates or go to the B.C. Utilities Commission and say: "Hey, look at the huge surpluses B.C. Hydro is generating. We demand a rebate"? They could do that. They can petition the B.C. Utilities Commission for a rebate; it's their entitlement. They're allowed to. But after this section passes, they won't be able to. A previous minister, the member for Esquimalt-Metchosin, as I said earlier, actually brought in intervener status and funding for interveners to allow them to do that very thing. When they felt unjustly treated by a government monopoly, they could go to an independent body and say: "We're getting ripped off here. We want our money back."
There could be public hearings, a process that was independent from the Finance minister and the minister responsible for B.C. Hydro. They could plead their case. Hydro would have to go there and defend the reason for the need to keep those rebates to themselves. The government would have to defend why they need those dividends, and the public would have their say. That's something this government used to stand for, six years ago. That's something the previous minister was proud of. I sat in this House when he made those changes; I heard him talk about them.
Interjections.
G. Farrell-Collins: No, I didn't. Hon. Chair, we didn't.
Interjections.
The Chair: Order, members. Through the Chair, please.
G. Farrell-Collins: The fact of the matter is that something happened on the road to a second term. This is a government that's trying, in this section, to rule by decree -- to bypass the independent body, to rule by decree. That's what it is. Despite the independent body, the government may issue directives. It's like in Versailles, you know. The member opposite, the minister responsible for B.C. Hydro, gets up in the morning at Versailles. All the little people are around him waiting to kiss his ring, and he says: "I want this dividend. Thou shalt have this rebate."
The public is sitting in Paris. They need to rally and come out and drag the king back into Paris, so he'll stand up and tell them why he needs to do these types of things. This is a minister who wants to rule by decree. He wants to be able to sit there on his throne and say: "This shall be the rebate. This shall be the dividend." And the four million people out there in British Columbia who are paying Hydro rates don't get a thing to say about it -- not a thing. Then he's going to take the money that he gets, and instead of giving them a greater rebate he's going to run ads telling those people what a great deal they've got. If that isn't the height of hypocrisy
If the minister thinks for one minute that the B.C. Utilities Commission would allow that to happen, I challenge him right here, right now, to strike out that provision in this section that says "despite the Utilities Commission Act." I challenge him. If he thinks that what the government is doing is within the purview of what it's entitled to do under the Utilities Commission Act, then strike out that part. Strike it out.
The fact of the matter is, he is usurping the right of an independent body to hear from the public and make a determination on what Hydro rates, dividends and, yes, rebates are going to be. The minister is wrong.
Hon. Chair, given the time, I move the committee rise, report progress and ask leave to sit again.
Motion approved.
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. M. Farnworth moved adjournment of the House.
Motion approved.
The House adjourned at 5:56 p.m.
The House in Committee of Supply A; E. Walsh in the chair.
The committee met at 2:41 p.m.
ESTIMATES: MINISTRY OF
(continued)
J. Wilson: I'd like to go back to where we were this morning and cover off a little bit more on the crop insurance program. Could the minister tell me how he would describe this program and how it would affect, say, a cow-calf operation -- as to whether or not it will work for them or whether they have been left out of the program?
Hon. C. Evans: The cow-calf operator would be eligible to purchase crop insurance for the forage component of their operation. So long as they are eligible to purchase some form of tier 1 option, then they're eligible for whole farm insurance.
J. Wilson: I'd like the minister to walk me through this. First, I need know -- and I've looked through here, and I can't see where
Hon. C. Evans: Sorry, hon. member, I don't know the date for the forage component, which is the last date to sign up. There's a different date for most regions and most crops.
[ Page 7059 ]
However, for the whole farm component, you can become eligible anytime up until June 30, provided that you are signed up for one crop under tier 1 by the deadline. Last year it was unnecessary to be signed up for crop insurance in order to apply for whole farm insurance. However, this year you would have to have met one crop by the deadline that applied to that crop in that region.J. Wilson: I would like to know that date if I could get it, and the other dates for various crops that are eligible.
I see in the application form for crop insurance that you must have been to
[2:45]
Hon. C. Evans: Staff will try to get the hon. member the dates of the various commodities' sign-ups while we're still in debate here, in case you'd like to ask me more questions. I'll try to get that.On the second question, about the purpose of a three-year tax history, the whole farm insurance program tries to figure out what the average income of your whole operation is. Part of it might be cow-calf, and another member of your family might be running a market garden. There are various income sources available to many farm operations. So we ask for three years of tax records in order to establish what the average is -- not what it is in a peak or low market, but what the average income of that farm is. Whole farm insurance will then pay 70 percent of the average income to that operation.
If a person has just gone into business, there is a negotiated entry-level program that works back and makes an estimate of what the operation should have been worth had it existed for a three-year average.
J. Wilson: I see that it says in the application that you need to apply for and hold valid crop insurance. How do you apply for that, and what is the procedure? I assume this is for eligibility, and it doesn't say to me that it is
Hon. C. Evans: I'm not sure of the answer if I take the question to mean that the terms in the publication say that you have to apply for a crop under the crop insurance program in order to qualify for whole farm insurance. The ministry took that to mean that you would apply within the time frame for a legitimate crop. We did not consider the possibility that a person might apply inappropriately late or for a crop that we don't insure and then assume to be covered for whole farm insurance. Certainly the intent is that you would not only apply but be covered for insurance in order to qualify for whole farm insurance. If you've identified a mistake in the literature, then we would like to see the publication that you're reading from, and I'll try to fix it.
J. Wilson: It was just the application form. In the application form, if you have to apply for a program, I guess it's important that we have the time frame that you can do that in. That is the question I had before: when is the deadline for various groups? I didn't see it in the application form, so I would not know where to get that information. That was not a question.
I have a bit of a problem with the way this is structured, in that a producer would only be eligible to insure 70 percent of his farm-gate proceeds, especially when we're in a situation which is a long-term operation turnover. It is not on a yearly basis. Can the minister explain to me why they have picked 70 percent?
Hon. C. Evans: Hon. Chair, it would appear that I have to go and make a presentation to the Electoral Boundaries Commission. It would appear that the time frame is squeezed. I'll be right back. In the meantime the deputy will answer questions. If there are any questions that are inadequately answered by a person of excellent intelligence and better capacity, I'll answer them again when I get back.
G. Abbott: We would be pleased to recess until your return. I think it's best that these questions be asked firsthand of the minister.
The Chair: Is it the will of the committee that we should recess? Okay. We'll reconvene at 3:05 p.m.
The committee recessed from 2:51 p.m. to 3:12 p.m.
[E. Walsh in the chair.]
F. Gingell: Could you please, Mr. Minister, advise the committee of the status of the long-term leases or the sale of the agricultural farmlands in Delta that were expropriated from farm families in the late 1960s and are known as the Roberts Bank backup lands?
Hon. C. Evans: Just before I answer the hon. member's question, let me thank everybody for their indulgence of my being gone for a few minutes there.
The legal status remains exactly the same as it has been all through your tenure here and mine. However, in the currency of political will, I'd say there's been considerable change. For the first time in my experience, I feel some optimism that we may untie this Gordian knot within the foreseeable future and that some properties may actually be offered for sale to the people who are farming that land. I also have some optimism that other properties may move from a short-term lease to a long-term lease, which would be good for agriculture.
Part of the motivation for that, I think, is to the credit of our staff, who have taken on this issue with some hope and faith and energy. And a great deal belongs to the municipality of Delta, which has really gone out in front of municipalities all over the province in support of agriculture. They've said to us: "You solve this problem; we'll solve our zoning problems, and we will let wealth creation flourish on the land." So I need to give credit to everybody. I met a potato producer there over the weekend, from one of those families involved, who told me that he feels for the first time like the issue might actually be resolved. I think there's a growing sense of optimism, and yet no legal change in status. What I'm reporting here is purely a sense of enthusiasm that we may be able to resolve some of that in the near future.
[3:15]
F. Gingell: Well, I'm really pleased to hear that. It reminds me of a year ago when you said exactly the same thing. I suggest to the minister that he did say that last year, and there was talk of the Whistler Land Co. getting involved.[ Page 7060 ]
And nothing's happened. We keep talking about these issues and we're all for it, but we've got to get things finalized. I really do encourage the minister to make that happen, because in the meantime the quality of that land is not being husbanded and maintained as it should be, and that's understandable. Until the farmers get long-term tenure, whether that be through acquisition or through long-term leases, it's understandable that they simply cannot take the risk of making major capital investments. So you will, as you say, be doing a good turn to the quality and the vigour and the economy of the farming community when you move forward, and I do encourage you to do that.Hon. C. Evans: I didn't detect a question, but I'll just say that I think this issue has been outstanding for 30 years. Is that right?
F. Gingell: Really, from 1994, when Mr. Harcourt made the announcements.
Hon. C. Evans: I know that the attempts of people with my job to put this land back into private ownership certainly precede the previous Premier. I don't feel any embarrassment that I gave the same answer a year ago and we haven't solved it yet. Because after 30 years of people in this job trying
J. Wilson: I'd like to thank the minister for the deadline dates for signing up. For spring planting, under forage crops, I see that April 30 is the deadline. Is it necessary to have the crop in the ground at the time that you apply for your insurance for that year's crop?
Hon. C. Evans: Oh, shoot! We should have gotten another piece of paper. This is the deadline for applying for insurance. However, there's another piece of paper that has the seeding deadlines for various crops, and this isn't it.
J. Wilson: I assume the seeding deadlines would be before April 30.
Hon. C. Evans: We will get the piece of paper for you in order to make sure that your assumption is correct.
J. Wilson: If I could insure my crop before I seed it, I could save my seed and my fertilizer, I'm sure.
Going back to where I was on the cow-calf operator in this program, is there anything factored in here to allow a producer to make a claim on a crop failure before the end of the year? Without having in place a tax return for that year, is there any type of interim funding set up?
Hon. C. Evans: There are two programs, of course, that the hon. member is talking about. One is the crop insurance program, the deadlines of which we have on a piece of paper. The other is whole farm insurance. You can apply for the crop insurance program at harvest time or, if there is no harvest, at the time that it ought to be. You can't apply to the whole farm insurance program until you have your income tax return for that year.
J. Wilson: I assume that if you want a whole farm insurance program, which seems to be the option here, as the minister would have us believe
I'm sure the minister knows full well that if you are in a cow-calf operation for the long term, it takes a lifetime to build a herd that you can be proud of, that will do a job for you. If you can get your weaning weights up to where you're at the top, it takes years of selection. As soon as you disperse any portion of that herd, you're forced to go out and buy on the market. The quality of livestock may be far inferior to what you have. It'll set you back years. I'm wondering if they have allowed for anything to cover this in the program.
Hon. C. Evans: The fact that you can make your forage claim not only in the year that you have the failure but at the time of year that you have the failure ought to allow the producers that the hon. member is talking about to do one of two things: either get the crop insurance payment early enough in the year to assist them to buy feed, or go to their bank and show them the date on which they will receive a crop insurance payment and borrow the money against the crop insurance payment to buy feed. However, failure
Interjection.
Hon. C. Evans: The hon. member suggests that I've got it wrong. If there are suggestions
[ Page 7061 ]
J. Wilson: What I hear the minister saying is that a producer would pretty well be forced to go to the crop insurance program, which is not the most desirable thing to do. Is it because the pay-out is so low? Is that the case?Hon. C. Evans: I think so -- yes.
J. Wilson: Then the crop insurance program isn't going to suffice. It's not going to do the job that is required to keep this man in business, because of the fact that the pay-out is inadequate. The principles of the program are fine, and if he could insure 90 percent or 100 percent of his crop, he would be in good shape.
The other alternative is to go to whole farm program, in which case
Hon. C. Evans: We're getting beyond the capacity of most folks to follow, but I think I follow the hon. member's question. I was talking about
The other thing that I want to say is that there are two possibilities for the hon. member's concern. One is that a cow-calf operator who believed that the pay-out of tier 1 crop insurance was inadequate to make up for a disaster and to carry his or her herd through the winter, and who had developed a herd over time and did not wish to be put in a situation of having to sell animals because of one bad year
[3:30]
J. Wilson: I hear the minister, but in most cases the remuneration you get on a ranch is not really conducive to sticking a bunch of money into the NISA program. It's not there to do it with, and so your top-up is going to be a few cents or a few dollars in most cases.The minister lost me here somewhere. When I read through the application form, the formula -- as I understood it -- for a beef producer dealt with inventory. Your assessment was based not on farm-gate receipts but on inventory. A reduction in inventory would kick in the program to allow for a pay-out from the whole farm program. The way I understood it, it was not farm-gate receipts; rather, it was inventory. Do I stand corrected there?
Hon. C. Evans: The hon. member's question is a good one and one that I don't fully understand. Because of the capacity of various farms -- such as grain, for example -- to stockpile
J. Wilson: I would appreciate the minister setting me straight here. I think it's a point that needs to be pursued, and it's something that I view as a flaw in the system.
I'd like to let the insurance program go for a moment and go back to where we were yesterday on this ten-point action plan. The minister has a copy. If we go to No. 1, where it says, "Current consultations with farmers on environmental issues will be consolidated
Hon. C. Evans: What I believe
We are going to provide that assurance by having the Ag Council, which has representatives of all commodity groups and all regions, have a regular meeting with the Minister of Environment and the Minister of Agriculture. All processes that the Ministry of Environment might wish to enter into in terms of a single issue out there somewhere will be discussed at that table -- about how it impacts on other processes and also about item No. 5, the financial impact of additional processes -- before they're allowed to unroll out in the field.
The hon. member will appreciate that if the Ministry of Environment staff finds some person in blatant contravention of some rule somewhere in my constituency, they are going to act. They're going to issue some kind of cease-and-desist order or something. It's not intended that staff in any way be limited from carrying on their statutory function. It is intended that different arms of the government not announce yet another process affecting agriculture without first taking it to the table with the council and saying: "How would you like this to work, and how will it impact on other processes?"
J. Wilson: I guess when the I read the word "consultation," I understand that you have to identify the issues, but
[ Page 7062 ]
then you have to develop a means by which consultation can occur. Will there be -- when we have our joint committee up and working and dealing with the issues that they think are out there -- an avenue for someone to get to that committee through a consultative process that is not going to be centred or located, say, in Victoria or in the lower mainland, but which will maybe move around the province and hear people?Hon. C. Evans: I think there'll probably be two avenues. Perhaps the person who wished to get the attention of the committee would be part of a commodity group -- the Cattlemen's Association, the Horticultural Council, what have you, or part of the Farmers Institute network. I actually think that most producers in the province, through one way or another, have a delegate on the Agriculture Council. So the cattleman might go to the Cattlemen's Association where he or she lives and say: "Help me with this problem and raise it at this table, because I think that other people might be in this same jam."
There's another way, though. I guess if a person felt more comfortable using the staff of the Ministry of Agriculture in the closest district office, they could phone my staff and say: "Would you raise this up through the ministry and have the Minister of Agriculture bring it to the table?" But either way, through a commodity group or through the Ministry of Agriculture, it seems to me that a person anywhere in the province would have some kind of representative -- in their commodity group, their Farmers Institute or my staff -- that they could reach to get an issue to the table.
J. Wilson: Hon. Chair, I have to push the questions, because I've got to be out of here in five minutes. I'm going to ask one more and then I'll run.
I see here that the Minister of Agriculture is going to supply technical policy support. Could he elaborate on that and tell me something?
Hon. C. Evans: Well, hon. member, how about if I use an example instead of theory? One of the huge issues in the Fraser Valley, year to year, is that you're allowed to spread manure if the crops are growing and you're not if the crops aren't growing. The Ministry of Environment staff, historically, have made that decision. And they've done it in a way that the hon. member probably wouldn't like, which is by picking a date on the calendar and saying: "On this date, crops stop growing." Our staff might actually go out and look to see if the crops are growing. So what we're trying to do is to say that when there is a judgment call to be made with respect to agriculture, Ministry of Agriculture staff will provide technical support and go out and look at the situation and report back to me at the table, rather than just the Ministry of Environment staff.
J. Wilson: In that case, then, we are looking at an increase in staff under the Minister of Agriculture, I would assume.
Hon. C. Evans: No, hon. member, there will be no increase in staff in this ministry. This is a job layered on top of our existing jobs. The hon. member's point is well taken: you can't do an infinite amount of work.
I instructed staff to negotiate this agreement with the council and with the Minister of Environment at the request of farmers, who said to me: "A whole lot of the stuff you're doing is less important to us than solving this problem. This is our number one concern."
It won't mean that we'll get more work done. It will mean that some other work historically done by this ministry is not done.
J. Wilson: I guess it's an assumption, but unless this minister's staff picks up the ball and runs with it here, we won't see anything happen. As we understand, the Ministry of Environment is so overworked that they're unable to keep up with the workload that they've got there. So for this program to be even a little bit effective, the onus is going to fall on the Ministry of Agriculture staff to do the work. The Ministry of Environment
I assume that we're not going to see too many cuts or too much loss of service in other areas in the ministry, because it has been trimmed right down to the bones now; there's not much left in there. So if we take on this job, which could be a huge job, what will happen to the support services that we have today? That's my main concern here.
[3:45]
Hon. C. Evans: The hon. member and I are in such agreement that it seems like perhaps we ought to form sort of coalition here and put forward to leadership of both political parties an argument for increased staff and budgets for the Ministry of Agriculture. Perhaps if both political parties and Reform all agreed what percentage of the budget we should have, we might actually get it. It would be unique in Canadian political history; I completely agree with the guy.J. van Dongen: I'm pleased to participate in this debate. I'm going to pick up on some of the discussion from the previous member. This is with respect to the agreement that has been worked out with the Ministry of Environment and the Ministry of Agriculture -- this ten-point plan. First of all, simply to underscore what the minister said yesterday, I think this is an extremely critical area for agriculture, certainly in my perception. In doing various investigations on various cases, it's even more critical than I might have thought at first.
I want to focus in particular on No. 7, which deals with drainage and irrigation and issues surrounding that. I'd like to ask the minister, first of all, if the ministry or the Agricultural Land Commission has any opinions or any sense of the state of drainage in a lot of our floodplain areas. It's my perception as a farmer that a lot of our floodplain areas are struggling, and I think that may partly be a reflection of the two years of bad weather we've had. But it's also a reflection of urban drainage issues and a lot of water coming down from the highlands. That applies in a lot of our floodplain areas, such as Cloverdale and a lot of the lower mainland. I can think of farms in Mission, Abbotsford and Chilliwack. I know the minister has had letters. I think it probably also applies in places like Port Alberni and Courtenay and possibly some areas in the interior. I guess my first question to the minister is: does the ministry or the commission have or any sense of the actual drainage situation?
Hon. C. Evans: The Agricultural Land Commission is actually engaged in a series of meetings with people -- starting here in Saanich -- discussing water issues, both the availability of water and drainage and runoff issues. Staff, of course, deal with it all over the province. But I want to address the subtext of the member's question.
Urban drainage especially is an issue which I never hear of in my job except when it's raised by farmers. It is my perception that average citizens don't know that it's an issue
[ Page 7063 ]
and that municipalities either don't know or don't recognize that it is an issue. Politicians of all parties, in their zeal for growth as a measurement of the capacity of governance to manage a society, don't want to talk about it. It is also my perception that increasingly in Canada, fish and wildlife issues are more in the public mind than agricultural issues. Whereas in the sixties or the seventies or even the eighties, there might have been national support for an ARDSA program or something that assisted people with drainage as if production of land was an important social value, in the country today there is not support for that kind of use of the public purse. In fact, I think there is a belief on the part of average citizens that if land use is going to change its designation, it should change back to an unmanaged floodplain or an ecosystem managed for swans or ducks or geese or fish, not for agricultural production.I could give all kinds of answers about things that we're attempting to do. As the member sees on the page, we are trying to come up with some guidelines for ditch maintenance -- even by the end of this month. I have some thoughts; everybody I talk to has some thoughts. This ministry is proposing a farmer, actually, for the environmentalist of the year award, to try to make the point that ditches can be hugely beneficial to the environment, if managed correctly.
But really, hon. member, what we need to do is move the discussion into the other House and maybe even to Howe Street or into the newspapers. This discussion in this room is like every one I'm ever involved in; it is isolated to those people who are actually interested in farming. Society outside this room behaves as if what it really wants is to get rid of farming in rich river delta and floodplain areas that have historically supported the business.
J. van Dongen: I thank the minister for his answers, and I agree with a lot of what the minister said, although I think the perception that fish and wildlife values rank higher with society has not always necessarily proved out when it's put to the test. I look at the response that we've seen in the Fraser Valley to the debate on ditch-cleaning, which was precipitated by DFO and their requirements on local governments. I think once the farm community took that debate on, certainly in terms of the reaction we've gotten locally
Having said that, the reason I raise it is because I think that the scale of the conflict that we're facing between these perceptions of fish and wildlife values and the Ministry of Environment -- if I could be really specific -- and DFO versus Agriculture is more serious than we think. I say that as a farmer, recognizing the importance of drainage in these areas -- the really, really critical importance of drainage. Good drainage is not just not having puddles on your land. You need a column of soil that's porous, that's out of the water. You need fall, and you need to be able to move the water. I think that people sometimes have the perception that well, if I don't really see a puddle, the drainage is fine. That's not the case. We're not talking about the land being right under water, and you've got poor drainage. To the untrained observer, they may not really know when you've got bad drainage. I think that our drainage is getting worse quickly, because of the factors that I've mentioned.
I want to underscore how critical it is if we're going to maintain farm productivity for land-based enterprises, which is critical from a competitive point of view. I know there's been some discussion, but in the last year or two, I have thought more about the concept of a right to drainage and a right to irrigation water being tied to farmland. I guess I like the notion, from a farm perspective, of a legally established right, although I think that's probably not realistic. But I'm thinking about something very close to that.
In all of these situations no one can deny certain historical rights. We have farms that have had irrigation water for 40 years and are now faced with losing it. We've had ARDSA projects, which the minister mentioned, that went in as little as five, six, seven years ago and were funded by three levels of government. And now we're faced with a situation where we can't even maintain those ditches, never mind create new drainage systems. So I'm wondering if the ministry -- particularly the Land Commission, because I think they've put some thought into this -- has any views on this concept of a right to drainage and/or right to irrigation water tied to agricultural land.
Hon. C. Evans: The hon. member is correct that the Land Commission and also the ministry have been involved in addressing access to irrigation water in recent years and months. But I don't know -- at least, I have not heard in my job -- about a right-to-irrigation or a right-to-drainage movement or a quasi-legal sort of bureaucratic argument.
The hon. member knows about the good news: places like Delta and Saanich and the like. These are municipalities that have shown a willingness to work out these issues. It occurs to me that we attempted some years ago to rewrite the Water Act -- 100 years old and utterly archaic; it's basically a mineral act, written largely in order to allow placer mining -- and we failed. I don't see any political will to re-enter that debate. So perhaps it would be better if we attempted to raise the questions the hon. member is discussing as some manifestation or extension of the right-to-farm legislation rather than trying to address the Water Act itself.
[4:00]
I would like to repeat a little bit of what I said earlier. The hon. member is correct that in those areas like the Fraser Valley, where people fight back -- where people who are farming make a case for drainage, for example -- the general public has the capacity to learn and even achieve wisdom, and things get better. But unfortunately, the attack is pretty much everywhere and the fight-back campaign only takes place where farmers have enough scale to make an articulate voice. Perhaps we should be looking to try and create some kind of accord between agriculture, the province and municipal government in order to make universal these questions of the right to drainage and access to water for agriculture.J. van Dongen: I'm probably guilty of mixing the two up a little bit. I want to focus on drainage just for a minute. I agree with some of what the minister said. On drainage -- probably as he said -- a core group or a process involving the ministry, local governments and farmers is what's required. I like trying to tie it into the right-to-farm concept or notion, even if it's just as a way to look at it. I think that's critical.
I have a letter that is a response to a letter that I sent to the minister also. This letter is from the Minister of Municipal Affairs with respect to the urban runoff problem. She says that the Ministry of Ag and Food and the Ministry of Environment, Lands and Parks are forming a committee to guide the implementation of a fish-protection initiative in the Fraser Valley. It will include staff from the Department of Fisheries and Oceans and the Union of B.C. Municipalities.
[ Page 7064 ]
My first question to the minister is: is this committee something separate and distinct from any of these ten points in this agreement here?Hon. C. Evans: I'm sorry; I missed part of the question. It was my mistake for presuming what the question was. Let me just say that it sounds like the reference in that minister's letter is to this document, and it was our intent that Environment and Agriculture and the Ag Council would make some agreement on ditch maintenance and then invite municipal government and DFO to the table. I had some disagreements with staff who thought that we should start with DFO at the table. Maybe that would have been right, but personally I think it would be better if the province had all of its lines together and ministries assisting one another before we take the next step of sitting down with the federal government.
J. van Dongen: So what the minister is referring to is the first sentence in No. 7: that the B.C. government will draft guidelines on ditch maintenance?
Hon. C. Evans: That's correct.
J. van Dongen: If I could refer the minister to recommendation 12 of the recent report from the federal Standing Committee on Fisheries and Oceans, it may be something that the ministry wants to look at. It's certainly an improvement over what we've got right now, and it recommends that the Department of Fisheries and Oceans go back to the pre-1997 approach to ditch maintenance, which, I think, in the minds of farmers and local governments was bearable. I think the two elements that are not bearable and not acceptable to agriculture are leave-strips, because they are simply forms of expropriation without compensation, and I want to make a further comment on that. I think the other thing that's not bearable -- and it's part of this whole public debate about fish and wildlife values versus other values -- is for local governments and/or farmers to accept increased costs of ditch maintenance to preserve fish habitat values.
Those are the two major issues, certainly in the region of the province that I live in. Of the number of local governments that we've worked with on this issue, those are the two major obstacles, and I would hope that the ministry addresses particularly those two items in whatever policy they come up with.
In the dealings we've had with DFO, there's tremendous pressure between us and them, and I think that there's still not a recognition -- certainly at the senior management level -- of the reality that what they're expecting is not acceptable. Again, I simply want to underscore the difficulty that we face on this issue. Farmers are not prepared to give up leave-strips, because we see part of that as a concern about ultimate access for drainage. Leave strips start out at five metres and end up getting wider and wider. All those things continue to build, and we've seen examples, such as the one that the member for Fort Langley-Aldergrove has, where they're not satisfied with ten-metre leave-strips. They want 16 acres. Again, it's important that the ministry go into this thing with a clear understanding of the complexity of the issue we face.
The people and the agencies that represent the interests of fish and fish habitat need to accept the fact that in a competitive economy and a competitive environment, they have to be prepared to put some dollar values on things. It's not like we can spend any amount of money to protect one fish. There has to be a decision made there. I think there is a reluctance right now to face that. That's part of the pressure we're facing. So I appreciate the minister's responses.
I just want to address one other thing. The minister referred to the Water Act. I'm not sure that what's required on the irrigation issues -- now we're talking irrigation -- is amendments to the Water Act. But I think there definitely needs to be a change of attitude and a change in administration under the Water Act. I might start out on this issue by asking the minister if he has been successful at this point in making a deal on the Beaver Meadow Farm in Courtenay with the Ministry of Environment in Nanaimo.
Hon. C. Evans: First let me go back to the question of fish. We're having an incredibly philosophical day, and I have no idea whether you guys want me to actually talk about the things you raise or limit myself to the specific questions.
I used to be the Minister of Agriculture and Fisheries. We had quite a struggle in my office one day when staff and I and some other ministers were discussing what the Fish Protection Act would look like. We exempted agriculture from that act at the end of that meeting in order to avoid expropriating land out of production. We said that there would be a producer-driven planning process where people owning land adjacent to fishery streams would be asked to come forward with some kind of a plan for how they were going to manage that stream so they didn't kill the fish. That is my idea of an outcome-based process rather than a regulatory process. And we won.
Now I'm not the Fisheries minister. Hon. member, with all due respect, the guy who is the Fisheries minister is really supportive of agricultural drainage. Then there's another Minister of Fisheries who represents another level of government -- and who thinks I'm not a very good person and uses my behaviour as an example that British Columbians don't really support fish. This other gentleman is very hard for me to deal with. We don't have what you would describe as a mutual appreciation of one another's professional capacities. He is your political colleague. So I would argue that whenever you have trouble with the province, you should come to me, and I should try and fix it. If I don't do it, get on the public record and beat me up for not doing my job. But when another politician of a different political party who isn't exactly my pal gets in the way, then I would ask you to use other avenues you might find available to direct to that gentleman some responsibility for his actions. Frankly, I think that in the worst way that person is going out among his client group and taking credit for protecting everything, and now when it comes down to who pays, he's hiding behind the province. Talking out of both sides of their mouth and having it both ways
Now what was your real question?
J. van Dongen: Beaver Meadow Farm.
Hon. C. Evans: If it isn't fixed, it will be by the time we meet again.
J. van Dongen: On the minister's first response. With all due respect, I have the same frustration with that individual. I tend not to look at things in terms of political alignments. Having said that, I don't view him as having the same political alignment as us. So let's just make that clear
Interjection.
J. van Dongen: Let's look at the fact there are two different and separate parties.
With respect to Beaver Meadow Farm, I think the action the minister took on behalf of farmers in that particular situa-
[ Page 7065 ]
tion is admirable. What's involved here are four water licences: one is basically a permit to clean ditches; two small ones involve a hatchery and some very small amounts of water; and a larger licence involves 230 acre-feet of water, a very significant amount of water. I'm told by the owner of the farm that he's had these licences for 40 years, or this amount of water for irrigation. It's an indication to me of the attitude within the Ministry of Environment when they don't even answer his letters.This isn't the only case. I've studied other cases in the interior, for example, where the ministry does not even answer the rancher's or the farmer's letter, thereby making it impossible for that individual to even appeal the decision to the Environmental Appeal Board. There's no decision to appeal; they just ignore them. I want to raise this as a specific issue that I'm hoping the minister might address with his colleague the Minister of Environment. I certainly intend to raise it in her estimates -- basically, outside this ten-point process.
You've got farms that have had these licences for many, many years. In this particular case, this farm has had a hatchery project, as the minister knows, in its own community, with a local society. They raise 300,000 coho in the ditches on that farm, through that little hatchery. Yet the Ministry of Environment sees fit to ignore them. That's the signal to me, as a farmer -- and to a lot of other people who are active within the industry -- that there's no limit to where the Ministry of Environment or people with that interest -- so-called fish and wildlife values -- will go. I'm hoping that the minister will pursue that issue specifically, because I think it's a very serious one. We're in a period of time where we either fight back and at least hold some ground or we're going to lose it forever. I say that very seriously. As I said, I know that there are a number of other examples.
[4:15]
What happens to farmers is that they're all in isolated situations and they get picked off, one at a time. They don't even realize that it's happening to them collectively. But it is happening and it's very serious and it's not right. When you've got a farm that has gone to the extent that this farm has to protect fish values and then still gets treated like dirt, it shows you what the problem is. I don't think that we have a very good administrative system when the Minister of Agriculture -- much as I admire him doing it -- has to go on a weekend, as I was told, to meet with the farmer and the Ministry of Environment, basically to beg and plead on his behalf. The Minister of Agriculture cannot do that for every farm that needs it. There needs to be a better system within the Ministry of Environment and a fairer system to respond to the needs of farms in this situation.Hon. C. Evans: Of course we need a better system; the member's right. We have to fix this case and use it, as I think we are trying to do, not as one-off to solve this particular problem but as a case to fix the system so that it works for other people.
I wonder if I might just express a desire to the members opposite. The Agricultural Land Commission's chair has to go at 4:45. I wonder if you have land reserve questions you would like to ask while he is present; it would save me flying him back over here.
G. Abbott: My question for the minister involves the policies, I guess, of the ministry or of the Agricultural Land Commission respecting churches as a permitted use on agricultural reserve lands. The questions I have are prompted by concerns which have been raised to me on numerous occasions by a group in the Shuswap riding called the New Life Outreach Fellowship. They have been attempting to get permission to construct a church on agricultural land on the Trans-Canada Highway, I guess about 10 or 15 kilometres west of Salmon Arm. They have been quite frustrated in that they have submitted two or three applications to the commission and have been unable to secure the permission to construct the church building on that land, which they would like to do.
So in the interests of being able to respond to them rather more intelligently when they make their appeals to me, I'd like to explore some of the questions with you that they raised with me. The first question is: what is the existing policy with respect to churches as a permitted use within the agricultural land reserve?
Hon. C. Evans: Churches are considered by the Land Commission as a non-farm use.
G. Abbott: Am I correct in my understanding that the view of churches as a non-farm use or as a non-permitted use within the agricultural land reserve is a revision of the policies of the commission in the past?
Hon. C. Evans: Churches have always been considered a non-farm use. However, non-farm uses are often considered in terms of land quality, so sometimes people apply for various usages, among them churches. Depending on the quality of the land and the factors affecting agriculture, they have been known to allow churches as a non-farm use on agricultural land. The chair advises me that the record historically of allowed and non-allowed is probably 50-50.
G. Abbott: It surprises me a little that the policy has not been changed or revised over time. Given that -- again, I'm not an expert here, but I know that the chair of the commission is
Hon. C. Evans: There are two parts to the answer -- I think there are two parts to the question. One is the soil classification question: does the Land Commission understand that part of the land that the folks in Shuswap want to use is class 6 or 5 or 4? I'm advised that that is true and might constitute an acceptable use, except class 6 land is gullies, and that's not where the people wish to put their church. The question of the locale of the church is actually on the higher-class soils.
On the subject of higher-class soils, the Land Commission does sometimes let them out. Primarily that has to do with some kind of planning function, where the Land Commission is engaged with a municipality or a regional district in some kind of logical development and agricultural planning process. In the case of Richmond, locations for churches was part of a planning process and resulted in sort of a saw-off, where
[ Page 7066 ]
churches were allowed access to high-quality class 2 soils next to a highway, and the back ends of the same properties were reserved for agricultural use.I'll make a personal comment, too, hon. member. From my time in the regional district, I actually quite approve of the realignment of boundaries being part of a municipal growth-management process and an ALC process mixed up together. We're engaged in that in the Nakusp-Arrow Lakes area. It isn't perfect, but it works better than either process in isolation.
G. Abbott: The minister is right. The proposal to site the building on this property is certainly on the higher-rated portion of the property; there's no question about that. The point I would make, however, is that if one looks at the overall capability of this parcel, if there were a suitable site for something like this, it would appear to me that it might be so. Of course, I'm happy to leave that to the professional consideration of the commission.
It's also important to note from the minister's response that the location in question is within the Columbia-Shuswap regional district; it's not within a municipality. As a consequence, I'm not even sure -- I should know, as a former chair of the board -- whether there is planning in this particular location or not. I note the minister's suggestions around the importance of local planning in allowing these kinds of things, and that is something that I will pass along to the New Life Outreach Fellowship.
I do want to note a couple of other things here, because, I think for good reason, the fellowship have made these points to me. One is that the fellowship -- and this may be a relatively new part of their proposal -- are prepared to construct a church which could, in whatever circumstances, be changed into a farm building as required. I guess the other thing I want to note about this particular group is that they do have, as part of their world-view, the notion that growing food and sharing it with the needy in the community is a worthwhile goal. I suspect -- I don't suspect; I know -- that when they say they will meet any obligation put forward by the commission to actively farm the remainder of the parcel, they will do so.
I just want to ensure that this group is achieving the same level of fairness which church groups in other regional districts and in municipalities in the province might receive. If the commission has a consistent policy with respect to churches on agricultural land, that's fine. But I do want to see that there is a level of consistency so that they don't come back to me and say: "Well, why not us? There are 15 other churches on agricultural land elsewhere." I don't know how many there are; I'm pulling that number out of the air. But they'll say: "Why not us? Why aren't we accorded the same level of fairness?"
I guess there's a couple of things that I could ask the minister to comment on here: first of all, to assure me that the New Life Outreach Fellowship is not being penalized because churches in the past have committed to growing food or growing crops on the balance of the land not dedicated to the church and failed to do it
Hon. C. Evans: I can give the assurance that the sincerity of the church's application is not in doubt, nor is the church being judged because of some historical insincerity on somebody else's part.
[B. Goodacre in the chair.]
G. Abbott: Just a couple of other questions for the minister with respect to this particular issue. I'll pose it this way and would appreciate the minister's and the chair of the Land Commission's sincere advice on this: if this group was prepared to place some legal covenant committing to agricultural use or agricultural production on the balance of the property, would that have any bearing on whether another application to the commission might be successful?
[4:30]
Hon. C. Evans: I don't think that a legal covenant offer is necessary or particularly helpful -- because of my previous answer. The Land Commission has no doubt as to the integrity of the group's promise to farm the land. They're not being turned down -- and haven't historically been turned down -- because nobody believes their promise to produce food on the rest of the land. They were turned down because it's seen as a non-farm use on the high-capacity part of the land.It seems to me that if what they really want to do is build a church, and if they have taken the same application back three different times, then there are a couple of options. The Land Commission talks to the church and sees if there is some way to change the application to make it passable, and presumably, putting the church on the lower-capacity part of the property might do that. Another option is for somebody to help the church members find property of the same valuation suitable for building a church on. Then they market the property that they can't build it on and acquire some property where they can.
I'm going to offer two different avenues here. You tell the folks that if they go back to the Land Commission and say, "The minister promised us a dialogue about whether we can adapt our application in some way that is suitable," the Land Commission will talk to them. The second thing is that if they would like to talk to my staff about whether or not the Ministry of Lands has any lands around, or whether swapping or selling or simple market forces can be used to find another piece of property
G. Abbott: I do appreciate the minister's helpful responses with respect to this, and I will communicate that to my constituents. Hopefully, through some permutation of the factors involved here, we can achieve some satisfaction as to their goal.
Just to conclude my questions, this isn't an Agricultural Land Commission question. This is on behalf of my old friends at the Columbia-Shuswap regional district. I am advised that the noxious weed program is back on again, that the ministry has found some funding for a 1998 noxious weed program. Could the minister advise? This is prompted by 16 years on that particular board going around the mulberry bush on provincial funding for this program, not always with the current government but with former Social Credit governments and everyone else. It was always kind of an up-and-down program.
Is the current provincial contribution to noxious weed control a product of having some money left over from the last fiscal year or a new-found commitment to provincial contributions to noxious weed control?
Hon. C. Evans: Allow me to say that the program is reinstated for your former reason, and it's going to stay there
[ Page 7067 ]
while I stay here, because I think it was one of the dumber cost-saving measures we engaged in in recent years. I found it difficult to defend in here this time last year, and I found it really difficult to defend at home. It was somewhat problematic in Dawson Creek, and I got tired of driving around the province defending dumb decisions. So we got it back. I would ask the hon. member to do his part and keep raising it, and I'll do my part to keep funding it. We'll try to convince governance generally that it's good public policy.I want to point out that part of it was not reinstated. What we've done is try to reinstate it where regional government agrees that it's a good program and will participate with us. We did not reinstate the Cattlemen's Association part of it, which was basically a private land part. Personally, I think it's defensible public policy. We'll do it where agriculture has a strong enough voice in the region to convince the regional government to participate, and we'll do it in on public land.
G. Abbott: As I recall, my former reason was a new-found commitment to a revitalized program rather than finding unexpected funds.
Interjection.
G. Abbott: Oh, it was unexpected funds from the previous year? Nevertheless, we hope to keep finding unexpended funds from year to year to do this. Well, that's not quite as reassuring as a powerful commitment to it, but fine. It sounds like the commitment is there, and hopefully it will be.
I think the important point here from a regional district perspective is that weed control programs -- and these weed control programs are almost invariably on Crown rights-of-way -- are of no value as one-year programs. They need to be three-year, five-year and long-term programs to make a difference, because obviously if you leave areas untreated for one, two or three years, they're back in worse shape than they originally were.
The minister has suggested that the program will stay in office as long as he is in office. I was going to ask whether there would be a three- to five-year funding certainty. I guess we may fall a little bit short of that, but perhaps the minister can comment on that.
Hon. C. Evans: I can't give you assurance of that because, as you know, I can't precommit to even one year. Even if I did, it would have no power in law or anything like that. You have my commitment to attempt to maintain this program and the ministry's position that it is an essential part of the service that we provide. I completely agree with the member that as an ad hoc program, it's stupid; it would never work. It needs to be an ongoing program, and that's what we are attempting to put in place.
R. Coleman: I just have one question for the Agricultural Land Commission, and then I'm going to move on by giving it over to the member for Peace River South for agriculture questions and then come back to my issues, if that's okay.
First of all, I would like to say that I'm sure the chair of the commission will advise you -- and I will have discussion with my colleague -- of the benefits of covenants in the agricultural land reserve and how much difficulty we've had with them. Those covenants probably should be something of no resort -- not even of last resort -- relative to what they do to us in the future and to some of the difficulties we've had with some of them in my particular riding and how they've impacted on the ability for us to deal with issues relative to the ALR.
I would like to also say to the chairman of the commission -- and to you, the minister -- that I'm very happy with the Agricultural Land Commission and the work that it does and the cooperation that my particular office has received from it. I think they're doing outstanding work, particularly in consideration of where my particular area is and how urban is impacting on farming, and we'll get into that discussion shortly.
The only question I have with regard to the commission -- and I don't know if it's a commission question -- is in the siting of intensive agriculture like mushroom barns and large greenhouse operations. Do we take the soil viability into that when we strip the soil and build something over top of it and then call it agriculture?
Hon. C. Evans: The answer is no, they are of permitted use -- farm use -- so they're allowed on agricultural soil. There's a bit of a contradiction here. You aren't allowed to strip the topsoil away, even if you're going to pour a slab of concrete. However, you can pour concrete on top of the topsoil.
J. Weisgerber: Before lunch we were talking about the farm loan program -- the $18 million that was made available for farmers for distress loans as a result of tough farming conditions around the province. We were also talking about the fact that only 23 people had applied. As we left the debate around noon, the minister left posing at least a rhetorical question about
I think the minister missed the obvious point -- and the point that I raised to him 18 months ago, 12 months ago and six months ago -- and that is for a program like this to have any meaning, the interest rate has to be better than what the farmers can negotiate themselves. I have no argument on the equity side, but if the program was to have any value
In answer to the question that the minister appeared to be asking of someone, I think that what's missing in this program is a commitment by the government to bring the cost of borrowing down, at the very worst, to prime. Many would argue that it wouldn't have been unreasonable for government to have made no-interest loans available to people in distress given the fact that even prime at this time is relatively low and that government's ability to borrow wouldn't make it a tremendously expensive program. I hope the minister will respond to that.
It occurred to me while the minister talked about the fact that of the 23 people who have applied -- and again, I think that's an appalling number -- the first being a friend of the minister's, who was turned down
[ Page 7068 ]
Hon. C. Evans: It is true that the hon. member argued that the interest rate should be lower at the time the program was constructed, and any failure of the program certainly isn't his.Yes, loans have been agreed to. Strangely enough to me, every time one is, I have to sign four copies of pieces of paper. I will get the member the number; I don't have it here. Suffice it to say, it's less than 23.
[4:45]
J. Weisgerber: I'm going to move along; I think we've exhausted this topic for now.The next area I would like to talk about is the Peace River Farm Crisis Committee, which have been actively working with the minister on this Peace River grain issue. They recently made an application to the provincial emergency program for assistance. I know the minister was copied with a letter, as I was. I've undertaken to provide a letter of support to the Attorney General. The argument was that for farmers in Ontario, Manitoba and Quebec faced with floods, these were seen to be emergency incidents, and the federal and provincial governments combined to provide coverage for some unusual costs.
Now, these folks have looked at the program and said that there are obviously a lot of results of these two years of, if not floods, incredibly wet seasons that will never be covered by crop insurance, regardless of what coverage there is. An example of that is the very deep ruts that were left in the field as a result of attempts at harvesting. Indications in the correspondence are that there was at least a glimmering of interest from the provincial emergency program in exploring that possibility with the federal government. I wonder if the minister could advise whether he's had an opportunity to have input through the Attorney General, who administers the provincial emergency program. If not, is it his intention to provide that kind of support?
Hon. C. Evans: I have had, although not personally with the Attorney General. My staff have been talking with Attorney General staff and expressing my support for going this route. The PEP program, it seems to me, offers a way to bridge this huge problem we've had, where buildings can essentially be declared disasters, whereas crops and soils can't. If we could extend the definition of the PEP program, it gives us a way to cost-share land-based disasters with the federal government, similar to what happened in assisting some of the people with the terrific snowfall we had two years ago.
J. Weisgerber: I think the fact of the matter is that the provincial emergency program has in the past provided coverage for crops that are in storage. They simply have never been willing to provide coverage for crops that are in the field. The idea -- and I think it's a novel one -- of approaching them to deal with the rutting and other unusual costs is one that warrants some support. Again, I'll leave it at that. I think the fact that if all the agencies involved give some indication of support, there's at least a likelihood or a possibility of this moving forward.
The first one of the last couple of items I want to raise is an old chestnut I bring out mostly every year. I know I've discussed it with the minister on a previous occasion -- that is, the forage seed initiative. For at least ten years forage seed producers in the Peace have been trying to get government to buy forage seed from the British Columbians who produce it. Most of the forage seed is sourced here in British Columbia; it's bought from seed suppliers in the Fraser Valley. The tragedy is that they buy their forage seed in Washington and Oregon, whereas a lot of good-quality seed is grown here in British Columbia -- clover, fescue, alfalfa. But it's never sourced by the people from whom government buys.
It's been one of those great frustrations. For a decade now I've been trying to get government as part of its requirements -- Ministry of Highways and Ministry of Forests being two of the biggest purchasers -- to simply indicate that the seed must be B.C.-grown where available. I haven't got anywhere with a series of ministers from both governments. I raised this with the minister last year, and I'm going to sit down and see whether there's been any progress at all on an issue that, if I had more hair, certainly would have me pulling it out.
Hon. C. Evans: I was dismayed the first time the hon. member raised this with me two years ago. I thought, well, that sounds like a simple problem; I'll sure get that fixed by the time he comes and stands up next year in estimates. I have to admit that he stood up the second year, and I gave the same answer as the first year. That was my first clue that it was as difficult to fix as the hon. member suggests, and he might actually have raised it for ten years without any change. This year, however, I have several things to report, because I wasn't going to stand here again without news, at least.
The background is as the hon. member describes it. The hon. member will know that Dawson Seed Co. has recently purchased an idle seed plant in Dawson Creek and is upgrading it to have seven new jobs at the plant. The Ministry of Agriculture and Food, since we met last, led a group of seed producers on a mission to Europe to evaluate new markets and ventures and to better understand the requirements of that market, which is leading the B.C. seed industry to believe that there is market opportunity to justify investment.
North Peace producers have received funding recently to explore new grass seed varieties partially on the expectation of selling to the Dawson Creek plant. We have new plantings happening in the Peace of orchard grass, brome, timothy grass, rye grass and bluegrass as a result of the collective optimism of these initiatives. We expect that the Peace will be producing and selling quite soon an all-B.C. grass seed mixture. The hon. member pointed out that Peace River seed is traditionally mixed with American or Albertan seed in the Fraser Valley, and they compete for provincial government orders but with a large mixture of external seed and with no market advantage. It is my desire that by this time next year, I'll be able to report to the hon. member that the British Columbia government purchased from this company 100 percent Peace River seed, and he will be able to declare victory on this issue, which he has certainly led in terms of resolving the situation for his constituents.
J. Weisgerber: That was very encouraging, and I'll be back next year, God willing. I will certainly follow up and see what kind of progress we're making. Indeed, as I've said many times before, the government itself, with 93 percent of the land base, is a huge consumer of grass seed. We should simply give our producers a fair shake. I think it's better seed. If you're seeding in most of British Columbia, seed raised in the Peace is a better variety than seed raised in Oregon -- with all due respect to the state of Oregon. The climate there is much softer; the climate in the north is harsh, and therefore you get a better strain of things like fescue and the other grasses grown there. All the best. I will come back and check.
The final issue I want to talk about is something that the member for Shuswap touched on: the weed control program. I
[ Page 7069 ]
know that the Peace River regional district was pleased to see funding for weed control reinstated. I think the minister must understand that the weed control program does indeed focus on weeds on private land. The $45,000 that the ministry provides to the Peace River regional district couldn't begin to control weeds on public land. What the money pays for is an inspector to go around and make sure that people who have private land deal with weed infestations when they are identified.The issue of public land is something that I don't think has yet been dealt with. The Ministry of Highways does some work, B.C. Hydro and B.C. Rail do some work on their rights-of-way, but the biggest area that ultimately has to be addressed for weed control is land that's managed by the Ministry of Lands. Lands along riparian ways, along rivers, along streams and on public lands isn't controlled by the ministry nor is the money provided to the regional district for control of those weeds on that public land. What we're talking about is an enforcement service that's provided, quite rightfully, by the regional district for weed infestations on private land. At least, that's my understanding of it. If the minister, who is all-knowing, has information that would suggest that I'm incorrect, I'm sure he'd let me know.
Hon. C. Evans: Firstly, the minister is not all-knowing. Secondly, I don't have information that the hon. member is incorrect. However, I do think there are variations in the way the program is delivered in different regional districts. I believe that in places, the regional districts contract with the Cattlemen's Association to treat public land such as dumpsites and the like. I even think that various government agencies like B.C. Hydro work in some areas with the regional districts; they run a joint program. But in the main it is precisely as the hon. member describes it.
R. Coleman: I want to canvass a few issues with the minister. I'd like to do a little preamble, because I think it helps with where my questioning will lead this afternoon. The area I come from is the second-largest farming and producing community in the province, but it sits against the urban sprawl. As the minister is well aware, the pressures on farming from the residential growth that's taking place in the Fraser Valley are quite intense. There's a number of issues that deal with it, and I know we dealt with the ditch issue earlier. I just want to touch on that briefly from the standpoint of my disappointment with a meeting with the Department of Fisheries and Oceans that was held with four Members of the Legislative Assembly and four mayors from the lower mainland.
The officials from the Department of Fisheries and Oceans took 40 minutes to talk about the protection of fish habitat in the Fraser Valley by dealing with the ditch-cleaning and the leave-strip areas along ditches. In their 40-minute discussion, not once did they ever allude to the fact that anybody was catching too many fish, and not once did they allude to the fact that where you have storm sewers
Today I want to touch on three issues that are of concern to me. One is what I will refer to as the industrialization of agriculture and how that land base and the use of that land is being affected. I want to deal with that one first and find out where the minister sees us going with this particular issue. I did ask the question of the Agricultural Land Commission just a few minutes ago; I asked them the question about the type of land that we put intensive agriculture on, whether it be large mushroom barns or massive greenhouse operations. I do have information, obviously, that when we excavate property to build these facilities, it's a requirement to get down to some level of hardpan for the foundations. We do excavate the topsoil off the property. In the particular cases of a couple of mushroom-growing operations in my riding, the topsoil was actually sold for $100 a load. It was stripped off the land and the barn was put in place and then the $100 loads came out.
My concern is with the industrial side of agriculture. I just want to deal with one family in my riding, the Lindstroms. The Lindstroms have a property across the street from a mushroom operation in the agricultural land reserve, and they've had it since 1957. The mushroom operation has somewhere in the vicinity of 60,000 square feet of barn. I think it's 60 by 200 feet; it's huge. The industrialization of agriculture
[5:00]
I want to just give you an example of the traffic movements coming out of this one operation. We have 110 traffic movements per day coming out of the operation in this industrial type of barn situation and well over 500 a week with regards to it.The Lindstroms, who have been across the street since 1957, have been told by the B.C. Assessment Authority that the value of their land is down by 25 to 30 percent -- it will be knocked back by 30 percent. In actual fact, even though they have tried to move into a different area so they can live away from the noise factor created by this type of agriculture, they have been unable to do so, because nobody wants to buy their property. Whenever there is an action, there's always a reaction. In this particular case, we're trying to protect and encourage agriculture. As we intensify it into basically the large grow operations that are no longer the traditional farm, I'm wondering what the minister sees we can do relative to how we're going to adapt our industry and our communities to handle it.
Hon. C. Evans: Well, the hon. member correctly points out that just as the city evolves to impact negatively on agriculture, so also can agriculture evolve away from its more pastoral qualities to a more industrial and even offensive nature. I don't pretend to be able to know how to fix either problem, actually. The member points to basically the most prevalent problem of farming in British Columbia, where we have not enough land, steep valleys and an expanding population. The only solution I know of to these problems, essentially is planning on both the provincial scale and the community scale.
I do not wish the hon. member to ascribe to my comments anything at all about the particular mushroom operation or his neighbourhood or mushrooms in general. However, applying planning principles to the province as a whole, it would seem logical to use various incentives or disincentives to encourage more industrial-style agriculture away from the urban-rural interface -- in fact, perhaps away from the lower mainland -- to parts of the province where the industrial nature of the operation would be more desirable for the community.
[ Page 7070 ]
As the hon. member knows, there are lots of areas in the drybelt, for example, where nitrates are not an issue. To the extent that we might move nitrate-producing parts of industrial agriculture into the drybelt, it would make a heck of a lot of sense. There are areas where smell is not an offence. It must be true because we've been operating pulp mills all over the province for decades. I think, since I've lived in areas where there are pulp mills, that part of the difference is that the citizens the hon. member talks about lived there before the industrial operation. In the case of most pulp mill towns, the people move into the town accepting the odour.There is also the opportunity for municipal planning on a local scale to direct people away from problems. In this case, I think both Langley with mushrooms and Delta with greenhouses are examples of communities that are struggling quite progressively to answer these questions. In fact, I hope that by the time they're finished, they will be communities that we can hold up to other people in B.C. and ask them to imitate what went on there.
I don't think, however, we will ever
I want to finish on one note. Part of the problem that the previous member raised with urban drainage is quite interesting. People who used to have our jobs 25 years ago had the foresight to move urban development onto the hillsides above agriculture, saving the land. Now the drainage problem that we're talking about today is caused by the excellent planning decisions of a previous generation of politicians. In other words, those now cities on the hillsides are draining onto the flat land, creating the floodland problem. This points out that even sensible decisions can impact negatively in the future essentially because of our inability to stop growth in agricultural communities.
R. Coleman: I agree with the minister on a number of the points he's made. But an intensive agriculture
One of the processes that has come out as a reaction to that was on July 28 of last year. The minister, through order-in-council, disallowed Langley's ability to move ahead on two bylaws, one of which would have allowed for the setbacks and screening of barns or operations within the community and another which would have controlled composting on farms. There was a moratorium, which has subsequently run out, and the municipality is now sitting with the situation of an open window relative to on-farm composting for mushroom composting -- while we're trying to build the model. I would like to actually see that closed by the ministry in some way -- at least a moratorium on any new composting operations until such time as we've set the standards and built the bylaw that we'll be able to operate in the future.
Mushroom compost has an odour that is indescribable compared to any other odour that we may ever want to live with. I've actually brought people into my community -- because there is now a composting operation on the eastern end of my community, just across the border in Matsqui, which is now called Abbotsford -- and had people refer to it as the absolute worst smell that they've every smelled. And it now permeates the entire community of Aldergrove as a result of another outdoor composting operation. So now we have two Money's.
My concern would be to somehow
Hon. C. Evans: Yes, I will consider it. I want to couch that by saying -- not for the first time -- that part of the reason we didn't do that before was because
R. Coleman: Thank you, minister.
Just so I'm clear, it's a moratorium on farm composting that is basically what would close the window until such time
I want to touch base on a couple of other issues that are affecting farming. Although we've had some discussion about the ditch-cleaning in the leave-strip areas, I want to bring to the minister's attention a couple of other things that are happening relative to the environment that affect farming. It's because of these that I have some grave concerns, because I think it actually could be a bigger problem than the ditch issue by itself.
I'll refer to two particular issues. One I brought up to the minister in question period. As we know, question period isn't necessarily a logical place to deal with an issue. Certainly it's not called answer period, so we know that we're not necessarily going to get to where we want to get.
I did bring up the issue of the Jim Shield farm, which is a property purchased by a longstanding family in Langley in 1991. It goes back to your previous comment relative to how we build subdivisions up on the hill and the drainage comes
[ Page 7071 ]
down and gets onto the lowlands, and then it affects the farm. This particular property has a ditch on it that was dug ten or 15 years ago by the municipality for drainage. When Mr. Shield bought the property in 1991, there were no restrictive covenants on the property; there was no restriction on his ability to use his land. He bought it for two purposes: one, to plant blueberries on about a 40-acre portion of the property; on about ten acres of the land, he was going to plant Christmas trees.When he went in to clear a portion of the property, the Ministry of Environment showed up and advised him that he couldn't use his land -- that he could not get across the ditch, because it was now called an unmapped stream even though there were no fish in it. Some of the water on the land was now going to be called wetlands, in spite of the fact that it was only there during certain seasons of the year. He effectively lost 16 acres of a 60-acre farm overnight, and his ability to use the land, right in the middle of agricultural land.
What happens when that happens to someone is
The second property that's affected like this is that of a constituent of mine by the name of Heinz Horner. Mr. Horner was on his land well before the agricultural land reserve came into being, and he's applied for a homesite severance. There's no problem with the homesite severance, but when the application went in, the Ministry of Environment came along and said, "Well, we're going to establish the top of the bank up here," which is the back portion of his property. Now, the land goes down in two levels into a valley where Bertram Creek is, and everybody recognizes that Bertram Creek is a fishery stream. But on the two levels before it got to Bertram Creek, which is about five acres, Mr. Horner traditionally ran his dairy cows back from the creek. It was always an allowable use.
[5:15]
So he loses five acres because of the decision, but when you stand on the edge of Mr. Horner's land and you look down the valley in both directions, you can see seven houses that are below the level of Mr. and Mrs. Horner's land, which he is told is now to be the top of the bank. So there are now seven farms on flatland, and if something happened to their homes, those homes would become non-conforming because of this decision relative to a piece of land.
So what we're doing is losing what is
Hon. C. Evans: I don't actually have the issue brought to my attention very often in terms of domestic use, like building homes. It is brought to my attention every day -- largely the fish question -- by the Ministry of Environment's or DFO's proposed or actual setback provisions stopping people from doing whatever they have traditionally done. I don't know the specifics, of course.
The member is right that question period is
Is it that the Ministry of Environment is attempting, with these decisions, to describe the floodplain? Is that what's going on?
R. Coleman: I don't believe that's what they're trying to describe. I think what they're doing is making a decision and speaking to the provincial surveyors. They're the ones that can really establish by survey where the high-water mark and the top of bank are.
What's happening is that because of a decision made by a field officer on the environment issue, it sets a height of land that's above where farms exist, whether it be the milking barns, the equestrian arenas or the residences that the farmers live in. It's above, so you have this plain above and a creek down below, but because of the traditional farming, you have an entire plain in the same area that is now below what is now being established as the level, which is the high-level mark. Once that's established, once it has an effect, as I understand it, on land use for the future.
It doesn't matter whether it's the Sumas Prairie where we have hundreds of farms or down in the southern part of the Abbotsford area where we have the berry farms -- but we do have some higher land near the Abbotsford airport along creeks where there's another one that's just taking place with regard to establishment of the high land -- or down on Bertram Creek. They're all affected the same way. It's not just affecting a farm; it's affecting a multitude of farms. It could affect an entire industry. In the case of the Nicomekl floodplain, it's affecting an entire subdivision in Langley city. The new setback is actually eliminating a number of homes from ever being able to be rebuilt, as well, because they're setting that level and they're saying that's where it is now.
As soon as one goes through and one gets approved and somebody accepts it, in the case of someone like Mr. Horner who wants his homesite severance, he accepts it. He goes ahead and he basically doesn't want to fight it in a long court battle. He says: "Okay, I'll establish that as my back property line." But once we've established that, we've affected everybody else on the plain below, and that's all agricultural land. So it's all land that affects your ministry, hon. minister, because that's where the best farmland exists and that's where the best opportunities for farming do exist.
[ Page 7072 ]
Hon. C. Evans: I will undertake to try to find out at the first meeting of my ministry and the Ministry of Environment some specifics on the matters that the hon. member asks about.
R. Coleman: I appreciate that from the minister, because in dealing with it on a local basis I see that we're facing something that we don't really
B. Barisoff: I just want to correct the one statement I made yesterday when I was having you go on a hunt to find $8 million for the chicken industry. It was the primary producers that actually injected that money into the chicken industry. So it's not something you have to go searching for an answer to.
With that, I think we've come to an end. I appreciate the minister's time and the fact that for me it's been a very productive time in learning more about the agriculture industry. I'm sure that we could go on for a lot longer, but I think that we canvassed a lot of area that was enlightening to me. There are a lot more areas that we could have canvassed, but I think in all fairness, we've accomplished quite a bit.
Vote 16 approved.
Vote 17: Provincial Agricultural Land Commission, $2,878,000 -- approved.
Vote 18: British Columbia Marketing Board, $925,000 -- approved.
Vote 19: Okanagan Valley Tree Fruit Authority, $2,000,000 -- approved.
Hon. C. Evans: Just before I do this, hon. Chair, I'd like to thank the members opposite for a very reasonable two days and to tell the hon. member that I asked the staff to make available whatever briefings he might like on any subject so that we can
I move that the committee rise, report resolutions and ask leave to sit again.
Motion approved.
The committee rose at 5:25 p.m.
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