[ Page 8049 ]

Prayers.

Hon. U. Dosanjh: Today I have the pleasure of introducing Nancy Wooldridge, president and founder of the Canadian Grandparents Rights Association, both provincial and national chapters. Ms. Wooldridge and Eric Turner, who is also a member, are both present. They have been working since 1982, for the past 16 years, to have grandparents' rights to custody of and access to their grandchildren specifically recognized in legislation, and I have the appropriate message from the Lieutenant-Governor today. I want the House to welcome them.

D. Symons: In the House -- or in the precincts, I'm not sure which; I can't see whether they're above me -- are 68 wonderful children, or youths, from James Thompson Elementary School in Richmond. They have several adults and their teacher, Ms. Hallett, with them. I wish the House to make them welcome.

M. Sihota: Hon. Speaker, in the gallery today from your riding is Audrey McClellan. She is joined by a friend of hers from Leipzig, Germany: Maike Beier. Would all members please make them welcome.

Hon. A. Petter: Visiting us in the gallery today -- I think he may be on vacation, but we're going to have a meeting later on today -- is the Hon. Lyle Oberg, who is the Minister of Family and Social Services from Alberta and also the minister responsible for representing the province on the social policy framework committee, on which he and I are working together. I'd ask the House to wish him well and make him very welcome.

G. Hogg: In the gallery today is a student of UBC and a resident of the Surrey-White Rock riding who was very active in that area in a number of youth affairs. I'd like the House to please welcome Lisa Dominato.

J. van Dongen: My wife Karen is in the Legislature today. She usually doesn't want to admit to being connected with any politicians, but she's visiting today and she's going to be in Victoria for about three days. I ask the House to make her welcome.

Introduction of Bills

FAMILY RELATIONS AMENDMENT ACT, 1998

Hon. U. Dosanjh: Hon. Speaker, I move that the bill be introduced and read a first time now.

Motion approved.

Hon. U. Dosanjh: Hon. Speaker, I'm pleased to introduce the Family Relations Amendment Act, 1998. This bill will amend the Family Relations Act to specify that the people who can apply for access to or custody of a child include parents, grandparents and other relatives of the child, as well as other people who have a close relationship with the child. This bill for the first time explicitly recognizes that where it's in their best interests, children should be able to maintain relationships with grandparents and others when their parents separate.

Bill 25 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

NORTHERN DEVELOPMENT ACT

Hon. D. Miller: Madam Speaker, I move the bill be read a first time now.

Motion approved.

Hon. D. Miller: This bill follows through on a commitment made by this government and the Premier following the Premier's summit on northern development held in Prince George last October. That summit brought together northerners from right across northern British Columbia to canvass a range of issues. At the conclusion of the summit, it was determined by the attending people that a northern commissioner's office would be desirable to bring a focus to northern economic development issues. We're pleased to follow through on that commitment today.

Bill 27 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Oral Questions

B.C. HYDRO AND RAIWIND POWER PROJECT

Hon. M. Farnworth: The agreement on the Raiwind power project, which was signed back in 1994, was a result of a proposal call by the Pakistan government at the time and was signed during a trade mission that was led by the Prime Minister of this country -- who, I might add, is a federal Liberal. The Pakistan government had put out calls for power projects throughout Pakistan, of which the Raiwind project was one of many. The current B.C. Hydro position, along with SNC-Lavalin's position, is that the project is proceeding and will come on stream shortly. We will have met all our obligations, and the taxpayers of British Columbia will not be on the hook at all.

[ Page 8050 ]

G. Campbell: In February of '96 the opposition exposed the scandal at B.C. Hydro with regard to insider trading and Cayman Islands bank accounts. All along, this Premier and this government have been dealing with the mysterious Ali Mahmood in Pakistan, as their Pakistan contact. Mr. Mahmood refused to assist B.C. Hydro in its investigation. Now he has gone underground in Pakistan and, according to some, may have fled the country. Can the Premier tell this House why B.C. continues to deal with a man who refuses what's taken place and refuses to tell us what he's done with over $1 million of B.C. taxpayers' money?

Hon. M. Farnworth: In response to the Leader of the Opposition's question, I'd like to point out a number of things. One, the allegations that he raises were dealt with in the Smith report. I can tell you, from a letter from the firm Considine and Co., that the voluminous report, which covered some 2,500 pages of interview transcripts and 25,000 pages of other documents, completely cleared B.C. Hydro. The fact of the matter is that. . .

[2:15]

Hon. M. Farnworth: . . .B.C. Hydro has acted properly at all times. What is taking place, though, hon. Speaker -- it is important for the Leader of the Opposition to realize it and it is what he doesn't seem to understand yet -- is political and economic turmoil in Pakistan. The independent power producers in Pakistan -- not just the one that B.C. Hydro is being used by but also the companies involved, including National Power of Britain, Midlands Power of Britain, General Electric of the U.S.A., Coastal Power of the U.S.A., Toyota of Japan and Mitsubishi of Japan -- are all under pressure from the Pakistan government because their contracts were signed under the previous regime in Pakistan. They are doing everything they can to discredit the contracts and the companies. . .

The Speaker: Thank you, minister.

Hon. M. Farnworth: . . .from the government of the time.

The Speaker: On his second supplementary, the Leader of the Official Opposition.

G. Campbell: The reason I am directing my questions to the Premier is that this minister evidently doesn't understand that there has been political turmoil in Pakistan for some time. In fact, in terms of the offering, it was pointed out that there was a great deal of political turmoil and there were millions of dollars at risk. You had to be willing to lose all of your dollars when you were investing. My question to the Premier is: has there been any contact between this government and Ali Mahmood? Where is Ali Mahmood? And what has he done with over $1 million of B.C. tax dollars?

Interjections.

The Speaker: Hon. members, order.

Hon. M. Farnworth: I think the question for this House is not, "Where is Ali Mahmood?" but: "Where is the member for Kamloops-North Thompson?"

The Speaker: Minister, that was not the question.

Hon. M. Farnworth: The issue in Pakistan is the economic and political turmoil that is currently taking place there. Instead of the opposition focusing on where Ali Mahmood is, they should be focusing on what Hydro is doing, along with our other partners in nations around the world, where legitimate contracts have been signed and where power projects that are intended to aid in development and to create opportunities for British Columbia are under threat.

The Speaker: Okay. Thank you, minister. Just finish up.

Hon. M. Farnworth: Why aren't they joining. . .

The Speaker: Finish up, hon. minister.

Hon. M. Farnworth: . . .with our government and the governments of the other nations in telling Pakistan to back off?

G. Farrell-Collins: It's interesting that the minister raises the issue of Brian Smith's report. My question is to the Premier. The development costs of this project were handled by Southern Electric Ltd. in Pakistan, and those development costs, according to Mr. Smith, were never audited. In his investigation, Mr. Smith wrote: "The review team is of the view that Hydro should have required an audit of Southern Electric's development costs. This requirement would have eliminated the uncertainty about the validity of some of these costs."

Can the Premier, the man who championed this project through his government, tell us if he or his staff have ever demanded an audit of those startup costs to determine whether or not kickbacks or illegal commissions were paid to grease the skids to get this project through the cabinet in Pakistan?

Hon. M. Farnworth: The agreement to the Raiwind project, as I've said earlier, was covered by the Smith report, which categorically says that B.C. Hydro acted with all due diligence. The project was reviewed by the World Bank. Their report was that the project was in line with all the other projects that were being done, and due diligence was done there. The opposition is making allegations for which it has no evidence.

The Speaker: First supplementary, the Opposition House Leader.

G. Farrell-Collins: The minister is making assertions for which he has no evidence. Mr. Smith himself is clear, and the World Bank was clear when they said that some of our partners were money-launderers. There's another $1 million in this scandal that has gone missing and is unaccounted for. There was a million-dollar loan made by John Laxton to Ali Mahmood in October of 1994, about the time this project was being formed. This $1 million, according to Mr. Smith, has also not been audited and has never been accounted for.

No audit has been done on the million-dollar loan from John Laxton to Ali Mahmood, to determine whether or not that involved kickbacks or illegal commissions. Can the Premier stand up for the project he was so proud to usher through cabinet and tell us why no audit has been done? How can he or his minister possibly assure this House that there are

[ Page 8051 ]

Hon. M. Farnworth: The issue around the loan was canvassed in the Smith report and was addressed by the Considine letter I quoted from earlier on. Hon. Speaker, my response to the opposition is the same response that the governments of Canada, the United Kingdom, the U.S.A. and Japan said to the government of Pakistan: "If you have any allegations, bring them forward. Put up or shut up."

G. Plant: I have a question for the Premier too. It involves another quotation from the Smith report. He says this: "No conclusions can be drawn about all of the ultimate beneficiaries of the Southern Group's share of any financial returns from the Raiwind project, because the review team has been unable to determine the identities of all of the shareholders of SEL in the Marshall Islands. Mr. Mahmood could provide this information, but he has declined to do so in his responses to the review team."

So my question for the Premier -- and I hope he isn't waiting for the end of question period to stand up and give us the straight goods -- is this: if we don't even know who the other partners or shareholders are, how on earth can we know if there were kickbacks, in cash or share forms or some other consideration, to get this contract?

Hon. M. Farnworth: B.C. Hydro has a 7 percent share in the Raiwind project. They're a minority partner with SNC-Lavalin. This project is caught up -- along with projects from the United Kingdom, the U.S.A. and Japan, involving companies such as Toyota, Mitsubishi, General Electric and National Power -- in internal politics in Pakistan that are of a political and economic nature. That's what's going on here; it has nothing to do with what the hon. member is talking about. The story itself in Pakistan is over a month old. If you start to see what's happening now, the government of Pakistan is recognizing what the governments of Canada, the United States and Japan have told them, which is to put up or shut up. They can't, so they're having to back off.

The Speaker: First supplementary, the member for Richmond-Steveston.

G. Plant: Well, I want to quote from the May 11 issue of the daily Dawn, one of the newspapers in Pakistan, talking about the independent power scandal. This is what the newspaper says: ". . .these are highly sophisticated players. Isle of Man, Bahamas, Cayman Islands, Jersey. . .Channel Islands is where most of [the] commission-taking is consummated." Now, Southern Electric, Pathfinder Enterprises and the other partners are all registered in either the Cayman Islands or the British Virgin Islands. Given that financial transactions in those jurisdictions are shrouded in secrecy, what assurance can the Premier give us that no commissions or kickbacks were paid through these offshore accounts?

Hon. M. Farnworth: I'd like to quote from a letter signed by Chris Considine, QC, independent counsel to the Smith inquiry: "Based upon the available evidence, the review inquiry found no secret fees, commissions, procurement fees or other improper payments by B.C. Hydro, BCHIL, IPC or any other companies in which they had an interest, including the project operating company, SEPCOL. In addition, there is no evidence that such fees or commissions were paid by or to any director, officer, employee or agent of any of those companies."

M. de Jong: It's tough to find evidence when the government's own agent refused to cooperate with the investigation, that's for sure.

It wasn't that long ago that the Premier was standing here in this House telling British Columbians what a great deal this was going to be -- how much money they were going to make. Well, if they look at the share price now, they'll find that it's dropped to just below 10 cents a share; the $12 million investment of taxpayers' money that this government committed is now worth somewhere around a million bucks.

Will the Premier confirm that this harebrained scheme that he touted as being the be-all and end-all of B.C. Hydro's new international investment strategy has ended up costing British Columbia taxpayers $11 million, just to start -- $11 million down the drain.

Hon. M. Farnworth: Once again the opposition has missed the ferry on this one -- or do I mean missed the boat? The project in Pakistan has been successfully completed and is undergoing a number of tests. The project will perform in the way it is supposed to. The current issue is the fact that it is caught up in internal politics in Pakistan. The shifting sands of this area, which I'm sure some of these members are very familiar with -- the hon. Opposition House Leader, on a trade mission to Tunisia, must have learned that -- will change.

The Speaker: Hon. minister, wind up your answer, please.

Hon. M. Farnworth: The fact is that the people of British Columbia, and Hydro in particular, will not be on the hook for the $11 million, as the hon. member seems to allege.

The Speaker: First supplementary, member for Matsqui.

M. de Jong: It was the Deputy Premier, just a year ago, who stood up and said in this House: "B.C. Hydro will make money out of this. Shareholders will make money out of this. That's the reason we got into it -- to make money for British Columbians."

Well, the question is not a difficult one, to the Premier, to the Deputy Premier, to the minister: on this day, May 25, how much money have we made on these Pakistan projects? How much?

Hon. M. Farnworth: It's unfortunate that the opposition seems to want to focus on today as opposed to the long term, which is what this project deals with.

Interjections.

The Speaker: Easy, hon. members, easy.

Hon. M. Farnworth: This is a successful project that's being completed. The fact of the matter is that over the next few months, they will see that their allegations came to naught. The project will be completed, and British Columbia and B.C. Hydro will be in a good position at the end of it all.

Interjections.

[ Page 8052 ]

Petitions

The Speaker: Proceed.

J. Weisgerber: Hon. Speaker, on behalf of the Chetwynd Hospital Action Committee, I wish to present a petition of 926 letters from residents in that community. They say, in part:

"Chetwynd requests of the Minister of Health an opportunity to discuss our local situation. Our citizens are forced to drive 60 to 90 minutes for emergency health care. We only want the same access to health care as our southern neighbours enjoy."

Orders of the Day

Motions without Notice

Motion approved.

Hon. J. MacPhail: I also move that leave be given for the Select Standing Committee on Parliamentary Reform, Ethical Conduct, Standing Orders and Private Bills to meet while the House is in session today.

Leave granted.

Hon. J. MacPhail: In Committee A, I call Committee of Supply. For the information of the members, we'll be debating the estimates of the Ministry of Energy and Mines relating to the B.C. Ferry Corporation. In this chamber, I call Committee of the Whole on Bill 20.

[2:30]

STATUTE REVISION CORRECTION AND
MISCELLANEOUS AMENDMENTS ACT, 1998

On section 1.

G. Plant: The first section of this bill identifies four regulations. The explanatory note says that the intention of this section is to confirm and validate certain corrections which were made by regulation under the Statute Revision Act, and to give those corrections continuing effect. So the general purpose is to ensure that the statute revision project that was undertaken last year is, if you will, perfected to some extent by this section and by these amendments, generally speaking. Is that a fair summary?

Hon. U. Dosanjh: Correct.

Sections 1 to 8 inclusive approved.

Title approved.

Hon. U. Dosanjh: Hon. Chair, I move the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; the Speaker in the chair.

Bill 20, Statute Revision Correction and Miscellaneous Amendments Act, 1998, reported complete without amendment, read a third time and passed.

Hon. J. MacPhail: I call Committee of the Whole to debate Bill 14.

WORKERS COMPENSATION (OCCUPATIONAL HEALTH AND SAFETY)
AMENDMENT ACT, 1998
(continued)

On section 15, section 106.

Hon. D. Lovick: Before we commence today, let me do what I failed to do in our last gathering -- that is, to introduce the person who is primarily responsible for putting this bill together. Our senior policy adviser within the ministry, Susan McClure, is sitting on my immediate left. Joining Susan with me today is Gary Martin, who is the assistant deputy minister. Between the two of them and myself, I am sure that we will be able to answer any question that one could conceivably raise.

Having said that, we spent the first part of our time together looking entirely at definitions, and we spent a considerable amount of time on that. I gave some assurances to members opposite that on at least one of their concerns, I would have some discussion with legislative counsel. It had to do with the definition of "union." Though I must confess, even after reviewing the debate, that I'm still not absolutely persuaded that we need to make changes, I nevertheless recognize the point being made by the member for Vancouver-Quilchena. What that seems to be, quintessentially, is that there is an ambiguity there and that what we understand union to mean at the beginning of a bill may be problematic when we get into specific regulations. I understand that is also probably a legal opinion; Russell and DuMoulin or somebody offered that. If so, so be it.

In any event, after considering this matter with staff and talking about it and reflecting on it, I am prepared to table an amendment. I think the amendment is fairly straightforward. I don't think we've shared this with the member. Alas, I had to fly out of here on Friday at 1 o'clock and didn't get back until about 1 o'clock today. Therefore I didn't have an opportunity before that time to approve an amendment.

Let me, then, just read into the record what we're doing with the amendment. We're effectively suggesting that we change the definition of union by doing two things. If I might, I'll just refer all members to the definitions section of the bill, section 106. You'll note there that the definition of union contains one short statement. The proposal is to make the

[ Page 8053 ]

In my reading of Hansard, that is essentially what the member and his colleagues are asking. Rather than having a long debate, saying, "We think it doesn't matter, and they think it does matter," for purposes of clarity we are prepared to introduce this amendment, which we think will solve the problem. Accordingly, then, I table this amendment, which I believe the Table has. No? May I give this to the Table now. Could I also give one to my colleague across the way.

C. Hansen: Before I start to respond to the minister's comments about that definition, I just want to clarify with the Chair that we're going to deal with these sections one at a time. So we'll start with section 106, deal with that and go on to 107?

The Chair: Yes.

On the amendment.

C. Hansen: Certainly the amendment that the minister has put forward goes 95 percent of the way toward what I thought was important. My temptation was to stand up and say that I second the amendment motion, which, of course, is not required under our rules.

But it does leave me with just a couple of concerns, so I'll put these questions to the minister. In fact, over the weekend I drafted an amendment to this. To coin the old phrase, great minds must think alike, because we were looking at this from very similar points of view.

My remaining question to the minister is on the ability that the employer has to dispute a notice that comes from an organization. In the wording that I was going to put forward, I was going to say, in addition to using the definition of "trade union" which you're adopted from the Labour Relations Code, "an organization of workers that has been advised by the employer," so that the onus is on the employer to accept the recognition of that body as a union for the purposes of this act.

The third thing that I was going to suggest in my amendment -- which I will not proceed with, given the one that you've put forward -- was that the board would have the opportunity to designate an organization to be considered a union. My concern with the wording that you've put forward is that there may be a body out there that sends a letter that really should not be considered a union for the purpose of this act. But they put forward a notice in writing to the employer, to say: "We wish to be considered a union for the purposes ofthis act." My question to the minister is: what rights do employers then have to dispute that notice? Is that an appealable notice coming from that organization?

Hon. D. Lovick: I'm afraid my response will sound like a rhetorical question: why should they? It seems to me that if the workers decide they want group X to represent them and their interests. . . . Whether the employer agrees with that or not is, frankly, not the employer's choice. It is the workers' right to determine whom they wish to represent them.

C. Hansen: At the risk of splitting hairs on this one, I think it's important that it be on the record for accountability purposes. If we had an organization of workers. . . . I will read from the amendment that you've put forward: ". . . [an] organization of workers formed for purposes that include the regulation of relations between workers and employers." There could be an organization that comes together within a workplace and takes it upon themselves. . . . You may have some executive members who then decide: "Yeah, we want to have the rights of a union under this act." There's not necessarily accountability back to the workers in that workplace, where they take that initiative. Yet there's no ability on the part of the employer to do other than recognize that body, given this wording -- at least, that's the way I read it.

There's nothing in here that gives the employer the opportunity to go to the board and say: "Wait a second. This group that thinks it should have these rights does not have the support of the workers in the organization for this purpose." At the same time, there doesn't seem to be an avenue for appeal, unless there is some other provision in the act that I'm not thinking about at the moment. I'm wondering if the minister could comment on that.

Hon. D. Lovick: The member's last comment is the most important one. Unless there is some other avenue he is not thinking of -- and that would be the Labour Relations Board, in effect. . . . The Workers Compensation Board adjudicates a lot of things, but it doesn't adjudicate who is and who isn't the union, and who represents people who call themselves a union. That's the avenue, if there is such a one needed.

[2:45]

Hon. D. Lovick: I apologize, Mr. Chairman, for taking a little time. I am perplexed by the question, as are my staff, in essentially trying to imagine a circumstance in which something like this could happen. If a group of workers say, "We are indeed the people who have been chosen," or "We see ourselves as representing the workers in this workplace to deal with health and safety issues," and they are a group that does not represent the majority within that workplace, then I am sure the employer would very clearly know that that is the case. The employer would therefore say: "Sorry, there are other people who are making the same claim, so you guys are going to have to sort that out." In other words, it's not just a matter of somebody telling me: "End of story." Obviously, there is still some kind of human interaction in the workplace. I frankly don't think this is an issue. As I say, I can't imagine,

[ Page 8054 ]

C. Hansen: I don't wish to belabour this issue, so I will leave it on the note that this may be something officials can look at in the context of regulations, to give clarification as to how this may be implemented. I certainly applaud the minister for bringing forward the amendment. It goes a long way towards meeting the concerns that I raised on Thursday, and we may wish to dispose of the amendment at this point.

Amendment approved.

On section 15, section 106 as amended.

C. Hansen: The only other area I want to focus on before we leave section 106 is the definition of "owner." My colleague from Richmond East raised this briefly on Thursday. The definition of owner causes me concern when we get into the sections on responsibilities, because those responsibilities are very broad. I'm wondering if the minister can give us any precedent where the definition of owner has been given as broad latitude as it is in this bill that's before us.

Hon. D. Lovick: Member, we're in the process of searching. I am advised, however, that this isn't some kind of arbitrary designation. Rather, the language we are using here comes from another statute. We're simply searching at the moment to find out which precise one that is.

I take it that having established this one to your satisfaction, we will then move beyond definitions. Am I correct in that assumption?

C. Hansen: Perhaps while that reference is being sought, I can just elaborate on this so we can make the best use of our time. The responsibilities that are being added to the owner, under the responsibilities section, are really quite severe. Yet you couple that with a definition which is so very broad that it captures a lot of people -- to the point that a lot of individuals who would fall under this definition of owner would probably have very little knowledge or ability to realize that they have some very serious responsibilities under this act.

If we got to those sections of the act and the minister was prepared to accept another motion, which I'll put forward at that time, then that might satisfy a lot of my concerns. But I certainly wish to raise it under the definitions section, because it is so all-encompassing.

Hon. D. Lovick: I thank the member for that comment. I will advise him that we might indeed. He makes the point, though, that I want to make: simply that it's difficult to argue that the problem is a definition based on something that you might do later which will give life to a definition, as it were. I recognize that that is a systemic problem, if you will, in dealing with legislation. We always start with definitions, and we say that in contemporary and customary usage, this is what words mean. Above and beyond that, we nail them down in terms of formal definitions; but ultimately the definition will have meaning insofar as the words are used later in the act. So it's wrong, of course, and it simply doesn't work very well for us to start by saying: "Well, we'll come at the problem in the definitions section of the bill rather than in the substantive section."

Accepting the legitimacy of the member's concerns, I will say yes, of course, as we get further into the bill and we look and say: "Well, given that 'owner' means these things, this section is problematic." That's a debate we can certainly have, and I am quite prepared to listen to the member's concerns at that point.

To answer the first question, the specific one about whence came this particular definition, I am happy to report that this is apparently fairly standard. This is indeed the language used in occupational health and safety workers compensation legislation in the Yukon, Saskatchewan, Ontario, Nova Scotia, New Brunswick and Prince Edward Island. So it's tried and true usage.

C. Hansen: As I indicated, it's not the definition itself that causes me the concern; it's how it then gets used in later clauses. I do have some concerns about those later clauses where the word owner appears. My concern is made that much more serious by the fact that this definition is as broad as it is. That's why I feel it's important to raise this now. Certainly, if the minister were prepared to amend that to a much more limited definition of owner, my concerns would still be there in those later sections but perhaps not as vociferous as they will be as a result of leaving this definition in place.

What I would like to do when we're talking about amendments is. . . . I do have some amendments that I will be putting forward as we progress. I have not tabled these, but I would like the minister to have a copy of them, because they're certainly in the spirit of trying to make constructive suggestions for improvement of the act. I will send these amendments over to the minister, and he'll see the one that I've suggested pertains to the section dealing with the responsibility of owners as we get further into the legislation.

With that, unless any of my other colleagues have comments regarding definitions, I'm prepared to move onward.

Section 15, section 106 as amended approved.

On section 15, section 107.

C. Hansen: Certainly this section is well written. As we read through the purposes of this act, it does give us a sense that this is something very noble and something we can support. The concern I have is that what is stated in the purposes of the act doesn't always match with what is in the rest of the act. If we had a bill before us that really was 60 pages of legislation that fulfilled the purposes as set out in section 107, I think you would have unanimous wholehearted support from this side of the House. But I guess this is where we have our problems. So we will deal with some very specific issues under this section, and we'll deal with some general issues as well.

If I can start with some of the specific issues in terms of the meaning of certain words. In subsection 107(1) it refers to citizens: "The purpose of this Part is to benefit all citizens of British Columbia by promoting occupational health and safety. . . ." My understanding from people that know an awful lot more about this than I ever will is that the use of the word "citizen" in B.C. legislation is very unusual. I'm wondering if the minister could elaborate on why it's used in this particular context and what its meaning is.

Hon. D. Lovick: I think the terminology is probably used in the same way it is in Julius Caesar. It means everybody.

C. Hansen: In that case there's probably another word that could have been used to more advantage than the word

[ Page 8055 ]

Hon. D. Lovick: We are indeed mindful of that, and certainly there is no effort to infringe on the federal government's constitutional turf or anything like that. The last part of the answer is simply that the royal commission uses that particular terminology: it talks about the benefit of citizens.

C. Hansen: But I do think that it's important that we come back. . . . I recognize that given the powers under regulations, which are in the latter part of this bill, there is the power to give definitions to words through regulations. I think what's in Hansard is also an important factor in giving definitions to words. Just to clarify, I think the minister is saying that this word is not meant to be restricted to Canadian citizens but that it includes all those in the workplace. I just want him to clarify that this is in fact his definition and that officials, again through interpretation, can make sure that that's the net effect of this.

Hon. D. Lovick: Yes.

C. Hansen: I do have some general concerns about the bill when it comes down to the wording of certain sections. I do feel that this is a piece of legislation that was put together very quickly, and it may not have had some of the fine-tuning it might have required. This is one of those examples that I think a bit more time might have allowed some more precise wording to be used in different sections.

If I can move along to subsection 107(2)(c) where they talk about encouraging the education of "employers, workers and others regarding occupational health and safety," I'm wondering if the minister could elaborate on whom he sees fulfilling that educational role and what kinds of programs the board might be putting in place to ensure that this educational function is encouraged.

Hon. D. Lovick: I thank the member for the question, Mr. Chairman. The board has a specific mandate to carry out educational activities. Beyond that, however, I think it is safe to say that what this legislation is intended to do is to create what I have referred to before as a culture of prevention. The process of creating that culture of prevention is to educate all of us that safety matters, that it is indeed everybody's business, and to create partnerships so that everybody in the workplace acknowledges that she or he has some part of that new culture for the workplace that says we are all concerned about one another's safety and are all going to do something to achieve that. That, I think, is the justification for saying that this bill sees as one of its purposes precisely what it says: to encourage the education of employers, workers and others regarding its new culture.

C. Hansen: As we get into other sections of this bill where there are specific references to training, for example, for members of the health and safety committees, I do want to get into more detail on what may constitute that training. I appreciate the fact that I'm zeroing in on what is a very general phrase in the purposes section, but I would like to use the opportunity to get a sense from the minister as to where we might be going with this whole objective of the WCB to encourage education. Does the minister envision any expansion of the kinds of education programs that the WCB is currently offering? This is a new part. Are these new initiatives that he foresees as a result of this part, or is this really building on some of the very good programs that the WCB has had up until now?

[3:00]

Let me give you one small example, if I might. This morning I made reference to the fact that I was late getting here. The reason is that I was in Vancouver at Eric Hamber Secondary School, participating in a ceremony to award the young people in a young people's workplace safety program. What the WCB did is encourage young people to come up with a communications package or strategy to encourage workplace safety among their peers, simply because parents and old guys like us saying to young people to be very careful on the job doesn't work as well, perhaps, as their peers doing so. They have this marvellous program, and I gather it's not a very expensive one, to get all these young people, effectively, to come up with ideas on how you sell workplace safety. That's the kind of exciting innovation that, it seems to me, is going to help grow that culture I talked about, and I'm sure the member would support that.

C. Hansen: I'm wondering if, in anticipation of this legislation passing, the WCB is looking at their education programs. Are there any initiatives being done to put new or different kinds of education programs in place? I guess what I'm trying to get at -- given this new part and the new responsibilities that are being brought into this legislation -- is whether the board is looking at any new initiatives in this area or if they are basically relying on the existing programs they have in place.

Hon. D. Lovick: I would love to engage in a discussion about what the WCB is doing or might be doing, etc., but I think that takes us beyond the mandate of the legislation. That's certainly an appropriate subject for the estimates of the ministry, and I'm sure my colleague across the way and I will have ample opportunity to discuss just those issues. They are important issues. Suffice it to say, a lot has been talked about. Whether there are specific proposals in place at this point I do not know, but I will certainly know by the time we have that discussion during estimates.

C. Hansen: As I mentioned earlier, as we get into later sections, specifically where it talks about training, I do want to get a better sense of who. . . . There are provisions in this act that state that the board has to approve training programs, which gives the board an enormous amount of power that has

[ Page 8056 ]

So, as I say, I do wish to focus in on those more specifically. It's not something that I will leave until estimates to get some answers on, because I think it's important in the context of this legislation and the responsibilities that are being given to the board as a result of this legislation. Certainly those sections of the bill flow out of this part that we have before us right now, but I will save those until a later point.

I will move on to sub-subsection (e), which states that one of the purposes is "to ensure that employers, workers and others who are in a position to affect the occupational health and safety of workers share that responsibility to the extent of each party's authority and ability to do so. . . ." I think this is one of the key sections in this act. Certainly there is a great deal of concern that while the act purports to say that there is a shared responsibility, the rest of the act doesn't fulfil that purpose. I think this is one of the key areas where what is said in the purposes is one thing, and what happens in the rest of the bill is something quite different. I ask the minister to comment on that.

Hon. D. Lovick: Purposes sections in legislation are always problematic. They're problematic essentially because what they inevitably do is get you involved in a debate that is essentially a second reading debate -- i.e., the principle and philosophy of a particular measure. The declaration of purposes says what the bill purports to do, what it ideally hopes to accomplish by this particular legislative measure. The test of how well the bill lives up to those purposes will clearly be the sections that follow. Insofar, however, as we have already accepted the principle of the legislation -- we have passed second reading of this bill -- what we're now doing is clarifying, answering specific questions about the statements in the purposes sections. Beyond that, we aren't talking about the first principles of the bill. Rather, I think that discussion is properly reserved for the particular sections, as the member noted in his earlier comment. So I don't think I'm going to engage in some long analysis of whether I think this will work or not, but I am certainly prepared to answer questions about each of these particular sections.

C. Hansen: I guess it begs the question: if you've got the purposes of a bill that don't match the rest of the bill, do you amend the purposes to correspond to what's in the bill, or do you amend the rest of the bill to correspond to what the purposes claim the bill is all about? That's probably a discussion to which there is no answer this afternoon.

But I do want to focus in on this section; I don't want to dismiss it in the way that the minister may wish me to. I think that the comments about shared responsibility. . . . Certainly if you go back to the report of the royal commission where they talk about the shared responsibility and accountability of both employers and workers for workplace safety. . . . What was in the royal commission report, which was to have been the basis of this legislation that's before us, is not in the act, is not in this bill, yet the purposes clearly state that it should be. I can see that these purposes were written with a view to implementing exactly what is in the royal commission report. Then obviously, when it came down to the responsibility of workers and the accountability for workers, it is simply not in this bill. I would like the minister to comment on whether we should amend the purpose to reflect the fact that the rest of the bill doesn't do what this purpose says it's supposed to do or whether we should find appropriate places in the rest of the bill to amend.

Hon. D. Lovick: In my opinion, this bill does indeed do what the purpose is committed to doing. I'll give one small example: joint committees. There are workers and managers working together to promote and encourage issues regarding occupational health and safety. A joint committee, by definition, means you've got both sides, and they're both working to do precisely what section 107(e) says. So I don't accept the member's premise.

I know the example he's thinking of, and I know we will discuss that example, because of the one recommendation from the royal commission that the legislation does not mirror precisely. The member sees that specific example as sufficient to show that the purposes statement no longer obtains. I would argue that even that small example is perhaps debatable in terms of whether it has that effect on the total bill. But in my opinion, the bill is in general a very good illustration or enunciation of precisely what the purposes are.

C. Hansen: As the minister says, it is debatable. That's exactly why we are here in this chamber: to debate. What we are talking about are administrative penalties to be imposed on workers who flagrantly violate occupational health and safety regulations. It was a clear recommendation of the royal commission. They went to great lengths and devoted quite a bit of space in the royal commission report to explaining why they felt that was important. This isn't a case of going out and fining workers for the sake of fining workers. This is a case of being able to impose administrative penalties on workers who consistently and blatantly violate occupational health and safety regulations.

I'm fully prepared to debate this in a later section of this legislation, but the problem is that at the later stages, we talk about the administrative penalties for employers. But later sections do not have the administrative penalties for workers in these very specific cases. My concern is that if we don't fully debate this section under the purposes section, the Chair might decide that I'm out of order at a later stage. I think it's clearly in order with this section, but it may be ruled out of order at a later section because I'm debating something that's not here -- and should be here -- as opposed to something that is here. I certainly don't want to let that opportunity slip by, because I think it is an area that we need a full debate on before this legislation completes committee stage. If the minister would like to suggest to me another section where we can have this debate, I'm prepared to defer it until that section.

Hon. D. Lovick: Mr. Chairman, you'll notice I leap to my feet with some alacrity, because I am prepared to offer a specific section. We can debate section 196 to the member's heart's content on the issue of worker penalties. It seem to me that the member is on much more solid ground for being in order on 196 than we are on 107, so I would suggest that 196 is where it should happen.

C. Hansen: I'll be the first one to defer to the hon. member's experience and expertise in that area, so 196 it is. We shall certainly come back to this area under that section.

[ Page 8057 ]

But the concern is that throughout this legislation there are provisions that certainly do add costs to small business that diminish our competitiveness in British Columbia. At the same time, they do not add to the health and safety of workers in the workplace, and that is a very real concern. I wonder if the minister could comment on this section from his perspective, in terms of how he sees that this legislation, bringing in more bureaucracy and more regulatory requirements on employers, is somehow going to enhance our competitiveness.

Hon. D. Lovick: Well, first of all, let's challenge just a little bit of some of the assumptions there. First of all, there seems to be this blanket assertion that regulation is somehow going to trammel the creativity and creative energies of small business. Let's put on the record very clearly that small business. . . . For starters, one of the working definitions of small business used by this province is those with fewer than 20 employees. As you know, joint worker health and safety committees don't kick in for workplaces of fewer than 20 individuals. So that's point one.

[3:15]

Therefore I struggle. The member asked me for my comments, you know -- was I worried about stifling business and business activity? The short answer is no, because the other side of the coin, of course, is simply that injuries and time lost due to work are probably more of an impediment to a successful business operation than will be the regulations that we're talking about here -- as well as those huge other costs to the greater society that we talk about.

It wasn't very long ago that I attended the National Institute of Disability Management and Research inaugural ceremony. The point they made was in terms of the literally billions of dollars that economies in the world are paying out because of workers injured on the job. And we've done nothing, for the most part, to reintegrate those workers into the workforce. I think it's safe to say that most larger companies with more experience of workplace injuries, accidents and safety problems are very much on board and saying: "Yes, this is precisely the kind of thing we ought to be doing." That is certainly what I've heard. To argue that small business is less concerned about that or thinks that any intervention in terms of imposing a safety regimen is somehow going to be automatically hostile to or incompatible with the growth and development and success of the business, I think, is simply wrong.

The member and I apparently have some disagreement on that, and that's okay; that's what this chamber is all about, especially to have it in this forum. But I am not for a moment persuaded, despite the fact that I know there is a write-in campaign being organized by somebody or other to talk about the perils of Bill 14. . . . Interestingly, nothing was happening until a few days ago. But suddenly the fax machine has started to burn up. I've been around politics long enough to know that this wasn't spontaneous combustion in action. Somebody is organizing a bit of a campaign.

The reality, of course, is that until that campaign got organized, we didn't hear much about this. We didn't hear much at all. Indeed, when the regulations were introduced -- this incredibly far-reaching statement about making a better and safer workplace for all workers -- the response of the business community was either complimentary or virtually mute. So I disagree with the member's conclusion that this is a terrible, terrible impediment and a disincentive to business, but I certainly respect the fact that he has every right to that opinion.

C. Hansen: Certainly when I first had a chance to read through Bill 14, I did have some real concerns about it. We undertook to try to broadly disseminate some information, so I'm not surprised that the minister is getting some response from the business community around British Columbia. In fact, I'm quite pleased to hear that there is a letter-writing campaign that's caught the minister's attention. It is a real concern, I think, to a lot of organizations in the province.

He mentioned that when the regulations came into effect, there was not a big outpouring of concern from the business community. That clearly was a process of six years, which led to the rewriting of those regulations. In those regulations, which were tabled last fall and which everybody had a good chance to look at before they came into effect on April 15, there are certainly things that some employers would have liked to have seen done differently -- and which I'm sure some worker organizations would have liked to have seen done differently. But that was a process that was very transparent. Some of the concerns we have are that some of the processes that have led up to this bill have not been as transparent. Certainly this bill has equal if not greater ramifications than the regulations that came into effect. Yet this bill has not been out there for all to see for any significant amount of time before it's passed in this House.

The minister referred to the fact that bigger businesses do not have concerns. I can fully understand that, because the impacts of this legislation are not going to affect the major employers in British Columbia. They already have their health and safety committees set up. They've already got their

[ Page 8058 ]

I also want to come back to some of the specific words in this section, where it's talking about: ". . . to promote a culture of commitment on the part of employers and workers to a high standard of occupational health and safety. . . ." That is something that I think we would all like to see happen: the safety culture, as it's referred to by the minister in other documents. We certainly want to encourage that ourselves.

I note that when we get into division 4, which talks about the health and safety committees, some of the research that the minister was relying on -- which he made available to me -- talks about the fact that where there is that culture in an organization, then the health and safety committees can be effective; but if the culture is not there to start with, then those health and safety committees are not as successful. Yet what I see in this legislation -- as is stated in the purposes -- is that this legislation is to promote that culture of a high standard of occupational health and safety.

And just to find another section which I think uses similar language here: ". . .to foster cooperative and consultative relationships between employers, workers and others. . . ." You know, if we were successful through a piece of legislation in creating that culture then, yes, things like the health and safety committees would wind up having some possibility of success, as that research shows. But I don't see anything in this legislation that goes towards achieving this cooperative relationship or this culture of commitment that is talked about in the purposes section.

Certainly these are attitudes that have to be instilled, and you can't do that through legislation. I was wondering if, when the minister talks about promoting this culture, is he relying on things like the health and safety committees to create that culture, or are they something that can benefit as a result of the culture already being there?

Hon. D. Lovick: The short answer is both. Okay? Or take your pick: is that chicken or is that egg? Let me just make a couple of points. I think the member is coming at the purposes section of this bill in a fair and reasonable way, and he deserves a similar response.

Just a couple of points. First of all, let's make it very clear that the size of the company has no necessary correlation whatsoever with the number of accidents or the frequency of accidents or indeed even the severity of accidents. That's point one. Point two is that health and safety committees, to be sure, cannot guarantee a culture, but it would seem to me that they're a marvellous vehicle to foster a culture and to make it begin to flourish.

Try this out. Let me speak hypothetically to the House on this, Mr. Chairman, and say that if I am a manager/owner/operator of a firm with 25 employees, and I see that this is the legislation that mandates that we have to have a joint safety committee in my place of employment, what I'm going to do, I think, is say: "Okay, how do we do that so it isn't going to be horribly expensive, horribly problematic, horribly bureaucratic?" I'm going to call in my workers -- with whom I hope I have a decent relationship -- and say: "Look, here's something that's in all of our interests to do, to foster, to encourage. How can we, together, make this better?"

I don't think we should see it as the heavy hand of regulation. I think, rather, we should see it as a stimulus to get going and to do what should have been in place in the beginning. Let me give a specific example, using a larger business, of how you grow a culture. In my constituency, in Nanaimo where I come from, there is a mill -- the famous Harmac, a MacMillan Bloedel operation. It used to be both pulp and a sawmill. It is now two separate and distinct divisions. Harmac Pacific is the pulp mill.

Harmac Pacific used to have one of the absolute worst safety records in the province -- in the industry. Part of the reason they had that bad record was because of a lousy relationship between workers and managers at the mill. It was poisonous; everybody knew it. The PPWC, Local 8, hated MacMillan Bloedel, and MacMillan Bloedel thought that the PPWC, Local 8, were a bunch of irresponsible reprobates, etc. You get my drift. What happened, though, is that workers and management -- together, in committees -- said: "This is a loser. We're getting people who are hurt here unnecessarily. It's costing us hugely, as workers, in terms of our friends and pain and suffering and all of that." The company said the same thing: "This is a loser. It's costing us money. It's also having a definite negative effect on production, because workers aren't happy and therefore not as productive."

What they did, starting about six years ago, was begin to meet together. As the manager of Harmac Pacific, Doug Eamer, tells me, seconded by the Local 8 representative on the safety committee, Ken Jupe: "We realized we had to learn to like each other. We had to learn to work together. We had to recognize that this is a partnership, and that this is an issue that belongs to both of us. We all have to buy in." In six years, they have turned that around radically. Harmac is now the sixth-best in the province in terms of industrial pulp mills, I think, and that's pretty good.

[3:30]

I would suggest the same story will be told -- again and again and again, I hope -- by small businesses of 20 to 50 throughout this province -- those who are affected by this legislation. I don't think it's too onerous. I think it's a step in the right direction. I think, indeed, that as we go through the bill and look at all the regulations, we'll discover that they are not quite as onerous or as problematic as people might be inclined to believe. So there is my speech for the afternoon to the member, and I promise I will try to restrain myself hereafter.

C. Hansen: I enjoyed those remarks the minister made, because I think it does show the importance of workers and employers working together for health and safety. The example of Harmac that the minister used is probably replicated all around this province. But I think the key difference in where we come from on this bill is that you can't legislate that kind of cooperative attitude. If we work with the small business community and get them to recognize the importance of health and safety, then it can be successful; but to come in and legislate attitude doesn't work in any area of government, never mind in occupational health and safety.

[ Page 8059 ]

Here we have pages of legislation that we're sending out to achieve these wonderful purposes as set out in this section, when there is no track record to show that those are going to be successful. We will deal with that in greater detail when we get to the section on the safety committees, because we will have lots of questions and points to raise when we get to that point.

Certainly in terms of the purposes of the legislation, I think we've dealt with most of the issues I have. I'm prepared to move on from here, and the sooner we do, the sooner we'll get to some of those later sections.

Section 15, sections 107 and 108 approved.

On section 15, section 109.

C. Hansen: We're making great progress here.

Under section 109 -- this is the section that allows for a review -- it says: "The minister may appoint a committee to conduct a review of all or part of this Part and the regulations and to report to the minister concerning its recommendations." Could the minister please elaborate on the form and substance of this review and the timing of these reviews?

Hon. D. Lovick: The members opposite may have noticed that I was saying to the two people with me that here's what I think it's about. I'm just making sure that I'm answering what is indeed in the legislation. I have to restrain myself to not think I know everything.

What we're talking about here is analogous to a section 7 committee in the Employment Standards Act -- or a section 3 committee in the Labour Code, for that matter. I think my friend across the way is aware of that. What it does is it works essentially on the proposition that the industry, the workplace or whatever we purport to be regulating is probably dynamic and is changing on a constant basis. There ought to be a mechanism, then, available to us to respond to urgent, pressing circumstances without having to go through some elaborate process like setting up a royal commission or something like that -- in other words, a regular, ongoing mechanism whereby we can fine-tune and improve on things and we can respond to particular concerns.

That's what this provision is about; that's what the intention of section 15, section 109 is. It's to enable us to do this. It's largely, I would again emphasize, in recognition of the fact that the workplace is dynamic. I'll give you an example. How many years did people work at the video display terminals, typing with that flat keyboard that most of us grew up with? What you now see in offices are the new, so-called ergonomically designed ones, where your wrists actually flop right down. Personally, I find it awfully difficult to use, but I gather that you get good at it. I'm told that it's wonderful and has the effect of significantly reducing the likelihood of something like carpal tunnel syndrome. I merely make that point to show the dynamic workplace. Who ever dreamed, 20-odd years ago, that a keyboard like that and exposure to a VDT would even be a problem? It wasn't part of a workplace. Today, of course, it is ubiquitous; it's everywhere, obviously.

The other reason, very briefly, is: look at what happened with workplace regulation. We didn't change the regulations significantly for 20 years. That's why we had that examination and consultation that went on for about six years, and that's why the result of it was that huge document that scared everybody. It caused fear and apprehension everywhere because it was so massive. Surely what we ought to be doing, in terms of a dynamic workplace and responding to concerns of employers as well as workers about the workplace, is something more like an ongoing review before things get too big or get to the boiling point, as it were. That's the intention of this.

My final point would be simply that there is no necessary commitment to say that six months from now we're going to do one of these. It's rather that you are setting up a mechanism whereby you can reply to the appropriate stimulus.

C. Hansen: The minister mentioned section 7 of the Employment Standards Act. It is much more precise in what the responsibilities are. It clearly states that the section 7 review under the Employment Standards Act has to take place at least every three years. In this wording that you're asking us to pass today, there is no such requirement. I think we saw, under section 3 of the Labour Relations Code, where there is a similar requirement for ongoing consultation to take place, that the appointment of the section 3 committee did not happen. Instead we saw last year, when this government came in with Bill 44, which had significant changes to the Labour Relations Code, that the consultative process that was provided for in the legislation had been totally ignored.

First of all, let me say that I support the idea of this review. I would like some assurance from the minister that this kind of review is going to happen in a timely fashion.

Hon. D. Lovick: The short answer is yes. I would just draw the member's attention, though, to the Employment Standards Act, section 7. I would note that there is a conditional there. Note that the reference to every three years is within this context: "If a review committee is appointed" -- I underline that -- "it must provide to the minister, at least every 3 years, an evaluation report. . . ." So it's very much a conditional. It isn't the fact that that's a given, automatically, every three years.

But the answer to the member's question is yes.

C. Hansen: What I'm looking for is an undertaking by the minister that this review will go forward within a specific time frame. Are we talking. . . ? The minister said that he's not going to promise me that it's going to happen within six months. My bet is that you're still going to be trying to sort out the regulations from the act within six months, and there are probably major sections of this bill that will not be proclaimed six months from now. I'll wait to be proven right on that one.

But certainly I would like some undertaking from the minister as to when we can expect a review to take place under this section.

Hon. D. Lovick: Well, the short answer to the question is: when there is a need. It doesn't mandate that there must be a review. It says: "The minister may appoint a committee to conduct a review on all or part of this Part" -- etc., etc. In

[ Page 8060 ]

To go back to your question, however, about if it will be timely, if a problem is determined and if it is a very discrete problem -- as in a part of this, as opposed to all of it -- then it would indeed be done in a timely fashion. I think it's rather like the old proposition and maxim about justice: if it is indeed delayed, sometimes it's denied. I think the same would obtain here.

C. Hansen: I think the minister may have contradicted himself when he talked about this review being only issue-driven or problem-driven. Certainly if there's a problem or an issue with the services, the minister's got the capacity to conduct a review of anything he wants. I read this. . . . Going back to the minister's earlier comment, when he talked about the changing workplace. . . . This shouldn't wait for an issue; this should be an ongoing process. If there is an issue or a problem, then fine, go get somebody to review the issue or the problem.

The reasons I support this particular clause in here are that it's not going to wait until we have a problem and there is going to be a process of review of how this act is fulfilling the purposes that it was set out to do. That certainly shouldn't wait until we've got a specific problem. It should be, as I think the minister said earlier, just a reflection of the fact that we do have a changing workforce. I would certainly like to hear an undertaking from the minister that within a period of 18 months -- I'd even give him two years; mind you, we may have an election before then -- there will be a review undertaken under this section.

Hon. D. Lovick: The answer is no. No, I won't give that assurance. I think it's irresponsible for us to say: "We haven't passed this legislation yet, but when it's passed, the first thing we're going to do is review it, even if there's no reason to do so." That seems to be what the member is asking. I'm sorry, but I just do not think that's a responsible approach. Rather, it seems to me that what ought to be done is that if we look at it and say, "Oh, we now perceive that there are problems," we should respond to them. Frankly, it would seem to me that any government that sees there are difficulties with it, that sees that people are, for example, unhappy and are manifesting that in various ways. . . . Government responds to those kinds of things; any government would respond to that kind of stimulus, it seems to me. To offer some kind of arbitrary claim like, "Oh yes, whatever happens, even if everybody loves it, and they're all beating down the door to say, 'Oh please, let us buy into this legislation,' we're going to have a review anyway. . . ." I do not think that is responsible, and therefore no, I don't think we need to say that 18 months or two years from now there will be a review or that that should ever be written into the legislation. I don't think it should be.

[3:45]

I will move on to the next clause, where it talks about who should be part of this consultation process: "A review under this section must include a process of consultations with representatives of employers, workers and other persons effected by this part and the regulations." I'm wondering if the minister could give some elaboration as to who he sees as being part of this review process when and if it ever happens.

Hon. D. Lovick: First of all, it seems to me that logically one ought to try to capture the constituency that is referred to within the measure. Therefore businesses both large and small, all of those who are directly affected by it, as well as their workers -- union and non-union alike -- in addition. . . . I think that would cover the workers and the employers as referred to. The other persons, it seems to me, would be the technical folks. You would get some people with expertise, say, in other jurisdictions to see how our legislation matches up with the problems we've had or they've had -- those kinds of things. I think those would be the kinds of persons I would envisage being called together under this section.

C. Hansen: We are talking about the appointment of a committee here, which is provided for in subsection (1). In subsection (2) it then talks about the review including a process of consultation with representatives. There has certainly been some criticism in the past of some of these review committees and how they have been structured. If you look at the employer community in British Columbia, it is certainly anything but a homogenous group. We're talking about very diverse interests. Employer groups that are working within regulated utilities, for example, are very different from large, fiercely competitive corporations. They in turn are very different from the small business community in British Columbia. We're talking about some very, very different groups. We're talking about public sector and private sector employers. Certainly the small private sector employer has a much different outlook on these areas than an employer such as a small municipality, for example.

[P. Calendino in the chair.]

To elaborate on that a little bit more, one of the criticisms that has been made in the area of workers is that whenever there has been a consultative process that included workers -- as set up by this government -- they have usually found somebody out of the trade union movement. The unionized workforce in this province only constitutes about a third of the overall workforce. If you look at the groups that are out there representing these various categories of employers and workers, I can see where the big business community in this province is very well represented. They take care of themselves, thank you very much. The small business community in British Columbia has become very vocal over these last few years. I think that's something that. . . . It's not new to B.C., but certainly their willingness to get involved in these kinds of issues is new, compared to what it may have been ten or 15 years ago. I know that the small business community is very anxious that they be properly represented at the table -- not just be invited to submit briefs, but that they become part of the committee as it is structured.

If we look at the worker community, clearly it is possible to go to a phone book and find the trade unions in British Columbia that represent the unionized workforce. The non-unionized workforce in this province is very disparate, and there are clearly not organizations that are there to put their point of view forward. I think that means that government has a responsibility. Whether it's a section 3 committee under the Labour Code or it's employment standards or it's a review committee that is set up pursuant to this legislation that's

[ Page 8061 ]

In addition, I would ask the minister if he shares with me the importance of having the small business community represented on the committee that may be undertaking such a review in the future.

Hon. D. Lovick: First of all, let me make the point that the makeup of the committee will depend hugely on the purposes of the review. If it is a review of the entire part, obviously we will have to make it a big committee and should try to accommodate every interest within the larger community. If, however, it's a very narrow and specific one, for instance, then clearly one would choose the committee accordingly. So I want to offer that caveat and that condition first of all.

Second, I agree with the member in the general construct that obviously, as I think I said in my first comment about this section, we ought to attempt to bring into any kind of review that might be undertaken all of those persons directly affected by the legislation -- or representatives, at least, of those constituent groups. The predicament we have, as the member knows full well -- and I believe his term was "the disparate and divergent points of view" within even communities that like to think of themselves as being relatively homogeneous. . . . The reality is: where do you find the representatives? "Who speaks for whom" is the old question, of course.

My take essentially is that yes, we ought to do so, and to the specific question about. . . . I'm sorry, I'd better complete that sentence. Yes, we ought to endeavour, to the very best of our abilities, to accommodate all of those disparate interests. The only caveat I would impose when the member says that small business must be part of this process, is, again, back to that problem with definition.

If the member is talking, for example, about microbusinesses -- places with one, two, three or five employees -- then I am not sure, given the nature of this legislation, that there is a place for those people at the table. I don't think they need to be at the table. But certainly with small business as we have defined it -- 20 and above -- the member is absolutely right, in my opinion, that they should indeed have a place at the table. I agree.

C. Hansen: I guess one of the recent examples that brought this to my attention was reading the report of the section 3 committee on the Labour Code. They made reference to the fact that individual workers did not present briefs. At the risk of putting words into their report that aren't there, it was in the context of: "There can't be much anxiety out there on the part of individual workers, because they didn't come out to the meetings and didn't present briefs."

I think that when it comes to individual workers, it's clearly incumbent on government in these kinds of situations to reach out and solicit those views in a way that is very deliberate. I don't want to belabour the section 3 committee. I know they went out and did surveys and things like that, but those are hardly good substitutes for getting that kind of specific input. I think it's also important that that kind of input be sought when we go through a consultative process.

Unless any of my colleagues have any questions on this, I don't think I have anything more under section 109.

Section 15, sections 109 and 110 approved.

On section 15, section 111.

C. Hansen: Section 111 is the board's mandate under this part. This is an area where I think we are clearly putting the cart before the horse when it comes to the whole process of redefining the role of the WCB, its relationship with government and the services that it provides. In here we have set out the board's mandate. It includes -- and I'm paraphrasing here -- the authority to make regulations; to undertake inspections; to provide services to the joint committees; to ensure that persons are provided with information to encourage, develop and conduct or participate in conducting programs for promoting occupational health and safety; to promote public awareness; to prepare and maintain statistics; to undertake or support research; to establish programs of grants and awards in relation to its responsibilities; to provide assistance to persons concerned with occupational health and safety; to cooperate and enter into agreements, etc. To fulfil the mandate of this part includes, as we'll find out in other areas, the enforcement requirements.

So really, all wrapped up into one body, we've got everything from the body that makes the rules. . . . It's the body that educates the public about the rules; it's the body that provides education services; it's the body that sends out the inspectors. At the same time as giving advice on workplace safety, they're also inspecting and have the power to bring in penalties, which then lead to appeals. All of that's very well and good, except that you're talking about one body. Clearly this is the mandate that is now before the royal commission. Here we have, in this legislation, the board mandate set out in the same broad, all-encompassing terms that we have come to know as being the beloved WCB, at the same time as we have a royal commission underway to examine what are in fact the best structures to carry out all of these various functions -- whether it should fall under the responsibility of one body or should be the mandate of separate and distinct organizations.

I would like the minister to explain why we should be asked to pass, in this part, such a broad mandate for the board at a time when we're in the middle of a very fundamental and profound review of the overall operations of the board.

Hon. D. Lovick: Two points, if I might. The first one is simply that the mandate, functions, duties and powers of the board are consistent -- the ones outlined here -- with the recommendations of the royal commission. That's point one. Point two is that what we have here is simply a formalization and the spelling out of what was already in place, albeit perhaps in different regulations. All right? In effect, this is a statement of what was, but the codification thereof.

C. Hansen: But certainly if you look at the mandate that is before the royal commission today -- the work that they're doing in looking at the governance of the WCB -- I would contend that it is virtually impossible that we will not be here within the next year or 18 months, implementing the recommendations of the royal commission and making significant amendments to this mandate as it is now set out. Clearly we're going to be back here within a very short period of time to amend exactly what we're being asked to pass today. Can the minister comment on that?

Hon. D. Lovick: It ain't likely. I don't think we will be back in a short while.

Let me just emphasize that what we have here in terms of the WCB having all those duties, which the member quite

[ Page 8062 ]

As well -- I have made the point already -- this is essentially a formalization of what was and is the royal commission recommendation. It's quite true that there may be some minor adjustment necessary. Who's to know? None of us, I suspect, has quite that clear a crystal ball, even if we think otherwise. But broadly, as I say, this essentially represents what's already there: a codification and clarification. We think that's sufficient. One body should be making the rules, should be promoting, should be assisting and should also be responsible for penalizing. We just think that makes sense.

[4:00]

Hon. D. Lovick: I want to quote from page 12 of the royal commission report, lest anybody accuses me of quoting out of context. The question posed by the royal commission in essence is this: "Should the Workers Compensation Board of B.C. be responsible for accident prevention, compensation and rehabilitation?" Business and labour, the two main parties consulted, both said yes.

The question embedded in that question, of course, is: should it be a separate act, or should there be a separate agency responsible for some parts of that? The answer came back: yes. They got, in short, the answer to their question. Why delay, then? Let's carry on and do it.

C. Hansen: I'm tempted to ask the minister to read the next paragraph and then sit down, but I will read it for him -- literally the very next paragraph. I'll start with where the minister left off: "Should the Workers Compensation Board of B.C. be responsible for accident prevention, compensation and rehabilitation?" That's exactly what the minister just said. In the very next paragraph it says, "The answer to this question is beyond the scope of this report" -- meaning the interim report. "It involves a detailed understanding of the board's current policies and programs in relation to occupational health and safety, compensation, rehabilitation, as well as education and research. These matters will be dealt with in the commission's final report in September 1998."

So what the minister is telling us is that he's already prejudged, based on inputs he's had from employers and worker groups, that that's not necessary now, because that whole part of the royal commission mandate for their final report has just been pre-empted.

Hon. D. Lovick: Quite right. Yes, indeed, government made that decision. We said that if the two principal stakeholders are happy with it, why go through the motions, then? Why spend the extra money carrying out an unnecessary debate? Why have any great deliberations if we already know the conclusion? If the two main stakeholders are happy with it, why give an extra mandate, an extra layer of responsibility, to the commission? It has enough on its plate, guaranteed; it doesn't need any more. So in this particular instance, we said: "Let's go ahead with occupational health and safety, because it's necessary, and both parties agree that the WCB should be the agency responsible." I make no apology for that; it seems to me a legitimate conclusion for the government to draw.

C. Hansen: Can the minister tell us if the terms of reference of the royal commission have been amended?

Interjection.

C. Hansen: They haven't? Clearly the royal commission is proceeding with fulfilling its terms of reference -- the mandate. They have held extensive public hearings over the past few months all over the province of British Columbia, and they have included in it. . . . People have been basically putting submissions together to address this very issue, yet what the minister is saying is that that's all out the window because the royal commission should no longer be looking at this stuff. Has the minister given specific instructions to the royal commission to not be examining this area that was part of their original responsibilities?

Hon. D. Lovick: The question is a bit of red herring -- with all due deference, Mr. Chairman. We're talking about occupational health and safety here. That's in fact what this legislation addresses. The question posed to the two parties vis-à-vis occupational health and safety was: should the WCB have this mandate, or should it be given to some other agency or to government to make these sorts of decisions and recommendations? The answer vis-à-vis occupational health and safety -- not the other stuff, but occupational health and safety -- was yes, WCB can do that -- end of discussion. I don't think it changes the mandate and the nature of royal commissions. I see my friend from Shuswap here, who, like me, has a little -- more than a little, in his case -- background in Canadian history. Royal commissions frequently turn out to be something far different from what they were mandated to be. That's the nature of the beast. A royal commission's own commissioners have been known to change their terms of reference in the middle. And frequently it's the case that 50 percent of what royal commissions recommend is never even considered, never even sees the light of day. So this is not a problem. This is not some horrible breaking of the covenant or some awful and terrible circumstance.

B. Goodacre: I seek leave to make an introduction.

Leave granted.

B. Goodacre: In the gallery today we have a group of young people who are students of St. Joseph's School in Smithers, a school that I attended from 1959 to 1966. They're here with their teachers and parents as chaperons. Could the House please make them welcome.

C. Hansen: The minister was talking about the history of royal commissions. As my colleague the member for Shuswap pointed out to me, rarely, if ever, in Canadian history have we had a process whereby legislation has been enacted on a portion of a mandate of a royal commission while it's still underway. This is clearly unusual. I think it goes back to the point we made before, that we have this whole process backwards. We had a massive rewrite of regulation, then we brought in an interim report, which wasn't the choice of the royal commission, rather, it was a specific directive given to them by this government to come in with the interim report, which has resulted in this legislation.

[ Page 8063 ]

[W. Hartley in the chair.]

I think it comes back to beg the original question: what is so urgent about Bill 14 that we've got to somehow crank this thing up and force the royal commission to deal with it before they've completed their final report? Clearly we are putting the cart before the horse, as is set out in this mandate. But I appreciate the fact that we're not going to make progress on that.

Certainly there are a ton of areas under this mandate that we can go into in great detail, but I think what I will do is defer the debate on those specific issues until later in the bill when we can deal with the substance of those rather than the mandate that provides for them. With that, my colleague has some points.

B. Penner: I'd like to comment on the minister's remarks about royal commissions and their by-products, the reports that they generate, in Canadian history. I agree with the minister that all too often the recommendations of those royal commissions receive scant, if any, attention, either from the public or from the government of the day.

I'm concerned about the minister's comments a few minutes ago in response to a question from the member for Vancouver-Quilchena, when he gave some assurance that we won't be back here anytime soon, debating further changes to the Workers Compensation Board. That seems to me that he is, essentially, damning the upcoming final report of the royal commission to gather dust in the Legislative Library, like so many other reports and inquiries and royal commissions previously. I studied government and Canadian history to a certain extent, and that is the general perception. Certainly when you speak to people on the street, they have a sense that reports are generated that are rarely, if ever, acted upon. Just a few minutes ago I think this minister, perhaps accidentally, reinforced that perception by suggesting that 18 months or two years from now we won't be back here debating further changes to the Workers Compensation Board. If that's true, why do we have the royal commission working on proposals to change the Workers Compensation Board? Are we telling those people that are working diligently, day in and day out, that no matter what their final conclusions are, the Legislature is going to ignore them? I certainly hope that's not the case.

Hon. D. Lovick: I have no wish to be combative, but I have to say to my friend from Chilliwack that just as a little learning is a dangerous thing, so is a little listening. He didn't quite hear all the points I made. That's perhaps because he arrived a little bit late. The point I was making was that I will not automatically give any guarantee that 18 months or two years from now we will review this legislation. I said, rather, that we will see if there is compelling need to do so. If there is compelling need to do so, we will do so in a timely and responsible fashion. That's the point I'm making. I appreciate his amusement about royal commission reports. Someday we should compare notes about royal commissions we have known and loved.

Let me just make two quick points, though, about the comments of the member for Chilliwack as well as about the earlier ones of the member for Vancouver-Quilchena. The commission's first report, the interim report, called for legislation. We are introducing that legislation; that's what we're debating. Secondly, the final report of the royal commission will deal with compensation issues. That's its mandate, not to talk about occupational health and safety. I hope that clarifies matters.

Before I take my seat, may I join my friend from Bulkley Valley-Stikine in welcoming these young people from the north and say that I hope you all read as much as the member for Bulkley Valley-Stikine. He uses the library more than anybody else in this building, and I think we're all very jealous of that wonderful ability on his part. Welcome.

Section 15, section 111 approved.

On section 15, section 112.

C. Hansen: I only have one small point to make. This is regarding annual reports. I just want to compliment the WCB, because I think they put out a good annual report. I also think it has the kind of information that's useful. What is even more important is that it comes out in a very timely fashion. We have annual reports from various agencies and ministries that come out three and four years after the fact. By the time they come out, they're virtually useless. I would just like to pass along that compliment.

Section 15, section 112 approved.

On section 15, section 113.

C. Hansen: This section gives some very strong powers to the board. To say that "the action or decision of the board is final and conclusive and is not open to question or review in any court. . . ." We come down to subsection (3), which says: "Proceedings by or before the board under this part must not be restrained by injunction, prohibition or other process or proceeding in any court or be removed by certiorari or otherwise into any court." I know that the minister is going to say that this is not a new provision for the WCB; we find similar wording in section 96(1) of the existing act. But I would like to ask the minister if any other body under the provincial jurisdiction has similar immunization from judicial review.

Hon. D. Lovick: I don't know whether this will provide the member comfort, but I am advised that all Workers Compensation Boards across Canada apparently have a similar power.

C. Hansen: I guess, like a lot of things, that just because they do it somewhere else doesn't mean it's a good idea. I would like the minister to explain why this kind of power is important to put into this particular piece of legislation.

Hon. D. Lovick: The reason is historical precedent, essentially. The nature of workers compensation legislation is that the worker gave up her or his right to sue the employer in exchange for this remedy in legislation called workers compensation. What has gone on with that, then, is this extra protection to the board -- not to be subject to undue influence from parties -- given, as I say, that the worker has already given up something in order to avail herself or himself of the legislation. This becomes, then, I guess, the quid pro quo -- right? The board therefore must have something approaching absolute authority. That seems to be the explanation or justification for it.

[4:15]

[ Page 8064 ]

Hon. D. Lovick: Happily. I would draw the member's attention to the fact that this section refers specifically to the board's jurisdiction. That's the part that gives it that huge residual power, if you like. Remember, though, that in other parts of the board's operation, there are appeal mechanisms and appeal structures built in. So it isn't the case that the board's word is final on every single thing under the sun. Rather, it's talking specifically here about its jurisdiction. Okay?

C. Hansen: But I think that's where the concern is; that's where my concern comes from. It's because the jurisdiction of the board is very broad. If you look at the jurisdiction of the board today compared to what it may have been 70 years ago -- and I don't pretend to be an expert on what the board was like 70 years ago -- clearly, with the complexities of the workplace and the growing importance of health and safety issues in the workplace, the board's jurisdiction is huge, as we have just seen in its mandate. You know, we have a body that, under one roof and under the direction of one group of administrators, has powers to write the regulations, to educate, to investigate, to enforce and to penalize. Yet none of that is open to judicial review.

I'm wondering if the minister could explain for the House this issue of the protection that is given to the board. Is that an issue, perhaps, that is possibly reviewed in the report of the royal commission, for example? Is this something that has just evolved over the years, and we've accepted it because it's always been there? Or is this something that is being challenged -- and in what form?

Hon. D. Lovick: I don't know whether it's being challenged. But what I can say to the member is that I think his question is bang on. What I can say to him is that this matter of that historical power and the precedent for it may well be something that could change as a result of the royal commission's final report. That's quite conceivable. One of the things is that they may well look at it and say that it is indeed time to look at the operation of the board and its historical power, and ask: "Should it indeed be standing out there uniquely apart from all other boards in creation, apparently?" So that's quite conceivable.

B. Penner: This section caught my attention, as well. I think that all members of this Legislative Assembly, all 75 of us, hear on a regular basis from injured workers who question the ultimate authority of the Workers Compensation Board to make crucial decisions affecting the rest of their lives. One of the things that increases the amount of fear and trepidation on the part of injured workers is the fact that the Workers Compensation Board seems to be a complete entity unto itself.

On occasions such as today, we get legislation before us where we can hopefully have some input into what decisions are made by the WCB and how they're made. However, most of the time, day in and day out throughout the year, the Workers Compensation Board operates as a power unto itself, beyond reproach. This section makes it very clear, in case anybody didn't understand it, that even where there are gross errors in fact-finding or in application of the law, even the Supreme Court of British Columbia is rendered helpless. It is not able to help the workers who are helpless.

That's where I think a lot of concern arises. I had a gentleman in my office today who has been there numerous times, and he came back again today. He's dealing with a problem that's been going on for seven years, and every so often the Workers Compensation Board officials he deals with will just change their minds and give him a completely different answer than they'd been giving a week previous. None of these decisions, no matter how valid or invalid, are subject to judicial review.

As my colleague the member for Vancouver-Quilchena was pointing out, I don't think there are any other boards or commissions or agencies in the province that enjoy that kind of immunity from judicial review. Generally speaking, boards and agencies are entitled to make decisions, but if the Supreme Court of British Columbia is satisfied that they've made a gross error in fact or in process, or have grossly misapplied the law, then the Supreme Court is entitled to review that decision and recommend ways in which the decision should be changed and perhaps send it back to that board or agency to rehear the matter, subject to changes in their approach.

That's where we have some concern, and I had similar thoughts to those of the member for Vancouver-Quilchena: this is probably something the royal commission dealing with the Workers Compensation Board would like to make comments on. I don't know that, but I suspect that it's a matter of some discussion in the royal commission. I say that because we hear about it on a daily basis as MLAs, dealing with constituents who have been injured in our communities and who don't feel that their issues are being properly addressed by the WCB. Even if they are being properly addressed, they don't have confidence because they feel that no matter what is decided, it is beyond anybody else's power to challenge that decision. That's where some concern is coming from.

Hon. D. Lovick: I appreciate the comments made by the member for Chilliwack, and I think every MLA in this chamber has probably had similar views at one time or other when dealing with constituents who've come up against that monolithic creature called WCB. Two points, however. The first is that the points the member makes refer to compensation and what the WCB does, and that's not what this bill is about, let alone this section. That's the first point. The second point is that that is what the royal commission may well be addressing in its final report. Indeed, we hope so.

To this particular section of the act -- section 15, section 113 -- I would just make one brief comment. It's true that the jurisdiction as stipulated here may send tremors and trembles across the way and indeed through all of us, but I would note that what this legislation does is bring accountability for occupational health and safety precisely to where it belongs -- i.e., to government, as opposed to a non-elected body. That's what this legislation is about. This legislation is an enabling mechanism for the WCB. It's the statutory framework.

Ironically, given what we've been discussing for the last couple of minutes, this is the effort, in fact, to fix that problem and to bring accountability, as I say, into the process of occupational health and safety.

Section 15, section 113 approved.

On section 15, section 114.

C. Hansen: This was an issue we raised at the technical briefing with officials from the ministry, and I'm very grateful

[ Page 8065 ]

Hon. D. Lovick: Much as I would like to take credit for breaking new ground, I'm advised that it isn't the case. Indeed, the mechanism was available to us in the past, but it simply has not been invoked before this time. So it's good legislation; it's a good measure. But, as I say, I don't think there is anything strikingly new in here.

Section 15, section 114 approved.

On section 15, section 115.

G. Abbott: I have a question for the minister with respect to section 115(1), which reads: "Every employer must (a) ensure the health and safety of (i) all workers working for that employer, and (ii) any other workers present at a workplace at which the employer's work is being carried out. . . ." Perhaps the minister can advise or reassure me here. This seems to me to be a very expansive view of the responsibilities of the employer in the workplace. I guess the reason I have concerns is that in the two workplaces that I'm somewhat familiar with, the second portion -- namely, other workers -- could become quite an onerous consideration from a liability perspective, in this case. I'll give you the two examples.

In the case of a farm, as a farmer one might be responsible not only for the agricultural workers -- the pickers and so on -- that one would naturally assume would be the responsibility of the employer but also for independent truckers coming and going on a farm at any given time, particularly during harvest, who are taking the crop off to sale. Also, typically during the growing season, there are a lot of contractors around, doing work with herbicides or whatever for the farmer. There may be some concern that in this apparently expansive outline of the duties of the employer, the farmer may be responsible for a lot more than those people whom one would certainly expect him to be responsible for under WCB regulations.

As well, I'll give a second example. In a logging operation, certainly the employer would be expected to be responsible for the loggers working under his employment, care and supervision, but there are also logging trucks coming and going in the workplace which may be to some extent independent of the direction of the employer. Also, again within what might be broadly viewed as the workplace, there may be independent contractors -- roadbuilders and so on -- that are going about their work.

So the concern I have is that the apparently expansive view of the employer's responsibilities may make the employer responsible for a whole lot of people who are not directly under his supervision but who, under the terms of this legislation, may become his responsibility. I'd appreciate the minister's advice and comments around that concern.

Hon. D. Lovick: First of all, I would note that this section -- the member's quite right -- is indeed an expansion. But it is consistent with the royal commission's recommendations. Those people who sat and looked at this stuff and heard submissions from various people and presumably also from some of the individuals referred to by the member for Shuswap nevertheless came to this conclusion.

The kind of thing they were attempting to capture, I gather, is the delivery person, say, who would come to a construction site and have to walk across an area where there is all kinds of activity going on and who says: "Look, I'm just the guy delivering pizza or whatever, so I don't need to put a hardhat on." At any sensible and safety-conscious worksite I've ever been familiar with, there is no way you would get inside that construction zone without being told: "Sorry, you're not allowed in here until you do this." That's the paradigm case, if you like.

The other example would be the logging show the member referred to. Now, it's a long time since I logged -- you know, back to steel-spar days -- but I remember very well that for any truck that came on that site, there was a very big sign that said, "Ten miles an hour," I think it was at that time. Anybody who brought a loaded or empty logging truck in there who was going too fast had to watch out. You'd probably have a chaser or a hook-tender threatening your windshield with a chunk of two-inch cable. That was just a given.

As I read the legislation and look at it, it seems to me what we're talking about is essentially reasonable requirements. They say that obviously the employer must ensure. . . . But then what happens, as section 15, section 115(2) says: "Without limiting subsection (1), an employer must (a) remedy any workplace conditions that are hazardous to the health or safety. . .ensure that the employer's workers (i) are made aware of all known or. . .foreseeable health or safety hazards. . . ." That means putting up a sign on a farm, saying: "We are spraying pesticides here, thank you very much." If you're doing that, it would seem to me that you don't want some delivery person walking in and saying: "Hi, how are you doing? Here I am, and I want to talk to you about your manure spread." Most of that's common sense, and I wouldn't think it would be too onerous. I don't have personal experience of a farm, like the member for Shuswap, but what I detect here is that this is not terribly problematic.

Finally, members might like to know that subsection (ii), regarding other workers present at the workplace, is in fact mirrored in the Alberta legislation, which some argue ought, of course, to be our model for all things.

[4:30]

But let me go back to the farm example -- and this is typical of farms during harvest -- especially where there are a lot of people running around: pickers, agricultural workers and so on. Frequently there are also members of the public coming in to buy food directly from the farm. This is a typical scene at a British Columbia farm on a summer day when produce is moving. Let me use my example. Thrust into the middle of that hive of activity -- not mayhem -- is a delivery person who is coming to pick up some fruit to sell at the farmers' market in Vancouver. As a result of the carelessness of the delivery truck driver -- in this case, backing up without adequately checking behind him -- he runs over one of the workers there. Am I to understand from the terms of this legislation that the liability and responsibility for that accident will rest with the farmer in this case, rather than with the delivery driver who made an error in terms of the safe operation of his vehicle?

[ Page 8066 ]

It seems to me that what we're really talking about here is an individual's carelessness, an individual's responsibility. I think that as long as the operator of the workplace was indeed living up to what's stated here in terms of advising of risks and hazards and so forth, she or he would not have to worry about a circumstance such as the one you describe. Because we're dealing with legislation, however, I'm wondering whether we ought to perhaps take that under advisement, rather than simply take my word for it, because I don't think that's good enough in a case such as this where we're talking legal liability. So if the members are willing, we can either put that piece on hold and look at other parts of the section or stand down this section at some point -- whatever members wish; at your request.

C. Hansen: I greatly appreciate the minister's willingness to be cautious in how we approach that, because if the words the minister just spoke were something that we could take to court, they would have a very different significance than if it's just an opinion that he's expressing. Certainly if the minister's words were in fact a legally binding interpretation of this section, then I would be quite happy to say aye and move on, but I do have some other. . . . We may well wish to stand this down, once we go through it. Let's see how far we can get with it.

I would like to ask the minister a question pertaining to this section. I will preface that by saying that I'm going to ask him this identical question for each of the sections under this division. I don't want him to think, after we get halfway through this section, that somehow I'm trying to trap him down the line, so I will tell him that I'm going to ask the same questions with regard to each of these sections.

How are these responsibilities of an employer enforced, and what are the penalties that an employer faces for violating this particular section?

Hon. D. Lovick: The potential penalty assigned to the employer is entirely what is spelled out in this legislation. The comparable penalty, of course, is to the worker in terms of what she or he is subject to. Both of them in fact have certain obligations conferred on them by this statute, and for offending that statute, both can be penalized. The board's duty is to enforce. For a flagrant violation, of course, there can be penalties, and for something more flagrant than that, which is wilful and repeated and so forth, then there can indeed be legal prosecution. I hope that answers it.

C. Hansen: I want to address the issue that was raised by my colleague the member for Shuswap which led to the minister's offer to stand down this section. I have a suggestion in terms of an amendment that may well address that very area. This was an amendment that I sent over to the minister maybe an hour ago, so I appreciate that he hasn't had much time to consider it. But I would like to move an amendment: to add the after words "every employer must" the words "as far as is reasonably practicable." I would appreciate it if I could have this delivered to the Clerk.

On the amendment.

C. Hansen: If I can just speak to this. . . . I'm not a lawyer, but I understand from the legal advice I've been given that the words that we currently have in section 115 -- "Every employer must (a) ensure the health and safety. . . " -- are very, very powerful and have some very serious legal connotations. The word "ensure" is in itself one of the most powerful words in terms of an obligation that is put on an individual. This isn't a question of discretion that the board can show. It's not a case of the board trying to determine whether or not the employer was faulty in allowing, say, that delivery truck to back up. This doesn't leave that kind of discretion, because it says that the employer "must ensure." Then you can say that it happened, and there was no way of preventing it. Well, it doesn't give that discretion. It says that the employer "must ensure."

As I understand it, one of the other phrases in law that has very specific meaning to the courts is "as far as is reasonably practicable." It doesn't diminish the responsibility of the employer, but what it does is allow for those situations which are just clearly not preventable. The employer still has to make sure that he has taken every possible action to prevent a workplace injury, but at least it doesn't put the onus -- one that is totally unreasonable -- on an individual. As the minister will know from the proposed amendments that I put forward, I'm not just trying to put this phrase in as it applies to employers, but I want to see that phrase added to each of these sections. With that, I invite the minister's support for this amendment.

Hon. D. Lovick: I'm not going to reject or accept an amendment at this point, because I obviously want to look at that other large question with regard to section 115. What I do want to do, though, is to address briefly the member's concerns about that particular wording and wanting "as far as is reasonably practicable" put in. I understand that discussion went on in the deliberations with the royal commission. After some to-ing and fro-ing and debating between the various parties involved, the decision was made that rather than using that particular wording, instead we would have a stand-alone section in the bill -- namely, section 215, "Defence of Due Diligence." I'm sorry -- I misspoke that. As I recall, Nixon used to say, "I misspoke myself," so I'll be very careful about using that phraseology. In terms of who had some discussion about that, the reference I was making was to the reference group, not the royal commission.

The defence of due diligence is in section 215 of the act. In my considered opinion, after thinking about it a little bit, this does indeed do what the member wants it to do. He may disagree with that, but that's my sense of it. What the section 215 defence says, in essence, is that if a person proves that he or she took every precaution that was reasonable in the circumstances to prevent the commission of an offence, then the individual is not guilty of an offence. That's the codified defence that deals with all of those circumstances in which some penalty attaches to the failure to perform duty. In my opinion, that will probably do the job. However, at this point I won't dismiss the amendment peremptorily, but I do want the

[ Page 8067 ]

C. Hansen: My understanding is that the. . . . If I had received learned legal advice to the effect that section 215 had the same strength and power as the amendment I'm proposing, then I'd be quite happy. But the learned legal advice that I have been given is the exact opposite: that section 215 does not provide that kind of protection and that the defence of due diligence as contained in section 215 is really quite limited in what it sets out to achieve. Certainly, as my colleague from Shuswap just pointed out to me, if we had in section 116, "Every worker must, subject to section 215. . . " to pull the context of section 215 specifically into this responsibility, then that might work. But as it stands right now, the defence of due diligence that's contained here doesn't achieve that objective. I appreciate the minister's offer earlier to stand down this section, to get that feedback from legislative counsel. I'd certainly be prepared to wait until we get that advice back before we proceed on the specifics of that particular amendment.

[4:45]

Interjection.

C. Hansen: Go on to the general section 115 and then deal with it?

I want to ask about section 115(2)(f), where it talks about the requirements to post information or to post notices. We had this discussion on Thursday, when we were talking about the definitions, about what constitutes a workplace and the responsibilities to post. As the minister pointed out, there is wording in most of these sections, or in some of them, that says that it can be posted somewhere else where workers will see it. Well, this isn't one of those sections.

In here, it says that "at each workplace where the workers of the employer are regularly employed, the employer must "post and keep posted a notice advising where the copy is available for review." Coming back to the discussion we had on Thursday, this does not give the employer discretion as to posting it someplace other than the workplace the worker is engaged in. As we go back to the definition of "workplace," that includes things like a pickup truck, for example. Could the minister comment on that?

Hon. D. Lovick: I would just draw the member's attention to section 154, which talks about general posting requirements. Whenever we talk about posting information, that section obtains, so I think that will provide the required clarification.

C. Hansen: Thank you for putting that on the record.

The other thing I want to ask, which is maybe on a bit of a lighter note, is: do we have a definition as to what posting constitutes? I think that in every workplace, we can envision the lunch room with the peg board and a box of thumbtacks, and that these things go up on a regular basis. But I think, as we mentioned earlier, that we are in a changing workplace. Is it envisioned that the posting of notices such as these could, for example, be posted on an Internet site where all workers have access to it? Could the minister comment on that?

Hon. D. Lovick: The answer is yes. It could be done that way. Indeed, I would refer the member again to section 154 where it talks about electronic posting.

C. Hansen: Those are the only other questions I have regarding section 115, so if the minister is prepared to stand down that section, we can certainly move on to the other sections that come up.

The Chair: The section is stood down. We go on to section 116.

Interjections.

The Chair: The committee agrees to a five-minute recess? So be it.

The committee recessed from 4:48 p.m. to 4:54 p.m.

[W. Hartley in the chair.]

C. Hansen: When I started my comments on section 15, section 116, I indicated that I had a question that I wanted to ask on each of these sections. I would like to ask the minister: in terms of "General duties of workers," which is section 116, could the minister outline for us how it is enforced and what penalties are there?

Hon. D. Lovick: The workers are certainly subject to discipline from the employer. In the event that they are found guilty, if you will, of flagrant abuses, they are also subject to prosecution and the jurisdiction of the board in terms of enforcement.

C. Hansen: My reading of the existing act -- section 71, I believe it is -- is that there is currently a provision for penalties of up to $10,000 for workers who fail to meet these safety standards or for repeated violations -- that type of thing. Yet one of the provisions in what the minister referred to as a consequential amendment is to remove that section and replace it with these provisions in part 3. Is my interpretation of that accurate?

Hon. D. Lovick: I'm sorry, Mr. Chairman, but I missed the last point the member made, so I'm going to ask him if he wouldn't mind restating it.

C. Hansen: My reading of the existing act is that there is currently a provision for penalties of up to $10,000 for blatant violations of safety regulations by workers, and one of the things that we are being asked to do with this legislation is to remove that provision and replace it with no penalties at all. In saying this, I also recognize that we will be dealing with this under section 196. I'm fully prepared to defer that question until that time, but I don't want to lose the opportunity to raise it at some point during this discussion.

Hon. D. Lovick: Apparently, in the Workers Compensation Act there is indeed a provision to fine both workers and employers up to $500,000 for flagrant violations. Pardon me. I'm sorry -- it's in our bill, this bill. That is there at the moment for blatant violations for both workers and employers. So if the question is whether the $10,000 punishment for workers somehow got lost in the shuffle, I don't think there is an issue.

[ Page 8068 ]

I notice in section 116 that the word "reasonable" does come into this. It says: "Every worker must (a) take reasonable care to protect the worker's health and safety and the health and safety of other persons. . . ." Clearly, under subsection (2), again we don't have that provision for reasonableness. I would therefore like to move an amendment to section 116(2) by adding, after the words, "a worker must," the words "as far as is reasonably practicable." For the same reasons that I moved this motion under section 115, I believe there is a very important definition in law of what this phrase means. I think it gives protection to workers. They have to do everything possible to fulfil their obligations under this act, but their obligations do not provide for absolute liability -- the term that my colleague from Chilliwack pointed out to me is used in law.

[5:00]

Interjection.

Hon. D. Lovick: All the way to 121? Given that I said what I did about section 115 -- that I wanted to consider all of this as a serious legal question -- with the member's permission, what I would like to do is deal with all of those at the same time. We can certainly entertain other questions on section 116 and so on. As far as the amendments go, I would rather stand down all of those until tomorrow and then deal with them en bloc -- with the cautionary note, of course, that the statement I made earlier about due diligence, it seems to me, is probably satisfactory. Rather than, as I say, dismissing them out of hand, I'd rather give them the attention and concern that I think they deserve. If that's agreeable to the member, we can carry on looking at the other questions you might have about those particular sections. But in terms of the amendments, I'd rather deal with all of those at the same time. Is that acceptable?

G. Abbott: I think that my colleague from Vancouver-Quilchena certainly agrees that it would be reasonable to stand these down. I want to make a minor suggestion to the minister here, and I pose this as a friendly suggestion. This comes under subsection 116(2)(c), which currently reads, from the start: "Without limiting subsection (1), a worker must. . . (c) not engage in horseplay or similar conduct that may endanger the worker or any other person." The concern I have here is, first of all, that we're saying that we shouldn't endanger other workers through horseplay or similar conduct. It almost seems -- I know this is not at all the intention -- that if there are other reasons why you might endanger others on the worksite, then those might be reasonable; but horseplay or similar conduct is not a reasonable way to endanger others. That's a horrible way of putting it, but I hope that you're getting the point.

My second point in making this friendly suggestion here would be that I don't think the words "similar conduct" really add anything to this section. The more appropriate wording in this section might be -- and I think the section would be far more meaningful with this -- to remove the words "similar conduct" and substitute in their place "any activity." So the section would then read: ". . .a worker must (c) not engage in horseplay or any activity that may endanger the worker or any other person." In that case, it has a rather more expansive meaning that I think is important in this section. Otherwise, I think that it inadvertently projects a meaning which I don't think the minister intended. At any rate, that's my friendly suggestion to him.

Hon. D. Lovick: I'm resisting temptation a bit here. It seems to me that to put in a phrase like "any activity that may endanger" is probably a lot more problematic potentially. I think that could get us into some legal battles, simply because it has nothing to do with the intention at that point. It's just any activity that may be proven to endanger something. That's pretty tricky, when you consider that. . . . Well, I won't even try to imagine it. That kind of language, frankly, worries me more than anything I see here.

The note I would offer is simply that the member have a look at section 116(1) and see the governing provision for the section -- the framework for all of this -- which is: "Every worker must take reasonable care to protect the worker's health and safety and the health and safety of other persons who may be affected by the worker's act or omissions at work. . . ." That's the general provision, and the rest of it is simply an elaboration and elucidation -- ideally, a clarification. Given that context, it seems to me that we don't need any further clarification. The context, it seems to me, is absolutely clear and should be sufficient unto itself.

C. Hansen: In this particular section, the provisions that are set out under section 116(2) are basically those that were recommended by the royal commission in their interim report. Specifically, it talks about the November 1995 draft of part 3 of the proposed occupational health and safety regulations, where it talks about seven points that should fall under a worker's responsibilities. The royal commission report then goes on to say as recommendation No. 9 that "the province's occupational health and safety statute place duties on workers similar to those duties described in the November 1995 draft. . . ."

All seven points are incorporated into this section, except for one. That is subsection (e) in the royal commission report, where it says that a worker must "operate only the machinery or equipment the worker is authorized and trained to operate." That is noticeable by its absence in this list of responsibilities in section 116. Could the minister explain why that provision was eliminated?

Hon. D. Lovick: My information is that that particular section of the report did not make it into this legislation largely because of the concerns expressed by business -- namely, that it put the business owner at a distinct disadvantage insofar as the worker, in the event of injury, could say, "I was not trained; I did not get the proper training," and it's therefore the employer's fault -- or that the worker then could say: "I need a three-week or a three-month course to go and get trained on all this particular equipment at the worksite." I gather that was the concern expressed by business, and therefore, apparently, it didn't. . . . That opinion was heard and apparently acted upon, and the section is absent.

C. Hansen: Throughout this particular division, the word "cooperate" appears often. We're talking about cooperating with the officers of the board, etc. In this particular section that's before us, we've got two references to the responsibilities of workers: section 116(2)(f), cooperating with the

[ Page 8069 ]

Hon. D. Lovick: I think what we are dealing with here implicitly asks us to go back to the purposes section of the act to talk about growing what I've referred to as that new culture, where safety is everybody's business. I think cooperation as listed here has to be seen in precisely that light. We sit down and ask: "What are our common problems at this workplace, and how do we set about to solve those problems?" The act of setting about to solve those problems becomes, then, the definition of cooperation. That's certainly the context that I understand from reading this, and I hope that adequately explains it.

C. Hansen: If I can be permitted to reference back to section 115, which we stood down. . . . I find it interesting that in sections 116, 117, 118, 119 -- let's see how far we go here. . . . In each of those sections there is a responsibility to cooperate with the joint committees -- on the part of the workers, on the part of supervisors and on the part of prime contractors -- but there is not a responsibility. . . . The same clause doesn't exist under section 115 in terms of a responsibility of the employer. I'm wondering if the minister could elaborate on why that's. . . . Oh, my apologies; it is here.

I guess my question is in terms of the wording that is used throughout -- "consult and cooperate." It is a responsibility given to all of these groups to consult and cooperate; in the case of workers, it's to "cooperate with." This may take on some very specific meaning when we start talking about safety representatives in particular. That's the context in which I'm asking this. But with the responsibility of all of these various groups to cooperate -- and if I can jump around to the other sections where it says "consult and cooperate" -- on one hand you can envision the process by which there's going to be cooperation with the joint committee; on the other hand, if we start talking about the context of a safety representative, that cooperation may take on quite a different connotation. I'm wondering what kind of cooperation these various groups are obligated to show to a single, sole safety representative in the workplace.

Hon. D. Lovick: I think the short answer to the question is that an employer obviously can't interfere with the safety representative carrying out his or her duties as stipulated under the act. Beyond that, I'm not sure I can be more specific.

C. Hansen: I appreciate it. I didn't do a very good job of asking the question in the first place.

The concern I have comes down to who defines what appropriate cooperation is. I think we like to look at this legislation and envision this great spirit of responsibility and building this safety culture, as we talked about under the purposes, and I would love to believe that that defines 100 percent of the workplaces in British Columbia. But I think the reality is that there are some poisoned worksites out there. There are some situations where there is not the best of relationships between workers and management, which clearly is a big problem for both workers and management.

My concern, though, is not that government should be stepping in to try to find ways of making poisoned worksites happy workplaces once again, but rather how we prevent this legislation from being used in those rare situations. So it comes down to. . . . The point that I'm trying to make is: how do we define appropriate cooperation for any of these groups that are taking on this responsibility? Is it something, for example, that the board may be able to give guidelines to? Or are we going to put an onus on supervisors and employers and prime contractors to be responsible for cooperating in a way that is defined by the safety representatives themselves, in terms of what adequate cooperation is? In the case of those regrettable situations where there are poisoned worksites, that may be a very difficult goal to achieve.

[5:15]

It has also been shown to me that the board's mandate in this particular bill is also to provide services to joint committees and to worker health and safety representatives. So I suppose that in the event that cooperation was an absolute non-starter and the safety committee said, "We have a terrible, poisoned relationship, and we can't get along or cooperate," probably somebody could go talk to the board and maybe get some kind of mediation service or something and ask: "How do we learn to work together and to cooperate?"

Again, I don't think that's a major problem. That's one of those things that adults learn to deal with, and say: "Look, we don't necessarily have to love one another, but we certainly have to learn to get along in order to function." That's just as we know in this Legislature: we tend to work much better when we all make that leap and say that we'll quit beating up on each other and insulting each other, and that we will try to work cooperatively despite our differences.

The Chair: Members, the Chair wants to seek clarification. We're continuing debate on section 15, section 116. There has been an amendment tabled; there seems to be a general agreement on standing down some sections, but we haven't actually decided to do that yet. So maybe I could get clarification.

C. Hansen: I guess the line of questions that I have regarding cooperation pertain to this division as a whole. In fact, in reality they probably pertain less to section 15, section 116 than they do to sections 15 to 20. I'm certainly prepared to allow us to proceed with standing down section 15, section 116, and to move to section 15, section 117, which is probably more specifically relevant when it comes to the discussion we're having regarding the safety committees.

The Chair: By agreement, section 15, section 116 is stood down.

[ Page 8070 ]

C. Hansen: This is relevant to this discussion, because we're now talking about the duties of supervisors. Under section 15, subsection 117(2)(b), we have to consult and cooperate with the joint committees, so this is directly relevant, I think, to the points we're trying to make.

I just want to comment on the minister's last remarks. I was pleased that he was paying attention to my second reading remarks. I did talk about the culture that exists in most workplaces, which is not one of a definitive line that's drawn between workers and management. The point I made at that point was that in structuring the health and safety committees, you were asking those workplaces to delineate themselves along those lines. That's not part of the culture that exists in most smaller workplaces, in particular, and in those workplaces of up to 20 employees, let's say. That is the dividing line that comes into this legislation. So that was the context when I was talking about the culture of those workplaces. But I'm glad that the minister was paying attention.

The point I'm trying to make is that we do have such a thing as a poisoned workplace in British Columbia. Fortunately, they're not common, but they do exist. My fear is that we are writing into this legislation tools that could be used -- not as weapons; that's the wrong word -- to frustrate the relationship between workers and management, say, leading into a contract negotiation or something like that. My concern here. . . . There are other sections where I will raise this point again, but in this particular section is the responsibility to cooperate with a joint committee or, specifically, as this wording says, to "consult and cooperate with the joint committee or worker health and safety representative for the workplace."

In the case of the committee, perhaps that's not as major a concern, because the committee is made up of two worker reps and two management reps. So I believe that's quite a different dynamic. But in the case of the sole safety representative, which is chosen by the workers. . . . Anybody involved in a management capacity in that company does not have a say in who that sole worker representative should be.

In there lies the potential for many of the provisions in this bill to be used as a tool to frustrate a workplace in a way that puts pressure on an employer to take other actions that may be related to a collective bargaining process or to a certification process, rather than to what the intent of this legislation is about. That's where I'm coming from in terms of trying to get a clearer understanding of where the obligation to cooperate lies, and that's what I'm asking the minister to elaborate on.

Hon. D. Lovick: I'm not sure I can elaborate on this wonderful, hypothetical universe that's been created here. It seems to me that we should not forget that we are talking about occupational health and safety, and we're talking about the duties of various players in the game under that heading. To try and say that this will become a kind of stalking-horse or a Trojan horse, or something, to get at collective bargaining or certification issues, I think, is a bit of an imaginative leap. And if that happens, then I suspect that that's the kind of thing that already happens in any workplace today. When management and workers sit down to have coffee or whatever else, conversations like that would occur. But how this legislation would make that problematic or be somehow disruptive of the workplace. . . . I'm sorry, that strikes me as something of a non sequitur, and I'm really struggling with the point being made.

C. Hansen: But I think the point is that we're talking about the duties of employers. In this particular section that we have before us, it's the duties of supervisors, and it's saying that. . . . It's not saying that supervisors have to sit down and have discussions with their safety representative; that's not what this says. This says that every supervisor must consult and cooperate with the worker health and safety representative -- just to shorten it down to the concise phrase. This is an obligation that's being put on the supervisor. The supervisor must consult and cooperate.

What does cooperate mean in this context? Cooperation is a two-way street in my definition, but that's not the way this is set up. This cooperation is set up as a one-way street, because we don't subsequently have a responsibility for the health and safety representative to cooperate with management. So this is not a two-way street. Earlier the minister said: "Well, if this becomes a problem, they can go to the board for some kind of ruling or direction on this." That's not provided for in here. We have provision in here for our health and safety committees. Where there's an impasse among these four individuals, they can go to the board for direction. But the power is not given to the supervisor in this case to go to the board to say: "Look, this safety representative is frustrating everything that we're trying to accomplish in this workplace using this power, and he or she is saying that I have to cooperate with him because it says so in section 117 of this bill." So that's the context. It's not as minor a point as I think the minister is trying to make out. That's why I feel there needs to be some definition given to these obligations that we're saddling these employers and supervisors with.

Hon. D. Lovick: Let's try and imagine the context for this. I am a worker representative and I see a problem at the worksite -- or what I perceive to be a problem -- and I say: "Gosh, I'm worried about that, and my colleagues, my workmates, are probably worried about that as well, and I want to do something about that." So then I call my supervisor and say that I have this problem and that I think they and I should talk about it. It seems to me that by this legislation, the supervisor has an obligation to say, "Right, okay. Look, I can make some time available for you 40 minutes from now or tomorrow morning or whenever. We'll get together to discuss the problem." The supervisor can't say: "I don't care what you think the problem is; take a hike."

That is the illustration of what we're talking about here. The supervisor, in order to do his or her part towards creating a safer workplace, has got to listen to the complaint being made and cooperate with the representative to try and solve the problem. Now, that ain't rocket science. That's not terribly complicated, and that's also not the thin edge of the wedge to bring about the destruction of the amicable and productive workplace. So I'm really struggling. I don't see what the difficulty is. It seems to me pretty straightforward, and I hope that explains why I say that.

C. Hansen: Maybe I can approach this from a different direction. If there is evidence that comes forward that the powers given to certain groups under this act are being used for purposes that appear to be other than health and safety, is the minister prepared to address those circumstances through interpretations, through regulation, to ensure. . . ? I think what's important is that the provisions of this act be used for what they are intended to be used for. Some very big powers are being given to individuals and to groups under this act that weren't there before. I guess what I'm asking is: what do we as legislators do to ensure that this act is not misused in the future? If it is misused, does the minister feel that he has powers, through regulation and interpretation, to address those kinds of issues so that we can ensure that this act is only used for what it is intended to be used for?

[ Page 8071 ]

C. Hansen: I guess that if we knew that the review committee was going to be on a regular periodic basis, we might be able to address some of those problems at that time. Anyway, I'm prepared to stand down this section and move on to section 118, if the minister is agreeable.

The Chair: There's agreement that section 117 is stood down.

On section 15, section 118.

C. Hansen: Under the definition of "prime contractor" that we have before us, it states: ". . .the directing contractor, employer or other person who enters into a written agreement with the owner of that workplace. . . ." If we go back to the definitions section, we find that "owner" has a very broad definition. It includes a lot of different groups, as we were discussing a few hours ago when we were on the definitions section. I think it emphasizes the point I was trying to make at that time. You have this broad definition of owner, which includes a trustee, a receiver, a mortgagee, an in-possession tenant, a lessee, a licensee, an occupier of any lands. So in any one workplace there could be many owners that fit that definition. A singular individual or a singular legal entity does not fit the definition of owner. So I'm wondering if the minister could explain to us how we wind up using that definition in this context, because clearly it could be multiple individuals. If there is a written agreement with one of the owners, does that, then, constitute a prime contractor for these purposes?

[5:30]

C. Hansen: I think that what it does here is talk about who has that obligation for coordination. What I have difficulty with is seeing how a written agreement with one of the individuals that constitutes an owner. . . . Does that exclude the others who fit the same definition? Is there an obligation on the part of the directing contractor, for example, to determine all of the possible individuals and companies and other legal entities that may fit the definition of owner and have them sign on to this written agreement, so that it's clear who has that coordinating responsibility?

Hon. D. Lovick: I think it's highly unlikely that you're going to discover too many workplaces where you have a whole bunch of owners. I suspect that this isn't the case. What this ultimately boils down to is that the prime contractor is to coordinate the activities of those at the workplace and must put in place a system to ensure compliance. Clear away everything else, and that's all it is saying. I think that's straightforward.

C. Hansen: I'm not sure that quite addresses it, but I'll move on and take the minister's comments at face value.

I do want to point out that under subsection (2)(b), we do have the term "reasonably practicable" that comes into this. It says that the prime contractor of a multi-employer workplace must "(b) do everything that is reasonably practicable to establish and maintain a system. . . ." I think this harks back to the amendments I was putting forward. Incidentally, as an aside, I did not move the amendment I had for section 117, because I gathered from the minister's comments that we can deal with those when we bring those sections back. Certainly the minister has those amendments I was proposing.

I would like to ask the minister why reasonably practicable would be important in this section, whereas it is not in others. I appreciate that this may be awaiting feedback from legal counsel.

Hon. D. Lovick: No, I don't think that it requires feedback from legal counsel. I think, rather, that it's simply systemic. If you as one contractor are responsible for coordinating and ensuring the compliance of a multiplicity of other people, then I think it's asking too much to say that you must do something, rather than saying "do everything that is reasonably practical to establish and maintain. . . ." I think that's an absolutely fair qualification, if you like, on what is a reasonable obligation for you to carry out. If you have a whole bunch of people doing different things and not necessarily reporting directly to you, then you ought to be given a little bit of slack, I would suggest. That is why we used that language here, and I think it's appropriate.

C. Hansen: In the context of the minister giving consideration to the other amendments that I put forward, I hope he doesn't look at them in the context of cutting slack for these other groups that have responsibility. Certainly my understanding of these words, "reasonably practicable," is that they don't cut any slack. All it does is still allow the full responsibility to be placed on these individuals but allow for those situations which are just totally beyond the capability of that individual to be aware of. It's not a case of cutting slack. I hope that the minister looks at those other amendments in that context.

Interjection.

C. Hansen: Due diligence -- thank you. With that, I would be prepared to stand down section 15, section 118, and we could move on to section 15, section 119.

Hon. D. Lovick: I'm sorry, does the member have an amendment to section 118 as well? If not, it would seem to me that we could simply pass this one. Or is there something there that I'm missing?

C. Hansen: Actually, the reason that I did not have an amendment proposed for this is because the "reasonably practicable" words were incorporated, so certainly I would be prepared for us to deal with section 118 and move on.

Section 15, section 118 approved.

On section 15, section 119.

C. Hansen: Certainly I do have an amendment for section 15, section 119, which I will not move until we come back to review these sections at another time.

This is one that, given the definition of "owners," really has a very high burden of responsibility being placed on individuals who really may not have any reasonable means to

[ Page 8072 ]

Hon. D. Lovick: I can give a very clear example. How about ventilation? How about people who may, for example, be doing something as simple as putting together cleaning solutions or something? I know a couple of small businesses that do that in my area of the world. If you essentially get something that isn't a whole factory system where everything is indeed self-contained and hermetically sealed -- all these vials and vats and jars and barrels and so forth are open, and things are being poured every which way -- it would seem to me that it's an absolutely reasonable request for the business, even if it had only two people working there, to make darn sure that there was adequate ventilation. That's a reasonable request of a workplace, whatever its size might be. If that's what the member is asking in terms of the duties of the owner, I would say yes, if you are going to set up a place of work and you want somebody else to work there with you. . . . If you want to be foolish you can risk your own life, but you ought not to risk the worker's life as well. There is an illustration, it seems to me.

C. Hansen: In the example the minister used there's obviously a very important requirement for someone in a position of responsibility to take responsibility for the proper ventilation at that particular worksite. But here we're talking about owners. The cases that I'm most familiar with are areas where the owner in fact operates the company and is there on a day-to-day basis, washing out the dishes in the lunchroom and carrying out the garbage on Sundays. That's the definition of a president of a small business in 1998. Clearly there are examples of owners of companies who are not on the worksite on a day-to-day basis, and it would be totally impractical for them to be on the worksite on a day-to-day basis. Yet the way this is worded is that the owner has to take on the responsibility of having a very high level of knowledge as to what is transpiring in that workplace. I don't see how an owner can meet these obligations without being there on a daily basis. Could the minister comment on that?

Hon. D. Lovick: Again I would just ask the member to look closely at the language of the bill. I don't think it is onerous at all. It says that the owner of a workplace must "provide and maintain the land and premises that are being used as a workplace in a manner that ensures the health and safety of persons at or near the workplace." That means that you do have, for example, proper ventilation. You don't have big holes in the floor that people can fall into and break their arms or legs or necks. The second section says the owner of a workplace must "give to the employer or prime contractor at the workplace the information" -- note -- "known to the owner that is necessary to identify and eliminate or control hazards to the health or safety of persons at the workplace." In other words, if I own a workplace and I know that there are dangers inherent in that workplace, then I have an obligation to tell my workers about it. I don't think that is onerous; I think that's common sense. I think that's moral -- among other things.

C. Hansen: I certainly don't have any problem with subsection (b). I think it is logical that it should be there. I would feel a lot more comfortable with the requirements that are here under subsection (a) if we were able to adopt the amendment that says that the owner of a workplace must, "as far as is reasonably practicable. . . ." I think that allows for a very high level of obligation on the owner but still provides for those very unusual situations where the owner really has no means of knowing certain information that he may have to ensure has taken place. Again, I think, as with the other sections, that it is the word "ensure" that is in there. . . . It is a very high level of responsibility that's being placed on the shoulders of the owners, in this case, as with the other sections that we've talked about. As the minister knows, I do have an amendment for this section, which we can deal with at a later time.

I noticed in the Builders Lien Act that there is a provision that allows for an owner to file a claim of immunization. I'm wondering if any consideration was given in this case for a similar situation.

Hon. D. Lovick: I'm going to ask the member if he will explain. I'm assuming he means legal immunity, rather than a flu shot or something like that. Is that the case? I don't know that term; I'm sorry. I'm not familiar enough with the detail of the legislation, so maybe the member could give me some more information, and I might be able to answer. We don't know, so tell me more.

C. Hansen: The minister has probably caught me on using a phrase that was given to me by somebody who understands these things. Whenever I say, "Look, I'm not a lawyer," I'm not sure whether I'm making excuses or trying to protect my reputation. But not being a lawyer, I must confess that this was an expression that was given to me by somebody who does have some very good legal training. I gather that it is a process by which the employers can ensure that others are legally bound by their responsibilities and not giving themselves the day-to-day responsibilities that may otherwise be put on their shoulders.

Hon. D. Lovick: Reflecting on that question of legal immunity, and in terms of the Builders Lien Act -- this is part memory and part guesstimating or reasoning my way through it -- I suspect that it has something to do with the fact that somebody rents a building to you and you then use that building for other purposes. If you discover, for example, that unbeknown to you there are toxic substances or asbestos in the building, then perhaps you are able to get some kind of legal immunity from prosecution, simply because it's something you weren't aware of and you had no way of protecting against it. I think that's where that so-called immunization comes from. I'll make a note of it and find out, given that we aren't going to deal with this section today, in any event.

C. Hansen: With that, I would be prepared to stand down section 119 and move on to section 120.

[5:45]

On section 115, section 120.

C. Hansen: Again in this section, I do have an amendment to propose along the same vein as we have been discussing. But in this particular section, these requirements to be

[ Page 8073 ]

Hon. D. Lovick: I don't think we know the precise answer to that. I guess the point I would like to make, though, is that even if that isn't the case, I would think that probably some legal remedy would always be available. For example, if you own the business and the supplier gave you defective goods that effectively caused trouble because every time you opened the jar something blew up and affected somebody, then you'd have recourse that way. So something as flagrant and blatant as that would be dealt with, I'm sure.

What I will do is certainly get you a more specific answer to the question, although I don't know whether that necessarily causes any problem for me in terms of this legislation. We're talking about B.C. workplaces and B.C. workers and sending out a signal, if you like, to their suppliers, too, that they also ought to recognize that there are these obligations. It might make people who get supplies somewhat more mindful of what it is they're bringing into the workplace -- in case they aren't. I would also just point out that this, again, is a recommendation that comes from the royal commission and also that supplier obligations, I am advised, are not unique to British Columbia legislation. Indeed, virtually every other jurisdiction apparently includes similar supplier obligations such as those that are outlined and contained in this act.

C. Hansen: I have looked at legislation of other jurisdictions, and I must confess that I hadn't looked at this particular area of supplier obligations, so maybe the minister could enlighten me on this. My understanding of these supplier obligations, as they are presented in Bill 14, is that the same protection is covered under other law -- that this, in fact, becomes a duplication of it, perhaps not in the specific wording but more in the intent of this section, which is to ensure that we have only safe products. If there is a product that is not safe or is hazardous, then we can put the responsibilities back on the suppliers. But my understanding is that this is already covered under other legislation, separate from Workers Compensation Board legislation.

In terms of other provinces, I would be interested in the minister's knowledge of this, and in whether the other jurisdictions felt it necessary to have this provision covered under the Workers Compensation Board or under other occupational health and safety statutes, or whether or not it is in fact covered under general consumer law. It is my understanding that in British Columbia today we have this kind of protection covered under our existing laws, and that this does in fact become somewhat of a duplication of existing protections.

Hon. D. Lovick: No, I don't think it is a duplication, although the member is quite right that certain of the things that would be captured by this particular provision in terms of unsafe material, or at least potentially dangerous materials, would be covered, for example, under things like WHMIS -- the workplace hazardous materials information system. You'll recall that that again is a WCB regulation that says that for certain kinds of chemicals and other substances, there must be a labelling process that says precisely what's in things and also what to do in the event that some of it spills on you, and so forth. But as far as we know, there is no unnecessary duplication or any kind of redundancy built into this.

C. Hansen: One of the questions that came up in a review of this particular section -- and it comes back to my earlier question about extrajurisdictional suppliers -- is the onus. . . . My understanding is that this legislation cannot extend beyond the borders of British Columbia in terms of its powers, and that we're restricted to enforcing matters on British Columbia soil. So if there is a supplier who is supplying a defective product, we can't reach to Alberta or to Washington State to impose these limitations on those suppliers, because it's beyond the jurisdiction of this Legislature. But the question was raised as to whether or not these restrictions could be imposed upon a carrier of those goods at the point at which they cross into British Columbia. Does this particular section have the ability to reach in that area?

Hon. D. Lovick: It sounds highly unlikely, and certainly we're not aware of it.

C. Hansen: With that, I'm prepared to stand down section 15, section 120.

The Chair: The minister agrees, so by agreement, section 15, section 120 is stood down. Noting the time, we could. . . . The member for Vancouver-Quilchena on section 15, section 121?

C. Hansen: With that, hon. Chair, I move that 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.

E. Walsh: Hon. Speaker, Committee A reports resolution -- and completion -- of the estimates of the Ministry of Energy and Mines and Northern Development and asks leave to sit again.

The Speaker: Thank you, and congratulations.

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

Hon. D. Lovick: With that, I move adjournment of the House.

Motion approved.

The House adjourned at 5:54 p.m.

PROCEEDINGS IN THE DOUGLAS FIR ROOM

The committee met at 2:36 p.m.

[ Page 8074 ]

ESTIMATES: MINISTRY OF ENERGY AND MINES
AND MINISTRY RESPONSIBLE FORNORTHERN DEVELOPMENT
(continued)

The Chair: Before I recognize the next member, I would just like to remind members that these debates today will be on B.C. Ferries.

D. Symons: Hon. Chair, I appreciate being here talking about B.C. Ferries in this vote. I'd just like to make a few opening remarks and then move right into the questions very quickly. I think B.C. Ferries is a very important issue that we must be debating. I would describe it as a corporation in crisis. We have right now. . . . Since 1992 the passenger fares have gone up by somewhere in the neighbourhood of 80 percent and vehicle fares by 60 percent. At the same time we've seen an increase in debt from $14 million in '92, I believe it was, to $700 million today. There has been somewhere in the neighbourhood of a 5,000 percent increase. The corporation, in effect, is in what I would refer to as a bankrupt situation, in that its debts are greater than its assets at the current time. I don't know if there is a debt management plan in place. We'll find out as we move along today, I guess.

I am aware of the fact that the subsidy has been reduced considerably over the last few years. I guess I am pleased to see that the government has realized the financial situation of the Ferry Corporation and for this particular fiscal year has reinstated a more substantial subsidy to keep B.C. Ferries going. I gather from information I get from people in the field and also from comments in the newspaper that management-employee relations are not the best and that there are some problems regarding safety and job description issues. I'll try and get into some of these later on.

On the cost of the capital program, the member for Vancouver-Kingsway said in 1995 that a growth of 2 percent above inflation will pay for this program. He said: "That's all in the ten-year capital plan; it's all budgeted for." For some time now I've been asking for a copy of that ten-year plan. I got a brief summary of it today, which I think is totally inadequate, for the purpose of saying: "This is a management plan, a financial plan for the next ten years." We'll be discussing that, though, later on.

I'm wondering if we can find out. . . . The CEO of B.C. Ferries said on October 16, 1997, that he wanted to see how cost-saving efforts worked before increasing the fares of B.C. Ferries. That was a comment. . . . Passengers will have to pay some form of increase in the fare over the next number of years, but he said that the magnitude and timing of that is still to be decided after seeing how cost-saving efforts worked before considering increases. I'm wondering if we might find out, then, what some of those cost-saving initiatives were that B.C. Ferries were looking at and what the results of implementing them were.

Hon. D. Miller: Before I answer the member's question, I just want to talk very briefly about B.C. Ferries and some aspects of the corporation. Having listened to some of the media coverage over the weekend and this morning -- actually, going back over the last couple of years -- it strikes me that there are a lot of people that have got it wrong about B.C. Ferries. For some reason, they are not prepared to look at the strengths of the corporation and to look at what it's doing in a very positive way -- to look at some of the new initiatives as a source of B.C. pride. I, quite frankly, can't put my finger on that. I understand journalists; I understand that to a large degree one has to sometimes tolerate the excesses of the media. Quite frankly, some of the things I listen to are so self-serving that it causes me to wonder about the quality of journalism in our province. No doubt that issue has been noted -- in fact, I know it has been noted, Madam Chair -- right around this continent. There have been books, academic tomes, written about the lack of quality in journalism today. In my humble way, I don't expect that I'll have any ability to have any impact on that, but I can assure you that self-serving is a rather mild term when it comes to some of the claptrap that I've heard from the media relative to B.C. Ferries. Maybe everybody likes to have somebody they can whip. I don't know.

Let me try to deal with and put in context what we have here in British Columbia. Perhaps I can inspire you, Madam Chair, if no one else, about this corporation. Indeed, we do have some fiscal issues, and we're prepared to talk about those. We have a 41-ship corporation that is probably the third-largest passenger mover in the world. We're acknowledged. . . . In fact, we have received an award from an international group that we belong to for our ability to move passengers in a timely and safe way. That's no small feat. One would think that perhaps when a Crown corporation in British Columbia receives those kinds of awards, some of the critics might fade just a bit; but no, they don't. That's not good enough for them. But let me put that on the record: we have received those awards in terms of the efficiency of moving people and turning those ships around in a very safe and efficient manner.

Secondly, we have an aging fleet. I don't have to go through the history of the origins of B.C. Ferries: the fact that it was a private sector corporation that was nationalized by the government of the day and has since developed into this very large fleet. Those vessels are old; they need renewing. We can do that in variety of ways, and we do do that in a variety of ways. Last year we launched the Skeena Queen, a commuter ferry built by Allied Shipbuilders in North Vancouver. That vessel, which is in the $20 million range, was an outstanding engineering achievement, a tribute to the shipyard and the workers. It's been written up in the technical journals for its capabilities: the fact that it's highly manoeuvrable, doesn't throw a wake, and a variety of other things. That's just one small example where we've shown that British Columbia shipyards and British Columbia workers can build vessels that come to the notice of technical journals when it comes to these kinds of vessels.

But in renewing our fleet -- and let's make no mistake about it: the fleet needs to be renewed -- there were some fundamental decisions that had to be made with respect to types of vessels. And so the government and the corporation looked at a number of important policy questions. We could have just gone on blithely, I suppose, building steel-hulled vessels. We could have done that, but the cost of those vessels was considerably higher than the option we chose. We could have ignored issues around transportation policy -- in other words, the pace or the pulse at which traffic hits Vancouver Island and that whole question of the movement of traffic in the best possible way. We could have ignored that, but we didn't. We could have ignored, as a policy question, the state of the shipyards in this province and said: "We don't care. It's a declining industry and we don't care -- too bad. It's not our responsibility." We could have ignored that, but we didn't. We looked at all of those questions and made a decision to go with the high-speed catamaran ferry.

[ Page 8075 ]

[2:45]

In terms of our shipyards, look at the history of shipbuilding in this province. We once had a proud history. When I was a kid in North Vancouver, Burrard Yarrows. . . .

Madam Chair, is my time up?

The Chair: I recognize the member for Richmond Centre on a point of order.

D. Symons: Point of order. I think I was asking a question about some of the cost-saving initiatives that B.C. Ferries were looking at, as referred to by the CEO, and I have not yet heard the answer. He seems to be wandering all over the field but not answering the question.

The Chair: The Chair cannot compel an answer.

Hon. D. Miller: If we had left things the way they were on Thursday, you wouldn't have been able to ask the question. Anyway, I will get to the answer; I said that at the outset.

We looked at our shipyards. As I said, when I was a young boy in North Vancouver, that shipyard was teeming. I'd go down there as a young kid, take the old North Van ferry across. There were hundreds of workers, but it declined and declined. There was even a dramatic letdown by the federal government in terms of the icebreaker contract we were supposed to get and didn't. We looked at how we could tailor the desire to renew the fleet with a revitalization of our shipyards at the same time -- another reason to go with the high-speed catamaran ferries. You look at these fundamental policy questions and then look at what we're doing.

Then, we have our shipyards in North Vancouver and three shipyards here on Vancouver Island employing British Columbians now, today -- good family-supporting jobs. We're making some of the component pieces on Vancouver Island. Looking at two yards in North Vancouver, I can tell you -- I have some statistics somewhere; I don't have them in front of me, so I can't cite them -- that the efficiency gains of those workers are truly remarkable. Look at the opportunities now with BCIT. I think the Premier was at a ceremony there on Thursday or Friday last. Graduates from BCIT are now going right out of school into jobs at B.C. Ferries. At Avcorp there's another deal we did with a very good aerospace manufacturer. Avcorp successfully bid on a contract to do some of the internal work on the fast ferry as well.

We're competing with the world in new technology. We're doing what we've never done before: building this huge, high-speed catamaran ferry -- the first of three. We have never done that before. B.C. workers and B.C. shipyards and engineers -- all of those people you would normally associate with shipbuilding -- are contributing in a significant and positive way. There are jobs and a new challenge, and all we get are the critics. All we get are the doubters, saying: "Oh, you can't do that; you shouldn't have tried this."

I am filled with pride at what British Columbians are achieving. I'll tell you, when we launch that first vessel, hopefully in June. . . .

Interjections.

Hon. D. Miller: We've missed a few, but the members opposite have clearly never been involved with a large engineering project. They appear not to have been. I have been involved with lots of them as a worker. Do you want to go through the list in the private sector? Do you want to go check those projects and see where they come in terms of budget, being on time and those kind of questions?

Whenever you try something new, there are challenges; there are hurdles. What's wrong with that?

Interjection.

Hon. D. Miller: The hon. member opposite said she'll be 40 by the time the vessel is launched. I can tell you, I don't want to speculate on her birth date.

The Chair: Order, members.

Hon. D. Miller: The benefits in North Vancouver. . . . Who is the MLA for North Vancouver? Are they here? Look at the hundreds of jobs in that community. Anyway, I just wanted to put that on the record, because I can tell you that I was a bit unhappy last Thursday. When I left here I realized that I had not had an opportunity to talk about B.C. Ferries, and I'm delighted that the opposition has asked for reconsideration and that we're back here today.

Now, I think the member asked some questions about efficiencies. We're looking at reducing overtime by more on-time performance, fuel management programs, competitive bidding for supplies and contracts, and close control on discretionary sailings.

D. Symons: Most of those things are, I hope, things that the Ferry Corporation has been looking at traditionally, but we hope that you might find more efficiencies that way.

I noted that the CEO, back at that date and time I said -- which was October 17 -- commented in the press that they expected some form of increase in the fare rate over the next number of years but that the magnitude and timing of that was still to be decided. Now, that was said on October 16 and reported on October 17. Considering that the statement was made then, just one month before the fares were raised on November 17 of the same year, was there a real effort to look at alternatives to raising fares, or was it already planned all along?

[ Page 8076 ]

There's no doubt that broadly. . . . To some degree the problem with B.C. Ferries is that. . . . If you look at B.C. Ferries in relation to other international marine systems of a similar kind -- similar distances, those kinds of factors -- our fare structure is lower on balance; it is relatively a bargain, if you look at it on that basis. But the fleet does have to be renewed. We have to renew the fleet. That can be government debt, or it could be B.C. Ferries debt. Again, we're revisiting the question of what the corporation can reasonably expect to handle with respect to debt. There's nothing wrong with the debt itself. I know there's always a sort of slight innuendo. People talk about debt as though it's always bad, but if it's an investment in new technology and new ferries, then I presume it's got some value -- at least that's the private sector dictum. Who knows? Or, at least, who knows with respect to the critics?

There are some fiscal challenges; there's no question. The $45 million loss on the minor routes is something that has developed historically. It's easy, I guess, to argue that they should simply be subsidized, but if there are efficiencies to be gained. . . . If there are vessels, for example, that are virtually running empty at a considerable cost and you can look at ways you can find more efficiencies and reduce the burden on the taxpayer, then I presume that's something you ought to do. And we are doing that through the renewed stakeholder process recommended by Mr. Fryer, which we've accepted.

So I think there's a lot of work yet to do, particularly on the minor routes. I don't think for a moment that it's necessarily easy; it's tough. People get used to a certain status quo. They don't like change; they would rather that things always stay as they are. But in this changing world, that's not always possible.

D. Symons: I would assume from the minister's answers, since I didn't hear an answer to that aspect of my question, that the answer is yes -- that in October, when they were talking about looking at alternatives to raising the fares, they had indeed already planned to raise them in November.

I wonder if we can look at the cash flow from operating activities. They've been pretty well negative since 1996. The shareholders' equity -- or deficiency, in this case -- was $33 million last year. Can the minister give me the figures for the cash flow of the operating activities for '97-98 and for the shareholders' equity for those years?

Hon. D. Miller: These are unaudited statements, and this is on a base of $397 million. The net operating loss has been reduced from $29 million in '96-97 to $13.8 million in '97-98. Expenses over revenues have been reduced from $76.5 million in '96-97 to $59 million in '97-98.

D. Symons: And the shareholders' equity?

Hon. D. Miller: The deficit has increased from $32.9 million in '96-97 to $92 million in '97-98.

D. Symons: Until '96-97, B.C. Ferries had a net operating. . . . In '96 it was a small loss; otherwise, I think, it would have been operating income. . . . However, 1997 saw a huge increase in that loss -- from $3 million in '96 to $28.5 million in '97. From '93 through '97, the amortization costs have more than doubled -- from $17 million to $38 million. A considerable portion of that increase can be attributed to the debt of the new superferries, the new S-class ferries. However, the $38 million figure does not include the debt-servicing charges for the fast cats that are now being built, so those figures can only get worse, I would say.

What was the net operating loss for the '97-98 year? And, while we're at it, what are the projected losses for '98-99 and '99-2000?

Interjection.

D. Symons: I want the net operating loss for the fiscal year that's just finished and the projected loss for this current fiscal year and the following one. You've probably projected those, I would suspect.

[3:00]

D. Symons: And the amortization costs for the last fiscal year -- '97-98? And the projected figures for '98-99 and '99-2000 -- this fiscal year and the following one?

Hon. D. Miller: The amortization for '97-98 was $43.8 million. We may have these other numbers here; we will just take a look and try to find them.

D. Symons: Back during what I'll refer to as the outrage expressed by ferry users over the November 17 fare increase, the minister was reported as promising a long-term policy for managing the Ferry Corporation. It would be included in the next -- that's this year's -- provincial budget. He was quoted as saying the ferry fleet "is a necessary part of our transportation infrastructure and cannot be totally self-supporting." I gather that you backed that up by increasing the amount of subsidy this year. But do you now have that long-term policy that was going to be included in this year's budget? Other than just the fact that we have put in an amount of money this year, there must be a policy behind it now.

Hon. D. Miller: It's not complete.

D. Symons: My next question goes down the tube, then. It was: can you give us an outline of the policy?

The member for North Island wrote a letter to the Courier-Islander, published on December 2, 1997, which said in part: "The government is working on developing a long-term financial support policy that recognizes the ferries as an integral part of our transportation system, like our highways." This appears to be a complete reversal of the policy of only a few months earlier of having routes being self-supporting. Is the member for North Island correct? When will this long-term financial support policy be released? It's not done, but do you have a time line for it?

Hon. D. Miller: There are a couple of parts to it. Let's try to reduce this to its simplest essence: we have a large corpora-

[ Page 8077 ]

There are three primary components in terms of addressing that fiscal framework. The first is the subsidy, and I would say that the government has acted dramatically by increasing that subsidy from a low of $4.7 million, I think it was, to its current $24 million. So there's been a dramatic increase on the subsidy side.

We are clearly looking at the debt side, and I've said this publicly on many occasions. We're looking at ways in which it may be possible to move capital off-book: sale, leaseback and those kinds of things. That is actively under consideration, but I've nothing to report in that regard. If I had, I would.

Thirdly, we have to look at the routes -- the minor routes particularly -- which receive a massive subsidy relative to any other mode of transportation generally. Now, there have been some comparisons with Transit, and I don't know that they're necessarily apropos, but people are free to make them, if they like. We're going to deal with that through consultations in the stakeholders process, which now has a second tier, a kind of high-level tier. I think some information will be coming to that second tier fairly quickly.

D. Symons: When the policy is formed, I would appreciate a copy of it. You spoke of one being prepared for this session. We'll look forward to it.

The B.C. Ferry Corporation split recently into two divisions. I'm wondering what can now be done under the new corporate structure that couldn't have been done under the old one. What efficiencies are going to be achieved by this? I guess I'm asking, in a sense, if having two divisions will result in management increases. Basically, can two live as cheaply as one?

Hon. D. Miller: The answer to the last question is no. Secondly, there will be more of a focus on those business units by the managers.

D. Symons: Since you answered no to the last question -- can two live as cheaply as one? -- I gather it's going to be a little more expensive to operate it. We'll find out, anyway. We'll have to find out how that works in the coming years, I suppose.

I believe that management has expanded by over 40 percent over the last five years, from 123 to 200 management positions. In 1996-97 administrative costs were $56 million, up $16 million from the year before. Could the minister agree that it appears that administration costs are getting too high?

Hon. D. Miller: I don't know where the member gets his numbers, but I think they're wrong.

D. Symons: I'm pulling them out of your annual reports; that's where I'm getting them. The 1997 B.C. Ferry Corporation communications plan, under the fiscal framework, has as one of its messages: "More effective subsidization to share the burden of increased costs fairly throughout the entire BCFC system." That's in your communications plan for '97. I'm wondering; will the creation of separate major and minor divisions affect that objective of cross-subsidization?

Hon. D. Miller: Could the member just repeat that last part of the question?

D. Symons: You've divided the corporation up into two parts. But the communications plan said that you want more effective subsidization to share the burden fairly throughout the fleet -- that's the cross-subsidization. Will dividing it up into major and minor ones facilitate or impede that cross-subsidization?

Hon. D. Miller: Well, there's a lot to go into with respect to the issue of cross-subsidization. I mean, it lies at the heart of some of the problems the corporation has. Is it better to be more explicit, in other words, by having two separate units, so you can clearly see where the massive subsidy on the minor routes is? I suggest it probably is. At least it allows people to focus on the question.

I do believe, actually, that stakeholders. . . . And I've talked with some, actually, in some hostile meetings -- but some fairly decent conversation notwithstanding that. People are not in and of themselves irresponsible. But they also, as I said earlier, don't want the world to change. They like the way things are.

I'll use the example that drew probably the most heat last year and just make some interesting observations. The Bowen Island ferry -- I can't recall the vehicle fare but I think I can recall the passenger fare, which is about $4.50. That, the passenger-only fare on the Bowen Island ferry, is cheaper than a two-zone bus fare. I believe it's slightly under the fare of SeaBus, which goes across Vancouver Harbour. In other words, if you looked at just the passenger-only fare relative to, let's say, two areas that you might think are reasonable in terms of comparison, it's cheaper than a two-zone bus fare and the SeaBus. Now. . . .

Interjection.

The Chair: Order, members.

Hon. D. Miller: Thank you, Madam Chair, for saving me from the savage heckling.

Yet the passion of Bowen Islanders was startling. It's clear that a lot of people like to get that vehicle off the island at the peak rush hours of morning and evening. I guess one ought to ask themselves: fair enough, but are there better ways of doing that? Now, we haven't gone with this. I'm not in charge of Transit. But would you be better off saying: "Try to link it into the transit system and encourage people to leave their cars at home"? Now, that's a challenge in and of itself, because people don't like to leave their cars at home.

But these are some of the issues. They're serious issues; they're not just, you know. . . . And they'd be a challenge for anybody. I find it a bit of a challenge. I think it's a significant challenge for anybody, because, as I say, everybody likes things the way they are. I think one of the opposition critics -- the member for West Vancouver-Garibaldi, I believe -- went to Bowen Island to kind of, no doubt, speak on behalf of the government on these questions. In reporting back to my officials, he made a startling observation. He and his vehicle -- this was at mid-day, obviously -- were the only ones on the ferry. You can well see why there are considerable losses incurred.

[ Page 8078 ]

Those are the kinds of questions people talk to me about. They say, with respect to Saltspring: "Should there be three ways to get to Saltspring Island?" I guess that's a pretty good question. I don't have the answer. But if you cut it down to one way or two ways and there's a saving to be had by doing that, ought you to pursue that? I guess the answer is yes if the money's coming from the taxpayer, unless you believe that we shouldn't look for efficiency when it comes to spending tax dollars. So these are very difficult questions to deal with. This problem, quite frankly, has built up historically over three or four decades. I don't know why I always want to tackle these questions, but I've decided to try.

D. Symons: I've just a few things to say on the minister's comments, and then I have another question that relates to the reason the people weren't on the ferry: they were boycotting it at the time, I believe, because of the fare increases.

Second, if the minister does take a multi-zone bus trip in greater Vancouver, he'll find out it's $3 for three zones, so the fare comparison isn't quite correct with that one.

The statement in the public communications plan for 1997, which I referred to, referred to the idea of cross-subsidization of the ferries using the major routes that produce revenues to help offset the costs of operating the minor routes. But that seems to be in direct contradiction to the statement in the annual report, which was made elsewhere by this corporation, that says you want to direct revenues on each of our routes to cover those direct operating costs. Basically, I'm wondering which policy B.C. Ferries is pursuing now: the concept of cross-fertilization, shall I call it, or the concept of having each route be self-sufficient in operating costs. Which policy are you now following?

Hon. D. Miller: Somewhere in between. By the way, there was no boycott on the use of the ferry at all; there may have been some demonstrations, but there was no boycott of the use.

I just want to put it on the record that the return fare, passenger only, round trip on the Bowen Island ferry is $3.50; the return fare on the SeaBus is $4.50. So it's cheaper to take the ferry back and forth to Bowen Island than it is to take the SeaBus across the harbour.

Where do you draw your comparisons? That's the point. Everybody likes to use comparisons that suit their own purposes. People talk about the subsidization rate of Transit and say that B.C. Ferries should be. . . . There is no formula. There is no rigid norm, if you like. If you accept that, you'd be prepared to accept inefficiencies because it fits the pattern, and that would be folly. At the end of the day, as they say, there will be some level of subsidization -- no question in my mind. Should we attempt to reduce that to its minimum in a rational way through consultation with the stakeholders? Yes, we should. Where that process ends up is an open question, but it seems to me that it's an issue that has to be pursued. You should not just sit there and say that you're not prepared to tackle this problem because it's tough and occasionally you're unpopular. So we're doing it.

[3:15]

Hon. D. Miller: I understand that copies are available. I'll ensure that one is delivered to the member.

D. Symons: I've a bit of a general question here, I guess. I'm afraid to ask it in a sense, because he might go on at length with it. But I'll chance it anyway and hope for a short, concise answer, although the question is rather broad. Can the minister outline the corporation's fiscal and service objectives for the short term and maybe give just an overview of the long term? He can see it's a very broad question.

Hon. D. Miller: I'm going to resist temptation and say that in fact that's exactly what we've been discussing over the last series of questions.

D. Symons: I'm wondering, then, what evaluation system or benchmarks have been set up by the corporation to measure progress toward these objectives? Is there any accountability in meeting those benchmarks?

Hon. D. Miller: I didn't go to the same school as the member. I'm not sure I understand the question.

D. Symons: The question basically is: do you have certain objectives that the corporation is going to try and achieve? Do you set time lines with certain dates as to when it should reach its objectives? In another year you'll be this much further along the line toward your objectives, so you have these timelines, often referred to as benchmarks, to measure your progress toward your ultimate goals. Does B.C. Ferries have these, and are you on track? If someone isn't on track, is there some form of accountability for why they haven't reached their benchmarks? And is it political accountability or corporation accountability?

Hon. D. Miller: There are lots. I won't attempt to describe them with any level of detail. That is a more technical exercise -- the kind of benchmarks that are used by any corporation to measure improvements and efficiencies. You do set goals. I think we talked last year about one of them, and that's on the catering side. I'll just cite that while there was a certain flattening from '96 to '97, from '95 to '96 there was a fairly hefty -- almost $9 million -- increase on the catering side. As a goal, the corporation is saying: "Look, we think we can realize additional revenue from non-core-business areas." I think that on balance there's been some positive numbers in terms of those kinds of efficiency objectives.

[ Page 8079 ]

One of the concerns expressed during the protests of the fare increases last November is still being expressed by advisory groups and others. It's for an independent value-for-money audit of the whole operation of the corporation. I'm wondering if the minister might be able to tell us. . . . In fact, I believe that the user groups feel that Mr. Fryer's recommendations are too narrow and that an audit should include capital programs and tariffs and the cross-subsidization policy of the corporation. The minister said in a news release back then that he accepted Mr. Fryer's recommendations. Does that acceptance include the recommendation for an independent value-for-money audit and the capital programs along with it?

Hon. D. Miller: Yeah, I think there was a recommendation for a value-for-money audit. I've never quite understood these accountants. You know, sometimes I think we've got to be careful. We become captive to new phrases -- right? What seems fashionable and right today could be discovered, even a few short years from now, to be not very worthwhile at all. But notwithstanding that. . . . I'm a layperson. Far be it for me to stand as a critic of the honourable profession of accounting or of value-for-money auditing. Notwithstanding any of my personal views on the subject, there was a recommendation from Mr. Fryer, and I've asked the corporation to comply.

D. Symons: I guess I was asking whether the capital program and the tariffs, as requested by the user groups, would be included in that audit.

Hon. D. Miller: No. There are issues that are clearly political in nature, as they ought to be. The decisions, for example, on the capital side to proceed with fast ferries is not something that is going to be subject to someone saying: "Sorry, we don't like it. Stop." We have made a decision. We are going to, as they say, stay the course despite the critics, and there are many. But I think that at the end of the day British Columbians will be proud as they watch that vessel in action.

D. Symons: Mr. Fryer's report emphasized the importance of the stakeholders group and of consultation, and I note that the minister agreed with him on that. But I also note that when the CEO of B.C. Ferries announced the new tariff increases on March 19, 1997, he said: "In our view, consultation is key to shaping future pricing decisions." Considering that when raising the fares in March '97 the CEO was making the comment about it being key to consult, what happened in November '97, less than 12 months later, when the Ferry Corporation raised the fares, basically without consultation? Then right after that, they said that one of the messages they're trying to give is: "We're listening to our customers, and we are sensitive to their needs." Again, that's in the communications plan. I'm just wondering, after all of that -- in November increasing the fares again, bypassing the consultative process -- what steps beyond mere words is B.C. Ferry Corporation taking to establish credibility and competence in the consultation process by the various users and advisory groups? It seems on two occasions you have said how important this is and then bypassed it.

Hon. D. Miller: Well, I would say that the statements of the then CEO were right. Clearly the events of November were a message; we accepted that. I certainly did -- and took responsibility as the minister, actually. As a result of a lot of those things and the appointment of Mr. Fryer, I think we're back on track.

But again, there's no magic to this kind of stuff. You're dealing with tough issues, and whenever you have to deal with tough issues, you're going to have people. . . . You always have to make a decision, and there's nothing wrong with that. But guaranteed, I don't think I've ever made a decision in my life -- as a member of government, either individually or jointly -- where there weren't some people who didn't like it. That is the nature of decision-making. You try to get it right. I don't think we got it right last November, and so we're taking another run at it. And we've done some things in the meantime -- the increase in the subsidy -- and we're working on some other things that will hopefully help. But at the end of the day, we're going to be back at it; you know we will be. And you know that at some point in time there will be future tariff increases on B.C. Ferries; there will, regardless of who the government of the day is. Generally when that happens, people won't like it. I guess that's as sure as death and taxes, and I'm looking forward to suggestions as to how it doesn't have to be that way. I mean, the price of coffee keeps going up, and I'm sure a few other things too.

D. Symons: I don't think that was exactly the issue. As I understand the situation of the November fare increase last year, it was only a week or so past the point where the fares were increased that the user groups who'd been working quite cooperatively with the Ferry Corporation up to that point were expected to bring in their report that was going to discuss fares, increases, service and all of those other things. They'd been working toward bringing a report in on their views. And I could quite agree with the minister: after they have received the report, they could look at their recommendations and evaluate them and decide to follow them or choose what they wanted out of it and then do what they want. But to bring in your fare increases just prior to receiving the report would, I think, really make them rather jaded on whether the corporation can be trusted in the process of advisory committees any more.

Moving on to another topic, in 1997 there were 20 more full-time-equivalents in the B.C. Ferry Corporation than in 1996, whereas the salaries, wages and benefits increased by $12.1 million over the same period of time. I'm just wondering, since the ferry workers union did not receive a wage increase for that particular year -- they were on a zero-increase for that particular year in their contract -- where the $12.1 million went.

Hon. D. Miller: It's in this B.C. Ferries annual report.

Interjection.

Hon. D. Miller: Yes, and underneath that it says, "Operating Expenses: salary costs increased by 11.9. . . ." That's page 28. Just under that, there's a bunch of reasons: a one-time Workers Compensation Board offset at $3.2 million, which was not available in '96-97; actuarial adjustments of about $2.1 million; a wage increase of $1.9 million, or 0.9 percent; job evaluation costs of $2 million; and fuel costs of $4.5 million.

D. Symons: I must learn to read the bottom of the page.

It's interesting, because back in December I wrote to the CEO asking for information on that. It's too bad I didn't get it. I wouldn't have wasted your time asking the question if I had had a response to that.

When setting tariffs for routes. . . . I'm wondering if the minister can explain the factors that are used in setting tariffs.

[ Page 8080 ]

Hon. D. Miller: I've made that observation publicly myself on a number of occasions. In some cases there is no rational relationship between various routes; it's historical. I've said that these routes have been dealt with in a political way for two or three decades -- longer really -- and it's exactly true. That's why you've got those anomalies. These are the very kinds of issues that we are trying to address in the stakeholder committee with respect to the whole tariff structure. Why is it that. . . ? I can't remember the specific routes off the top of my head, but I looked at about four of them that are exactly the same with respect to mileage, the distance, and yet every one of them has a different fare structure, one way or the other. It's nuts.

But these are the problems that you've got to deal with, because people are fiercely resistant to change. Every time they get up and express their anger, the opposition is right there with them saying they're right.

Interjection.

Hon. D. Miller: Well, perhaps the lone voice of sanity from Powell River-Sunshine Coast will enlighten us -- hopefully, fairly soon.

It's a temptation I actually understand, because I was in opposition, and I recall siding with everybody who didn't like the government, for whatever reason.

An Hon. Member: And now you're in government.

Hon. D. Miller: And now I'm in government. I'm not complaining about it; believe me, I'm not complaining. In fact, I love being in government. I'm simply trying to point out a fact, what I think is a reasonable assumption to make. Their job, the opposition's job, is to side with people who are unhappy about the government and to tell those people: "We're on your side." And when they get to power, all of a sudden they have to deal with the reality of it, and sometimes it's not easy.

[3:30]

D. Symons: I'm very pleased to hear that the minister is admitting that he's having trouble dealing with reality.

I gather that the B.C. Ferry Corporation is moving toward a reservation system for the major routes and doing that in a major way by allowing a sizeable portion of vehicle spaces to be reserved. I gather that it is only a small portion right now, but I'm wondering if you might tell me what the plans are for the short or long term in regard to the reservation system on the routes.

Hon. D. Miller: There will be a proposal going to the board fairly soon. It will be a pilot for next year. I think 25 spaces per major vessel. . . .

A Voice: That's this year.

Hon. D. Miller: Oh, this year. I think it received a favourable write-up, if I'm not mistaken, by Daphne Bramham in the Sun.

D. Symons: I understand that there are plans afoot to expand that considerably. Could the minister maybe comment?

Hon. D. Miller: Yes, certainly subject to evaluation. The corporation is a modern transportation carrier of the public, and obviously it has to look at all of these kinds of things in terms of providing that service to the public: what's efficient, what attracts people, the whole issue of family travel, those kinds of things. Even though they are a Crown corporation -- they're subsidized -- they ought to act in every way, as much as possible, like a private sector carrier in terms of initiative, marketing and those kinds of questions.

D. Symons: I note that there is a reservation fee of $15. I'm quite sure that it doesn't cost that much for somebody to pick up a phone, write down a reservation and cover the expense of operating the system. Basically, $15 for a vehicle which would normally cost $30 on the major routes without the reservation is about a 45 percent increase. This seems to be just another cash grab on the part of the corporation. If you put on a fair number of vehicles, the likelihood of getting on without a reservation decreases. The more spaces that are reserved for reservation and assured loading mean there are less spaces for the average person going on there. To guarantee them a space, they'll have to pay a $15, or 48 percent, increase in their fare.

Hon. D. Miller: The reservation system would be cheaper than the assured loading. Touching on something the member said, everyone can accept the fact that it rolls off the tongue quite easily to say: "We'll put a reservation system in." We're used to that in terms of airlines and buses; it's not quite that simple for automobiles. It's perhaps simpler with respect to the major routes, but if you look at some of the complications on the minor routes in terms of back-end loading and those kinds of things. . . . If somebody doesn't show up with a car, it's far more complicated. Notwithstanding that, we're trying it, and if we can achieve some success there, then we'll certainly look at the potential for expansion.

D. Symons: In just a moment I do want to move on to the fast ferries, but I found a rather interesting thing in a book I got from B.C. Ferries. It was "Situation Assessment 1994: British Columbia Ferry Corporation." On page 54, called "The Financial Costs of MMP," I found two statements that I would like to read into the record:

"Costs are the first necessary step in the conduct of any business. They are not intrinsically bad. Unplanned costs are intrinsically bad, because they are uncontrolled. The only way that costs can be controlled is when they are anticipated, identi

[ Page 8081 ]

fied and managed by choice. When we choose our cost, we are in control. When they occur accidentally, the costs are in control."

Hon. D. Miller: I assume the member's car has never broken down.

D. Symons: If the member saw my car, he would understand that I don't drive new cars, and I get good use out of them. That's away from the ferries, but they do, at times, give me trouble.

Interjection.

D. Symons: No, I do my own repairs, from brake jobs to engine overhauls, so the expenses are not that much.

I did make some requests of the CEO of B.C. Ferries back on December 15. One thing that I asked for was a request for the CFI progress reports. I believe they come out pretty well monthly, and I wanted the ones from August '96 -- once the fast ferry program had begun -- up to the present. I have not yet received them. I only had one, from September, that I had asked for much earlier. Having seen that one, I decided that maybe looking at the others might be enlightening. I ask again, publicly, that if I could have those progress reports from pretty well August of '96 to the most recent one, it would be greatly appreciated. It gives a good idea of what's happening with that program.

Another request I made was basically a letter to Mr. Ward on January 26, in which I asked for. . . . Prior to last summer's announcement to build the fast ferry catamarans 2 and 3, contracts had been signed with various shipyards. I wondered then how the contracts were with these shipyards, and I got a bit of an answer. But it still left me somewhat concerned, because basically in the answer it said the contracts for the fabrication of the first ferry are on a time-and-material basis, using agreed production targets for each module and a costing formula that penalizes poor performance and provides incentives for good performance.

I'm wondering, then, if the contracts are done in that way, considering that the fast ferry number one is 12 months behind schedule. Initially I was told by them it was going to be ten to 12 months to construct the first ferry. It's now into, I think, the twenty-seventh month. Have any penalties been assessed onto any of the people for not meeting the deadlines? Has anybody had incentives for good performance given to them?

Hon. D. Miller: Yeah, I don't have a list, but there may have been some minor penalties. Nothing. . . . Again, I won't expand on the answer. The targets were set using the information from Australia, obviously with the ability of both the yards to exceed those targets and achieve savings, some of those savings going to B.C. Ferries as well.

D. Symons: I'm curious how you could say that they've met targets when indeed the first ferry is somewhere in the neighbourhood of 14 months behind schedule. According to the schedule I was told, it was going to take ten to 12 months to build the first one, at a cost of $70 million. We find that those things have changed somewhat.

I'm wondering, then, in the light of that, whether you can tell me exactly the payment system for paying for these. I gather, then, that with Vancouver Shipyards, for instance, you do not have a fixed dollar figure that they're building their modules to -- for the fast ferry program. You haven't contracted with Vancouver Shipyards for them that they will get X number of dollars for producing these modules and have them delivered on a certain date to the assembly shed. That's what often is done. When you bought the rail cars for the SkyTrain and for the commuter rail, you set a fixed figure for those particular vehicles to be produced. For this one, you seem to have just contracted for them to do the building, and you're paying the costs of the labour and whatever else goes along with that to produce these modules. If it takes longer, it just takes more money.

Hon. D. Miller: The construction was late in starting. There's no question that the project itself in total is behind the time that we anticipated having it completed, at least per vessel. I don't think that is actually a reflection of the people in the shipyards -- the engineering or labour working on the project. In fact, some of the efficiency gains over this relatively short period of time have been truly remarkable, and that's been attested to by external observers from outside the country as well.

But yeah, they're fixed labour rates. But they are targets built into the system, so there's not really any opportunity for abuse. It's not like a cost-plus -- just keep working and send us the bill.

D. Symons: You know, when I looked at the first story, for instance, it was announced on April 1, 1996, that the construction had begun. Or -- an interesting date, being April Fool's Day -- that's the day that supposedly the Premier announced that the ferry was being built.

Interjection.

D. Symons: You didn't notice that? Anyway, that's the date they were saying. We've gone considerably past the ten to 12 months, which I was given the year before, that it was going to take to build one of these ferries. I was also told at that time that, again by people that are knowledgable in the field. . . . They explained to me that for building one of these ferries, about 60 percent of the cost of the ferry is the labour that goes into it. So if we take 60 percent of what they were saying was the cost of the ferry, $70 million, that's $42 million in labour. Now, I can't imagine that if you were going to budget $42 million for that ten- to 12-month period to build a ferry, and it's taken 27 months -- and you're not quite finished yet -- that you've managed to get by on the $42 million. If it takes twice as long, and I assume you're paying these people regular wages all the way along, you are possibly going to double that labour bill during that time.

I gather that until very recently there haven't been any layoffs of people working on the fast ferry program. So if you take in the figures I was given in answer to my letter -- the amounts paid to Vancouver Shipyards and Hope and all those that were given to me in the letter -- I have it adding up to $24.8 million that has been used. The engines and the aluminum for the other two ferries makes a total of $47 million. Sorry, that's for the engines for that one. If you add in the engines and the aluminum for the other two ferries, which is another $46 million, we get somewhere close to $90 million. Add in $10.4 million for the building, and I get $100 million. Yet a year ago last May I was told that the corporation had spent or had commitments for $152 million. I'm just curious.

[ Page 8082 ]

Hon. D. Miller: I think the letter sent to you on May 21 is fairly clear. Quoting from the letter:

"The figure of $152 million that was previously provided to you was the total of commitments that had been made on the fast ferry program. It was not only for the first ferry, but it included commitments applicable to all three -- for example for the fast ferry assembly building, aluminum, engines and waterjets. "However, I can advise you that in respect to all three ferries, the contracted commitments to December 31, 1997, totals $130.4 million. This amount includes $104.7 million for costs of construction, which in turn includes materials and equipment. "While the first vessel in terms of cost allocations is perhaps in the $85 million, the forecast on the second is for the mid $70 million range, and the third is in the low $70 million range."

[3:45]

What the final accounting will show with respect to the cost of these vessels, quite frankly, will have to wait. It's not as though I fear waiting or I fear the answer. I don't. I repeat what I said right at the outset. Obviously there should be serious questions. There should be legitimate criticism. People should watch these things. But at the end of the day, are they also prepared to stand up and say: "I'm proud as a British Columbian that we can do this here in our province. I support this 100 percent, because I think it's good to have jobs in North Vancouver, I think it's good to have jobs in Alberni, good to have jobs in Victoria, good to have people employed and people training and getting jobs out of BCIT, good to have a company like Avcorp"? Are they prepared to do that, or are they just prepared to be critics? That's the question I'm interested in. I'm not posing it across the floor; I'm doing it rhetorically. But it's easy to be a critic. Anybody can be a critic. And a critic never built anything -- never built a damn thing. So where are you going to be at the end of the day when these things hit the water and they start serving the public? Are you going to say: "We're proud of this. We're proud of the men and women in British Columbia who did this"? Or are you going to look at a few dollars and say: "Oh, dear. We shouldn't have done this"? Make up your mind where you're going to be. It's coming up pretty quick.

D. Symons: Indeed I will tell the minister that if everything works as we've been told and the prices are where you've said they're going to be and all of that's in place, I will be there saying: "My criticisms were somewhat off base, and I'm delighted that it works." Part of the reason that I'd be delighted to say that is because if we form government -- or should I say when we form government -- we're going to have to deal with it. If it doesn't work, it's going to be an awful expense and a white elephant that I would prefer not to have to deal with. So I'm hoping, along with the minister, that all of this works.

I'm wondering if we can look at the cost of the shed for a moment. I was told that the cost of the shed was billed at $9 million, but I find the costs here add up to $13,089,000. On top of that, we have a $424,000 annual rent to the Vancouver Port Corporation for that. So by now, we've probably added another $1.5 million onto the $13 million for the shed. It's considerably over budget. Can you tell me: will that cost be all included as part of the CFI on the cost of building the ferries, or is it now being covered by the Ferry Corporation itself rather than CFI and the fast ferry program?

Hon. D. Miller: I can't tell you how much, but some portion of that will be amortized as part of the fast ferry program. Clearly it has use far beyond that. Let's assume, for example, that we are successful internationally in finding people who may want to buy a vessel we can build in British Columbia; then clearly there's an ongoing use. To a large degree, it's an investment.

D. Symons: I thank the minister for the answer, but I found a word there that troubles me somewhat. It is the word "partial." It wasn't saying that the whole costs are going to be. . . . Yet I asked the minister in 1996 -- and I'll just quote from Hansard: "When the cost of the fast ferries was put at $210 million -- $70 million per ship -- was that $9 million incorporated into the overall cost. . . ?" The $9 million I'm talking about is the shed. It's being basically amortized over the three ships. And the answer from the minister at that time -- which is this minister -- was yes. So I'm asking again: will the total cost of building that assembly shed be amortized over the cost of all of those ships?

Hon. D. Miller: No.

D. Symons: Would the minister then be able to give us the portion of that $13 million that will be covered by the fast ferry program? Can you tell us what part is and what part isn't then?

Hon. D. Miller: No, I don't have the breakdown. But regardless, there will be a portion. I don't have the specific number here.

D. Symons: At this point I would be very happy to have a ballpark figure. Are we looking at 25 percent, 50 percent, 75 percent, somewhere in that ballpark? Any idea whatsoever?

Hon. D. Miller: No, I don't. There may be somewhere in here that we can find the answer, and we'll be happy to do that.

Interjection.

Hon. D. Miller: It's better than 50 percent, Mr. Ward advises me.

D. Symons: I guess that opens up a whole new area of costs of the fast ferry program that were supposedly all going to be covered by CFI and the fast ferry program. Where are those costs now going to be allocated? Besides the shed, we have terminal adjustments that were going to be made in Departure Bay. I think they were about $9 million. The pre-

[ Page 8083 ]

Hon. D. Miller: I have to be careful. I don't want to attack the accountants again, but certain expenditures have to be incurred first of all with respect to construction of the fast ferry. One of those is an assembly shed, and that was done. That was an investment made as part of the overall project.

There are terminal upgrades that were made not just as a result of the fast ferry project. Quite frankly, we spent $100 million in Nanaimo on a terminal and an access road to get heavy truck traffic out of downtown Nanaimo. We could have said, in terms of capital expenditures: "Well, who cares about Nanaimo?" But we didn't do that. It's hard to draw a very bold line with respect to where costs are apportioned. Quite frankly, that is an accounting exercise. I mean, there are rules in terms of how you do these things. I don't know what they are. The accountants know what they are, and I'm sure they will do it the way that they're supposed to. I don't know; I think you're nitpicking here, but carry on.

D. Symons: Well, I will admit to nitpicking -- I mean, a few million here, a few million there. You know, $13 million for the ferry shed, and we've got $9 million that went in. . . . It says in Hansard. . . . I was told that in 1995, $9 million was invested in Departure Bay and Horseshoe Bay in order to fit the high-speed technology. I am wondering whether or not that $9 million is counted as part of CFI expenses. You said you're building these ferries for $210 million initially, and we were told that all the expenses of constructing them were going to be part of that $210 million. We're finding now that some of those expenses that are related to the fast ferry program are happening somewhere else.

Hon. D. Miller: I beg to differ, Madam Chair. I don't think you're finding anything, except that you're chasing around numbers on a page. To some degree, you have to understand the difference between when it's important and when it's not.

Yes, we spent some money on terminal upgrades. Would we have spent money in any event on terminal upgrades? Probably. The fact that they were spent to accommodate or to come in line with the fast ferry program -- so what? What does it mean? You're looking for something, and you're looking, I suspect, for a bottom line that's higher than what you find. And carry on.

But there are no politicians sitting down with the books; there are accountants sitting down with the books. I guess they've got rules for how they proceed. I don't know what they are. We rely on these professionals to do their jobs properly, and I have every confidence they will. So if you want to start chasing every nut and bolt, I bet we could be here forever. Would you be further ahead? I don't think so. I've tried to be straight up with respect to the detailed answers. You obviously have the ability to sit down with the corporation at any time and talk to them to get even more detail, and I would encourage you to do that.

D. Symons: Well, I guess the minister and I are going to differ on these issues, because we were given to understand something a few years ago, when this program was introduced, as to how costs were going to be allocated relating to the construction of these ferries. We're finding now that those borders are changing somewhat.

On July 7, 1997, at the assembly shed there was a news conference and photo op for the Premier, and he announced that the government would spend $168 million on two more fast ferries. That was for the other two. This was when he was announcing the decision to carry on with vessels 2 and 3.

The government has insisted that there was a fixed price of $70 million each, and that's changed slightly to $72 million. I think it may be $74 million now for each ferry. But you know, two times $74 million is not $168 million. So I'm wondering if the Premier was wrong in his math or if it was a Freudian slip when he told us that ferries 2 and 3 would cost $168 million.

Hon. D. Miller: I don't know, Madam Chair. I did read from a letter that was sent to the member in January, with the up-to-date information relative to costs. I did do that. In the interest of the member, I could read it again. Perhaps the member wants to take a look at it.

D. Symons: I think the information in that letter was relating to the costs so far for ferry 1, but I was just going by the Premier's announcement at the ferry shed on ferries 2 and 3 continuing. It was a great photo op for the Premier. He was quoted as saying $168 million for ferries 2 and 3 for the building project. He was announcing the end of the freeze -- "and we're going to build the other two ferries for $168 million." You've been saying the ferries are going to cost $74 million each, and 2 times 64 does not make 168. It works out to $84 million each for ferries 2 and 3. I'm just curious as to whether it was a mistake in mathematics on the Premier's part, or whether he was basically preparing us for the fact that these ferries are going to be considerably more expensive than we've been told heretofore.

Interjection.

D. Symons: No, that's the newspaper one, but he did make the statement. I was there and I heard it.

Hon. D. Miller: Now, let me get this straight. The member was there; he heard the Premier say something; he thinks it was technically incorrect -- the math was wrong. That may have been the case, and if that's the case. . . . These things occasionally happen; people do make mistakes occasionally.

A Voice: Even the Premier?

Hon. D. Miller: Well, no -- even the opposition. I recall one from last Friday; there was a little bit of an oversight.

But the point is -- and I'll go back to what I think is the fundamental point -- that there's been lots of zeroing-in on fast ferries. As I say, there are more critics than there are people who actually think about the broader implications for British Columbia. As I said at the outset, the fact that we're trying to revitalize our shipyards. . . .

Believe me, going into the shipyards and looking at the men and women that are working on that project -- not just in Vancouver, but in other shipyards here on the Island -- looking at what that does for them as families, looking at the potential to revitalize our shipyards and to compete internationally in building high-speed, aluminum-hulled catamaran vessels, requires a bit of vision. I'll credit the Premier with that vision. It requires being prepared to take some risks, and I'll credit the Premier with being a person who's prepared

[ Page 8084 ]

These vessels are going to be slightly more on the cost side than we originally forecast. There's been a dramatic improvement in labour efficiency from the first vessel to the second vessel. There has been some front-end-loading of costs on the first vessel -- aluminum engines and those kinds of things. I've talked about the investment in the shed. How that's apportioned with respect to the bookkeeping, I could care less. What's important is that we do this job properly, we do it well, we establish our reputation, and then we look hard for opportunities beyond British Columbia.

[4:00]

D. Symons: I appreciate the minister's comments. I guess what an opposition has to do is to look at things realistically. I think there are some real problems in this whole program. The minister talks about the workers. I find no fault with the workers; I think they're marvellous. I've been in the shed, there and I've watched the progress of the ship. The problem is: are we going to sell these, as the government says, on the world market?

Interjections.

The Chair: We'll recess for five minutes.

The committee recessed from 4:02 p.m. to 4:04 p.m.

[E. Walsh in the chair]

D. Symons: I was commenting that I think the real thing is that the push behind all this is to sell these ferries offshore. Indeed, if we absorb all these startup costs and build three only -- we built two superferries and were going to sell those offshore. . . . The costs are considerable if you're not building more than just the three of these.

We had a group of people here prior to the APEC conference from Southeast Asia looking at our fast ferry program. They were very impressed by it. That's what the newspaper article said, but if you read further down in the newspaper article, you found that one of gentlemen from the Philippines, who was obviously involved in shipping, said: "Yes, they're very nice. We might be interested, but the price is a little bit high. Maybe we'll consider purchasing a used one." Well, I don't know if you're building used fast ferries yet, but that was when the cost was only $70 million, and you are indicating that the cost is going higher.

We find that the company we partnered with to get the technology for building this ferry, Incat of Australia, has built a fast ferry very similar to ours, slightly smaller -- a wave-piercer though, because it's built a little sturdier, I suppose. It is going to be in the open ocean for a portion of going from New Brunswick across to Maine. From what I'm told, they've built this one for $60 million, and I gather they built it basically on spec and got the purchaser for it after. We're going to have trouble, I think, competing on the world market, if the firm that we've picked up our technology from is using some of the information, because I don't believe they've built a car ferry before. Now they've done it at a price considerably less than ours. So I think we are going to have some problems in the world market, and that's why I have some concerns about the whole program that's going on and whether all of your optimistic talking is going to work.

In 1996 B.C. Ferries hired Finnyard to bring in some technical know-how. Now, Finnyard has built quite a number of ferries and car-carrying ones, and they brought these people on. I'm wondering how long Finnyard was involved with the fast ferry program of B.C. Ferries and how much Finnyard was paid for their expertise. Was it a contract for a fixed amount, or was it a fee for service?

Hon. D. Miller: I don't know if the member has ever bought a used car. He tells me he only owns used cars. Do you go onto the lot and pay them the sticker price, or do you tell them that you think it's a little bit on the expensive side and that you're looking around? I'd actually like to hear the answer.

D. Symons: Well, for the last three cars I bought -- he wants to hear the answer -- I made bids on them, and my bids were accepted. They were bought through Crown corporations. But that's not how I'm buying fast ferries and not how I'm building fast ferries, so I'm not quite sure of the relevance of it. But I'm sure the minister will tell us that.

I was asking about Finnyard and their involvement with the fast ferry program of Catarmaran Ferries International Inc. How were they paid for their expertise? Was it a contract, a fixed amount or a fee for service?

Hon. D. Miller: A fixed amount, two years and $2.5 million. Look, it's very interesting, because, again, people who have come to look at the construction of the fast ferry have generally been impressed. There have been about five inquiries, and the latest was just, I think, yesterday, from Incat. They were, in fact, quite impressed with what we're doing. The wave-piercer was $64.8 million, not $60 million; that was reported in the Halifax papers. Perhaps there may be an object lesson there, but I won't get into that. By the way, they're smaller vessels -- smaller than the ones we're building -- so they're cheaper on a relative scale. Interestingly enough, they have the same general configuration in terms of diesel drive, etc. The results, by the way, were very, very good -- better than expected with respect to speed. I'm not saying that's going to happen with ours, but there have been lots of critics who've said that it will never work. Yet the same one -- in a relative sense smaller, but with respect to the drive and everything else -- apparently has been very, very successful. It was designed by Hercus, the same people who were involved with our project: 49 knots light, 44 knots loaded. They're doing fairly well, and let's hope that ours will perform as well.

It's not surprising to me that international buyers would say, as a matter of course: "We think you're a little on the high side." Why would they not say that? To take those kinds of

[ Page 8085 ]

D. Symons: We seem to have partnered with Incat, and you mentioned the designer of the ferry. Yet the minister told me last year how they are building these ferries to fit a certain niche market and that the size of the ferry and all the rest of it were going to be for this particular market. What we find is that the company we've picked up our technology from is basically going into competition for more or less that same sort of market. I gather that theirs is not as roll-on, roll-off as ours are, and we'll have the advantage of speed in loading and unloading. But beyond that, many of the rest of the capacities are not that much different. Theirs is built for the open ocean, whereas ours aren't.

To change tack a little bit, I wonder if I can go back to Incat and ask how much has been paid to Incat altogether for the Canadian rights, the designs, etc. What further obligations does CFI or B.C. Ferries have to Incat -- any design payments for each vessel, or whatever?

Hon. D. Miller: It's an interesting observation, because as the member points out, Incat is going up. But that's part of our thinking; that's where we said the market would be. As I recall, there were all kinds of critics who said no. So I guess we were right. And the $3.5 million Incat design fee is for three ships.

D. Symons: I understand that a payment was made to Incat or one of its representatives through a Caribbean island bank account. Could the minister confirm that? I'm wondering why it might have been done in that way.

Hon. D. Miller: No one on this side has any knowledge of that. If the member has knowledge, I would certainly like to hear about it.

D. Symons: We'll leave that one for the moment. Last year Treasury Board upped the authorization for the CFI program to $230 million. Has that cap been changed since then? If so, what is the figure now?

Hon. D. Miller: We're just checking out. . . . I'm getting conflicting advice, so as soon as I get the answer, I'll respond. Perhaps the member would like to continue with another question.

D. Symons: In '96 and in '97, I asked the minister for the business plan, which must have been prepared, one would hope, before the government would move into a $200 million-plus fast ferries venture. I've yet to see one. I'm beginning to suspect that there wasn't one, and I'm doubting that one exists even now. If it does exist, then may I ask again: could I have a copy of this plan?

Hon. D. Miller: Certainly.

D. Symons: Thank you. Maybe I worded that badly, because I asked if I could have one if one exists, and the answer was: "Certainly." Can I ask: (1) does it exist; and (2) may I have a copy of it? Let's first determine whether what I'm asking for exists. I don't want to be caught out on this one.

Hon. D. Miller: It's like that old "Saturday Night Live" -- certainly, certainly.

D. Symons: We got a good answer on that. I will be patiently waiting for that. I've waited two years now, so I'm sure that the few days it will take to supply that will be worth it.

There was an offer -- I guess it was after the issue with the ferry increases. . . . The CEO basically offered to throw open the books of the corporation to everybody to see what they were doing. I look forward to that.

I wonder if we could maybe look at a review of the history of the fast ferry program. It was announced in '95, with the first vessel to be in service in '96. The price was fixed at $70 million per vessel -- or $210 million for all of them -- and the minister responsible at that time, who is now our Premier, said: "It's budgeted right down to the toilet paper; it's all budgeted for." Well, we found out that indeed the toilet paper was a little more expensive.

I was also told that the time for construction was ten to 12 months and that approximately 60 percent of the cost was labour. We found that the time line is incorrect, even though the starting date was a year and a half later than was initially set. If you take 60 percent of $70 million, as I mentioned before, that's $42 million. The construction of the first vessel began April 1, 1996. Twenty-six months later it's still not in the water, let alone in service. I sort of worked things out. Last May I was told that $150 million had been spent on it so far and that vessels 2 and 3 were to go ahead. So I took the $150 million, and I subtracted $18 million for the aluminum for vessels 2 and 3 and $28 million for the engines for vessels 2 and 3. I found out that what we're getting here, when you work all these things out, is that the first vessel seems to be around $150 million. That's the cost I'm getting.

No matter how I look at this, I'm finding. . . . One way, I get that higher figure. Another way -- if we take one-third of the aluminum, one-third of the engine and one-third of the labour for two years, at $84 million -- we get $107 million for the first one. That's only counting that portion; it's not counting finishing the interior and all the other things that go along with it. I think we're looking at a minimum of $115 million for this first vessel. That's about a 65 percent cost overrun.

[4:15]

Hon. D. Miller: I'd be happy to have people from the corporation sit down with the member and try to walk him through that. He appears to be confused. I know I get that way myself when I'm faced with all these numbers. There does seem to be some confusion on the part of the member. He's having difficulty working these things through, and I'd be happy to provide able people from CFI and B.C. Ferries to help him go through this. We have had a number out there. . . . There's a letter to the member from last week that says $85 million. Let's hope it's right. It is higher than anticipated.

[ Page 8086 ]

Interjection.

Hon. D. Miller: I'll wait. You can have your chance when you get up.

. . .but there have been some very positive trends. The efficiency gains on the construction that's used in the weight of aluminum per person-hour -- or whatever statistical benchmark is used. . . . That has improved dramatically. Others who have observed from outside our borders and who are somewhat more dispassionate and a little bit more objective -- not caught up in the mass hysteria that sometimes accompanies these highly charged political issues -- have been favourably impressed by what we're doing. Everybody is working hard; they're dedicated. I think that with that kind of commitment. . . .

Madam Chair, I repeat: once in a while -- maybe every six months -- the critics might get off their soapboxes and actually talk to some of those working people and say: "I am proud of you as a British Columbian. I want to encourage you; I know we can do it." Why is it that there are so many doubters? People are always looking for the negative instead of standing up for B.C. It seems to me that this vessel epitomizes B.C. pride -- to me it does.

When I look at our proud nautical history, the shipbuilding history, on the coast of British Columbia. . . . When I look at what McLarens and Allied have done. . . . When I look at the Skeena Queen, that very efficient little vessel, an outstanding vessel. . . . My spouse was the proud breaker of the bottle on its bow. She did a magnificent job, by the way -- the first time, that bottle just went: "Boom!" I know, in talking to those workers, managers, engineers and designers, that there is a pride in our heritage when it comes to these kinds of questions.

Why does the opposition. . . ? I think they should go through these numbers; I'm not objecting to this. But when are they going to say: "We support you"? When are they going to tell those workers that they support them? When are they going to do that in a highly visible way? Why does the Leader of the Opposition -- talk about irresponsible -- go to Nanaimo and make a fatuous speech saying that these things are going to sink? Why would he be so irresponsible? Why would he express such lack of confidence in the designers, the engineers, the shipyard workers? Why oh why?

The answer is very simple, Madam Chair. He thinks -- and they've made this mistake countless times -- that there is a perceived political gain in joining the chorus of critics, that somehow it strengthens their position to go make a completely and absolutely irresponsible statement in front of the Nanaimo Chamber of Commerce that this vessel would sink. Now, this is a fellow who grew up in this province, and he's got no confidence whatsoever in British Columbians. I think it's shameful.

The Chair: On the vote, minister. On the vote, members.

D. Symons: I guess that every so often the minister goes off on a bit of nonsense, and it's unfortunate. I was there when the Skeena Queen was commissioned, and it is a great boat. I will say that the workers did a marvellous job on it. The issues that we're asking about have nothing to do with the competency of the workers in this province; they're great. I doubt whether you'll ever find anywhere where the Leader of the Opposition or anybody on the opposition benches said that this thing is going to sink. It's going to float. We have concerns about the leadership, the management and the political agenda that this government has in mind. It's not with the workers of this province that we have our problems; it's with the rest. We support the workers. That's great, and I am agreeing with you on that. The comments that the minister made regarding our leader and about us are unfounded, and I just want that to be on the record. I guess you get up there every so often and want to make some comments that are unfounded, and I will refute them.

We do have some problems with the ferry, and it has to do with the way the ferry was constructed and put together, not with the workers. They were doing what they were told and doing that reasonably well. We've had some buckling and warping in the two hulls of this particular ferry. The workers have been spending a couple of extra months trying to work on that buckling and warping that took place. We had problems in attaching the loading ramps. The design fault there was a problem, in that the modules below weren't going to be able to hold the extra weight, and you had to do some changes in order to accommodate the loading ramps. I'm even told that the pontoons in the two hulls, after you put the superstructure on, have started to widen out a little bit more than they should have. We have some problems with it. That isn't the workers' fault; they were doing what they were told. But those problems have added to the costs of this ferry. You can't stick workers down in the hull modules, trying to straighten out warping in there, without the cost going up.

Hon. D. Miller: I repeat, and we have witnesses: the Leader of the Opposition. . . . I was wrong. It wasn't Nanaimo; it was Qualicum Beach or Qualicum Bay -- one of those. We have witnesses; we know he said it would sink. Maybe he thought it was funny. Maybe he was trying to make a joke. But he said it; it's on the record.

These minor problems that the member raises. . . . I don't know whether the member thinks that there's a huge problem or that these are minor problems. He didn't really say. I'd like to know, because they are relatively minor. Again, it was not reported well.

I don't know if you managed. . . . Did you sit down and talk to the engineers? Did you go down there? Did you ask them about it? What kind of answer did they give you? Do you think they told you the truth? Tell me. Why would an engineer not do that? Do you think everybody's lying? Do you think everybody's trying to cover this up? Why? If you think they are, make the allegation.

A Voice: Give it a rest.

Hon. D. Miller: I'm not going to give it a rest.

The Chair: Order, members.

D. Symons: Indeed, when I first asked about warping, I was assured by the head of the corporation that there was none. Within a month or two, I knew that the workers were down there working on this warping. You were spending time on it; there was considerable time spent on it. So I don't know whether it's important or not. I just know that you spent a lot of time working on it. Indeed, as you were working on one section, you couldn't backtrack, because then you'd have to redo the inspections in all the in-between ones, to have them passed.

There were some real problems in dealing with that. The minister can tell me how important this was. But I know that

[ Page 8087 ]

I assume what our leader was saying. . . . I wasn't there to hear the comment that was supposedly made, but maybe the comments related more to the red ink of the corporation. That's what seems to be sinking at the current time, under this government's mismanagement. We'll assume that's what he was intending, and maybe he said it the wrong way.

[B. Goodacre in the chair.]

If we can take a look for a moment at the MTU engines, I gather from people with know-how, again, that these are designed to run at about 85 percent power. The European vessels that are using these MTU engines have run some of them at 90 percent, and they've had their engines down for about 20 percent of the time because they're running at that higher speed. I was told you're planning on running the engines at 95 percent. I gather that if you run them at more than 95 percent as a regular speed, you're going to void the warranty and the service contract, and that at that time B.C. Ferries would be responsible for bearing the full cost of downtime and repairs. I wonder if the minister might be able to confirm or deny that.

Hon. D. Miller: Well, there have been some minor problems, but they're minor.

I appreciate that the member is constantly trying to figure out what his leader says and means.

D. Symons: I wonder if you might comment about the speed at which the MTUs are going to be running and whether indeed you are taking a chance of voiding the warranties and the service contract on the engines if you run them at 95 percent or better.

Hon. D. Miller: At 1,200 r.p.m. they're designed at 100 percent. Plus overload, we'll be running at 95 percent.

D. Symons: The engines, then, are under full warranty and your service contract is all held, running at that speed. Is that correct?

Hon. D. Miller: Yes.

D. Symons: In the service contract, then, will any problems with the engines be fully covered by Detroit Diesel?

Hon. D. Miller: Normal warranty.

D. Symons: Last May, a year ago, the general manager of the fast ferry program said, as to how the catamarans can reach the claimed speed with less power and more weight than its competitors: "I'll put that down to efficiency." I'm just curious, then, if you might tell us how that statement jibes with marine engineering.

Hon. D. Miller: I gather it has to do with the length-to-breadth ratio or relationship.

D. Symons: I believe the two pontoons of the catamaran in this particular ferry are a little closer than the others, but that is not going to create a more efficient one. It's the shape of each of the pontoons, and I doubt whether you'll be getting more speed by moving them slightly closer. We will find that out, I suppose, when they're put in the water.

On July 7, at the announcement of the construction of fast ferries 2 and 3, the Premier also claimed that cat 1 would be launched in September 1997. Well, that hasn't happened. The general manager then put the speed down to efficiency. With ever-moving launch dates and slowly moving toward a more truthful or more accountable cost figure, the CFI program and its spokespeople have lost some credibility. You know, you keep on saying the exercise is all about building catamarans for the world market. What you have to do, then, is restore credibility, because our dates have gone forward, costs have changed, and so forth. I would suggest that in order to restore credibility to potential buyers, you have the sea trials done by a firm totally independent from B.C. Ferries and not by someone chosen by your government or B.C. Ferries. Let's have an independent assessment of its performance to help sort of bolster the confidence that indeed what's being done is being assessed by somebody independent of B.C. Ferries. Would the minister commit to that?

[4:30]

D. Symons: That's interesting. Since the first talk of building. . . . Sorry, that one I was going to leave out for the moment. This is the comment I've had from the gentleman who said $70 million is too high, but we'll leave that for the moment.

I wonder if we might now move on to your request for expressions of interest on basically privatizing some of the fleet and leasing them back again. What are the main benefits that B.C. Ferries finds of selling and then leasing back the fast ferries, and why are you doing it at this particular time?

Hon. D. Miller: That situation is in process. There were unsolicited bids, and we took a look at some of the factors around that as a result of the primary unsolicited bid and made a decision to proceed. We're currently evaluating offers.

D. Symons: Well, it did indeed move from unsolicited bids to solicited ones because you put out a request for expressions of interest. I'm curious as to why, at this time, if that indeed was a way of doing things, you didn't just start at the beginning of the fast ferry program by suggesting that people build them and you will lease them back -- having them do the design, build them and take all the responsibility for building these fast ferries that you seem to have taken on your own heads at this time. Would it not have been better to do that right from the start?

Hon. D. Miller: It's kind of interesting. The lack of faith of the opposition is readily apparent, but I guess it's not as apparent to some in the private sector who are looking at what we're doing and thinking that there's opportunity. So I think the fact that we started it, that we're at this particular juncture, and that it has drawn strong expressions of interest from the private sector is a bit of a testament to what we're doing, and I would only hope that perhaps there would be a bit more faith on the other side.

D. Symons: Again, we'll find. . . . I'm going to move off of the fast ferries, I think, for a moment. I'll just flip a page or

[ Page 8088 ]

Hon. D. Miller: No, that exercise will not take place.

D. Symons: I wonder if the minister might comment. I think it would be incumbent upon the government in power, if they're going to make a sale and then a leaseback arrangement, to let us know exactly the costs entailed -- used up so far, I guess -- for British Columbia under its payment for this thing that you're now offering for sale. Are we not going to be allowed to know the cost of producing the article that we're selling?

Hon. D. Miller: Any public expenditure, the member ought to know, is subject to public review, and that will be done. But with respect to any commercial transaction we might make between CFI and a proponent, presumably it's the proponent who has to be satisfied. The public has to be satisfied with respect to taxpayer expenditures. I think the member is mixing two things up.

D. Symons: I thought CFI was part of one of the Crown corporations and therefore basically part of government and the taxpayers. So I'm asking: at the point where you're offering this for sale, do we not as taxpayers have the right to know exactly what money has been put into that operation or project that now is being sold? The minister said certainly not.

Hon. D. Miller: If there are public expenditures -- revenue that we've derived from taxes or whatever -- and we spend it, we must account for it. We have numerous processes beyond these estimates: the auditor general, the comptroller general, the books, all the rest. It's all accounted for. If a commercial Crown corporation engages in a transaction, it'll be reported. But we're not going to do the list that the member. . . . It was his question that gave rise to this, or my last response. We're not going to do it. It would be foolish and irresponsible to do it.

D. Symons: I think we'll tend to differ on that issue also.

In the event that we do go through a sale-and-leaseback arrangement, would maintenance and repairs be part of the negotiation? From the minister's understanding at the current time, who do you think would be responsible for maintenance, repairs, crewing, the labour agreement and all of these things with the vessels? Who's going to take on these particular aspects of operation?

Hon. D. Miller: Those are all issues that are subject to the process we're engaged in now.

D. Symons: In looking at part B of the request for expressions of interest; I'm reading from page 5 of that. It talks about part of the objectives of B.C. Ferries being "to ensure that as B.C. Ferries vessel requirements evolve, an efficient process is in place to ensure that the corporation obtains a very competitive price from the successful proponent."

Are you going to have a single-source contract? How are you going to be able to achieve this competitive price if indeed you are letting the building of these ships. . . ? Under part B, it's the three fast ferries and possibly up to seven others. You're giving a contract for them to do these, but I'm not sure how you're going to get a competitive price from them when they basically have an agreement that says they have the right to build these ships.

Hon. D. Miller: It's a competitive process; normally that induces a competitive price.

D. Symons: It's competitive when you're bidding on part B? Then the person who gets the. . . . If somebody wins that particular contract with B.C. Ferries, after the request for expressions of interest, then out go requests for proposals. Eventually somebody gets that particular description under this request for expressions of interest. Then, basically, they have a hold on the building of ferries for B.C. Ferries in the future. I'm just wondering, after they've got that hold on that, whether we will indeed, ship by ship, be getting the best price and how you're going to be able to guarantee that, since they will have the contract for building them all.

Hon. D. Miller: These issues are being evaluated at the current time. We'll await the results of that before government makes any decisions.

I would just like to refer to a piece of correspondence dated March 23, which was delivered to the Leader of the Official Opposition, relative to a speech to the Association of Vancouver Island Municipalities. The Leader of the Opposition described the new high-speed ferries as "hulks that will not go fast and will sink." I know the member does not share that opinion. In fact, he's spend considerable time following the development of the fast ferry program and is asking legitimate questions with respect to some of the fiscal questions around that. It's just that these kinds of statements are very, very irresponsible and easy to make, but there's no real gain from making them. They are certainly a major discouragement to people who are putting all of their best efforts into trying to make this project a success.

D. Symons: I know that the minister himself has at times commented on the accuracy of the press reporting things. I would hope, in this case, that there has been inaccurate reporting. But I don't know; I was not there. I am sure that if the leader did make such a comment, he was overstating the concern we have about the fast ferry program. Indeed, the sinking of funds into this program and the red ink that's a result of that would be more of it. That's where the sinking and my concern come in as well, not for the ferry itself. It will float. Whether it will perform at 37 knots fully loaded may be another question that we'll know about not too long from now. I will be the first one to admit I was wrong if it does achieve that. I will be delighted, as I said earlier, to make that admission, because I don't want to see this fail.

I have some concerns that the government has underpowered the ship for the weight of the ship, and I know you have a concern about the weight-to-power ratio. You've been doing everything you can to keep that weight down, and I hope you're successful. Anyway, our leader may have overstated the fact, but I think his concern was more with the sinking debt of the corporation rather than the sinking of the ferry in a literal sense.

I'm wondering if we can go back to other topics for a moment. Last April, at the commissioning of the MV Skeena

[ Page 8089 ]

Hon. D. Miller: Not necessarily, and I don't have a timetable.

D. Symons: Reading from the Times Colonist on June 25, 1997. . . . A few moments ago, the minister was assuring me how accurate papers' quotes. . .but I find a quote in here that says there's a huge increase in ferry passengers. They may launch a new high-speed service because of this huge increase in ferry passengers. Yet I find later that year, this year and also the year preceding the 1997 comment, we seem to be indicating that both ferry passengers and vehicles are down. I believe that so far this year they are down by about 7 percent. When these comments are made, there often seems to be if not a misrepresentation then indeed a very optimistic view of things.

Hon. D. Miller: Certainly over the last couple of years we've experienced a bit of a softening in some areas, although there has been an increase in foot passengers and in buses, which has been of significant benefit to the tourism sector. There was a report in the media a week ago that talked about 7 percent and 8 percent declines respectively. I think that was a little bit out of context. That was for February, and I think there's been some reasonable increase since that time. But one would normally expect that the trend line in terms of ferry use would reflect a variety of factors. The economy, certainly, has been a little flatter than anybody would wish -- year to date, minus 2 percent. I think everyone would agree, though, that the long-term trend with respect to Vancouver Island is that there will be a need for increased capacity. The joke, of course, is that when they go, everybody wants to go at once. The member for Powell River-Sunshine Coast asked me a question last week about delays caused by some mechanical problems we've had, and we had them again this weekend. In fact, I was caught in the ferry lineup this weekend. But I relaxed, opened the windows, breathed the fresh sea air, read a couple of newspapers, took the hour wait -- the delay from the 2 o'clock to the 3 o'clock -- in stride, and felt quite comfortable and refreshed when I arrived. I had the chicken dinner special -- $7.25, a real bargain, a very tasty meal. I think it's a treat to travel on B.C. Ferries -- nice day, fresh wind blowing down the strait. But everybody wants to go at once. You know, if they kind of paced it out a little bit, we'd probably all be better off.

D. Symons: Just moving on a little bit to something different, the midcoast service was described as being a trial in a news release of December 21, 1995, from the Ferry Corporation. Now that it's been in place for a couple of seasons, I'm wondering how the trial is coming and what are the latest evaluations and recommendations that you might have regarding that. Indeed, it said then: "The strategy includes improved passenger and freight service to rural, isolated communities; a Port Hardy-based vessel for trial summer service on the midcoast. . . ." So I'm wondering how the trial is coming, and if you can give us a little bit of a report on that.

[4:45]

But the important point is this, and there's a lesson here, actually. I think I've made this case before, so I'll try to be brief, Mr. Chairman. For a defined expenditure by government in a Crown corporation on vessels and berths, we have probably levered two or three times that in terms of investments by the private sector, and we have provided opportunities for small communities that have really not much opportunity for economic diversification to develop some parts of their economy. It should be written up, because it's almost a classic example of where an appropriate government and, in this case, Crown investment -- let's look at it as investment -- levers at least that much and, again, probably two times that of the private sector and provides a better economic base for small communities. It stands to me as a shining example.

Now, it's going to be a struggle to make this thing pay or break even, but I have not talked to anybody who has taken this vessel and this trip who has not been absolutely ecstatic about what they've seen. We've also broken new ground in terms of the crew, in terms of the relationship between sort of conventional crew and the passengers. There's much more flexibility: there will be barbecues on deck; people sleep on deck. There's a kind of camaraderie that develops, as I've been advised, along the voyage. I think it's one that all members should try to take. I even. . . . It's in my constituency, or part of it is, and I've not had a chance to take it. But I know the mayors, Russ Hellberg, the mayor of Port Hardy, people in the regional districts, people in the aboriginal communities. . . . Percy Starr, my friend from Kitasoo, has developed a little bit of a tourism. . . . By the way, there's a community that really needs to be commended. They put in that dock themselves; they're independent; they're determined to develop their economy. I've got the utmost respect for that small community of Klemtu, north of Bella Bella. This has provided just one more opportunity. It's not the complete answer, but I can tell you that the people up in the midcoast are thrilled that we've started this operation. So we want to give it a good chance to prove itself.

D. Symons: Well, it's nice to be one-up on the minister on this particular one, because I took that trip last summer. Unfortunately, the day that I was there the ferry was late leaving by about six hours. Yet I didn't find anybody in the large number of people on board who minded that, because they rather enjoyed the trip, and I did too. It wasn't a problem. They had some problems with the prop or the rudder at that time, and they were making sure that things were fixed for the trip. It was an enjoyable trip. My concerns might be, I guess, about the evaluation of it. Back when this was being proposed, there was, at the same time, a private person who was trying to put in a service. He was dickering with the government over putting in a service to those islands or those areas, because it had been done before by the private sector.

I was asking the minister responsible at that time -- this is back on June 22, 1995 -- about that particular service and about how the negotiations were going with the private sector.

[ Page 8090 ]

Hon. D. Miller: We did an extensive report. We consulted widely with stakeholders on the north and midcoast. Quite frankly, one of the very compelling arguments they made. . . . They had had private sector, subsidized service; they'd had it from the old government. They were betrayed. They were absolutely and fundamentally betrayed when Coast Ferries, which had the subsidy at that time, was let go and Marine Link, the tug and barge operation, subsequently received the subsidy. Ever since I've been elected, I've been strictly on the government's side. I have worked hard to redress and make up for that situation. One of the compelling reasons people on the midcoast wanted a government ferry is because they said: "If you put a subsidized operation in and the government changes, we'll be abandoned again." That's their comment, and I guess they thought they didn't have much faith in the opposition.

Going back to an earlier issue, I gave a very short and abrupt answer to a question that was asked with respect to sea trials on the high-speed ferry. I don't know whether the member was simply asking the question, or whether he thinks that ought to be the case, but I want to just confirm that that is the view of Robert Ward, the marine consultant, who was rather insulting to B.C. Ferries personnel. We don't need an independent organization to test this vessel. We move millions of passengers annually. We've launched countless vessels -- very highly technical, sophisticated vessels. We always tested them, and it's an insult to suggest that we don't have the competence. . . .

Just for the member's information, this is a letter that appeared in the Nanaimo paper, I think, in response to Mr. Ward. I'll read it, because clearly he's one of the people I talked about -- a technically competent individual British Columbian who works for B.C. Ferries and who clearly is insulted at the tone of Mr. Ward's letter that somehow Ferries can't do that.

"As the trials chief engineer who will be responsible for the mechanical and electrical trials program for B.C. Ferries' first fast ferry, I take great exception to both the content and tone of C. Robert Ward's letter. The people involved with the formulation and execution of both the builder's and owner's tests and trials program are neither incompetent nor dishonest -- as was openly implied in Mr. Ward's letter. They include a ranking member of the Australian Navy submarine test and trials program, a master mariner with worldwide ship trials experience and the only high-speed-craft-type rating in Canada, one of the world's most respected scientists in the field of hydrodynamics, factory-authorized engineers and technicians from some of the largest marine equipment suppliers in North America and Europe, and a myriad of professional marine engineers and deck officers who have spent the better part of two years of their lives totally immersed in and being trained for the operation of this ship."

D. Symons: Yes, I did also read that letter in the paper, so there wasn't any need to read it to me. But I appreciate your comments on it.

Just a very few more questions on this. I do want to ask just a couple of questions on the Victoria Line -- and I maybe didn't warn the minister ahead of time -- because it still exists on the books, and you're still responsible for it.

You're involved in the ISM. I wonder if you might be able to give me an idea how often the ISM people monitor B.C. Ferries compliance? How often does B.C. Ferries monitor its emissions and other potential pollution sources on its ferries?

Hon. D. Miller: No, I think we. . . . Well, we've got an agreement with respect to the Victoria Line. I don't know if I'm still the minister responsible, but I'm always happy to. . . . I didn't receive any warning on anything, Mr. Chairman. I spent the weekend puzzling as to why we hadn't talked about B.C. Ferries last week.

ISM is an international standard, and under the convention, as I understand it, we've had some reports on the Queen of the North. In fact, we did some centre-of-gravity trials in Prince Rupert a couple of days ago. The ISM international standards are to be, as I understand it and as I recollect from memory, fully implemented domestically by 2010 -- something like that. We want to try to comply with the highest standards. Obviously that requires looking at our vessels. I talked earlier about the age of our fleet. There's been endless criticism from members opposite with respect to the debt of B.C. Ferries, but it seems to me that at the same time, they recognize that the fleet has to be kept current and kept up to the highest standards. B.C. Ferries has an outstanding record in that regard, I believe, and will always attempt to meet the best standards in a timely way.

D. Symons: I understand that the MTU diesels you're going to be using in your fast ferries are close to the ISM levels of emission right now; but when those emission standards are tightened in the year 2000 -- and I believe they're tightening in steps up to the 2010 you referred to -- they probably will not be able to meet the standards in the year 2000. I have a concern that you have purchased engines that might not meet ISM standards, and you've committed yourselves to being part of ISM.

Hon. D. Miller: I think the member is combining two organizations: the IMO, the International Maritime Organization, and the ISM. I believe we'll meet the standards.

D. Symons: Nearing the end of the B.C. Ferries part here. . . .

Interjection.

D. Symons: Yeah.

I gather that in a recent test -- and it was a simulated test -- of evacuation of the fast ferry with the staffing that you want to put on them, it failed that particular test. So I'm wondering what you're going to do in order to be able to pass the evacuation test as required by Transport Canada.

[ Page 8091 ]

D. Symons: Well, you had a simulated evacuation with a crew of 23, and it didn't pass the time requirement of 17 minutes. Is that not correct?

Hon. D. Miller: My officials are expressing bafflement. I again repeat: the member said "I understand." Now, I would like to know where the information came from. Is it something that we can chase down? It's news to us.

D. Symons: May I ask this question then: has B.C. Ferries conducted a simulated evacuation for the fast ferries -- simulated, mind you -- with a crew of 23? And did you meet the standard of evacuating the ship within 15 minutes, which is, I gather, the time that fast ferries have to be evacuated in?

[5:00]

D. Symons: With that, I'll be able to check back with my source and then maybe get back to you on that.

Hon. D. Miller: Has that guy got a name, or is he afraid to use it?

D. Symons: I'll leave that, because I'd like my sources to be still available to me, thank you.

I'm wondering. . . . The Queen of Victoria, I gather, needed about a $1.5 million overhaul last fall. It was tied up, and rather than do the work in a timely fashion while it was tied up, you had to do a $2.3 million rush overhaul job when it was needed to replace the Queen of Nanaimo, which had some difficulty. I'm dealing here with a year ago last fall, when the Queen of Nanaimo gave you some serious problems; it kept breaking down in the summer. I gather that because you didn't do that $1.5 million overhaul in a reasonable time and you had to fast-track it, it cost considerably more.

Hon. D. Miller: We don't have the number, but I'm advised it's nowhere near that magnitude.

D. Symons: I think I'll leave the ferry program as such, then. I'll just pass on one thing, if I may pass it across the floor. What I have, somewhere in this pack of papers, is an outline of various reports and the time lines in which they come to B.C. Ferries. I'm wondering if I might be able to have a copy of those particular documents. I think I'll produce this later on, because it's gotten mixed up here and gone astray -- oh, here we are. It's the performance reporting requirements of B.C. Ferry Corporation. I've highlighted some in yellow, and I wonder if they might be provided to me at some future date -- certainly not now. I'll pass this across the floor. If you don't have those particular answers -- because this was a surprise to the minister -- then I would appreciate a written response or sitting down with somebody at some future time and getting those.

With that, I'll just move to the few questions I have on Victoria Line Ltd., and then I will be complete and will allow others to get in on the debate. The 1994 annual report of the Victoria Line gave some rather optimistic views of how the ferry was going to go. They talked about a mission that it will operate without subsidy and that it was going to be an affordable investment, etc. And the chair of the board, who is now our Premier. . . . We've had over a period of time the capital cost assets, and that particular one for '94 was roughly $8.1 million. You're leasing the terminals, and so forth. The lease with the Victoria Clipper is now $120,000 per year, and I gather they are responsible for paying -- that answers my first question already -- the terminal leases. The total debt now for the Victoria Line, I would figure, is in excess of $10 million. The debt servicing must be close to somewhere in the neighbourhood, I would think, of $400,000 per year. So even while you're leasing the vessel to the Victoria Clipper firm, you're losing somewhere around -- $400,000 minus the $120,000 you're getting back for the leasing -- about $280,000 to $300,000 a year by leasing it to them because of the debt you currently are carrying.

Hon. D. Miller: Well, I think the member is dead wrong. Perhaps it might be more useful if I could arrange a briefing on the Victoria Line issue for him. As I recall, the issue was pretty straightforward. We started the Victoria Line service. Independently, the Victoria Chamber of Commerce estimated that as a result of that move by government we were bringing in $16 million or $20 million annually to the greater Victoria area by way of tourism benefits. We made a deal with the private sector; essentially, they wanted to test the vessel. And I can recall a very successful announcement down at the dock. The mayor was there and the Chamber of commerce was there. They all applauded what we'd done. As I recall, it kind of stood out, because I was, you know, caught up in the last year on issues around tariff increases. The private sector operator immediately increased the tariffs -- rather dramatically, relative to what B.C. Ferries had done -- and there wasn't a peep or a murmur. I guess that's the difference between the private sector and the public sector.

D. Symons: I would agree with you, I suppose: when the public sector is doing it, there seems to be more outcry that they feel the government should carry on the costs. I would agree with you somewhat in that statement.

Again, going back to the Victoria Line, last year I asked the minister what the borrowing cap was for the Victoria Line, and he was at the time not able to find that figure but sort of promised that he would get it, and you know, I'm still waiting for it. So I repeat the request -- and maybe this time you could give me within the next couple of days, what the borrowing cap or debt cap is for that; I'd appreciate it if the minister could commit himself to getting that for me.

Hon. D. Miller: Yes.

D. Symons: Also, I phoned the person in the government phonebook who's supposedly responsible for B.C. Ferries -- the financial person -- asking for a copy of the most recent annual reports on it, and I'm still waiting for those. And I asked last year for a copy of the original business plan and the cost-benefit analysis that must have been done, I guess, before the decision to initiate the Victoria Line into service was made. As of yet, I still haven't received that. I'm certain that you must have done a proper study prior to committing millions of taxpayers' dollars to this particular service. Again, you know, it's been a bit of a financial disaster from the point of view of the money that's gone into the ferry. Now, maybe it's offset by the value of the tourism it has brought to Victoria -- and I won't argue that point -- but I wonder if I might still get a copy of that original business plan that was done prior to the implementation of that particular service.

Hon. D. Miller: Yes, I'll make sure I pass along these requests to the appropriate officials.

[ Page 8092 ]

[E. Walsh in the chair.]

The first question I have with respect to CFI is with respect to the share structure. It was reported earlier this year by local media -- the Vancouver Sun, BCTV and others -- that there had been an increase in shares in CFI; 25 million shares were issued. I wonder if the minister might clarify how that share structure is established and who the shareholders are.

Hon. D. Miller: I gather that is a normal process. It was setting up a company and giving it a capital value and a certain number of shares. It was set up by B.C. Ferries. That's the simplest answer I can give to that question.

G. Wilson: Could the minister confirm, then, that it's 25 million shares, and could he confirm what the share value is?

Hon. D. Miller: It's 25 million shares and, let's say, $20 million.

G. Wilson: For my own edification. . . . Under the capitalization program of the Ferry Corporation Act the authorized capital is one million shares, but the maximum consideration of value on that may not exceed $100 million. How does the $20 million that CFI has put in place relate to the existing share value of the B.C. Ferry Corporation under section 4 of the act?

Hon. D. Miller: There is no relation.

G. Wilson: Then I'm a little bit confused as to how these share values are structured, because the law is pretty clear about what B.C. Ferries can and can't issue, with respect to share values. Given that CFI is a wholly owned subsidiary of the B.C. Ferry Corporation, presumably it has to be governed by the act. I see nothing in the act that would allow for a second share offering to be made, especially if they're held by the corporation.

Hon. D. Miller: Again, it's not an area of expertise that I'm all that familiar with. My understanding is simply that it was a structural issue in terms of setting up the corporation with a certain number of shares and an assigned value.

G. Wilson: I don't want to belabour the point, but what causes me concern is that within the act the capitalization for B.C. Ferries is very specific. It says: "The authorized capital of the corporation is one million shares" -- and it talks about the share value. Under section 9 it also talks about there being one fund which essentially includes all income, revenue or other capital assets that the company would have outside of the ships and vessels. It talks about them essentially having to have that one fund in situ.

I don't understand how CFI can be constituted as a wholly owned subsidiary of the B.C. Ferry Corporation under the act and have a second allocation of shares. It's not a big thing; it's just that I want to know how it works.

Hon. D. Miller: I don't believe there's a conflict. With CFI it was done under the Company Act, and I don't believe there's a conflict. I think I understand your question. I don't believe there's a conflict with the Ferry Corporation Act.

G. Wilson: The idea of establishing the shares. . . . Is that done in order to facilitate, at some point, a joint venture or potential sale, in order to bring in joint venture capital? That, to me, would make some sense, if that's the case.

Hon. D. Miller: Yes, although I don't think too much should be read into it. But it was always the intention, I believe, to sell CFI if the opportunity arose. I think that was announced. I think there are politicians on the public record. . . .

G. Wilson: Just to expedite this. . . . I don't want to get bogged down in the legalese of the act, because I'm not a lawyer and I know the minister's not a lawyer. We can celebrate that. Nor are we chartered accountants; we might celebrate that. I do think this is an interesting point in terms of public policy and how a Crown corporation or agency is established. It would seem to me that there are some real opportunities if in fact there is an opportunity for a joint venture in portions of that company. There may be significant benefits to the taxpayers of British Columbia if there could be a public share offering of that portion of construction. But there's nothing in the act that would permit it if it's a wholly owned subsidiary of B.C. Ferries and governed by the Ferry Corporation Act. Maybe the minister could arrange to have somebody who is a little more knowledgable sit down with me and go through this. It strikes me that we could be running on a very thin edge here.

Hon. D. Miller: I would certainly be prepared to have someone canvass the issue, and if there is some information relative to that, I will forward it to the member.

I instinctively become a bit nervous. The last major involvement of government in terms of offering shares to the public -- the Skeena. . . . I don't know. Sometimes I think government ought to be very careful about appearing to get into the business of saying to the taxpayers: "Oh, you should buy a share in this." I know what the member is getting at, and I would like British Columbians to be able to participate. Hopefully, they can do that in the private sector, and we can be out of it.

G. Wilson: I wasn't going to try to draw parallels between the fast ferry project and Skeena Cellulose -- and I don't know that there are any parallels; let me just say that -- but I do think that is an issue that needs to be clarified. It's an issue that has caused concern for people who look at these things and talk to me, and I'd like to have that clarified. If I can move on, then, to the second aspect of CFI.

Once this ferry is launched. . . . And I'm not going to go back through a lot of material that has already been canvassed as to whether it's good, bad, right or wrong, or anything else. We're obviously committed to a minimum of two, I understand, and potentially a third vessel. Once this has been launched, I wonder if the minister might tell us what the impact of the expenditure is going to be on the overall construction program for B.C. Ferry Corporation, keeping in mind that I represent a riding that has been looking forward for a number years now for a replacement for the Queen of Sidney that will go between Little River and Powell River.

I'm wondering if we can see an end to the fast ferry construction and whether or not the amount of money that's

[ Page 8093 ]

[5:15]

G. Wilson: Is it the intention of the minister, then, that CFI will potentially broaden its program of construction beyond strictly aluminium construction? May it in fact be the agency through which we can have a more long-term capital construction program, either as a wholly owned subsidiary of B.C. Ferries or possibly after being sold to private interests? I'm with the minister when we talk about the need to maintain the shipbuilding industry in British Columbia. I think that's absolutely right on. I'm not sure that was the wisest expenditure of money. Nevertheless, time will prove us right or wrong on that. But there is no question that we have to put significant capital expenditures into upgrading the fleet. What concerns me is that if CFI becomes the focus of construction for offshore sales, who picks up the slack with respect to constructing to maintain the domestic fleet?

Hon. D. Miller: Well, there are other yards capable of construction of conventional vessels. The Sidney, by the way, is high on our list of priorities. But we're also looking at other opportunities in terms of off-book financing; we clearly have to. Earlier today, I tried to put in a box the context around the primary issues around B.C. Ferries: the need to renew the fleet; the capital expenditure, obviously, that that entails; and the ability to service that capital cost over time on an ongoing basis.

Those have presented some huge challenges, which we're looking at in a variety of ways to try to resolve. We think off-book has some promise, some opportunity. It's got to work properly, but it's a fascinating field from a business point of view: the ability of people to utilize, say, a tax system in the U.S. in a way that gives them an opportunity for a profit on an off-book financing deal. Again, I'm not a financier, but there are opportunities there. What you have to do is make sure that you evaluate it very smartly so that you make sure that it's in your favour. But if it is there and if, as a result of those kinds of arrangements, we can maintain our commitment on the capital side, then I think that's very important.

I clearly think that we have the resources in B.C. I'm not personally, and never have been, worried about the broader debt issues. It's clear. Look at Alberta for just one example. If you want to look at debt to GDP and those kinds of questions, B.C. is in a very good position. I think these kinds, I call them investments, pay off handsomely in the future, both in the short term and the long term. But you have to be prudent about how you do it. So, looking for these alternative financing mechanisms is very much part of the process we're engaged in.

G. Wilson: Let me move into the broader issue of financing for the corporation, because it seems to me that there are two ways in which one can look at the B.C. Ferry Corporation from a philosophical point of view: one, it's a Crown corporation that should be a stand-alone, pay as you go, user-pay service; or two, it is a public corporation that has as its primary obligation and responsibility the movement of the public as quickly, as cheaply and as frequently as possible. And there is a cost, a price tag association with that. That's something we're going to have to pick up and carry on a provincewide basis, because you clearly can't do it on an isolated, user-pay model and have the kind of revenue that we need to do the kind work that needs to be done in the long-term capital construction.

I put to you that a number of different agencies around North America have been looking at ways in which there can be operational funds established, and I wonder if there is a different model of taxation that is being looked at with respect to the provision of dollars for ongoing operating costs. One of the things that I've done some work on and looked at in some detail is the establishment of revenue bonds. Revenue bonds are essentially secured by farebox revenues but also developed through capital expenditure by government, by Crown.

So essentially the bonds are broadly-based. They are supported by the economy. They are often connected to sales tax as a source of revenue. What that does is provide a provision of revenue to B.C. Ferry or Transit or Highways, or whatever it is that the government chooses to do, without unduly burdening those people who are dependent on the ferries and live in ferry-dependent communities. That's not to suggest that they're going to travel free. Clearly there's a tariff that's going to be assigned. It has worked reasonably well.

I draw the minister's attention to Standard and Poor's work with respect to the establishment of these bonds, because I think there is a real opportunity here for us to find an alternative system of financing that doesn't necessarily burden the taxpayer. It is established as a bond, it's supported by the broad base of the economy, it doesn't isolate the user and it does provide the necessary revenue to keep the corporation going.

I wonder if the minister might want to comment on that.

Hon. D. Miller: I believe there has been a look at the question. I'm not sure how extensive. That's fine, and we ought to look at those things, but I don't know that it would resolve the fundamental issue that we're really facing, which is that, regardless of the source of revenue, there is still a requirement to take an overall, rational look at the operation, looking at the needs of the people it serves, to determine whether or not you can do better. How do you build into the system -- to me this is a really interesting question -- an accountability framework for the users, or stakeholders as we've identified them? We've conferred on the stakeholder committees, both at the Island level and the strategic level, a sense of participation or responsibility with respect to some of these operational issues. How do you do that? For example, if you know in your own mind, as an MLA in an area served by B.C. Ferries, that you could save money in a rational way and still meet the service needs, do you think you ought to push for that? Do you see what I'm trying to get at? Separate the obtaining of revenue or the allocation of revenue from the broader issues or the more important questions. I don't think $24 million is onerous for government. As a minister, it's always tough trying to get more money. But if you're looking at a $20 billion-plus budget, $24 million is not terribly onerous. But sometimes those areas get squeezed.

[ Page 8094 ]

The minister might say: "Let's take the Bowen Island example. It's less than the SeaBus to and from work." But the point is that if you don't want to take the SeaBus, you can go on the Lions Gate or the Second Narrows or you can even walk if you have to. You have another way of getting across there. Unless you own a boat, many people don't have another way of getting to and from where they want to go. They see it as an extension of the highway, and they believe -- rightly or wrongly; I think rightly -- that the Ferry Corporation has to be seen as an extension of the highway. So increased tariffs on a user-pay basis is not the way to go.

Given that we have rising costs -- and I acknowledge that -- and given that we have to recognize that this corporation has to have revenue in order to operate, there has to be a better way to finance it. I would argue that the $24 million subsidy is not enough. In fact, I argued last year that we should have had $40 million -- I think this year $45 million to $50 million, probably, given the data and the information that I looked at. Whether that subsidy is picked up in part by a public bond offering or issuance is something that we can do. We can do that and share that debt load, that cost, throughout the province, not strictly by those communities that are isolated by it.

It seems to me that if we are going to commit to the B.C. Ferry Corporation, and we should. . . . Even though I'd be the first to stand up here and take shots at B.C. Ferries, if you travel the ferries worldwide, it's probably one of the best systems in the world, without a doubt. I've waited in Greece until the ferry's full before they sail. You know, I understand that rationale. So it is not that we want to try to diminish the service, because I don't think we can do that, but we also can't continue to hike up the fares. I wonder if the minister would be prepared to strike a task force, to look at alternative funding sources and to deal with this, other than the operation of the stakeholders who right now are pretty highly charged.

Hon. D. Miller: Yes, I think timing is everything. I don't think it's the right time now. We are looking at these questions. In fact, I did say in response to the first question that I wasn't sure at this point about the level of detail, but let me try to make three quick points.

I think there is a different mind-set when the public is dealing with a public entity versus a private sector entity. There's no question about it. I don't know -- I've never been by to look -- what the history of what it costs to park in downtown Vancouver is relative to fare increases on the Bowen Island ferry. It would be interesting to look at some of these. My sense is that the public are much more ready to accept the private sector, because they probably feel that they can't do anything about it anyway. Public sector or government probably -- and again, this is just my instinctive sense -- feel that they've got an opportunity to influence, and they will rally under some circumstances. Clearly the second tariff increase last year provoked that response. So I think there's a difference there.

Secondly, there's no question that tariffs can influence behaviour -- in other words, people making choices. I think it's important that we look at them in that light sometimes. These are broader questions around transit. As a member for the rural part of this province now responsible for the north, I've tried not to ration the time that I can look at any particular question, but I am intrigued by the whole question of transit issues. We spend literally billions over time on highways and on improving the transit system. Are we getting the desired impact? Where is the point at which the driver will make a choice. . . ? I was driving with my wife one day down Granville Street, desperate to get to the airport, caught in traffic, and I swear that virtually every car had a single driver. They have clearly made that choice, even though there are consequences.

[5:30]

My sympathy, quite frankly, is with -- what used to be or probably is the northern part of your constituency -- the very small communities. The population base is simply so small that they would never, ever be able to have a cost recovery system. As you know, up in Rivers Inlet, Owikeno and just north of that in areas where I represent, people -- I mentioned Percy Starr, who they had so much admiration for -- were paying 27 cents a pound for every single thing that came across that dock or into that village, whether it was potatoes or a litre of milk. It was added on to the cost. So I have far more empathy, if you like, with those people, and I recognize that there are circumstances where we simply could not expect a cost recovery in those situations.

G. Wilson: Because we're pressed, I don't want to take the time to go back through the history of this thing, but the union steamship and what happened when those contracts were cancelled, and the problem with the transport -- or B.C. Transit, I guess -- and the Highways ferries that only recently have come over into the B.C. Ferries fleet, and so on. . . . Essentially, we used to have that prior to Bennett's decision to take a privatized system and make it into a Crown entity. . . .

Interjection.

G. Wilson: We still have to pay -- that's true. As the minister says, we still have to pay, hon. Chair; that is correct.

The question is: what rationale do we have to set the subsidy? In other words, we have to have some kind of rationale. What is the rationale to the set the subsidy? What's too much? What's too little? That's a question I have for the minister, and I'd like him to answer that. Secondly, what rationale do you have to set what is an appropriate tariff to cross Georgia strait? And should the tariff not be the same? Do you do it by kilometre? Do you do it by cost of vessel? Do you do it by frequency of sailing? What is the rationale? Right now

[ Page 8095 ]

Hon. D. Miller: It's a good question, because you can limit yourself unduly. And I submit that the Langdale argument is a classic. I mean, I'll just run down this -- this is off the cuff, but this is in your constituency -- for illustrative purposes: Horseshoe Bay to Langdale, plus $1.5 million; Sunshine Coast to Powell River, minus $2.3 million, almost minus $2.4 million; Powell River to Comox, minus $2.5 million; Powell River to Texada, minus $2.3 million. That's a total on the minus side of $5.7 million -- say, arguably, almost $6 million. You can look at it as an umbrella, which used to be a principle in transportation, and in other areas as well. In fact, to a large degree, I guess, you'd argue it still exists for hydro. We essentially have postage stamp rates, for the most part, regardless of where you are; it works. I'll give you another one: beer or liquor. If you buy a case of beer in Prince Rupert or Victoria, it's the same price. Arguably, it costs more to take it there.

So areas under government purview have tended to be evenhanded with respect to distribution or allocation. Therefore you'd have to argue that there's an implicit subsidy in some parts of the system. I think, you know, some things are better left alone, obviously. But Ferries is a bigger problem. I don't think there is. . . . There is no simple or ready answer to the question: what's an appropriate level of subsidy, and what's an appropriate tariff?

Although I. . . . Well, I guess I don't mind trouble. But in an ironic kind of way, this whole thing. . . . We're now joined in this debate as a result of our decision to raise those tariffs for the second time, last year. But they're good questions; they really are good questions. If you can get people thinking about them, I think you could probably develop a fairly rational overall policy that would -- I see the member from Parksville nodding or shaking his head -- guide you. So we'll see how the stakeholder process goes this time around. I still think it's going to be a tough haul, but we'll give it a shot and see if we can't come up with something that we think arguably "makes sense."

G. Wilson: I guess, though, the frustration for those people who live in ferry-dependent communities is that not only do we have to deal with the problems associated with residents -- and the people have to get back and forth -- but we have to deal with the frustration of not being able to get to and from where you want to go in portions of the year when your ferries are clogged up with people who you desperately would like to have come and visit you. As the minister said earlier on, everybody likes to travel, you know, often at the same time.

So clearly we have to come up with a rationale that suggests that people who live in a community and travel on those ferries, as part of their highways, to do all of the kinds of normal daily activities that people do have to have an expectation (a) that this service is going to be consistent, frequent and reasonable in cost, and (b) that they're going to be able to continue to have that service throughout the year and not get penalized in peak seasons when the corporation deems that they can simply make more money.

I mean, we've now got ourselves into low, shoulder and peak seasons, for three different fare rates. We've got ourselves set up in a situation, if you take Horseshoe Bay-Langdale, where the accounting on the process. . . . When you buy a ticket in Horseshoe Bay, you go all the way to Powell River. Yet it's accounted to the Sunshine Coast, not accounted from Sunshine Coast to Powell River. So there are inequities in the system.

The frustration is that we've set up a stakeholders committee to provide advice to the government on how we believe we could knock some of those inequities down. The advice was not taken. A tariff was put in place. There was a huge hue and cry. Mr. Fryer was brought in. He's made a set of recommendations which only go very partway. Because he has a very narrow set of terms of reference, they only go partway to solving the problem. There's no confidence whatsoever out there that the government's actually heard the message, which is that we must treat the ferries as an extension of the highways. We need to broadly base the subsidy so that British Columbians as a whole maintain that system in the same way that they maintain the highway system, because not all of us drive all of the highways.

Hon. D. Miller: That's true, but surely. . . . I accept the issue around confidence. I mean, we're going to have to go back at it. But let me. . . . Are we not all of us to some degree penalized by events like peak seasons? I'm sure that's true in the city of Vancouver. I don't know it, but I think it probably is true. I know it's true here. Try to drive on the highway at the peak season. I mean, there's a bit of an inconvenience. At the same time, it's a bit of a blessing, because clearly in areas like Victoria -- and I think probably in the Gulf Islands -- there's an enormous economic benefit that is derived from tourism. So you consequently always get, particularly in areas that are reliant on tourism, a bit of a love-hate relationship with the tourist. While they're there, they clog up your ferries and your highways and they're all over the place and you complain a little bit; but at the same time they pay the bills. Look at the northern service. If we didn't have that tourism aspect to the northern service, then the losses for the taxpayers would be many, many times what they are now. So we always have to weigh these factors.

I don't think that because you live on an island you're any more immune than if you live in a big city and may be affected in a different way but nonetheless affected. You and I both know that people who live on islands have developed a certain view of the world. It's been roughly described to me as: "Will the last one over please pull up the drawbridge?" We also know that the public -- and I'm not faulting them; I'm not being a critic necessarily, for the sake of being a critic. . . . We also know that people want the best possible level of service at the lowest possible cost, and they don't necessarily care that someone else is paying a hell of a lot of money to subsidize a service that makes their life better. Why should they?

This goes back to the stakeholders committee, and we'll see, because it's a new business. The trick is whether you can actually confer a reasonable level of responsibility on the user to get them to agree in a rational way that some changes ought to take place that might result in fewer sailings per day, which might result -- because the question was asked about the sort of irrationality of the tariff system -- in a policy decision that says we should try to rationalize this. And that might mean that if you've been protected for 30 years in this one part of the system, we're going to have to bring you up over a reasonable period of time so that you're consistent with. . . . Four or five runs have almost exactly the same mileage, and yet their discount rates and their tariff rates are all different. Now, you know what they're going to say? The lowest one is the right

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There are no single, simple answers. I think these are actually very good and useful questions, ones that ought to be talked about a great deal. It's very difficult sometimes to debate public policy in too open a way. If you're going to debate public policy, you ought to be a bit provocative for the sake of discussion. Yet I find in my job that the minute I do, I'm sort of damned: "You shouldn't do that." I've always found it strange, because I always thought the best discussions came out of being fairly freewheeling.

G. Wilson: Let me go to the third section, the general section, and focus in more specifically on some of the key problem areas, because it relates to exactly what we were talking about.

When I first moved to the Sunshine Coast -- that's back in the mid-1970s -- there were 14 sailings between Horseshoe Bay and the Sunshine Coast -- two vessels going back and forth. You could get back and forth frequently. If you missed one, you had an hour or an hour and a bit to wait. What has happened is that the B.C. Ferry Corporation has taken as a policy the move toward larger vessels so they can carry a higher capacity of vehicles over a fewer number of sailings, because they believe that to be cost-effective.

I would strongly suggest that what we have to do is take a chapter out of the pages of the new carriers like WestJet and others, who look to a standardized vessel with interchangeable parts and interchangeable schedules; it can fit any dock in the system. The crew is all trained on the same vessel. They have all of those kinds of efficiencies, and they put more of them in service to give more frequent service. The reason that people in the urban areas don't mind sitting in a rush hour is that they know rush hour is an hour -- or maybe an hour and a half or possibly two -- but they know that they don't have to sit as people on the Sunshine Coast did on the Victoria Day Monday, when you had 590 cars -- these were not people; these were cars -- sitting waiting to get on a ferry that they couldn't get on, and that's just one sailing. In the course of that day, there were over 2,000 vehicles at one time or another sitting on the road waiting to get across on that ferry. We can't have that, because if we're worried about tourism and small business, these people are frustrated. They're not coming back. If we're trying to get to and from businesses, the business people are frustrated they can't get back. As the MLA, I'm telling you we don't want to do this anymore. We've got to fix the problem.

[5:45]

Hon. D. Miller: I'll try to be very brief. Just an interesting observation: route 3 actually had a reduction -- not huge, but a reduction -- in volume. I think the replacement, as the member describes, of the old system, of the ferries back and forth. . . . They were aging; I think they had to be replaced. The decision was made, obviously, at that time to optimize -- optimum with respect to the size of the vessel and the movement of people. It is a bit ironic because we're going back. . . . Going back to the fast ferry debate, the critics argue conventional ferry size; we argue speed. That seems to be more in line with your argument. But I think the issue is optimization. You have to look at the particulars of any given route or set of routes in order to arrive at what might be rationally the most optimized system.

I worked for the Ministry of Highways in 1974, and I remember the huge debates about lineups and the problems in the peak summer season and all the rest of it. I think it's going to be a feature. It'll never be perfect. We actually do a very remarkable job. We had a terrible weekend this past weekend, and with that we moved a lot of people. They didn't have to wait forever; there was some waiting. But the corporation really pulls out all the stops in terms of dealing with that emergency, the loss of the gear in the Alberni, getting other vessels moving. I appreciate the member's observations, and I look forward to more discussion. I think this whole issue is an important one, and we ought to try to work at it even if there is some criticism.

G. Wilson: Let me just put one last question. On the commitment that some of these other issues. . . . I think I might have some meetings set up. Your ministerial assistant has been very good and promising solutions to a lot of the problems before the end of the year. I'm delighted about that.

A Voice: Which one?

G. Wilson: If I tell you which one, I'll. . . .

Let me just ask you one last question, and it has to do with the Queen of Sidney. The Queen of Sidney is an aging vessel. It's a vessel that at the very least can use a coat of paint, because it's kind of rusty and looking a little haggard. It needs to be replaced. I wonder if you might be able to give me information to take back to the people of Powell River and Little River as to when the construction program commences, so that we can have a new vessel by the wharf between Little River and Powell River.

Hon. D. Miller: I can't right here, but I will make this commitment. It is high on our list. We are engaged, to some degree, in looking at some fiscal issues. The moment I can give the member an absolute assurance with respect to the Queen of Sidney, I will do that as soon as I can.

Vote 32 approved.

Hon. D. Miller: I move the committee rise, report resolution and ask leave to sit again.

Motion approved.

The committee rose at 5:50 p.m.

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