[ Page 8549 ]

The House met at 2:05 p.m.

Prayers.

Hon. G. Clark: In the gallery we have some special guests who are closely connected with the annual MLA-press gallery tennis tournament. The prize for the winning team is the coveted Speaker's Trophy. The outstanding success of the tournament can be attributed to the players on both teams, and to the following guests who are here with us today: Dave Fujisawa, the B.C. vice-president of SHL Systemhouse Co.; Owen Taylor, the Victoria manager of systems integration with SHL Systemhouse Co.; Jack Hutton, a program development specialist with Providence Farm; and Chuck Johnstone, a Cowichan resident and event organizer. I understand that the Speaker of the House will be attending the tournament to present the trophy. We wish the tournament every success, and of course, all members expect that the Legislative Assembly team will once again beat the press gallery team. Please join me in welcoming all the visitors to the gallery.

G. Campbell: I am pleased to rise and join the Premier in welcoming the representatives of the tennis tournament. As you know, Providence Farm is an exceptional community facility on Vancouver Island. The tennis tournament is one of the highly regarded sporting activities of the year; in fact, they put it off until late June so that it doesn't interfere with the NBA finals. I want to welcome all of the representatives here today and say that we need more quality players from the legislative side to make sure that we continue our record of success.

G. Robertson: In the House with us this afternoon is a very good friend of mine, Mr. Rick MacEachern. I've known Rick for over 40 years. He is down in Victoria with his wife Pat for a few days. I would ask the House to please make Rick welcome.

W. Hartley: I'm pleased to acknowledge the presence in the House today of some 25 young grade 6 visitors, along with some adults and their teacher, Ms. Cortez, from Fernwood Elementary School in Bothell, Washington. Please join me in welcoming them.

L. Reid: I have two groups of students in the precincts today to introduce. The first group is 57 grade 7 students from Howard De Beck Elementary School and their teacher, Ms. Daley. The second group is from Garden City Elementary School. They are 31 grade 7 students accompanied by their teacher, Mrs. Aitchison. I would ask the House to please make both of these groups extremely welcome.

I. Chong: Visiting us today are a number of UVic students. They are Aaron Gairdner, president of UVic's B.C. Young Liberals; and Candice Ford, Herman Chung and Christian Hoefer. I would ask the House to please make them welcome, as they will be observing us at question period.

B. Penner: It is my pleasure to introduce Mr. Paul Decloet, who is here today on his way back to Ontario. He has just come back from Asia. He is visiting his son, who is a reporter in the press gallery: the bright and energetic reporter we all know, Derek Decloet of the B.C. Report magazine. Would the House please make them welcome.

G. Janssen: Joining us on her birthday today is a very good friend of many years, Kinnie Van Benthem, who is a neighbour and fellow countryman. I'd ask the House to make her welcome.

Introduction of Bills

ELECTORAL BOUNDARIES COMMISSION AMENDMENT ACT, 1998
(NORTHERN ELECTORAL BOUNDARIES PROTECTION ACT)

J. Weisgerber: I move that a bill intituled Electoral Boundaries Commission Amendment Act, 1998 (Northern Electoral Boundaries Protection Act), of which notice has been given in my name on the order paper, be introduced and now read a first time.

Motion approved.

J. Weisgerber: This bill, if adopted, would protect the parliamentary representation of northern British Columbia residents by ensuring that our four northern constituency boundaries remain intact following the Electoral Boundaries Commission review. The constituency boundaries of Peace River South, Peace River North, Bulkley Valley-Stikine and North Coast would be protected. The bill allows these four constituencies in the northernmost reaches of the province to have up to 50 percent less population than the average across-British Columbia population representation.

The four constituencies are unique among the existing 75. Not only do they rank in the top five constituencies according to size -- at over 50,000 square kilometres each -- but by far they are the most remote, all more than 800 road kilometres away from Victoria.

The intent of this bill is threefold. First, it distinguishes the four existing constituencies, which, by virtue of their special geographic considerations, impose unique demands on their constituents and MLAs. Second, the bill recognizes that in very special circumstances, population cannot be the primary or sole factor used to determine the configuration of our provincial electoral boundaries. Finally, it provides a mechanism that would maintain northern representation without the need to increase the total number of seats in British Columbia beyond 75.

Our northern constituency boundaries must be protected so that northern voices are not diminished in our provincial Legislative Assembly solely in a bid to achieve a population statistical average.

Bill M209 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

SUITABILITY OF EMPLOYMENT STANDARDS BRANCH APPOINTMENT

[ Page 8550 ]

Hon. D. Lovick: I thank the member for the question. I think it ought to be raised. The applications for positions with the employment standards branch were advertised some time ago -- I believe in March of last year -- and all of the major stakeholders in the affected industries were invited to make submissions.

For the position in Nanaimo, which Mr. Cronk now fills, there were five specific applications made. Mr. Cronk, who operated an independent contractor business as an electrician, had long experience and qualifications, and the employment standards branch in its wisdom decided he was clearly the best candidate. They clearly didn't look at whatever his history might have been in any kind of trade union activity; rather, they were measuring his abilities in his candidacy to carry out that job. They decided he was the appropriate person, and therefore he was offered the job.

The Speaker: For a first supplementary, I recognize the Leader of the Official Opposition.

G. Campbell: Clearly Mr. Cronk's history should have been looked at. The fact of the matter is that he stood idly by as the most violent labour dispute we've seen in the last decade took place. When that dispute was over, Mr. Cronk said quite clearly that the wider struggle against Mac-Blo and what he called the rat unions wasn't over. He said that he was sworn to wage war against those companies, those so-called non-building trades companies across the province. He said -- this is part of his history, and this is something that should be a matter of concern: "We'll put the squeeze on them all over the province."

How can the minister justify the appointment of a person with Mr. Cronk's background to a job that requires fairness and good judgment? And more importantly, how can any of those companies expect to be treated fairly?

[2:15]

It seems to me that the important point is that a person's historical. . . .

Interjections.

Hon. D. Lovick: Members, please. Wouldn't the members like an answer, hon. Speaker?

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

Hon. D. Lovick: I shall indeed. It seems to me that there's a principle that ought to obtain here -- namely, that a person's past history of involvement in a trade union ought to have nothing whatsoever to do with his or her suitability for this particular job.

The Speaker: I recognize the Leader of the Official Opposition on a second supplementary.

G. Campbell: Mr. Cronk stood idly by, and he was responsible for the organization, for the picket line that engaged in one of the most violent acts that we've seen in this province in the last decade. He did nothing. That is his history; that is his background. He is not an appropriate appointment for this government or any other government. It doesn't have anything to do with whether he's a trade unionist or not; it has to do with the fact that he stood by as his people broke the law -- threw hammers through truck windows and hurt people. . .violently opposed to what was taking place in the province of British Columbia.

Will the minister admit that Mr. Cronk is not an appropriate appointment for that job, and will he do the right thing and have him fired today?

Hon. D. Lovick: To my knowledge, Mr. Cronk has never been convicted of anything, although he has been accused by Mr. Hochstein and by Mr. McCarthy -- a.k.a. the Leader of the Opposition across the way. . . . I would also point out that Mr. Cronk received one month's training and instruction on how to perform this particular job on the skills development and fair wage compliance team. He is supervised by a manager in Victoria. Since he commenced his work conducting site investigations, there have been no complaints received about his activities or his decisions.

C. Hansen: This is not an individual who is simply a member of a trade union that got involved in difficulty. This was the picket-line boss in a trade dispute that resulted in some of the worst violence we've seen on any picket line in this province in the last ten years. This is a guy who is an avowed enemy of the non-building trades unions and an avowed enemy of companies that use non-building trades labour. How can the minister allow an individual such as this to have the enormous powers of a fair-wage enforcer and to use that power in a vendetta against companies that he has dealt with in the past?

Interjections.

The Speaker: I will recognize the minister when there is silence and order in the chamber. It's getting a little out of hand. I recognize the Minister of Labour and of Aboriginal Affairs.

Hon. D. Lovick: Madam Speaker, I know that the political environment in the province has changed with the return of Mr. Vander Zalm, but it seems to me that the folks across the way are moving much further to the right with this line of questioning than even Bill Vander Zalm ever went.

The Speaker: Minister. . . .

Hon. D. Lovick: The suggestion that somebody's alleged history as part of a trade union picket line should be grounds for prohibiting that individual from ever being employed in a position such as the one described here is unlawful. It smacks of blacklisting and witch-hunting and the worst kind of outrageous right-wing, redneck behaviour we've ever seen. These people ought to be ashamed of this line of questioning.

[ Page 8551 ]

Hon. D. Lovick: They owe an apology. . . .

The Speaker: Thank you, minister.

First supplementary, the member for Vancouver-Quilchena.

C. Hansen: Hon. Speaker. . .

Interjections.

The Speaker: Members, order, please.

C. Hansen: . . .if this minister is contending that for us to be opposed to picket-line violence and violence in the trade union movement is somehow a right-wing phenomenon, I don't think so.

This minister is accountable for the people that work in his ministry. If they had done one bit of research, they would realize the vendetta that this individual has been carrying out through the venomous words that he has been speaking over the years. This is a dispute that resulted in a TNL Construction employee being airlifted to Vancouver with serious injuries. This is a dispute that led to 33 arrests. This is a dispute that is a black mark on labour history in British Columbia. Will the minister ensure that this individual is removed from this responsibility with the employment standards branch, so that he cannot continue this vendetta in the future?

Hon. D. Lovick: Hon. Speaker, if I were to agree with the request being made by the member opposite, I would be party to the worst kind of blackmail, the worst kind of intimidation, the worst kind of coercion, in the name of doing the right thing. What those folks are really suggesting is that they want me to break the law. They want to, in fact, single out an individual. . .

Interjections.

The Speaker: Hon. members. . . .

The minister will wind up his remarks.

Hon. D. Lovick: . . .named by their friends, who are well known to be not terribly supportive of trade unions and who are suggesting that because of the activity of this particular individual on a very ugly picket line -- ugliness caused by both sides, let's not forget -- and on their say-so alone, he ought not to be given the job in the employment standards branch. I stand by the recommendation given me by the branch. This was the best person of those who applied for the job. He has the qualifications and, indeed, has done the job well thus far.

G. Farrell-Collins: I see the Premier and the Deputy Premier sitting there laughing. This is a man who was the picket-line captain on a picket line where we saw the most violent actions we've seen this decade. An individual was airlifted by air ambulance to hospital with serious injuries. There were 33 arrests made. If the minister can't understand that someone who was the picket-line captain, who, after those violent actions, vowed to continue his vendetta to every corner of this province, and who now has the power of an enforcement officer with Employment Standards. . . . It's the minister who doesn't deserve to have the job.

The Speaker: Your question?

G. Farrell-Collins: This isn't McCarthyism; this is Jimmy Hoffaism. Will the minister demand the resignation of this individual, who has no right to hold that position of power?

Interjections.

The Speaker: Order, hon. members.

Hon. D. Lovick: I'm tempted to ask the member to repeat the question, because I didn't hear one. I think we had a statement, and the statement, unfortunately, is an ugly one. The member suggests a vendetta. Let me suggest that the only vendetta being carried out here is by the Liberal opposition. The vendetta is being carried out against working people and trade unions in this province, and that's what this is about.

The Speaker: On a first supplementary, the Opposition House Leader.

G. Farrell-Collins: This gentleman, Mr. Cronk, said: "We'll put the squeeze on them all over the province. The wider struggle against Mac-Blo and these unions is not over." In the time frame from when he was out there on the picket line, where we saw this kind of violence -- individuals airlifted to hospital, 33 arrests. . . . At the end of that, he vowed to continue the struggle and made statements like that.

Now the Minister of Labour defends the right of someone like that to be an enforcer on the fair-wage deal. How can the minister justify someone of that calibre, someone who has sunk that low, holding a job in the public service where he has the powers that he has as an enforcer under the Fair Wage Act?

Hon. D. Lovick: How wonderful it must be to be able to speak with such passion about an issue that one knows nothing about and has no personal experience of. This line of questioning amounts to absolute character assassination, based entirely on the word. . . .

Interjections.

The Speaker: Order, hon. members.

Hon. D. Lovick: Hon. Speaker, how interesting that these people who claim to argue for due process and fairness believe in shouting down anybody who disagrees with them. But that happens.

The only point to be made here is whether an individual should be automatically excluded from employment because of his or her involvement in a trade union. We on this side of the House say: "Absolutely not; that will not happen." We will ensure that the laws and due process in this province are maintained.

And if the hon. members want to talk about sinking low, let me remind them of their own paradigm illustration of labour relations: the member for Kamloops-North Thompson, who believes that "you whack 'em, and then you whack 'em again." -- that's how you discipline workers.

Interjections.

The Speaker: Order, hon. members. Will both sides settle down, please.

[ Page 8552 ]

Leave granted.

A. Sanders: On behalf of my colleague from Langley, I wish to introduce Mr. Knelsen, a teacher from Glenwood Elementary School. He has with him 32 grade 7 students. Could we please make them welcome.

Orders of the Day

The House in Committee of Supply B; W. Hartley in the chair.

[2:30]

ESTIMATES: MINISTRY OF FORESTS
(continued)

G. Abbott: I'd like to pick up where we left off yesterday, with the small business forest enterprise program. I presume we have the right staff here to deal with that issue today. I want to begin by reviewing with the minister, if I could, the application of the recently announced stumpage relief to the forest sector and its particular application to the small business forest enterprise program.

I think I have a clear understanding in my mind about how stumpage relief will be applied to the major licensees. On the coast we will see a fixed reduction of $7.45, I believe; for the coast licensees, superstumpage paid to Forest Renewal B.C. will be reduced by that amount. In the interior, it's $3.50 or $3.10 -- something like that -- that's going to be deducted from the amount that's paid to Forest Renewal B.C. What I'm trying to do is just make sure that I've got it clear in my mind how the same thing is going to work with respect to the small business forest enterprise program.

What I am assuming occurred here is that, effective June 1, 1998, there will be a reduction in the base stumpage for small business sales. The minister gave me these numbers yesterday. I believe that for the coast, just over $9 will be deducted from the base amount on the small business sales. As I recall, in the interior the amount to be deducted was in the $4 range. Perhaps the minister can refresh me on that and correct me if I'm wrong in saying that as of June 1, 1998, all small business sales, whether they are on a fixed stumpage basis or a variable stumpage basis, will have the deduction of those amounts that I've stated, depending on whether they're on the coast or in the interior. Could the minister correct me if I'm wrong?

Hon. D. Zirnhelt: This is where we left off. I just wanted to get the numbers precisely. The average reduction on the coast is $8.10, and the average reduction in the interior is $3.50. But because a certain percentage of the timber is billed at minimum stumpage and it can't be reduced, it makes the average for the non-minimum-stumpage timber higher. That results in a $9.45 reduction at the coast and $4.90 in the interior -- that is only for those sales that have a variable stumpage. Those small business sales that elected to have a fixed stumpage rate, which protected them from it going down or up, are stuck with the contractual arrangement made at the time they entered into the sale. Any new sales -- where someone might opt for a fixed-stumpage rate -- will start from a reduced base, which will be, you know, roughly $9.45 and $4.90 lower. The new upsets for new small business sales will have the reduced amount, but not those that elected the fixed rate.

G. Abbott: I appreciate the minister confirming, I guess, my understanding of how this is going to work with respect to the small business program.

The concern that flows from my understanding of the changes that have been executed as of June 1 is. . . . It's difficult to explain, and I hope the minister can bear with me as I try to translate something that I put in graph form into words that, hopefully, are meaningful. If one sets the change in base stumpage from '94, when superstumpage was introduced to fund FRBC, and puts it over to June 1, 1998, when we see a dip in that line because some stumpage relief has been offered that will reduce the amount that goes to FRBC. . . . If one sets that graph against a curve of basically what softwood lumber prices did over the course of that period between 1994 and June of 1998, one sees, really, quite a pronounced bell curve -- I guess that is what it would be referred to. It swings up in '94, '95, '96 -- we had very good softwood lumber prices through '96 and through about half of '97 -- at which point it starts to tail off into 1998. Basically, we set a kind of bell curve indicating the price of softwood lumber on the American market atop this other line which we have which indicates the base stumpage that is paid at the same time.

My concern here is that those contractors, those companies that in 1996-97, when the markets were very buoyant, when it looked like, you know, those prices were going to hold up for the long term. . . . Some of those contractors' businesses obviously bid some fixed stumpage contracts, and what we find as a consequence with them bidding high in '96-97 is that. . . . The minister can presumably argue, if he wishes to, that it was their own choosing to do that, but where it leaves them in terms of the situation in 1998 is that with their fixed bids and their fixed stumpage sales that were bid in '96-97 -- they're up there already. . . . What they're going to be up against is not only a situation where softwood lumber prices have fallen dramatically since that time and have rendered their sales probably uneconomic, but in addition the serious factor of variable-bid stumpage sales dropping off further. So the margin between what is economic and what is uneconomic, in terms of the variable sales versus the fixed stumpage sales, is going to be very wide.

I suggest to the minister that perhaps what we are looking at again are unintended consequences from the perspective of trying to keep some consistency on the fixed-bid side. I hope the introduction and the explanation is not too complex here. Essentially, I'm saying that as a consequence of these two factors -- the reduction in the price of softwood lumber and the reduction in the variable stumpage licences -- there's a huge gap between the fixed-bid and the variable-bid small business sales. I'd like the minister to comment on that as we proceed.

Hon. D. Zirnhelt: I have a couple of points to make. One is that there is no strong linkage between log prices and stumpage. Just because you reduce the stumpage, it doesn't

[ Page 8553 ]

We're prepared to consider extending the term of these licences, so that when the market rebounds they might be able to hit the upswing a little bit. We're looking at that; we're looking at ways to mitigate this effect. I go back to the point that when they did bid, they made some judgment about what's going to happen with log prices.

G. Abbott: And they did. There is no question, hon. Chair, that when they did their calculations around submitting a fixed-bid stumpage proposal on a small business sale back in 1996 or '97, they undoubtedly made some projections about markets and all the rest of it. The point here, as I see it, is that the recent stumpage relief that was announced in Kamloops by the Premier and the minister was all about getting people back to work and relieving lumber businesses, whether they be big companies or contractors or small lumber businesses -- whatever it happens to be. The notion was that the savings in stumpage would help to make the industry economic again. As I recall, it was very clearly a recognition as well that the Forest Practices Code had cost a good deal more to implement, particularly on the coast, than what the former Minister of Forests had anticipated back in 1994.

[2:45]

Again, it seems to me that while we have addressed those, we have made, in this process, those unfortunate companies and small business people -- who had, from 1996 to 1997, fixed stumpage small business licences -- less economic as a consequence of this. We have widened the gap between the variable stumpage folks and the fixed stumpage folks. That was already happening because of the decline, in the latter part of 1997 and the early part of 1998, of softwood lumber prices.

I more or less understand how the stumpage systems work, and I don't want to get into an argument about what drives stumpage. I mean, clearly the value of forest products declined, and we see it being less economic to harvest those small business sales. We may have inadvertently added one more impediment here to the recovery of particularly those businesses that are trying to work with fixed-rate stumpage small business sales.

Hon. D. Zirnhelt: Well, we haven't added an impediment. They opted to lock themselves in, so when a change was made, they were stuck with the deal made at the time. One of the effects might be. . . . We don't know this for sure, but often it's the major licensees that buy the small business wood so that their situation is more economic. They'll be able to purchase the small business wood. But just reducing the stumpage doesn't mean that they're going to get any more for their logs anyway, you know. One effect might be that they reduce the price of logs too. That's the problem with that particular little market there.

When we chose the relief, we thought it was fair that the system be equitable for all those who were in on the fixed rate: major licensees, woodlot, ag lease and so on -- all types of licensees. It wasn't discriminating against any particular type of licensee.

G. Abbott: I'm not arguing that the government set out to discriminate against people who had fixed-rate stumpage small business licences. That's not my argument. The point I'm trying to make here is that as a consequence of a set of government actions, the gap between how economic small business sales are on a variable-stumpage rate versus a fixed-stumpage rate has been inadvertently widened.

Again, let me back up here, because I want to pursue this point -- it's a very important one. I don't fancy that any member in this chamber would want to look back six months or a year from now and say: "Oops, we inadvertently bankrupted 50 small businesses in British Columbia because we didn't recognize the particular difficulties that we were going to add to or exacerbate."

Let me put it this way. Let's try, for a moment, to put ourselves in the shoes of someone who is proposing to bid on a small business licence back in the summer of 1996 or the summer of 1997. At that point in time, we had pretty good to very good prices for random-length lumber on the American market. Things looked good. We bid strongly in order to get the sales. We would all concede, too, that back in the summer of 1996 or the summer of 1997, a contractor or business person bidding on one of those sales would have had no inkling that in June of 1998 the government was going to introduce stumpage relief for variable-rate small business sales but not for fixed-rate small business sales. I don't think any business person could reasonably be expected, in the summer of 1996 or the summer of 1997, to have anticipated that.

Now, certainly that argument might be made for the spring of 1998, when this issue was very much on the front burner and, I suspect, probably induced people to go variable rather than fixed. But I don't think anybody can be reasonably expected to have anticipated that possibility back in the summer of 1996. I think that is imposing upon them an ability to look into the future which is not realistic.

So again, what we have is someone bidding a sale back in the summer of 1996 based (a) on the premise that lumber prices were going to hold up and (b) on no knowledge that some two years hence the government would be introducing a reduction in the base rate of variable-stumpage small business sales. Again, what has occurred here is that with the additional reduction to the variable rate, folks, the gap has widened between what it's costing the fixed-rate guy and the variable-rate guy. The variable-rate guy has been made more competitive; the fixed-rate guy has quite possibly and perhaps inadvertently been priced out of the opportunity to harvest sales, that with the relief, might otherwise be viable. I'd like the minister's comments on that.

Hon. D. Zirnhelt: Our defence of the approach here is that if we had affected log price. . . . When he bid he knew what the log price was or had some idea what the log price

[ Page 8554 ]

Just to remind the member, if he'd bid on a sale back in '96. . . . Typically the sale is for one year, and there may be an extension for another year. So it's going to run out in the summer of '98. But in the summer of '97, there was a softening; people knew there was a softening happening. But adjustments were made because of the code cost increases; in '96 and in '95 we knew that there was a cost to the code. That was factored in to those who were doing the bidding. The people who had a chance to bid, and then to elect to set that price, knew what the costs of the code were at that time.

G. Abbott: But the point here is that everybody knew that the code costs were higher than what the former Minister of Forests had anticipated and considerably higher, particularly, on the coast. Everybody knew that. Yet what's happening here is that the recognition of those additional costs is being extended only to those who, whether through good luck or good judgment, elected to go with variable stumpage as opposed to fixed stumpage.

If the extra costs of the code are a burden to everyone in the industry -- and clearly they are. . . . I have correspondence, as I know the minister does, from a variety of contractors, particularly on the coast, who are scared to death of the current situation. We are not delivering relief from code costs to that particular group. We're delivering it to everybody but those who, for good reasons or bad reasons, elected to go with fixed stumpage. Would the minister concede that? We are delivering those code savings, in the form of stumpage relief, to those that had variable stumpage small business licences, and we're delivering it to major licensees. But we're not delivering it to the fixed-rate guys.

Hon. D. Zirnhelt: What I will say is that we are delivering the savings to those who were on the variable rate. But let me make a couple more points. Anybody who is in the small business program could bid on new sales with the stumpage change; they can do that. But if someone bid in '96, when we were on the swing up on the bell curve, they already had a saving. They didn't have to pay more stumpage. It was going up.

I have to admit that there are some people who get caught in the movement up and down. That happens, and I know of no fairer way. . . . If we had an unlimited resource, we could have come in and reduced it even more perhaps -- if we could have got away with it and so on. Don't forget that the small business program's bidding process is often what we refer to as the market that determines the price. We use that as the justification to show that we do have a market-based pricing system. We're reluctant to tamper with the system itself, with the way it was set.

In '97 we were continually talking about stumpage reduction, so anybody who bid in that era could have projected that the stumpage would come down -- taken us, in fact, at our word. They knew we were negotiating or at least dealing with licensees to do that.

I'll just repeat. In '96, to use your example, if they elected a fixed rate, they were pretty smart, because it went up and they won on that. There's no way to get what is seen on the part of some of these people as this 100 percent equity they would rather have. I do feel for those people who get caught in the market turn, but I dare say we would never hear from those people who had the fixed rate when stumpage went up -- they weren't crowing. And I'll just remind you that when we did increase the stumpage back in '94. . . . We didn't increase it; we kept those people whole for the one-year or two-year term of their licence. So that same category of people had an advantage at that time.

G. Abbott: It's an interesting discussion we're having here, and I hope we are gradually rising to a broader understanding of what each of us is saying. I don't dispute anything the minister has said about the market being in operation. According to when you bought in '96 or '97, and what you bid in '96 or '97, you're going to be a winner or a loser in the marketplace, depending on how well you bid and the luck of the draw and circumstances -- all of those things come into it. There's no question about that. I agree entirely with the sentiments there.

The point I'm making here is that the government -- with the best of intentions and actually in the right direction, I think -- did tamper, to use that term. "Tamper" is not the right word here, because that's not the intention. Two weeks ago the government chose to announce stumpage relief for the industry. The government had concluded that stumpage relief was necessary to get the industry back on its feet again. Further, the government concluded that because the costs of the code were far in excess of what the former minister had anticipated, there was a powerful argument, a powerful rationale, for introducing that relief and hopefully persuading the Americans of the virtues of the argument.

[J. Doyle in the chair.]

[3:00]

Hon. D. Zirnhelt: You make one argument, and I make a counterargument. But you used the word "marketplace." We do not affect what they get for their logs; we have studied it, and we're prepared to share information with you. We do not believe that we'll affect the price that they get for their logs. They're in a special market; they're operating on a log market basis, which is different from most of the other licensees.

The point is that if we did affect the log market, then they would have an additional argument to make.

G. Bowbrick: I ask leave to make an introduction.

Leave granted.

G. Bowbrick: Joining us in the gallery today are 49 grades 4 to 7 students from Connaught Heights Elementary

[ Page 8555 ]

G. Abbott: The minister makes an argument about the recent stumpage changes not affecting the value of logs. He may well be right in making that argument. But what I don't seem to be able to communicate here is that with these changes, as of June 1, we are effecting a substantial reduction in the stumpage that is going to be paid by the variable-rate small business licensees on the one hand compared to the fixed-rate small business licensees. As of June 1, the one group is going to drop, and the other group's going to stay the same. The viability for those on the fixed-stumpage small business licences is going to be adversely affected. I can't see how it could be otherwise. We are going to give that relief of unexpectedly high Forest Practices Code costs to the one group but not to the other. That's the point I'm making, and I don't seem to be getting through on that. Perhaps I'll see if I have this time.

Hon. D. Zirnhelt: I hear and I understand. The point is: we have one small business bidding system that has a stumpage rate determined in one way, and that's what they bid. The other system we have -- calculated stumpage -- is the one we have to effect, because that's the one the Americans have been watching, for example, and that's the one covered by the softwood lumber agreement. Therefore, we have to approach it rationally and change it systematically. That's the argument that we made, and that's the rationale for making the changes.

To use your argument for a minute: if the price of logs goes up -- which it could do -- those people on the fixed rate will still be on the fixed stumpage, and they won't have to pay any more. The other people will have theirs go up. It's tougher for them when there's a reduction, but there's a major advantage for them when it goes up. So they have a disadvantage one way and an advantage the other way.

G. Abbott: I wholeheartedly agree with that. In their fixed position, as the markets go up and down, their fortunes -- good or bad -- will change. I'm saying that that's right: in some cases the market going up or down will benefit the guys that elect to go variable, and sometimes it will benefit the guys that elect to go fixed.

But in this case the government has resolved to deliver stumpage relief to forest operators in British Columbia, yet there is a portion of them that we're not going to be delivering that to. If we're making the argument here around relief from unexpectedly high costs associated with the Forest Practices Code, surely it holds just as powerfully for somebody who bid on a fixed basis as it would for somebody who bid on a variable basis. I'll read some letters here -- perhaps a little later -- which are from people who elected, wisely or unwisely, to go with fixed stumpage in '96 or '97 and who are now looking at uneconomical harvest opportunities.

Maybe the minister could respond to my point here, which is, again: if the argument holds for the major licensees and for the variable-rate small business licensees that because of unexpectedly high code costs there is justification for an approximate, across-the-province $5 reduction or relief from stumpage, then surely it holds for the fixed-rate guys just as well as it would for the rest of them.

Hon. D. Zirnhelt: We are going around in circles, and I don't think we can stop it very easily. I think this is really all that I have to say about it: the people who bid on the wood -- and then fixed -- knew what their costs would be, because the code has been around since before they considered bidding. So they knew that. . . .

Interjection.

Hon. D. Zirnhelt: Well, they did. But the other people had no choice. Their stumpage was going to go up if there was a fluctuation in the market. There are two systems. The systems are quite different, so the systems are treated differently. I'll just finally comment that they're different.

G. Abbott: The minister says we're going around in circles here, and perhaps we are to some extent. I'm still not convinced of the argument that is being presented by the government. Furthermore, I think that what's going to occur, as a consequence of the one group that is -- in my estimation, not in the minister's -- being treated differently than others, is that we may have businesses in the province that fail or experience difficulties or give up small business licences because of this. I think the government's intention of getting the industry back on its feet will be marred to some extent by the unfortunate situation here.

Let me ask this question so that we can perhaps move along here: did the ministry calculate what the cost of relief would be to those on fixed stumpage rates? In the process of sorting out whether they would extend stumpage relief to that group, did they arrive at what the cost would be to Forest Renewal B.C.'s coffers in terms of that relief?

Hon. D. Zirnhelt: As the member will remember, we looked at the accumulated stumpage in the FRBC bank account, and that was the pot from which we were going to pay the cost relief. These small fixed-rate sales don't contribute to FRBC; they contribute to general revenue. So while we tried to make some estimates of what this would be. . . . The studies are imprecise, but we did do various calculations.

G. Abbott: Is the minister prepared to share what those calculations were?

Hon. D. Zirnhelt: We can provide some information to you, through the director of the revenue branch, but I just want to say that estimates are difficult to be precise about, but we did make some estimates.

G. Abbott: It's the estimate of potential cost and/or saving, depending on which side you're looking at. I'm not looking for down to the last million dollars. Would we be in the realm of $50 million in costs or $10 million? What kind of ballpark are we looking at?

Hon. D. Zirnhelt: The problem in the estimates is trying to figure out how much would be logged if you reduced it and how much would be logged if you didn't reduce it. There is no science that helps with that very precisely. I don't have a ballpark figure for you. But what's going to happen if stumpage happened to go up on July 1 for some types of sales? Would you then be asking us to reduce it for the fixed-rate people? People will benefit as this goes up and down. That's to say that when they bid, they take a chance, and that's the system they're playing in. Even if we did the reduction for the fixed-rate people, it's not clear that that would put them back to work, as there are other factors.

[ Page 8556 ]

G. Abbott: What I would do. . . . The minister asked the hypothetical question: if the rate goes up the next month, would we offer relief to the variable-bid people? I'd say no, we would not. What we are doing here -- and this is the point I've been trying to make all the time -- is that we're making a one-time change to the system as of June 1 in an effort to get logging companies and lumber companies back on their feet. The reason I'm having some difficulty embracing the line of argument I'm hearing from across the floor is that we do appear, at least on the surface, to be treating one group differently than another. I'm understanding the argument that is being made. But it's not something we're going to be repeating next month. I don't expect that the government is going to be introducing additional stumpage relief for the foreseeable future. On a one-time occasion the government elected to do that.

I still need to be persuaded that it's not appropriate to deliver that saving to the one group that elected to go fixed rate. I appreciate that that's contrary, in some respects -- theoretically at least -- to the notion of a fixed rate. But we're doing it for everyone else, and it's tough for me to understand how we aren't in that respect not fundamentally changing the marketplace these fixed-rate people are working in. That's the point I've been making here, but I'm not going to ask the minister to comment again on it, unless I have suddenly persuaded him of the merits of my argument. I want to move along and not dwell on this point. We have been around it. So unless the minister is persuaded, I'll move on to the next point.

Interjection.

G. Abbott: Oh, I'm sorry. You are persuaded? Good.

[3:15]

G. Abbott: We'll complete the circle by saying again that the theoretical argument being advanced here may have some merits, but we are cutting off our nose to spite our face in terms of the treatment of one group and what they have to work with, I think. Let me note that over the past few weeks I've received numerous letters. They're primarily from logging companies around the province who have been very, very concerned about this issue -- particularly companies on the coast that have been particularly concerned about whether the stumpage relief would apply to them. They have been advancing arguments as to why it should.

I'm not going to read all of those letters into the record. We have some time constraints around these estimates, and I don't propose to take all the time up to do that. But I think it is important for the record to show the concerns that have been expressed around this, because I think they are important ones, and they're ones that I have found persuasive.

I want to quote here from a letter from Harold Hayes, who is the vice-president of Hayes Forest Services Ltd. and, I think, one of the larger independent contractors in the province. Mr. Hayes advises, in a copy to me of a letter that was directed to the MLA for Malahat-Juan de Fuca. . . . He notes at the outset that he has five small business sales that were awarded prior to the June 1 changes. He goes on to say:

"We have been an active participant in the SBFEP for the last eight years and have successfully completed 13 timber sales comprising a total volume of over 500,000 cubic metres. These timber sale licences have been both conventional and helilogging sales. We have been active in this program to augment employment opportunities to our employees and to maintain the level of work and business which our company performs. "Our involvement in the SBFEP has been critical to our company's survival, as we have lost work in our traditional operating areas due to land use decisions -- Carmanah, Walbran Valley, Great Central Lake and Clayoquot -- and to native issues. . . . In the latter area, our operations and annual cut of 150,000 cubic metres was totally lost for a period of five years.

"Four years ago, we undertook a great challenge and risk and entered the helicopter logging field. Having invested our resources in training, aircraft and facilities, we are now very successfully operating two S61 Sikorsky helicopters. The timber sales which we currently hold are all helicopter logging sales and were bid to provide work to our helicopter logging program. In this extremely difficult economic period, this work is critical to our employees and to our company. If the stumpage is not reduced, we will be forced to lay off approximately 50 employees by September 30.

"As you are aware, poor markets and high stumpage rates have severely contracted the level of harvest in the province. The government's recent reduction of stumpage rates across the board was made in response to this problem in order to try and stimulate economic activity, employment and revenue to the Crown. We are requesting that this same reduction be extended to all licence holders, regardless of their type, including SBFEP competitive-bid timber sale licensees who chose fixed stumpage rates.

"It is imperative that the stumpage reduction be extended to all parties and that the economic playing field remain level. The actions of the government in reducing stumpage across the board has fundamentally changed the market and cost-structure for Crown timber. As this change in the market is caused by government intervention and policy, rather than market forces, it is only fair that stumpage relief be extended to all parties. If stumpage relief is not extended to SBFEP participants such as our company, they will be penalized and put at great disadvantage as a result. In our opinion, there is no compelling rationale to discriminate against small businesses in this way."

If I can't persuade the minister at this point that his ministry ought to review this situation and revisit some of the issues around it, I hope that in the weeks ahead, when

[ Page 8557 ]

Hon. D. Zirnhelt: I've seen Mr. Hayes's letter. We expected letters from people like that. I have a number of them. I have read them all, and I will be responding to them in due course.

G. Abbott: I regret that I've been unable to persuade the minister of my view on this. One of the options that the minister suggested might be a possibility here would be the extension of the harvest period, so that presumably, as markets hopefully reverse in the months and years ahead, a sale that might otherwise just be outright lost. . . . I hope the minister can concede that there are a number of uneconomic harvest possibilities there for some of the fixed-rate small business sales right now.

What do we mean by extending the harvest period? Is the ministry prepared to extend it until markets turn around or until some fixed period of time into the future?

Hon. D. Zirnhelt: It would not be more than one year at a time. We will observe the situation, monitor it, to see how it goes. We've done it before. Anything we do would have to be seen to be fair. In particular, it has to be fair to those people who also bid on it, who could equally make the argument that if that person hadn't taken the sale, they could have bid it at the price they paid. We have to have it be seen as fair.

G. Abbott: I think we'll move along to other aspects of the small business forest enterprise program at this point. In leaving it, I think we do have a problem out there, particularly on the coast, with a lot of unemployed loggers right now. If we can get them back to work without offending any code of fairness around how small business sales are conducted and so on, I hope we can do it. The contractors, the small business people, need a lot of help right now -- that's clear -- particularly on the coast.

The reduction that has been provided to the folks that have variable-rate small business sales is considerable; a $9.45 reduction is going to go a long way toward getting people back to work. Regrettably, that won't hold for those in the fixed-rate position. I guess we've made all the arguments around that, and we need to. . . .

Unless the minister has something further to say, in concluding that, I want to go back to a point we were at yesterday. I had requested some information around category 1 and category 2, etc. The minister didn't have the right staff here at the time to provide us with the detail I needed. Perhaps I will ask the minister if the right staff are here to proceed with that discussion now, and whether the minister had anything that he wanted to add in conclusion around the issue of stumpage relief to small business folks.

Hon. D. Zirnhelt: There was a question about where the million cubic metres transferred to bid proposals came from. What I would say, and get it on the record, is that it came from category 1 or 2 -- either category -- and in the "Any" category there were 110,000 cubic metres. . . . In category 1 alone there were 380,000 cubic metres; and in category 2, which is the small business with a sawmill, a bush mill, there were 340,000 cubic metres. There's a transfer of 170,000 into the small business forest enterprise program from other apportionments. So that totals a million; that's where the million came from.

G. Abbott: Could the minister advise, then, with the addition of the one million cubic metres that have come from category 1, category 2 and other categories, what will be the total cubic metres available in the bid proposal category?

Hon. D. Zirnhelt: It started out at three million, and it will end up at 4.4 million. So there's that one million and there's another 400,000 from TFLs. TFLs have to contribute a portion.

G. Abbott: Could the minister advise what portion will be contributed via the TFL route?

Hon. D. Zirnhelt: There are 940,000 cubic metres in the TFLs. There used to be 400,000 sold as bid proposals. There now will be 810,000 sold as bid proposals. The rest will be sold in other small business sales, category 1.

G. Abbott: I thank the minister for that explanation; it clears up that point.

The next question I had, which we were unable to answer last day, is: what remains of the category 1, category 2 and other category wood? What is the volume that is going to be left, in short, for sale as open market sales to whoever is the highest bidder?

J. Weisgerber: I request leave to make an introduction.

Leave granted.

J. Weisgerber: It's my real pleasure to introduce to the members a number of students from Little Prairie Elementary School in Chetwynd. They're grade 7 students. They're seated in the gallery behind me. They're accompanied by Mr. Brian Bradshaw, Ms. Filgate, Mr. Oliver and a number of other parent chaperons; Mr. Bradshaw's class comes every year. It's a real pleasure for me to see groups from Chetwynd. It's a further pleasure, inasmuch as Mr. Bradshaw taught both of my daughters when he was a teacher at Pouce Coupe, and I know that he is fondly remembered by them. Would all members please make the class particularly, and their teachers and parents, welcome to this House.

[3:30]

G. Abbott: The reduction to 600,000 cubic metres in the small mill category gives me some pause, at least initially. Obviously there were about a million cubic metres prior to the transfer out to the bid proposal category. Why would the minister not anticipate that possibly, in order to bump up the value-added sales or the bid proposal portion of timber available, that the 50 percent reduction in the amount going to the category 2 small mills will not pose problems to that group in the province.

[W. Hartley in the chair.]

Hon. D. Zirnhelt: The overall intent of government policy is to direct more fibre to the reman sector. What we have

[ Page 8558 ]

G. Abbott: We've just spent a considerable amount of time talking about the marketplace and the government getting involved in the marketplace. Again, this is an example. . . . Perhaps it's for the best of intentions, and maybe it's entirely in the right direction, but there is obviously going to be some movement away for a portion of timber for more open-market sales. Is this something that would give rise to the Americans around their issues on sales reflecting real market conditions as opposed to the government altering the situation in the market? Is that at issue here?

Hon. D. Zirnhelt: I have to say that there's still competitive sales, so from that point of view, it's salutary. The Americans, don't forget, have limited the amount of primary sawn fibre that they'll accept. So we have no choice. If we want the industry to thrive and grow and find internal markets, we have to direct it to the reman sector -- but we expect that the bids will be very competitive.

G. Abbott: This is a big ministry that the minister is attempting to guide. We do run into these interesting situations where in some sectors it appears that it's okay for the government to intervene, and then we get into other instances where we want to let different factors rule. I guess we've run into this with respect to plywood earlier on, and we've run into it with respect to small business sales, which we more recently discussed.

This is an interesting one here, as well, where, again. . . . I'm not going to argue with the action here at this point, but I do think it should be noted that we are moving away from open market sales. I guess the government has concluded that it is necessary to do that at this point in time. It's presumably going to be a fairly cumbersome and difficult matter to administer, I would think -- to have a million cubic metres of wood that the government has said has to go here or has to go there.

I presume there is a tracking mechanism involved, and I guess the issue is whether there are particular factors at work here -- particular market forces or other forces at play here -- that require the government to do that. Why would the open market sales not work in a way. . . ? Particularly if those open market sales were larger, would they not work in a way where presumably the value-added producers might want to bid that wood alongside a licensee or whoever? Does the government, in short, consider that this particular kind of intervention is going to be necessary in the long term, or is it a reflection of the relatively limited amount of wood that is sold on a market basis in British Columbia?

Hon. D. Zirnhelt: Well, there is a major size differential between the major licensees and the small business, particularly the remanners, so they don't have the purchasing power or the long-term licence and so on upon which to make investments. We're just trying to create a larger critical mass of remanufacture operators that, over time, hopefully will be able to have enough purchasing strength to purchase on their own. In the meantime, it was clear that it required a public policy intervention to steer more fibre in that direction.

G. Abbott: I should note, again for the record, that as opposition Forests critic I have received a considerable volume of correspondence around this issue. Just one example of it is a letter from the chair of the Boundary Small Business Timber Association. They take exception to the amount of wood that has been transferred from category 1, 2 and others into the bid proposal apportionment. I'll just briefly advise of what the reasons for that concern are. I quote here from a letter of May 3 to the minister, and these are on category 1, category 2 and category Any:

"The small business operators in these categories provide high-value jobs from which a family can actually be supported, in contrast to the lower-end wages that are paid in the remanufacturing sector. The Boundary Small Business Timber Association feels that the government commitment to transfer timber is merely a manipulation of numbers in order to achieve your government's promise of job creation. We also question if these bid proposals are providing newly-created jobs or are just another avenue for existing licensees to obtain a greater wood supply.

"The small business program in the Boundary district has been very successful in the past, with all sales being sold -- an unprecedented return on every dollar being invested by government. Therefore the Boundary Small Business Timber Association is unanimously opposed to any transfer of timber from category 1, category 2 or category any to the bid proposal apportionment."

So what we have, obviously, is a view among some contractors and so on in the province that this particular incursion, I guess we could call it, by the government into the marketplace is not appropriate. Obviously this is one group that feels more wood, rather than limited, should be available to the open sale. I don't know if the minister has any comments on that. If he does. . . . Apart from that, I'm ready to move along again to other small business issues.

Hon. D. Zirnhelt: We expect that the overall increase in the amount of market wood will mean that small loggers will continue to work. I mean, there's more wood going to be put on the marketplace. It won't be somebody, the remanner, setting up a logging show; we expect that it will go to the small business community. So while they might not be bidding on that wood, we expect this is going to be the same loggers who will then contract to log it.

G. Abbott: I'm not sure whether this is the right place to raise this question; this is a broader question. I think the minister made a comment along these lines yesterday, that what we need to create in British Columbia is a larger pool of market-driven log sales. My understanding is that this concept is moving along in the coast region fairly well and that there have been considerable discussions of that possibility -- that there appears to be even some disposition on the part of some licensees to see more wood sold on that basis. I don't know whether the same kind of discussions are going on in the interior.

Is it the view of the minister that in the longer term, the broader term, what we need is a larger pool of market-based log sales, both in the interior and on the coast, to overcome some of the American objections about our stumpage system, etc., and to provide a fairer and more accurate appraisal of the real value of wood in British Columbia -- in short, a B.C.-based stumpage system?

Hon. D. Zirnhelt: Our B.C.-based stumpage system is what we say. . . . It's a combination of the Vancouver log market, other small log markets that are developing and the

[ Page 8559 ]

We have talked to industry about a number of ways of doing that, either through a transaction-based system. . . . There are a number of options, but there is no consensus yet in British Columbia. It is my view that we have to be cognizant of the arguments that are going to be made next time we negotiate a softwood lumber agreement. That's three years away. We'll have to come up with a system within British Columbia that's made in B.C. -- and we're happy defending with the International Trade rules -- and make sure that that system is suited to our needs. But we do have to consider in the process B.C.'s need for community stability.

G. Abbott: I'm happy to concur with the minister's written suggestion that we take a brief break for refreshment.

The committee recessed from 3:43 p.m. to 3:47 p.m.

[W. Hartley in the chair.]

G. Abbott: The other item left over from yesterday and related to small business is the addition of the Small Business 2000 program. I had a question about whether Small Business 2000 was a restructuring of the small business forest enterprise program or if it was sort of a side program in relation to the broader program involving the allocation of additional wood to value-added producers. The minister said that he would advise of that today, and I look forward to hearing that now.

Hon. D. Zirnhelt: What I didn't have at my fingertips were all the details. Small Business 2000 is a redefinition of the delivery strategy and program outputs for the small business enterprise program over the next three years. It's a comprehensive plan, which implements five commitments affecting remanufacturers, agreed to under the jobs and timber accord. The accord called for a significant increase in the amount of wood to be made available to the remanufacturing sector, leading to an expanded production of value-added goods and increased employment.

Specifically, it does it this way. There are a number of initiatives: firstly, the increase of one million cubic metres of harvesting rights in the bid proposal system -- we spoke about that earlier; the sale of most of the small business apportionment within tree farm licences as bid proposals, and we spoke briefly about that, and I gave you those figures; the sale of all volumes available each year -- in other words, to make extra efforts to get the volumes sold; the sale of the accumulated volumes which have gone unsold -- that's the small business undercut. Since the beginning of the small business program in 1988, there has been an accumulated undersold volume. In addition, we have made it possible for the shake-and-shingle people to bid on some 250,000 cubic metres. They were considered as primary breakdown before. They are now considered to qualify on this amount of the sales -- not on everything but on the 250,000 cubic metres. Those are the elements.

G. Abbott: Thank you to the minister for the brief outline of the changes that are incorporated in Small Business 2000.

The question I have around the reorganization of this portion of the small business forest enterprise program into Small Business 2000 is whether the difficulties, the problems, the shortcomings, that have been inherent in the SBFEP up to this point will be overcome by, I guess, among other things, a name change. I know that there is a slightly larger complement of staff in the Ministry of Forests to deal with the forest enterprise program in the coming fiscal year than there was in the previous one. But I'm not sure whether the name change and the slightly larger staff complement will overcome what have been fairly chronic difficulties within the program in successfully achieving the goals that have been set by government.

Among the inherent problems with respect to the small business programs is, typically, an undercut across the province on an annual basis. My understanding is -- at least as of February of 1997 -- that we are looking at an accumulated unsold volume of somewhere around eight million cubic metres; presumably that's a little bit larger now. I expect the undercut in small business sales was considerable in 1997, as well, so I expect we've probably got somewhere around nine million cubic metres in undercut at this point that could potentially be moved by the new Small Business 2000 program. While I admire the ambitious objective of trying to move those nine million cubic metres into the marketplace in the near future, I suspect that perhaps the ministry is overreaching with that particular objective -- but I guess we'll see.

So that's one of the big problems: the annual undercut. The first question is: what's different about Small Business 2000 from the small business forest enterprise program that is going to see us not only cut the volume that is set by the ministry as an annual objective but also deal with that accumulated undercut of -- and the minister can correct me if I'm wrong -- some nine million cubic metres over time?

Hon. D. Zirnhelt: We've undertaken to sell 2.1 million cubic metres of that undersold. . . . So while there's been an accumulated undercut, it has been redistributed back through the timber supply review to cushion other impacts. You know, some timber supply areas have had overcut situations, and they're on their way down. This has contributed to wood for future in an unbroken stream. Some of it's been taken back into the general wood supply for all licencees.

We offered last year 9.3 million cubic metres, and 8.5 million was taken up. So there is a shortfall, that was the market. But the performance of the small business enterprise program has been improving every year over the last two years, and we will advertise it all. We're not sure that it's going to be bought, but we will endeavour to get it sold if there's a market for it. The only thing that might change things is if there's a continued poor market and there aren't sales for it. But we will get it sold -- that's our commitment, to offer it for sale -- and we're confident we can.

G. Abbott: There's an interesting question that arises from the first portion of the minister's answer, that perhaps 2.1 million cubic metres of the undercut accumulated in the small business program could be put back into the TSR to offset what everyone knows is going to be a continuing dilemma around fibre volumes, particularly in the coast region. Is the 2.1 million cubic metres in the coast region where it could be reincorporated into the TSR as one way to offset the fibre shortage difficulty, which we know is coming in the southern coast region?

Hon. D. Zirnhelt: Of the 2.1 million cubic metres of the undercut that we're going to sell. . . . We're not going to try to sell all the undercut that's accumulated since way back in

[ Page 8560 ]

G. Abbott: The notion, then, is not. . . . This was a concern expressed to me, and I'm not going to get preoccupied with it, because I think the question's been answered. There was never any notion on the part of Small Business 2000 that they would attempt to inject into the marketplace, in short order, eight or nine million cubic metres of additional wood. We are going to see a gradual reincorporation of that. I gather from the minister that some of it has already been reincorporated in TSRs around the province. We're going to see, in the short term, 2.1 million cubic metres coming back into the system, but we're not trying to throw so much of it back in that it's going to affect the marketplace significantly. Is that a fair summary of what's been said?

Hon. D. Zirnhelt: Yes, it's over three years. We sold some of it last year; this year we anticipate it to be 800,000 cubic metres, and then there's another two years running. So it will be over the years. We didn't want to put so much on there that it would depress the market too much. That's what we think is manageable.

G. Abbott: One of the rumours circulating with respect to Small Business 2000, prior to its announcement, was that it would be set up as tantamount to a Crown corporation, perhaps at arm's length from the Ministry of Forests. I gather that that is not part of the new program -- that this is simply another program in Small Business. So there are no issues around accrual of silviculture responsibilities or anything along that line. Is that correct?

Hon. D. Zirnhelt: We do have in the act and in the program policy structure. . . . The small business forest enterprise program, for example, still exists. Small Business 2000 is a strategy, a way of delivering extra wood, of getting these new targets in place. So there are elements of that that total up to more wood for the reman sector, basically. That's what it is. There are still other elements to the small business forest enterprise program.

There was consideration of a separate agency, but upon examination, and looking at the record of the small business program, it was determined that we could deliver the wood on a timely basis. We've made some changes to the act to allow us to sell a little bit larger and longer-term sales, sales for which the larger of the small business enterprise participants could actually do the engineering and planning, so that it would also help to get the wood on the market faster.

G. Abbott: Another area where the small business forest enterprise program has fallen short of the expectations of government has been in the annual revenues delivered to government from the program. In some cases the expense side has exceeded what was anticipated. In some cases the revenues were lower than forecast, and on several occasions, at least, the fact that anticipated volume for sale went unsold confounded the expectations of the Ministry of Forests prognosticators as to the performance of the small business forest enterprise program.

[4:00]

Hon. D. Zirnhelt: There is a lot of uncertainty out there in the marketplace. The director of the revenue branch says it's difficult to forecast, but the record in forecasting in the last couple of years has been remarkably close. We're very close on our expenditure side, and we've seen improved performance on the revenue side. I can get those figures for you, and they'll be available a little later. I'd just say that we're close, and I don't think the shortfall has been significant.

G. Abbott: The performance, at least in some years, has been as much as 30 percent, which seems to me to be very significant. In some cases, obviously, there's a market factor involved. But the question I had was whether Small Business 2000 is going to be doing things in a different way or adopting a different strategy or somehow. . . . Regardless of whether the name of the program is Small Business 2000 or SBFEP, the program has to contend with a bunch of forces which sometimes conspire to leave the program short of expectations. What, if anything, can be done in Small Business 2000 to improve -- at least theoretically -- the fiscal performance of Small Business?

Hon. D. Zirnhelt: We are confident that we can deliver the wood as promised under Small Business 2000. We're confident, given our record last year and the plans we have this year, that we'll do it. We have introduced two new tenures -- the non-replaceable forest licence and the timber sale licence with cutting permits -- as two new methods of getting the wood out and under licence and allowing people to work on it. I mentioned that earlier. We have additional funding for the program of $5 million to get the wood out. We've made it a higher priority and emphasis within the ministry. We've organized within the ministry and reallocated staff so that we now have separate groups in the district offices that specialize in the business of getting the wood out. We've gone through an evolution that makes for a much more efficient organization. That was done independently of the 2000 initiative, which targeted wood to the remanners. I think the combination of efforts we've made should see the delivery of what we intend to deliver.

G. Abbott: Has there been a reorganization of the staffing or staffing model within the small business forest enterprise program to enhance accountability of senior staff related to that particular function? Perhaps the minister can outline whether, in order to achieve the objectives around enhanced sales and enhanced fiscal performance, there has been any change in terms of the deployment of staff in order to achieve those objectives as well.

Hon. D. Zirnhelt: In discussing how to organize better to deliver what we knew to be the new policy thrusts, we created stand-alone units so that staff were pulled together into a unit to work more efficiently.

I just want to respond with respect to the forecast for the small business program. The forecast for '97-98 was $298 million; that was the revised forecast. The actual estimate for that year. . . . The first estimate was $300 million, so we came

[ Page 8561 ]

G. Abbott: That's good. I hope that the program is highly successful. I think that the tenures associated with small business licences are an important element in our forest industry in British Columbia. I hope that more and other diverse tenures can be developed through this program and others, and I hope that it's highly successful. I hope that every year hence it eclipses expectations. That's good if we eclipsed expectations in the last year. I don't think we need to argue about the point that in the past, the goals have not been achieved as effectively as that. Hopefully, it is being reorganized in a way that will see continued and greater success for the small business program in the future, whether it's called Small Business 2000 or any other description.

The last question I have on this is. . . . The minister made reference to the shake and shingle industry being offered 250,000 cubic metres, I believe, as potential sales to them under small business. Is it the minister's understanding that that 250,000 cubic metres is essentially a starting point to alter the small business program in a way that will get those folks involved? Or is that a realistic estimate of what's needed, and will it suffice to make the shake and shingle sector happy in the months and years to come?

Hon. D. Zirnhelt: This is a number that we arrived at in some negotiations with the various aspects of the sector. We're going to try that number and see how it goes. We're not prepared to open up everything to the shake and shingle sector; we're prepared to open up some. It's not without its controversy. The remanufacturing sector has a different view. But we're trying it. This is a new category, and the shake and shingle people are pleased. This will help them. One of the reasons we did it is that there is a bit of a shortage of cedar, particularly when the cedar price is high. So they are having trouble maintaining their operation, but this will help. It isn't everything; it isn't their only source of fibre.

G. Abbott: That will be an interesting and ongoing dilemma: how to distribute the available volume of cedar around the province. Of course, there are several different groups with rather different views about the best disposition of the available cedar. So it is an interesting issue that the ministry is going to have to wrestle with in the years ahead.

Unless any of my colleagues have questions about the small business forest enterprise program or Small Business 2000, I think we can probably move along. I believe that my colleague the deputy critic for Forests has some questions for the minister around the shake and shingle industry specifically.

R. Coleman: I'm glad to have the opportunity to ask the minister some questions this afternoon relative to the shake and shingle industry and to enter the debate relative to the Forests estimates. I spent the last day and a half dealing with leaky condos, so this could be somewhat refreshing -- unless the shakes leak, and then maybe we have a problem there.

[T. Stevenson in the chair.]

First of all, I would just like to sort of profile this industry a little bit. I don't think that everybody understands what the shake and shingle industry's impact is and what it really is to the British Columbia economy and to the forest industry. This industry exports $210 million a year. About 97 percent of that is going into the U.S. market, which is a very strong market for this particular industry, and the Pacific Rim is growing at a rate of about 13 percent. Most of the mills are located in the Fraser Valley, and there are 105 mills in the Shake and Shingle Association. Those are small, non-integrated and family-operated mills. They can be operations with from ten employees to 80 to 100 employees, depending on the size of the operation.

What they do contribute is about 3,500 direct jobs and 500 jobs in the salvage and transportation area. Interestingly enough, the industry basically produces 2.5 jobs for every 1,000 square metres of fibre. Obviously everybody knows -- most people should know -- that the material used is western red cedar. One of the difficulties of this industry is the security of fibre, because it's really determined by other markets. It's determined by what's going on in the industry and their access to fibre. The only market for salvage when a log is below lumber grade, other than wood chips, is what this industry provides.

I found it interesting, when I looked at this industry, that it actually creates seven times value-added into this industry, but it does not seem to be recognized as a value-added industry. So my first question to the minister would be: why isn't the shake and shingle industry recognized as a value-added industry?

Hon. D. Zirnhelt: It is, for the first time. We recognize it as a value-added industry.

R. Coleman: Is that relative to the 6 percent that you were referring to earlier, with the 250,000 cubic metres? Or do you recognize it as an entire value-added industry relative to its access to fibre?

Hon. D. Zirnhelt: As a category of value-added, it has access to the 250,000 cubic metres; that's right.

R. Coleman: I take it that would be the 6 percent under the enhanced eligibility sales for this particular industry.

I just want to refer to a couple of comments relative to that from the industry itself and ask the minister a couple of questions. The industry was promised that it would be allowed to bid on 250,000 cubic metres of value-added timber sales per year. We're calling these enhanced eligibility sales. Because shake and shingle would only be given access to less than 6 percent of the 1998 small business timber, they've requested that the provincial template for waiting for enhanced eligibility category sales be modified to reflect the unique contributions of their industry's sector to the province's forest economy. Would the minister tell me whether that has been taken into consideration -- to tailor the waiting of this industry for their eligibility to access the 250,000 cubic metres?

Hon. D. Zirnhelt: Because it's a major departure, we're going to take half of the 250,000 and make it available under that modified template. The other 250,000 would be the provincial template.

R. Coleman: Could the minister expand on the reasoning for that decision to take half and leave the other half under the provincial template?

[ Page 8562 ]

R. Coleman: I don't anticipate that the minister was surprised that they'd come back and try to gain additional advantages. The question is: is this enough fibre for the industry? How much more fibre do they need? Where are they going to get it without shutting down their mills? I just wonder what the ministry's take is on how much fibre this industry really needs to function relative to the 3,500 jobs that are at stake.

[4:15]

R. Coleman: One of the statements made to me by the industry, basically, was that if the shake and shingle industry has access to bid openly on all 4.3 million cubic metres of the small business wood, they would gladly compete. Having had access to 6 percent of the wood under the enhanced eligibility sales, shake and shingle should be given, by virtue of job content, a more even chance of getting the wood. So what they're saying is that they'd gladly compete for the 4.3, but since we've got the 250,000, they'd like to get some weighting put to their advantage. Could the minister explain to me why we didn't just have them bid openly for the 4.3 million cubic metres, rather than getting into 6 percent access and then splitting off the weighting between the ministry and the industry?

Hon. D. Zirnhelt: We undertook some negotiations with the various parties, and that's what we resolved. They're choosing to make an appeal indirectly through you, and I'm saying: "You went in the process; you cut a deal; stick with the deal."

I would just tell you that shakes are boards. You split the stump once. There may be two hacks at it, and you get a shake. You make the bolt, and then you. . . . So it's a board. If they want to add value to it, take the shakes and make them part of panels or something else, then they can qualify for the whole 4.3 million. That they're neither fish nor fowl, I guess, is their argument. They have traditionally been treated as a primary breakdown, and I was persuaded by their argument. But we're not going to give them the whole access to the red cedar market at this point. There are other takers and other people who have jobs that are dependent on it as well.

R. Coleman: I've been in a couple of shake and shingle mills. I actually used to lay them as a roofer a long time ago -- back in memory, when I was very, very young. The question is. . . . I'm not actually renegotiating through the minister during estimates; I'm just trying to determine the reasons for some of these things happening. The industry brings these to your attention in spite of the fact that they may have made a deal, but that doesn't mean that everybody is always satisfied, of course. So obviously I come and ask the question.

There's another access to fibre for this particular area of the industry, and that's salvage. It seems to be a bit like the bottom of the food chain. But I understand, according to this industry, that salvage has been treated as harvesting, the same as a clearcut. Salvage goes against the tenure holder's allowable cut. Tenure holders are responsible, under the code, for the actions of their own salvagers. There are a couple of questions there that I would like to explore with the minister. If the salvage goes against the tenure holder under their FTA, are they having a tendency to leave fibre that's salvage in the forest and not take it out because it goes against their cut? Are we missing an opportunity relative to getting something else out of the forest that could go into shake and shingle mills?

Hon. D. Zirnhelt: It varies a bit across the province, but some of the material doesn't go against the cut, particularly in the interior. On the coast it may well do. Both the ministry and the industry are taking salvage out all the time. I think it's a continuing to and fro about who can take it out most economically. The whole reason why we have a provision to charge it against the cut is that it is fibre; it is merchantable fibre; it has value. The licensee usually has the first rights over that area. We want them to take as much of the salvage wood out as they can. But to the extent that it provides an opportunity for salvage operators, we try to facilitate that as well.

R. Coleman: If the salvage is of a lower value than timber within the cut, and it goes against their cut, I think the tendency would be, in some cases, to leave the salvage in the forest and cut more timber for other uses. I'm just wondering if the minister could tell me what analysis has been done relative to where we have salvage going against the tenure holders' allowable cut. What analysis do we have as to the amount of salvage we're taking or leaving in the forest in those circumstances versus when it doesn't go against the allowable cut?

Hon. D. Zirnhelt: The rule is that if it's usable, then it's waste-assessed, and it'll be charged in one way against the licensee if it's left behind. If it's below the utilization standard, if the regulations don't require that it gets taken out, then we try to find some way to make that available through the salvage program. We're going to put more resources into the salvage program so that we can actually get at some of this stuff. If it's below utilization standards, it isn't charged against the cut.

R. Coleman: The process that determines whether the fibre that is left behind is usable fibre that should be taken against the cut would be, I take it, through the Ministry of Forests. I'm just wondering how far behind or how up to date you are on analysis of these types of cuts, as far as knowing what's not being cut and what's not being taken.

Hon. D. Zirnhelt: Within the year, sort of, it's assessed. Before they burn, if that's the prescription for the area, we have to do the waste assessment. So it is current. There may be a slight time lag, but the waste assessments are current.

R. Coleman: That waste assessment is done by your officials?

Hon. D. Zirnhelt: Yes. The major licensees do their own, and we do verification audits. It's done by contractors for the small business program.

R. Coleman: I'm also led to understand that the tenure holders are responsible under the code for the action of sal-

[ Page 8563 ]

Hon. D. Zirnhelt: The legal obligations under the code are for the activities on that sale, so the licence holder holds the obligation. So they are reluctant to let in someone who might have some effect on their obligations. We realize it's a problem. We're trying to find some way to work around it, but there's no easy solution. You can't hold two people responsible for the same piece of land at the same time. But we are trying to finesse how salvagers can get access to salvageable material.

R. Coleman: With regards to salvagers, as part of that review or discussion for salvagers to get this fibre out of the forest, has there been any discussion relative to the bonding of salvagers, so that if they go into an area when the licence is in place to take out the fibre that may have been identified as low grade and that can go to a shake and shingle mill. . . ? Has there been any thought to trying to get a handle on the bonding and the management of salvagers, so that we can encourage more salvage to be taken?

Hon. D. Zirnhelt: Since the licensee holds the primary responsibility for the area, we're trying to encourage them to partner up with people in the salvage business. Then there can be a business relationship of a bonding nature, if necessary, between the licensee and the salvager. If the government gets involved, then it's another sale to be issued and another process and another bonding and so on. So the simplest way is to let the two parties operating on the landscape work it out between them. It will remain for government not to be an impediment to that, but we are going to hold the primary licensee responsible for activities. We've tried to create incentives for them to do that, and we're continually examining how it's working and trying to make improvements there.

R. Coleman: I guess it would be safe to say that the ministry has identified the problem and is working on it and trying to come up with better ways of dealing with salvage in the forest. Would that be a fair assessment of our discussion at this point?

Hon. D. Zirnhelt: Yes, that's a fair assessment.

R. Coleman: One of the points that was brought to me when I met with the shake and shingle industry was that the application of stumpage fees and costs applied to different sizes of logs -- between a shingle, which is 18 inches, and a shake, which is 24-inch quality -- is actually an impediment to taking shingle wood out of the forest. It obviously hasn't got the same value added to it that a shake does. One of the positions of the industry was that the salvage fees need to differentiate between those two sizes: the shingle size and the shake size. Has there been any discussion in the ministry relative to that differentiation?

[4:30]

I'm not sure what the problem is. It seems to me that on a short log, you could make whatever size is the best size; you'd be trying to make the longest one possible. I don't know that there's a big problem there. I mean, it's not something that they've brought to my attention.

R. Coleman: That's interesting, because they brought it to mine, and that's why I brought it up to the minister. But at the same time, not knowing the economies of scale of the 18-inch versus the 24-inch. . . . It was a question that I wondered if the ministry had had brought to its attention and had discussed. Obviously I don't run a shake and shingle mill. It was just a question of the salvage fee differentiating between the two sizes: the 18-inch and 24-inch. I think it refers not to stumpage but to the salvage fee. The salvager prefers to take out the 24-inch, because there's a better return to the salvager, and leave the 18-inch in the forest. Is there any thought, therefore, to creating an incentive to take out the 18-inch on the salvage side?

Hon. D. Zirnhelt: Given the relative values of $300 and $1,000, the stumpage is a flat rate of $5.20 for both of them, so it's not a big part of their costs. They can optimize for the market based on what they get. The base rate is still pretty low.

R. Coleman: I'll just take those comments back to the industry, because obviously what they're looking for, or their explanation. . . . It may be best to crystallize it back to the minister in more detail.

There were some general comments, and I just would like to get the minister's comment on them on the record, obviously, for the industry is one of the areas -- of many, I guess -- in forestry that we walk through. But one of them was basically that stumpage is too high. Sales are being awarded, which are uneconomic, to develop shake and shingle mills that are not directly affected by the U.S.-imposed quota. Therefore stumpage rates could be adjusted for this sector. I'm sure that every sector wants their stumpage rates adjusted; all sectors would probably like to see none whatsoever. Has the ministry had any discussion relative to the stumpage as it affects this particular industry? Or is it just the industry again looking for a stumpage reduction?

Hon. D. Zirnhelt: The $5.20 rate for cedar is a very low rate, and it's low to encourage salvaging, actually. But no, we haven't undertaken product-specific stumpage discussions with the producers of those products. They compete in the market for some of the other wood that also goes into cedar products, some of which is shipped to the United States.

That raises the whole issue of fungibility, and we have to be aware of that. We did, in discussions with licensees, talk about destination-specific. . . . Stumpage is based on the destination of the product. But that's a more complicated, more complex and more costly stumpage determination system. Industry as a whole has rejected that at this point in time.

R. Coleman: One of the other issues just brought to me, as I noticed in my notes relative to salvage and the Forest Practices Code, was how quickly deactivation took place in the new river and stream setback requirement -- but particularly the deactivation to get access to the salvage, and the timing for the deactivation. The industry seemed to feel that as we deactivated we were actually taking away access to fibre supply. I know this is an issue elsewhere, relative to access to timber, silviculture, thinning and what have you for the future

[ Page 8564 ]

Hon. D. Zirnhelt: Deactivation is now being done, as much as possible, before the road is constructed. The problem is that if you leave the road open, waiting for a number of activities that lag well behind the harvesting operation, you've got the issue of liability. If deactivation should have taken place to stop a washout, and there's a washout, who then is liable for it? So there are some very serious practical problems associated with this. We're trying to address it, for example, by leaving the roads open longer on the flat, where there isn't the same risk. I've been in conversations with forest management people and salvors, and I think there is a resolution often -- but not always.

R. Coleman: When I was going through some notes relative to the industry in the Fraser Valley -- and this isn't from the industry -- there was a comment made. . . . I haven't been able to get hold of anybody in the industry to ask them what the status of this is. This is actually quite old, so this could have already happened. This note is dated November 28, 1996. But it brought a question to my mind because of one of the requests.

It was basically that the industry needed the Forests minister to champion a proposal for a Fraser Valley wood residue power conversion plant. I take it that it's with regards to hog fuel or whatever. It said, basically, that the outline was to save industry jobs, support a new Forest Practices Code, help clean up the environment, help small business, lessen the need for hydro projects and new transmission lines and invest in their own region.

I'm just wondering: seeing as it was 1996, has there been any discussion or did anything ever happen with that movement towards some sort of power conversion for the hog fuel, I guess it would be, in the Fraser Valley?

R. Thorpe: I seek leave of the House to make an introduction.

Leave granted.

R. Thorpe: It's with great pleasure that I introduce to the House 27 grade 6 and 7 students from Wiltse Elementary School in Penticton. They're accompanied today by their teachers, Glenn Rebuka and Clare Ingles, and parents Jim Mottishaw, Sandy Ewanchuk and Marianne Frank. Would the House please make them feel very welcome.

Hon. D. Zirnhelt: I can't say that I am familiar with it. It's common around the province, but I really can't. . . . I'll endeavour to get information and pass it on to you. It probably went to the Minister of Environment and the Minister of Employment and Investment, but I'll try to dig that up for you.

R. Coleman: It would appear, actually, that these are talking notes from a meeting with the minister in November of 1996. I'd be happy to give him a copy of this so that he doesn't have to go chasing his tail. It dealt with five requests, and the five requests include the inclusion in 16.1 sales, which has obviously affected the value-added credits program. The note here is that that's been dropped, and the new focus is a jobs-for-timber program. Then there's a request for consultation and a request for easier access to salvageable wood, and then the wood residue power conversion plant was on there. That's why it got to my attention, and I wanted to bring it to the minister's attention. I'll get him a copy of that so that he can maybe follow up on those notes.

I just want to go back to. . . . In between, I was looking for the explanation that I had written down relative to the salvage issue on the 18-inch and 24-inch. . . . The explanation was this: "Fibre that is suitable for making shingles is being left in the forest, wasted because there is no adjustment fee to account for the lower shingle recovery. The recovery of squares, shakes or shingles from shingle wood is approximately one-half of the average recovery from shake blocks. All fees, stumpage and royalties should reflect this difference." That was the note that I got from a meeting with them, and it would be the explanation that I have relative to that. Maybe the minister could comment on that, now that I've been able to give him the explanation.

Hon. D. Zirnhelt: Well, there may be more to it than we understand, so I would encourage the member to get that organization to supply us with the details. I'm sitting here thinking about 18 inches versus 24 inches, and we're charging the same amount, and people can make the best product out of it. Let them make that decision; we're charging so little that we don't think it makes much difference, but there are big conversion differences. If some cedar stands come in shorter lengths, and they can only be converted to shingles, and that's worth one-third of what the others are, maybe we should be charging less. It's just the problem. . . . My director of revenue, who does all this black-box stuff with the stumpage system, doesn't know the problem, so please provide me with some details.

R. Coleman: I can understand that, because I've read reams of stuff on the stumpage system, and I don't know if anybody has ever quite figured it out. It seems pretty complicated to me.

There are three other points relative to salvage that I just want to make on behalf of the industry. This goes back to some of my earlier comments. One is: "The liability for violation of regulations must be the responsibility of the salvager, not the licensee." This is a statement made by this particular industry. The background to it is: "The licensee should not be expected to police small-scale salvage operations. The Forest Service should take on the responsibility and can protect the public through a bonding program. Fines and penalties should be commensurate with the impact that small-scale salvage operations would have on forest resources." That's the background to my earlier question. I don't think you need to re-answer.

The second point goes back to being part of the allowable cut. The statement that was made to me is: "Salvage volumes should not be part of a licensee's allowable cut." Basically, the note that I have made, which is very supportive, says: "The licensee should not be punished for supporting cedar salvage operations. Salvaged volumes should not decrease a licensee's annual allowable harvest of prime or standing timber. Salvage should be additional to approved harvest levels, a bonus and incentive to support small-scale salvage." I'd just like to see what the minister's comments are on that particular piece of philosophy.

Hon. D. Zirnhelt: I take the point. But if we didn't charge an AAC against it, then there would be no incentive for the primary licensee to harvest it. We're now talking about split-

[ Page 8565 ]

R. Coleman: Obviously I'm not putting these forward as a position statement on one way or the other. It's just that when I met with the industry, these were issues that came to me, and I wanted to make the minister aware of them.

Back to the activation side. Basically, I'll give you the reasoning for the deactivation question and that was: "The new deactivation regulations are preventing salvagers' access to old non-active cutblocks. The value of the salvage cannot justify the cost of rebuilding the roads. If roads and bridges are removed, salvaging cannot take place. The solution to this industry is to require the completion of the salvaging plan before deactivation takes place." I would assume that that's in place now; that we have a salvaging plan as part of the plan before we deactivate it. I just want to be sure that that's the case.

Hon. D. Zirnhelt: That will be done this year for the small business program. It is also moving into the forest development planning of the major licensees.

R. Coleman: Obviously, given the meetings we had in the last couple of days with one of the major licensees, a lot of things are about to change in this industry as to how they do business. So it's going to be interesting times ahead.

One of the other issues relative to salvage was basically that. . . . I don't understand this, and maybe the ministry can explain it to me. The statement made to me was that old maps are not accepted for new salvage awards in old cutblocks. I wonder if you could just explain that to me.

Hon. D. Zirnhelt: Under the code, the map authorizes where you can harvest. The problem with salvage is that you're not given the permit for the whole of the block, because it may well be severely restricted to certain areas of that block. There has to be a specific map attached. It would seem to me that it's fairly simple to take the old map and put something in a line and submit it as a new map. But I don't know if it's more complicated than that.

R. Coleman: Before the minister creates policy on what the definition of a new map is and I go running off to the industry, maybe he'd like to check and see whether, if we put lines on an old map, we're going to call it a new map, so that this industry doesn't get confused after today's debates. Maybe you can just check and find. . . .

Hon. D. Zirnhelt: Yeah, the advice I have is that if it's possible to do it and be accurate enough for the purposes of holding the parties responsible as to where they're licensed to harvest, we do it. Beyond that, I can't comment on the adequacy. I take your point. It's an issue they've flagged with you, so there must be a problem beneath it somewhere.

R. Coleman: Just one last question on the salvage side. The industry had written and been in contact with the deputy minister relative to some of these issues, and they had asked for a salvage program contact person to basically deal with some of these issues. I'm wondering if that person was ever appointed or selected or identified to the industry.

[4:45]

R. Coleman: Just to go back for a minute to the electric-power generation project in the Fraser Valley, the industry wrote to the minister on this on October 15, 1996. Attached to it was an outline on wood waste in the Fraser Valley which gave an introduction to the problem, basically relative to the phasing out of the beehive burners. It outlined some of the background, which is basically that there are an estimated 350,000 gravity-packed units -- GPUs -- of wood waste residue being produced annually in the mills located in the Fraser Valley, from the Port Mann Bridge to Chilliwack. They say that companies haven't ignored this issue, but there's no obvious solution to incineration that would leave a viable industry.

It went into a discussion about Fraser Valley power, the competitive power, and why support for wood-residue energy would take place. They identified a couple of things as being the reasons for that: the new Forest Practices Code, the beehive burners, cleaner waterways, clean air, reduction of greenhouse gas emissions, reduction of the need for transmission lines, etc. -- and also some revenues to government. I know that the minister gets tons of correspondence, and maybe, relative to the other document I mentioned earlier, I'll just give you a copy of this and then you can have. . . . It was sent to you in October 1996. Maybe you could revisit the issue with the industry; that would be helpful to them, I'm sure.

I have a letter that deals with a tendering situation on shake and shingle, and I'd like to ask a couple of questions on it. I'll just read some of the letter to the minister and ask for a response. This is dated May 7, 1998.

"The Ministry of Forests tendered its first 'Enhanced Eligibility' or shake and shingle small business timber sale -- timber licence A58253. The tender was structured in such a way as to make it impractical, in fact almost impossible, for a small shake or shingle mill to bid on. First, the tender allowed only four weeks to make a proposal -- a short time for a brand-new category to be assessed. Second, the tender did not mention that shake and shingle mills were eligible to bid. Third, the Shake and Shingle Association was not informed of the tender, and therefore we were not able to inform our members. Fourth, ministry staff were unable to confirm that all production after the blocks have been produced would be calculated as value-added. Fifth, the weighting was modified in such a manner that it discouraged instead of encouraged shake and shingle sector bids. And sixth, the size, upset cost and revenue threshold of the sale made it economically prohibitive."

"I restate our position that today, more than ever before, the shake and shingle industry needs access to wood it can economically harvest. As other wood industry sectors curtail operations, our sector's ability to stabilize employment in the forest industry cannot be ignored."

[ Page 8566 ]

R. Coleman: So the industry has had the six points addressed, and you are going to go back and look at this tendering process so that it works better for them. Is that to be my understanding of your answer?

Hon. D. Zirnhelt: Yes.

R. Coleman: I think that pretty well covers the issues that are facing this particular industry. It would be interesting to see some of the stuff relative to the power generation plant and what have you. I think most of the background information is in the hands of the ministry. Most of their other issues deal with code issues and other things like that, which we're going to canvass later in estimates. I just wanted to sort of do a summary and discussion of this particular industry and its concerns. I appreciate the minister looking at them. I will provide the minister with copies of those two documents, so he can take those and review them.

G. Abbott: I just want to advise the minister of where we're going to be going next in terms of the current-issues portion of this. I've got a couple of constituency-specific forest issues, which I think we can deal with relatively quickly. We'd appreciate doing that. The issues we'll be talking about in the relatively near future will be the aboriginal issues associated with forestry in B.C., compensation issues, non-FRBC silviculture issues -- that will be a very brief thing in advance of our discussions of that around FRBC -- and then I think we would proceed, at that point, into the state of the industry.

Before moving into those topics, the member for Peace River North has some specific questions around fire suppression in the Fort Nelson area, if I understood him correctly. The member for Cariboo North has questions with respect to a woodlot in his constituency. If we could deal with those specific constituency ones, then we could move along, in a methodical fashion, through the areas that I just mentioned.

R. Neufeld: I want to just ask some questions about fire suppression and its application across the province. As I understand it now, there's a contractor that deals with fire suppression, and it's also done in-house. It's not the way we used to do it, where we hired a bunch of people around the province; it's actually organized totally from within the ministry. Is that correct?

Hon. D. Zirnhelt: I don't have the people here who've got all the figures, but the vast majority is still in-house. There are a few contractors, as far as we know.

R. Neufeld: Does Conair do most of the fire suppression work for the province?

Hon. D. Zirnhelt: The information I have is that Conair provides the bulk of the aerial combat service.

R. Neufeld: What part of it does Conair supply? Does the Ministry of Forests have tanker bases that they actually own or lease at different airports across the province, and does Conair use those tanker bases? How is that process accommodated?

Hon. D. Zirnhelt: We didn't have a schedule of these things, so I don't have the people available. If you want to give me the questions, I'll get the answers. We can try to arrange to have the personnel here, but it would take them some time to get here. Which way would you like to do it?

R. Neufeld: I will just leave it up to the minister. If he wants to get the right people here who can help with these questions, we might as well do it that way, rather than have me ask them and then try and get the answers back. I can do it at some other time; it doesn't matter. I can come into the House at any time when it's convenient for the minister to have the person here. That suits me fine.

Hon. D. Zirnhelt: I'll endeavour to have them here after the dinner hour.

J. Wilson: I've listened to the discussion on woodlots and how well we're doing in getting more woodlots out and this kind of thing. I have a constituent who has a woodlot that. . . . The ministry pulled his licence late last winter; he appealed it. Then they put the woodlot up for tender, and the thing is still under appeal. Now to me, this seems a rather heavy-handed way of doing business if you're trying to promote woodlots. To my knowledge, this woodlot has never had a problem. The individual who has held the contract with the ministry has honoured all of his commitments on that woodlot, and yet it was still removed from his hands. Could the minister explain to me why they would tender a woodlot that has been removed and is under appeal before the appeal is dealt with?

Hon. D. Zirnhelt: I don't have the files or the details here. I'm generally aware of the case, as is the deputy who's here. The woodlot was cancelled for cause, in the minds of the ministry, and then tendered again. Once it came under appeal, there was then an undertaking not to award it until the appeal was finished. So rather than cancel the tendering, if he loses the appeal then the tendering goes forward. But a decision to award will not be made while this is under appeal.

J. Wilson: I realize that the award will not be made while it is under appeal. But why would it be tendered before there is an appeal heard on the cancellation? The reason for the cancellation is somewhat ambiguous.

Hon. D. Zirnhelt: We'd have to check as to the actual sequencing of it. You can't tender something if there's no resource there, nothing to be tendered. It was cancelled. I guess there are appeal procedures and periods. I don't know the actual details of when that happened. This file has been going on for some time; I don't have the explanation here. I'm sure the explanation has been given to the party. If it hasn't, I'd like to know, and I'll undertake to get the explanation and forward it to the member.

J. Wilson: I haven't heard an explanation on this either. A cancellation is not final until the appeal is over and done with because the appeal is the process you go through to stop the cancellation of the licence. Now, why would the ministry allow the thing to be put up for tender and not even know that the cancellation was going to take effect? What it does is put a lot of doubt on the actions of the Ministry of Forests in dealing with individuals, and it has become a real problem. I've had

[ Page 8567 ]

[5:00]

J. Wilson: As if this weren't bad enough, what has happened here is that the individual in this case, the person who had his licence removed from this woodlot. . . . When the woodlot was retendered, they expanded the boundaries on the woodlot to make it larger. In doing so, they removed a portion of a 20-year grazing licence from this individual, with no notification whatsoever. This licence is in good standing, and now part of that licence is going to be covered by this expanded woodlot boundary, and it is going to have a serious impact on his ranching operation, because it goes from a grazing licence. . .that now comes under the Forest Practices Code and woodlot management. Can the minister explain why they would allow this to happen?

Hon. D. Zirnhelt: I actually don't know the details of this particular case. Grazing and woodlots can be compatible, so I don't know what the problem is.

J. Wilson: As the minister well knows, a grazing licence is a long-term tenure to grow forage for your cattle. Now, if you cover that area with a woodlot, and the woodlot operator goes in and does a lot of silviculture work, he can force the tenure holder on the grazing licence out of there for a period of time, and he would lose that forage.

Hon. D. Zirnhelt: All over the province, we have licences for harvesting over top of areas that are licensed for grazing, and we expect the two tenure operators to work together. Why this hasn't happened in this case -- or if it has happened in this case. . . . I don't know the answer to that question.

G. Abbott: I'm advised that the member for Powell River-Sunshine Coast has some questions around salvage. Our deputy critic, who had been canvassing some of those salvage issues a little earlier, is consulting with him with respect to that so that we don't have any duplication or overlap of what's done here. Perhaps in the brief interim here, the minister can get the necessary staff back to comment on salvage.

I want to briefly ask a question around the responsibilities that the Ministry of Forests bears under the Ministry of Forests Act. In particular, I have heard in recent months considerable concern that it appears the ministry is deviating from the responsibilities assigned to it under the Ministry of Forests Act. Most notably, it appears to be deviating from the act in terms of the five-year resource program. It would appear, from what I read, that there is some basis to that. Certainly the Ministry of Forests Act, as it appears before me, has an entire section -- section 8 -- devoted to the requirement to produce a five-year resource program. In the 1992-97 forest and range resource program produced by the Ministry of Forests, there are schedules for basic and incremental silviculture, references to target areas, treatment areas, and so on. But the five-year forest and range resource program for 1997 to 2002 doesn't carry the same schedules that appear in the previous five-year program provided by the Ministry of Forests. I am asking, initially, what the reason for that is. Why does it appear that one of the requirements of the ministry under the Ministry of Forests Act is not contained in the 1997-2002 program?

Hon. D. Zirnhelt: Well, I'll be looking for an answer, and officials that are watching will be looking to get an answer. I'll give it to you as soon as I've got it.

R. Thorpe: I ask leave to make an introduction.

Leave granted.

R. Thorpe: It is with great pleasure that I introduce to this House 31 students from Wiltse Elementary School. It's grades 6 and 7 today. They're accompanied by their teachers, Ron Olsen and Tony Biollo, and parents Paul Munro, Myrna Tischer and Patrick d'Aoust. I'd ask that the House please make them feel very welcome today here in Victoria.

G. Abbott: I think it's an important issue, and what we'll do is set the issue aside for now. The minister can canvass his staff, and I'll keep the file handy. Perhaps we can pursue that a little later in estimates.

I now invite the member for Powell River-Sunshine Coast to pursue some of the issues around salvage which he would like to canvass with the minister.

G. Wilson: I'm pleased to be able to get into these estimates. As I understand it, we are on the topic of salvage. I am going to, for the time being, restrict my questions to that matter, although I think that as the estimates progress, I will have other questions beyond that. I wonder if the minister might think back a year to WASH, which is an association of salvors and hand loggers. They essentially were people involved in what would conventionally be called beachcombing, I guess, and who were very much involved in salvage work in British Columbia coastal waters.

There was a great deal of work done to try to come up with an agreement that would provide for a more reasonable or equitable process with respect to these salvors being able to retrieve abandoned logs that could then be marketed. The Gulf Log Salvage Cooperative Association and others were very much involved in trying to come up with a means to eliminate penalization of people who were able to pick up these logs and move them into a market. There was a lot of work done last year, and it would appear that this year we are sliding backwards on what was otherwise, I think, a reasonably acceptable agreement -- at least I'm assuming it was, because the furore of the discussion around it tended to diminish.

I'm wondering if the minister might tell me who in his ministry is currently monitoring this situation and to what extent the log salvors -- and I'm talking more specifically about the beachcombing side of it -- are continually consulted with as ministry policy changes, in light of what have become very restrictive market potentials for selling these logs.

Hon. D. Zirnhelt: As you know, there is a long history -- 40 years -- of friction in this industry. We are going slowly, not backwards. Our main objective is to create a better climate and

[ Page 8568 ]

G. Wilson: As I'm sure the minister would know -- although, coming from an interior part of the province, maybe not as well as those of us who live on the coast -- there are times when you're in a boat, and you are perceptibly moving forward because your engine is doing what it can, but the current is actually taking you backward because it's greater than the velocity of the engine that's carrying you forward. So while you think you're going forward, in fact you're going back. That's what I'm hearing from people on the coast. They're saying that progress is so slow that it's almost no progress and that, given the market changes and how narrow an opportunity there is now for people to get logs into the marketplace, the friction that the minister refers to is once again going to raise itself if we don't come up with a suitable agreement that is going to be able to be used in the administration of this sector of the industry.

In the past, many people have done very well out of coastal log salvage operations. It's becoming more and more difficult now, because of the changing marketplace, for that to occur. Therefore, because fewer are able to do well, it seems that we have to put in place some kind of a system that would allow those people in the industry to have a better opportunity and that would eliminate, where possible, the kind of friction that will come as a result of the disagreement that now exists between the major forest companies, some of the coastal companies, the Ministry of Forests and these log salvors.

I wonder if the minister might tell us what Mr. Howard, in particular, is doing with respect to the ongoing consultation with this group. I'm pleased that there are discussions still underway. But from what I hear, the discussions are really less than fruitful, and conflict is once again going to be with us if we don't deal with some of the outstanding matters. These matters have not really changed, really, since 1997.

Hon. D. Zirnhelt: The police and industry want us to move faster and bring in a regulatory regime for the area that isn't regulated. WASH doesn't want the regulations. We're not going to come up with a regulation here on the floor. The question of if we're moving fast enough. . . . I would suggest that you indicate to WASH that they continue to make their views known through the process we've set up. That's how we're going to get resolution. I don't know what the specifics are. My guess is that they want the logs. And industry wants the logs, because they paid for them, and they lost them. My interest as the minister is that they get picked up and utilized and that we don't have fights over who owns them.

G. Wilson: Amen. I think that's what everybody is trying to do. The difficulty is that there doesn't seem to be a mechanism with respect to the matter of ownership -- outside, I'm assuming, of the stamp -- a way of determining whether or not those logs are available for salvage.

The difficulty is, I think, that there is a perception out there. . . . It's interesting that the minister introduces the police into this question. I know there were some questions raised earlier about a truly unbelievable figure in lost revenue with respect to timber that was being stolen. There's a perception that people who are involved in coastal log salvage -- beachcombers and other people who are involved in this industry somehow -- are all crooked, are violating the law and are a bunch of gypsies and bandits who are out there trying to rip somebody off. That perception is wrong.

I represent a long coastal community of people who frequently go out and pick up logs that the major forest companies frankly don't feel they even have the time, interest or money to go and collect. If others are prepared to go and pick them up, take them off the beach, collect them, get them into a market and put some value to them -- especially if they go to local mills -- then presumably that's a really good idea.

I think what we'd like to hear from the minister is that there is, number one, some recognition of the legitimacy of this group within the industry, and that there is, number two, a commitment of this government to make sure that the interests and concerns they have are going to be looked after and that we're not simply going to cater to the major forest companies. Those simply say, "Well, that's great if you go and get the logs we've lost, but as soon as you find them and bring them in, we're going to continue to own them," notwithstanding the considerable risk and cost that these individuals might have undertaken in salvaging the logs in the first place. I think that's what they'd like to hear from the minister in these estimates: that there is an interest in making sure that these people are recognized as being a valid part of the forest industry.

[5:15]

I can tell you that I'm sympathetic with their concern. I won't say that I can deliver everything they want, but the director of the revenue branch knows that I want resolution on this, and I'm putting the pressure on to do it. I'm advised that I should go slow at this moment, because it needs to be handled carefully in order to get the regulatory regime correct. So we will continue to consult with them, and hopefully we'll get it right. But I am sympathetic and understand and appreciate the role they play in marine log salvage.

G. Wilson: The problem is -- and I hear what the minister's saying -- that, to my knowledge, there has been. . . . I welcome the Minister of Transportation and Highways into this debate. I'm not quite sure what his contribution is going to be, but I'd be happy for him to get up and display his knowledge of coastal log salvage.

The problem with going slow is that we are going so slowly on this question. . . . To my own knowledge. . . . I really only became knowledgable about it 20 years ago, when I moved onto the coast in my own riding. For at least 20 years, if not longer, there has been conflict in this area. The difficulty is that coastal marine log salvors are characterized as though they are some kind of gypsies out there preying upon these poor, unfortunate major forest companies, who lose logs through the breakup of booms or as a result of other kinds of activity, and that somehow, once they have risked going and salvaging these logs -- and often there is considerable risk -- they shouldn't be eligible to cash them in. That's what the very nature of the word "salvage" is, as the minister, I think, would agree.

Maybe we could hear some kind of projected time frame on when we expect we're going to have some language that

[ Page 8569 ]

Hon. D. Zirnhelt: Because there was conflict, and there were two sides to the conflict, we picked a small commission of two people, one representing each sector -- the salvors and the industry -- to get both views. We came up with 23 recommendations. I'm prepared to move on the recommendations, but WASH doesn't like them; it's trying to buck them. Maybe if I invite them down and put them together in a room again and give them 24 hours, they'll solve it. I'm prepared to move faster; you can tell them that. The problem is that they don't like the direction we're going to move in; they don't think it's fair. We don't have consensus on this, and unless they come to some way of agreeing, we can't proceed. I'm prepared to move faster on it if they're prepared to come to some resolution on the recommendations they disagree with.

G. Wilson: It's not my style to be argumentative, hon. Chair; you know that. But it is truly interesting that the minister tells us they appointed two people, to get both sides of the story. They got both sides of the story, and they got two recommendations. They got one set of recommendations, and then one of the two members filed a whole bunch of minority concerns about the recommendations that were put forward. That's kind of where we ground to a halt here. I'm sure he doesn't mean this, because I know the minister to be far more open-minded than he's appearing to be in his remarks, but what I'm hearing the minister say is: "These are the recommendations. The moment you're ready to capitulate to all of these recommendations, we're ready to put them in place. But if you don't like the recommendations that are in front of you, we're not prepared to do anything." So it's like it's our way or no way.

What I'm hearing from WASH is that they are prepared to sit down and discuss those recommendations, with amendments and possibly some changes that would be to the benefit of both sides. I think they've got some good ideas. I'm thinking that it's time to try and get these groups back together and try to take those recommendations and recognize that they're not all going to be implemented as presented. There are some opportunities for some amendments and some good new ideas. We might have a win-win that will really take care of this side of the industry. If the minister is prepared to say that he's ready to move on that, I'd be happy to do what I can in trying to get. . . . I mean, good Lord! I don't tell WASH what to do any more than the minister can or should. But it seems to me that we could start to get this discussion back on track.

Hon. D. Zirnhelt: We've had the report for over a year. There were 33 recommendations, and there was agreement on many of them. But we're prepared to get the parties back together again. We did that once. It didn't work. We'll try to get them back together again and see if we can resolve it.

G. Wilson: Well, we couldn't ask for any more than that. I appreciate that from the minister. I'm sure that the members of WASH would be keen to know that their concerns are at least being addressed.

If I could, I'll turn to two other very quick issues on coastal salvage. We're coming off the water; now we're going onto mainland salvage. I listened very carefully to the questions that were put to the minister by the member for Fort Langley-Aldergrove, so I don't want to duplicate those questions. There is a real concern. . . .

I should go on the record as saying that the Residue Value Enhancement Association that was set up on Vancouver Island has had a number of meetings with the minister. I've been involved with some of them -- not all of them -- but I have certainly been a party to try to get some of these things going. I think there is a general appreciation by people who are involved with the Residue Value Enhancement Association for the interest the minister has taken.

One of the issues that was brought up was the need to try to find a way to expedite the applications for salvage in various TFLs. I think the concern we had was that where there are plans in place, ministry officials are essentially using their time and energy to look at these plans and move forward to get green harvests going. They're putting applications for salvage contractors to the very bottom of the pile.

The concern with this is twofold. Firstly, it takes a long, long time, therefore, to get an application approved. I know that the minister was going to look into this. There was a discussion around having a staff person in the district office who would be responsible primarily for expediting these salvage licences, and that doesn't seem to have happened. There was some discussion around it. For a very brief period of time, it looked like we were actually going to get that to start happening, and now it doesn't seem to be happening at all. As a result, we're back to where we were a year ago, taking enormous amounts of time to get what should be fairly simple, straightforward applications processed. I wonder if the minister might comment on that. It is an area of ongoing concern, particularly at a time when the sector is in a down cycle and people are really hurting financially.

Hon. D. Zirnhelt: We did some pilots around the province. We tried to learn from that, and we did. We realized that we had to have some dedicated personnel for that. We have the head of the program in place, and we're proceeding to recruit personnel who will specialize in salvage permitting in those district offices that have salvageable material and where there's interest by salvors. We're moving on that. There will be people in the district offices to process them.

G. Wilson: I wonder if the minister might just tell us, then, which district offices are going to benefit from these personnel. Do we have a list of those offices?

Hon. D. Zirnhelt: Yes, the instruction from the ADM of operations was that every district office was to name a contact. They were to designate somebody by the end of May. In some cases, that might be a temporary contact as some recruitment goes on. But there will be dedicated personnel for the salvage program across the province.

W. Hartley: I seek leave to make an introduction.

Leave granted.

W. Hartley: Today in the gallery we have some 20 grade 4 and 5 students from Satsop Elementary School. They're here with their teacher, Ms. Hendrick, to learn about comparative government and local history. Would members please welcome them.

G. Wilson: I wonder if the minister might tell us how these personnel, when they come in, are to be assigned. Are

[ Page 8570 ]

Hon. D. Zirnhelt: We're actually gearing up so we have designated contacts now, and the district manager can make that known to the organizations. But we'll be in recruitment of the actual people. They will be contested positions, and they may or may not be filled by people from within the ministry. My guess is that it'll be personnel within the ministry. There'll then actually be dedicated personnel. Right now it's a contact whose job may or may not be full-time on salvage. We're moving to a full-time dedicated staff model for that program.

[W. Hartley in the chair.]

G. Wilson: That's good news, and I'm sure that the people in the industry are going to be pleased to hear that. I hope there would be some directive from the minister's office. . . . Maybe it's not necessary, but I'm suggesting that it might be necessary in some districts where the managers may not see the urgency of notifying people in the industry that these personnel are actually on board and are dedicated. By way of a suggestion, if I may be so bold, I would suggest that there be some kind of memorandum from the minister's office advising that people in the industry receive direct notification. This would go a long way to satisfying some of their concerns, and I think that's a good thing.

[5:30]

Hon. D. Zirnhelt: These are the facts. There were three bids for the sale you're talking about. One was for $17,000, one was for $15,750, and another one was for $13,000. The complainant probably bid the $13,000. The district manager looked at the highest bid and disqualified it for some reason -- I don't know; it wasn't registered. The second bid was $50 over the $100 multiples. The district manager decided that he had the discretion to pick. Although they had asked for it to be in multiples of $100, he feels that he was within his rights to award to somebody even though they were $50 over the $100 multiple.

G. Wilson: Well, I'm really impressed at the minister's clairvoyance and that he would know precisely what tender I was talking about. Not having suggested which one it was, I'm amazed at his ability to read minds. But it certainly seems, though, that it's illogical -- I think the minister would agree that it is illogical -- to have the rules of tender set out in black and white, saying that the bids must be received in multiples of $100, if the manager can then turn around and give an award to somebody who doesn't even read the rules and puts a bid in that is not in multiples of $100. Now, if people follow the rules, presumably. . . . How does one then disqualify those bids that are not within the rules?

The reason that the $17,000 didn't get it was, I'm told, because they weren't eligible. A lack of eligibility was the reason that one was no longer accepted. So we're at $15,075, I think it was, which is actually $75 over the number, and the next bid was $13,000. People who put in bids of $100 multiples presumably expect -- if that's the rule -- that the ministry is going to follow it.

Can the minister tell us whether or not he agrees that it is at very best confusing, and at worst somewhat dishonest, to have those rules and then have them just arbitrarily changed by a regional manager? Would he agree that such language should be removed from the tender documents, so that we do not have an expectation of a bidding process that is then overturned at the pure discretion of the regional manager?

Hon. D. Zirnhelt: I could see that the complainant could have an argument if it was somebody who bid $13,050 when he bid $13,000, but given that the next-highest bidder was $15,750, we're splitting hairs here. He could have bid $15,700 and got the award. But what we've done, because of the confusion, is remove that language. So we no longer ask them to bid in multiples of $100.

G. Wilson: Okay. I'm tempted to challenge the minister's ability to read my mind and to tell me what my next set of questions will be.

About four or five months ago there was discussion around the requirement with respect to detailed logging plans of salvagers. A huge report was commissioned, and it came out with a whole bunch of new rules for contract salvage loggers. I wonder if the minister might tell us where we are now with implementing regulations with respect to the submitted plans of the contract salvage loggers. There was a general agreement at the meetings that I attended with ministry staff that it was illogical to require the same level of detail from salvage loggers as from those who were going in to harvest green timber. I wonder if the minister might tell us where we are at with that.

The second question -- and that concludes what I want to talk about, depending on what the minister's answers are -- is on the idea that prior to active logging, there would be a provision for traversing, ribboning and defining areas that would provide for salvage opportunities when cut plans are initially prescribed. I wonder if the minister might tell us what has happened with those two recommendations. In the ministry meetings I've had, there was general agreement that we should be proceeding along those lines.

Hon. D. Zirnhelt: Well, just to give you some information, we've gone away from requiring a logging plan. It's no longer required. What we have instead is a pre-work conference that describes what the desired results are. So there are no more requirements to ribbon unless there are some unusual circumstances that I might know. . . . But there is no more requirement to ribbon, as a rule. We've gone to the pre-work conference as a way of doing it; we've advanced, and we are implementing those procedures.

G. Wilson: Does that apply to all districts, then? Or is that at the discretion of the regional manager?

[ Page 8571 ]

G. Wilson: So as I understand it, then, once these people are trained. . . . I know that very recently those ribboning requirements were still there, and the old plans were needed in at least two districts. But it may well be that they simply do not have the personnel in place that are required to do this work. Can the minister tell me. . . ? Is there a time frame within which we can expect to see uniformity in this application? The reason I asked the question initially was that in dealing with local constituents who are involved in log salvaging, there appeared to be inconsistent regulation. The regulations from one district to another were inconsistent. Based on the minister's answer, I'm assuming that the reason for that is because in one district there are trained personnel and in others there are not. So if the minister might just give me a ballpark figure as to when we can expect to see uniformity of requirements in place, that will go a long way toward helping people who right now are somewhat confused and a little bit angry that they've had to put a lot of money and time into plans when people in neighbouring districts have not had to.

Hon. D. Zirnhelt: Our intention is to have people trained and in place by the end of the summer, say. With dedicated staff for salvaging, we intend, through their training, that they will have a consistent set of operations.

I have to correct the record a bit. We still can require ribboning around the area to be cut, but the actual layout of a logging plan that involved ribbons and so on is no longer required.

As the training progresses, as we staff up, as dedicated small business staff learn how to do it and as we get a chance to pass on the requirements to the people who propose the sales, we'll be able to deliver the program consistently.

G. Wilson: If I might just ask the minister one last question or set of questions, I don't think it would take too long. It's not exactly on salvage, but I'm not sure where else to fit it into my questions on estimates, given that when I come back we'll be talking about interior issues more specifically and matters more directly related to aboriginal access to timber.

The minister is aware that there is at least one operator on Vancouver Island involved in cutting timber for export to temples. I can't explain it any other way except to say that it's for the construction of temples in Japan, Korea, Taiwan and China. As the minister will be aware, because of the ban on raw log exports, there are a number of pieces that are required in the export of this material that are not sawn in the conventional sense -- in the sense that they're not dimensional lumber. They're not cants, in the sense that they're not squared. There may be just a notch taken out of them or just one slab cut off of them; they may be modified in a very limited way. Or they may have a very large sway in them, because that's what's required by the people constructing these temples.

The problem is that up until now. . . . There is a general consensus that the ministry has had, up until this point, really no method for classifying these logs, so a special permit for export has been required for each of these logs. The people who are contracting for the export of this timber are no longer willing to contract to Canada if we have lengthy delays as a result of the permitting process for these pieces.

I can explain this a little more clearly. Somebody who's going to build a temple in Japan or China will send the blueprint, with all of the pieces required. This person will contract to custom-cut all of those pieces that are required to construct this temple. There may be, in that whole blueprint, five pieces of wood which don't conform to conventional timber, which are extraordinary in their size, dimension and cut. I know the minister's staff has been very helpful in this, and we've had a number of meetings on it.

But I wonder if the minister might confirm that what we can do now is actually have a temple-log classification. Nobody's going to rip off the system, in the sense that you can't export the raw log, because it's cut to the dimension of a blueprint. You actually have an architectural plan. So it strikes me that if we can have the minister agree that we can have a classification such as temple log, it will remove the special permitting required. It would give great comfort to the supplier, because he will be able to bid with confidence to those people who are purchasing. And we will have a multimillion-dollar industry, which is desperately needed, in British Columbia.

Hon. D. Zirnhelt: As the member knows, temple components haven't been on the list of recognized manufactured products. That's the problem. We are pursuing that. The proponent there knows what we're doing and, I understand, is happy with the progress. We will find a way to help them. It's not going to be today or tomorrow, but it will be as soon as we can add them to the list of manufactured products. It will be done.

G. Wilson: I had to do due diligence to make sure that we had that on the record, only to add my voice to those who are saying the sooner, the better. This is a niche industry, and it's a very productive and lucrative one that will employ a significant number of people on Vancouver Island who otherwise would be out of work. I certainly do encourage the minister to get temple components on the list at the very first opportunity.

I'm sure that in the interim the minister might want to confirm that when these contracts come forward, the ministry will not delay permitting, because otherwise he'll lose those contracts. If the minister can confirm that, then I'd be prepared to take my place until we get into interior matters, where I have some more questions for the minister.

[5:45]

G. Abbott: We'd like to turn now to issues where the issues of Aboriginal Affairs intersect with issues associated with the Ministry of Forests. Do you have the right staff component here? No problem? Great.

At the outset, we appreciate that there are issues which may be best posed to the Minister of Aboriginal Affairs in his estimates. But there are obviously some significant implications for British Columbia's forests around some of the recent developments in aboriginal affairs. I hope the minister can share his knowledge with us today with respect to these issues as we proceed.

[ Page 8572 ]

Hon. D. Zirnhelt: As the member knows, title is deemed to exist, although not specifically. It has to be proven first nation by first nation. Nothing has been proven except that it's known to exist and, as such, is an encumbrance if proven. Therefore the potential is there for it to be proven.

We have to act accordingly to protect the users of resources. So we take that into account when we begin to process applications that involve the use of Crown land and resources. We accept the court's direction that nothing has taken away the jurisdiction that we have. So we are governing ourselves as we understand the court decision.

G. Abbott: The minister notes that the ministry has taken into account the apparent direction that's contained in the decision. Could the minister enumerate in a more precise fashion how the decision has been taken into account? In what ways have the management or other practices of the ministry been changed or reformed to take account of the Delgamuukw decision?

Hon. D. Zirnhelt: Coming from the court decision, there is no detailed process for doing the additional consultation that is required. So we are asking our people to be cautious and to do the very best job they can to consider the rights that might be infringed on if they proceed with processing applications to use Crown resources.

We are attempting, through negotiations with the First Nations Summit, and also with other organizations like the Union of B.C. Indian Chiefs and the Six Nations Alliance, to try to come up with some mutually agreeable methods of consultation. But that definition has not happened to the degree that will probably be required. In the interim, we're doing the best we can to consult further and to build a record of consultation.

G. Abbott: Is it correct for me to assume from the minister's answer that Ministry of Forests personnel are awaiting further guidance from other realms of government, be it provincial or federal, to guide them in their future responses to the Delgamuukw decision? Obviously there is some uncertainty being voiced by the minister with respect to how his ministry should conduct itself around issues involving aboriginal title and other aboriginal issues. Are we awaiting some further guidance from another realm of government?

Hon. D. Zirnhelt: We have given guidance. As our consultations proceed, we may well give further guidance.

G. Abbott: I'm not sure if I missed the core of the answer or whether the minister missed the core of my question. It was: is there going to be further guidance with respect to how this ministry, or indeed other ministries, should respond to issues posed by Delgamuukw? Is this ministry awaiting some further direction with respect to this matter?

Hon. D. Zirnhelt: Well, as you know, the court suggested that negotiation is the way, without giving terms of reference for negotiations or anything else. So we're endeavouring to undertake negotiations on how we might consult, in order to satisfy requirements under the Supreme Court decision. We have these discussions. Some of them are just getting underway, and some of them are further advanced. We have given guidance to our district managers; we may give further guidance as processes are developed through these negotiations.

G. Abbott: I understand that pre-Delgamuukw, the ministry had a policy which the ministry personnel, including district managers, used in relation to aboriginal claims and other issues. The question is: how has that policy been revised in the wake of the Delgamuukw decision -- if indeed it has? Or does that revision await further direction from the Ministry of Aboriginal Affairs or other sources in government?

Hon. D. Zirnhelt: Before revising the policy that was out there pre-Delgamuukw, we are awaiting the outcome of the negotiations. There is no easy way to proceed, so our district managers and others are under instructions to work with the spirit of the decision. We have to have mutually agreeable ways to keep these things out of the courts; we're attempting to do that. If those processes inform the policy, then we may revise the policy accordingly.

G. Abbott: The minister notes that the revisions of the pre-Delgamuukw approach or policy within the Ministry of Forests with respect to these issues are awaiting the outcome of negotiations. Could the minister clarify for me what negotiations he is referring to that apparently will shape the outcome of the policy issue?

Hon. D. Zirnhelt: Well, the member might know that there were, pre-Delgamuukw and continuing after, discussions with the First Nations Summit. We were trying to meet the spirit of what first nations were putting forward. Some of them had different opinions and would bring to the table commentaries on the adequacy of consultations; we would allow that to inform our policy. Right now we have a table with the summit. We have undertaken to have discussions with the Union of B.C. Indian Chiefs and the Six Nations Alliance. In the case of the Six Nations Alliance, we have a two- to three-month process that we agreed on, to try to give effect to consultations in this post-Delgamuukw period.

G. Abbott: I appreciate the minister's informative answer. Could he advise me -- when he uses the term, "we are engaged in discussions and negotiations" with, among others, the First Nations Summit, the Union of B.C. Indian Chiefs and so on -- who "we" is, or who "we" are, to be precise? Is it a Ministry of Forests negotiation that is ongoing with those groups, or is it a broader negotiation between government that merely includes the Ministry of Forests?

The Chair: Minister, noting the time.

Hon. D. Zirnhelt: Yes, noting the time. The "we" is corporate; the "we" is government corporately, involving the various ministries that are involved.

Noting the hour, I'd like to move that the committee rise, report progress and ask leave to sit again.

Motion approved.

The House resumed; the Speaker in the Chair.

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

[ Page 8573 ]

Hon. D. Zirnhelt: I move that the House, at its rising, stand recessed until 6:35 p.m. and thereafter sit until adjournment.

Motion approved.

The House recessed from 5:58 p.m. to 6:38 p.m.

[The Speaker in the chair.]

Hon. D. Zirnhelt: In Committee A, I call the estimates of the Ministry of Labour. In Committee B, I call the estimates of the Ministry of Forests.

The House in Committee of Supply B; W. Hartley in the chair.

ESTIMATES: MINISTRY OF FORESTS
(continued)

G. Abbott: At the time we recessed for dinner, we were in a discussion on the impact of the Delgamuukw decision, specifically on the forest industry in the province and on the Forests ministry. The minister had noted, in the wake of the Delgamuukw decision, that his ministry was engaged in discussions with the First Nations Summit and the Union of B.C. Indian Chiefs to look at, I guess, what an appropriate response to the Delgamuukw decision would be in terms of policy and process.

I want to ask the minister next: are there parallel processes going on between the ministry and the First Nations Summit, and the ministry and the Union of B.C. Indian Chiefs? Or are those bodies two of the members that are at the one, single-process table?

Hon. D. Zirnhelt: I can answer in general terms for the member, but the lead on this file would be the Minister of Aboriginal Affairs. So let me just say that the summit, because there is a treaty relationship and a history to the treaty-making, is much more advanced. There has been one meeting between the Premier and the Six Nations Alliance, with a resolution to follow up with further discussions with the Union of B.C. Indian Chiefs. I believe there's a commitment to meet sometime in the near future to begin discussions.

Just to advise the member, we do have people standing by from the protection branch. If a note could go to the member for Peace River North, we're ready anytime he is.

G. Abbott: I'm just scribbling out a note to the hon. member as I formulate my next question.

Could the minister advise what other ministries are involved in those discussions?

Hon. D. Zirnhelt: The primary ministries and offices involved are: Aboriginal Affairs, Energy and Mines, the land use coordination office, Forests, the environmental assessment office and Environment, Lands and Parks.

G. Abbott: Could the minister advise whether this is exclusively a government-to-first-nations discussion, or whether there are representatives of industry involved, as well, in any of these rounds?

Hon. D. Zirnhelt: The discussions with the summit involved the Treaty Negotiation Advisory Committee, the B.C. Business Council, the Union of B.C. Municipalities and COTA. Just to direct the member, beyond that I don't have any details. These are being conducted by the Minister of Aboriginal Affairs.

[6:45]

Hon. D. Zirnhelt: The discussions that the Ministry of Forests is involved in are primarily the ones around forestry and the environment, where there is a memorandum of understanding with the summit and with the Union of B.C. Indian Chiefs. So there are those two tables that were underway before December 11. They were continuing after but, of course, had to be modified, and they are continuing.

G. Abbott: Just to go back to the previous question, the portion of the question that I guess is not answered is. . . .The minister noted early on in our discussion that the ministry's policies around these issues will, in large measure, at least, be governed by the outcome of the discussions that occur. What I'd like to know is what the minister foresees. I appreciate that it's not something that the ministry necessarily controls in terms of timing and outcome. But what is the expectation of the ministry around when the issues will be resolved to a point where ministry policy on these issues can be defined?

Hon. D. Zirnhelt: It's too early to tell where we might be headed with it. We don't have any deadlines as such, but our view is the sooner the better. We're anxious to carry on with the discussions. There are events that come in between, and people wait for mandates and feedback from their constituencies and so on. It's our intention to pursue negotiations. I can't say what the results of those negotiations are going to be, nor can I tell you when. In my view, the sooner the better.

G. Abbott: The member for Peace River North is here. If the protection people would like to commence a discussion now, we could pick up the aboriginal discussion after that discussion is completed, if the minister feels that it's appropriate.

R. Neufeld: I'll start right at the beginning again and ask the minister, in regard to fire suppression across the province, how it is handled: whether it's all done in-house or whether we contract out, and who we contract out to. Are there numerous companies that we contract to, or does Conair do the majority of it? I'll maybe just leave it there.

Hon. D. Zirnhelt: I think I've neglected, in the past, to introduce the people with me. I have Jim Dunlop, who's the director of protection services and Dave Langridge, who's the superintendent of aviation services.

[ Page 8574 ]

R. Neufeld: All the aircraft services. So Conair would be the major contractor, would they?

Hon. D. Zirnhelt: Yes, Conair is the largest contractor. There is some done by Air Spray Ltd., but they're much smaller.

R. Neufeld: Just for the record, I thought Conair did most of the work, and I don't have any problem with Conair doing it. I think they do a great job, and from what I understand, they're very good at what they do. Do they also own tanker bases that are stationed at different airports around the province? Would those be owned by the Ministry of Forests? Or are they owned by the federal government, at different airports, and leased back? Maybe the minister could explain that a little bit.

Hon. D. Zirnhelt: All the tanker bases are leased by the ministry -- usually from Transport Canada or, if the municipality runs the airport, from the municipality.

R. Neufeld: I have two issues that arise from the tanker base in my constituency. The tanker base in Fort Nelson, then, is obviously owned by the ministry and leased from the federal government. The minister is aware that the federal government is turning over all the airports to the provinces, and the provinces, in turn, are downloading them to the communities. That makes sense if you've got a community that's big enough to handle a fair-sized airport. In the case of Fort Nelson, we have a huge forested area that is 250 miles north of Fort St. John or 350 miles south of Watson Lake. That's the major airport where you could actually base tankers -- that being Conair. In fact, I was I just in Fort Nelson, and Conair was there fighting some fires.

The community went to a referendum on taking over the airport, and it would have increased the residential taxes so much that it was turned down. We're left in a pretty difficult position. We have the Ministry of Forests, which has a tanker base there and employs Conair to fight fires that range 400 to 500 miles around there -- to go around the borders of the province. What will Forests do if, in fact, at the end of the century, year 2000, the community still doesn't take over the airport? If the community doesn't take it over and it's left with the federal government and they decide to close it, what do we do for fire suppression in the northeast?

Hon. D. Zirnhelt: One of the possibilities -- similar to the Puntzi Mountain base that isn't running as an airport -- is that you can lease the facility from whoever owns it and try to run a limited operation. But we'd have to examine the liability issues and what's needed for the aircraft. What I'm informed here by the officials is that they would do the business case for providing that service. But my guess is that if somebody's trying to put together a business plan from the municipal level, they should factor this in. Beyond that, I don't know what more I can say, but you may have more questions.

R. Neufeld: Do I get from that answer, then, that the Ministry of Forests would be quite willing to work with the community and maybe ante up a few more dollars so that we could keep that airport running? Is that exactly what I heard from the minister in a business case?

Hon. D. Zirnhelt: I'm informed that that's not what the officials meant when they advised me, and I'm reluctant to enter into negotiations across the floor of the House. But we would have to do a business case for providing this service, and we would have limited options, as you've identified. There aren't too many airports that are close. This one's certainly central, but it's a problem we'll have to confront. I would just urge you to put the local authorities in touch with our officials in air protection, if they haven't been in touch already.

R. Neufeld: In fact, the officials have been trying to arrange a meeting with the minister and some other ministers for well over a couple of months, and we haven't been successful in doing that. So maybe, after this discussion, that meeting will come to fruition a little bit quicker so that we can deal with that issue. It's a serious issue that's facing the north, and it doesn't just involve the Ministry of Forests. There are other things that have to continue on, whether we like it or not, such as medivacs and those kinds of things, so the Ministry of Health has to be involved -- and Northern Development.

I'm hopeful, after this brief discussion about the problems that we're experiencing in the community of Fort Nelson with trying to keep the airport running, that maybe we can meet and come to some resolution. The minister should also know, of course, that the airport was built during the war for war purposes. It is larger than you actually need there, but just going in and making it smaller isn't that easy either. There's just a matter of fact that you have an airport that's already constructed and runways that have been built and that are being kept in pretty good shape up until, probably, the year 2000, and then it's going to go downhill dramatically. I think it behooves all ministries in government to look seriously at that airport.

I just wonder if that is the only airport in the province that the minister is aware that might be experiencing that kind of trouble and that may reflect on his ministry's with the ability to fight forest fires. Is there any other airport in the province that you are experiencing the same problem with?

Hon. D. Zirnhelt: It would appear that this is the only one that has come to a head at this time. That's the only one we're aware of. It might happen in some other cases, but we're not aware of where this might happen.

R. Neufeld: I guess the biggest problem is that the population there is so small. I mean, we're talking about a population of between 6,000 and 7,000 people being able to maintain an airport plus all the other amenities that go along with a community that size, and it just becomes unmanageable. That was obvious by the people -- I think 60 percent of the people -- saying no to the referendum on taking over the airport, even though they know how important it is for health reasons -- medivacs and those kinds of things. I'm hopeful, then, that the minister will be able to meet with those people fairly soon and that we can work out a business plan, maybe along with the other ministries, to where we can deal with that issue.

[7:00]

[ Page 8575 ]

There are a number of them from Fort Nelson north. There are three main ones. I'm wondering if it wouldn't be in the ministry's best interest to take those over from the federal government, only so that they don't decommission them -- so that they're left intact and you have some bases along the Alaska Highway that you can actually use for fighting fires. It also works well with Medivac. When you're talking about the distances between hospitals that we have in the north -- 200 to 300 miles -- compared to the south, it's kind of handy to be able to land an aircraft beside the highway to pick up people that have been hurt or to able to go to fires that are very close by. Actually, we all know what happens if you get to them right away: you can control them quickly and not burn up as much forest. Would there be something that the ministry would be willing to look at to take over those airports for those reasons?

Hon. D. Zirnhelt: Yes, we would be interested in taking over some of them, because we would find some use for them. So there is some positive interest in them -- probably not all of them, but certainly some of them.

R. Neufeld: I appreciate hearing that. I'm not talking about a lot of money. It's really the liability part of it that is probably the biggest issue, and I think that's why the feds want to get out of it. Although, to my knowledge, there has never been a liability charge over any one of the strips, I'm afraid that if they dig the ditches across the strips, there is going to be a liability charge come up. There are a tremendous number of American pilots who actually fly small planes from the lower 48 to Alaska. They do VFR, visual flight rules; they fly the highway. If they get into trouble, they can land at these airstrips. Really, all it takes is just taking them over and probably once a year or something knocking the small trees down so you can still use it for light craft. There would be no snowplowing in the winter, because in the winter most of the aircraft up there are on skis. Of course, there are no forest fire issues anyhow.

I should put on the record that there is also the ability for the ministry to probably work some chargebacks to some of the major oil companies that operate in the area and use those same strips for supply depots. So there's an ability to actually. . . . I should be careful when I tell you this, the way you guys like to charge others. There's an ability for the ministry to actually recover some of their costs -- and I just mean some of them -- and I think it would be beneficial to everyone. So what I'll do, for the minister's information, is send him a letter along with a map showing the strips that I'm talking about -- the three major ones that I think would be well worth looking after.

If I can again impress this on the minister, it would really be nice if you, along with the Minister of Health and the Minister Responsible for Northern Development, could meet with the community of Fort Nelson as soon as you can to try to look at some of these issues, so they can start working out their business plan as to how they can probably take over that airport.

G. Abbott: To return to the issue of the Delgamuukw decision and its impact on the forest sector in British Columbia. . . The reason I inquired as to the possible time line around the conclusion or at least the advancement of the discussions between the province and the representatives of first nations was that it appears that the ministry's policies around consultation will be, in some considerable measure, honed or determined by the outcome of those discussions. As we know from previous discussions in this House earlier this year, the Delgamuukw decision has produced -- in the Crown Lands ministry at least -- something akin to bureaucratic paralysis. Obviously there would be a real concern here if the decision had induced the same in the Ministry of Forests. It doesn't appear that that's the case. But my next question to the minister is: has there been a definable impact on timber harvesting in the province of British Columbia as a result of concerns arising from the Delgamuukw decision?

Hon. D. Zirnhelt: There has not been. I just reference the fact that in January, February and March of this year, in the interior and northern regions, we harvested more than we did the year before.

G. Abbott: Has there been, for example, any impact to this date on the ability of the ministry to achieve a two-year standing timber inventory as a consequence of the Delgamuukw decision?

Hon. D. Zirnhelt: No. The inventories have been increasing.

G. Abbott: The last question I have -- and I know some of my colleagues have questions in this area as well. . . . I want to talk about the impact of the decision from a different perspective, and that is the belief of some first nations people that they may have a special opportunity to harvest Crown lands as a consequence of the Delgammukw decision. For example, I note a letter to the district manager of the Chilcotin forest district from what's termed as the Tsilhqot'in national government. This letter reads in part. . . . I'll just quote from one sentence: ". . .Nemaiah Valley Tsilhqot'in community claims that they have authorized community members to harvest logs on what you" -- meaning the district manager -- "consider to be Crown land, for the purpose of providing timber building materials for community housing, just as the Tsilhqot'in people have done for a millennium."

Is that view one that has emerged in any location other than the Tsilhqot'in nation? Is this an issue which has broader impact and is being seen in other parts of the province?

Hon. D. Zirnhelt: It has occurred in a number of areas around the province.

G. Abbott: Could the minister outline for us where that impact has been felt, what the magnitude was and in what locations in the province?

Hon. D. Zirnhelt: Those are statements, perhaps statements of title. There hasn't been an impact.

G. Abbott: So the minister is therefore advising that in different locations in the province representatives of different

[ Page 8576 ]

Hon. D. Zirnhelt: There was one case, post-Delgamuukw. A stop-work order was issued and the work stopped. It's proceeding through legal channels now.

G. Abbott: Could the minister advise what location that occurred in?

Hon. D. Zirnhelt: Yes, it's in the Prince George region, north of Williston Lake.

M. de Jong: Since we're on the subject of aboriginal land claims and the impact that they may or may not be having on areas within this minister's purview, I thought that maybe we could just spend a few minutes. . . . It's really the first opportunity we've had to present to this minister some of the findings that arose out of this House's select standing committee. I know that the now Minister of Small Business, Tourism and Culture is here. He chaired that committee, and some recommendations arose out of that extensive exercise in consultation with British Columbians. I should say to the minister that a lot of what we heard from British Columbians at a whole range of hearings right across the province focused on, as you might expect, the forestry resource, land tenure questions and how this ministry was going to respond in light of ongoing Treaty Commission negotiations, specifically the Nisga'a AIP.

If I could just start here, the main body of the report. . . . I should say, not necessarily to remind the minister but to make it clear on the record, that the government, through the Minister of Aboriginal Affairs, has indicated. . . . I think it was a couple of weeks ago. It took some time, almost a year, but he has now at last offered the government's response to the report. He said that the government accepts all of the recommendations in the main body of the report. There was a minority report attached, but the response from the government via the Minister of Aboriginal Affairs was that the government accepts all of the majority recommendations.

I see the Minister of Aboriginal Affairs nodding his head. I may be summarizing, but that's my recollection of what the Minister of Aboriginal Affairs had to say: the government accepted the majority recommendations. If I'm wrong, I know that the former chair of that committee, the Minister of Small Business, Tourism and Culture -- who is in the House here -- will correct me and bring that to the minister's attention.

In the section of the report dealing specifically with forest management and the forest resource. . . . The committee, in the main body of the report, began by drawing some conclusions based on the evidence they heard. In fairness to the minister, I'm not going to put all of them to him. But I'd like to put two or three to him, so that he can verify the accuracy of what the committee members from all sides of this House came up with. The committee concluded that throughout this negotiating process the Ministry of Forests and the Minister of Forests will "retain a lead role" in decisions affecting Crown land. That was the impression and the conclusion that the committee members came to, obviously based on the assumption that this ministry and minister had, to that point, been playing a lead role. Were they correct, or were they under some misconception as to how this is working?

Hon. D. Zirnhelt: Well, I would interpret that to mean that the Minister of Forests is responsible for lands over which we have management responsibility. Many of those are Crown forests, provincial forests or whatever, and to the extent that we regulate -- exert jurisdiction over -- the provincial forests, then we would be a lead proponent. But if it's a Lands matter in those forests, of course Lands would have a role to play.

M. de Jong: I think the impression that committee members had is largely consistent with what the minister is saying insofar as management of the forest resources is concerned. The issue here, in all of these negotiations -- both pre- and post-treaty, if we can speak in those terms -- is whose authority is going to be paramount. That is an issue, a tug of war, that takes place both at the negotiating table and, I'm sure, within all branches of government, including the one we're concerned with here -- the Forests ministry.

[7:15]

We have, over the last number of weeks, referred to some examples in this House where I would say, respectfully, that exactly the opposite has taken place, and where policies pursued by the ministry and the government have driven aboriginal peoples out of involvement in the forestry sector. But I'm sure that the minister has another take on that. If he agrees with that conclusion that committee members came to, maybe he could say so and also indicate whether the ministry and his government have taken any steps in recognition of what the committee was saying.

Hon. D. Zirnhelt: I would say that there has been an ongoing program to encourage local participation and first nations participation in a number of activities. We've had people go through a technical training program -- forestry technician-type training -- and we do encourage joint ventures so that the economic benefit of the resources is spread to first nations communities. In some cases, we use the small business program and make opportunities available to local communities to bid. Often they are first nations communities. It was started before the report, and we carry on and do it under our own jurisdiction, under the Forest Act.

M. de Jong: I am always reluctant to ask, particularly the Forests minister, a question that involves an answer that itself involves numbers or assigning a quantitative figure to the number of jobs or opportunities that have been created, but I'll try it here. I should also say that I don't necessarily agree with a trend I see developing within government to quantify on the basis of ethnicity or, in the case of the aboriginal issue, breaking down figures as they might particularly apply to aboriginal peoples. But I'm going to in this case, because I am told that the government does keep these figures. When the minister says, "We have undertaken a number of initiatives," I know -- or he has told us -- that within his ministry he has been diligent about having measurable indicators to evidence that progress has been made. If those initiatives are underway, I guess the question is: what have the results been? Between June 1997 and June 1998, how many more members of the first nations community are now working in the forestry sector? How successful have the ministry and the government been?

[ Page 8577 ]

M. de Jong: Actually, we know that the minister gets numbers, gets figures, in a fairly detailed way, on a biweekly basis, as to the number of jobs that are being lost in the forestry sector. Presumably that would include figures that are relevant to aboriginal communities -- and there are those that depend almost entirely on involvement in the forestry sector. Is he in a position to tell us, since February, when he started collecting those figures, how many people in aboriginal communities are no longer working in the forestry sector?

Hon. D. Zirnhelt: We don't have those figures disaggregated by aboriginal community.

M. de Jong: We could probably save ourselves time, and I don't want to get caught up in dissecting these documents. . . . I know that the minister, either in this House or just outside the door, indicated when that issue was raised that he would be providing all of those biweekly reports from February on. I haven't seen those yet. Is he prepared to make those available today? I do recall him saying that they would be available.

Hon. D. Zirnhelt: What I said in the House, I believe, was that I would consider making the numbers available. Before the member laughs too much and thinks he's so clever, he should realize that some of the information is specific to firms and was collected on a confidential basis. So we won't be disclosing information about specific firms.

M. de Jong: I can go to the memo, and I'm happy to do that. I don't recall the minister saying that he would consider releasing the documents; I heard him say he was going to release the documents. I'll find the memo later, but I know that the minister's request, as reflected in the memo, was for a regional breakdown of job loss in the forestry sector. If the information he's got refers to specific firms, the one thing I know for certain is that the government has no shortage of whiteout. There's no shortage of whiteout in the desks and offices of these ministries. So subject to the minister's stated preference to white out references to any particular firms. . . .

I know the Minister of Fisheries didn't have any hesitation in releasing his report. It referred to a particular geographical area and the devastating impact the ministry was having on the shake and shingle industry.

But let's get back to the point at hand. Subject to the qualifier that the minister has attached, is he prepared to release the documents?

Hon. D. Zirnhelt: I've answered the question.

M. de Jong: Well, let's try again. I heard the minister say he would consider releasing some figures. My question was: would he release the biweekly reports on job losses that he is receiving, recognizing his desire to white out references to individual firms?

Hon. D. Zirnhelt: They've been requested under freedom of information, and they'll be severed appropriately and produced under freedom of information.

M. de Jong: If the minister doesn't want to release them, then just say so. It's the only government I've ever seen that uses a piece of legislation that is designed to facilitate access to information that government is collecting on citizens, and uses it as a shield, as an obstacle. You know, if the minister doesn't want to release the documents, then at least have the temerity to stand up and say: "I'm not going to release the documents."

Hon. D. Zirnhelt: What the member is forgetting is freedom of information and protection of privacy. Some of that information has to do with commercial information, and I've told you that the reports have some commercial information in them.

M. de Jong: I'd have a lot more faith in the minister's response if this government hadn't been singled out this week as having the worst record in Canada in terms of responses to freedom-of-information requests. It's not that difficult. There's supposed to be a 30-day deadline. This government is consistently late: 60, 90. . . .

Interjections.

M. de Jong: The Minister of Small Business, Tourism and Culture says it's the best legislation in Canada. That's like having a shiny new Cadillac, but it doesn't have an engine.

Hon. Chair, I just want to be clear. The minister is now saying that the reports that he is receiving with respect to the memo -- his stated request for a regional breakdown on job loss in the forestry sector -- are actually reports that relate to commercial endeavours in the province and that his refusal to release those documents is tied to the fact that it's commercial information that he believes needs to be severed, pursuant to freedom-of-information and protection-of-privacy regulations. Is that the position? It keeps changing.

Hon. D. Zirnhelt: The position hasn't changed.

M. de Jong: Let me ask this. One of the conclusions that the committee came to. . . . I'll just read it; it's very short.

The Chair: Excuse me, member. The member for Okanagan-Penticton has a point of order.

R. Thorpe: I'd ask the member from Mission to withdraw those comments on the member for Fort Langley-Aldergrove.

The Chair: Member, you would have to clarify just what you're asking. The Chair didn't hear any particular comments from that member.

R. Thorpe: But the member from Mission knows what he said, and if he's an honourable member of this House, he'll stand up and apologize to the member for Fort Langley-Aldergrove for the comments that he made. He knows what they were. Stand outside and say them.

Interjections.

The Chair: Order, members. I'm sorry, member. As I said earlier, I didn't hear such comments, so without clarification on just what the comments were, I can't ask anyone to do anything.

[ Page 8578 ]

Interjections.

The Chair: Order, members. Members, order! The Chair has already made a ruling on this. That's the matter. . . .

The member for Matsqui on a point of order.

M. de Jong: The Chair wanted clarification on what remarks the member found offensive. He's provided that information to you, and he's asked for the hon. member to withdraw the remarks. That's pretty clear.

The Chair: I'm going to ask that if there are any more questions to the minister, they should be presented now.

The member for Matsqui on a point of order.

M. de Jong: The member from Penticton has made a specific request about remarks that, in my view and respectful submission, are unparliamentary, hon. Chair. He heard. . . .

The Chair: Member, please take your seat. Rulings from the Chair are not debatable.

Interjections.

The Chair: The point of order has been dealt with. Shall vote 44 pass?

The member for Peace River North. . . ?

R. Neufeld: On a point of order, hon. Chair. The remarks that were just put on the record by the member for Okanagan-Penticton, which you asked for clarification about, were the words "racist cop," as spoken by the Minister of Fisheries. This is not the first time that we have had ministers of this government sit in this House and make remarks that are totally unacceptable.

H. Giesbrecht: You're so pure.

R. Neufeld: It's not the first time. And, to the member for Skeena, I have never used that kind of discussion in this House at all.

The Chair: Order, member. Please take your seat.

R. Neufeld: But that is absolutely. . . .

The Chair: Member, order.

R. Neufeld: No, I'm not done. . . .

The Chair: Order, member.

Interjections.

[7:30]

Interjections.

The Chair: Member, you're treading on very thin water -- okay? And you're going to sink.

Let's continue with this debate, or I'll have to call the vote.

T. Nebbeling: Point of order.

The Chair: Is this a new point of order, member?

T. Nebbeling: It's a point of order that is a reflection of my personal feelings: that what the previous member asked through the Chair to happen has not been dealt with.

The Chair: As long as it doesn't deal with the original point of order.

T. Nebbeling: It certainly has to deal with the fact that I, the member for West Vancouver-Garibaldi, also heard the same remark made. I was astonished, and I didn't react in time. My colleague did, but I personally want to be on record, as well, to see this remark of "fascist cop," made by the Minister of Fisheries to my colleague from Langley-Aldergrove, withdrawn.

The Chair: I recognize the Minister of Fisheries.

Hon. D. Streifel: Could I try something here? I deny the allegation from the opposition, but if the member from, I believe it's Fort Langley-Aldergrove, is offended by the comments across the floor, I withdraw anything that may have been heard. But I'm not on record. . . . I find it very difficult to defend the allegations when there's been no record of debate along those lines. If it helps the members opposite, then anything that. . . . I don't want to go on record as doing something I didn't do, but I want to satisfy the member opposite that I haven't offended the member -- no intention. . . . Nor will I accept that. . . .

The Chair: Minister, thank you. That ends the matter.

M. de Jong: Getting back to the committee's report, I think the final conclusion that I want to put to the minister reads as follows: "Under the Forest Practices Code, a number of matters are 'referred' to first nations. There appears to be a lack of capacity among some bands to deal with these referrals" -- that being a capacity-related issue. Is that an opinion that the minister shares? If it is, can he provide some indication of where he has seen that to be a problem and where it might impact on the ministry's willingness to refer matters to first nations?

Hon. D. Zirnhelt: What we do is take it. . . . It has to be on a case-by-case basis. It depends on the circumstances. If we think there's a problem with overload, where there's been a lot of referrals or complex referrals, then we're prepared to encourage training. The forest tech training program is designed to assist in capacity-building. In some cases, we fund traditional use studies, which then give them an information base upon which to judge referrals. It varies throughout the province, depending on the state of organization. This is an ongoing problem. We recognize it's a problem, and we deal with it as we can. We consider that the federal government has a significant responsibility to assist in the development capacity as well.

[ Page 8579 ]

At some point this evening I hope we will talk about the issue that the minister alluded to, in terms of shared responsibility between the federal and provincial governments in terms of developing some of that necessary capacity.

I wonder if I could direct the minister to another one of the recommendations, where it says: "Responsibility for environmental assessment and forest practices and standards should remain with the provincial and federal governments, and should not be transferred to any first nation as a treaty right." In fairness, I think that contemplates perhaps a different type of arrangement but says that those things shouldn't be transferred as a treaty right. Is that something that the minister, as the one responsible for the management of forests, agrees with?

Hon. D. Zirnhelt: I agree to the extent that we expect there to be a high degree of environmental protection and so on implicit in the treaties. But with respect to the details of this in any treaty, we will take this issue of forest practices and environmental protection as something to be discussed in negotiating treaties. We don't yet have a treaty with any of this right in it, so I don't know where it would come up. If you want to pursue that, I would suggest that you discuss it with the minister responsible for treaties, who is the Minister of Aboriginal Affairs.

M. de Jong: I understand that. I hope the minister appreciates that I've only selected those areas out of this report that I think, in fairness, relate specifically to items that fall under his jurisdiction.

Again, it gets back to that issue of paramountcy. I think the debate, as it exists at the negotiating table and elsewhere, is: whose jurisdiction will be paramount in this matter? I can contemplate a situation where a first nation would, by virtue of some other mechanism, assume responsibility for maintaining environmental and Forest Practices Code standards. It would fall short of transferring responsibility for those two areas of governance via the treaty, creating that treaty right entitlement. That is something, if it were to happen, that would impact directly on this minister's ability to manage forests in British Columbia -- his paramount authority for managing forests. As I say, I think it is fair, recognizing what the minister has said about the give and take in negotiations. But this is a specific recommendation, and I think it's fair to ask the minister for his response to that recommendation.

Hon. D. Zirnhelt: There probably would be different regimes on lands that become first nations lands and lands that remain provincial Crown land. On provincial Crown land the jurisdiction would remain as it is.

M. de Jong: Hon. Chair, I missed the first part of the minister's reply.

Hon. D. Zirnhelt: I said that there's probably two separate situations. One is on first nations land which may have federal paramountcy or it may have some other kind of jurisdiction arrangement established as a result of the treaties. On the remaining provincial Crown land, the provincial Crown jurisdiction would remain as the paramount jurisdiction, unless defined in some other ways through further court rulings.

M. de Jong: I'm trying to decide whether or not that represents substantial agreement with that part of the report. As I say, when I hear the minister say that he can see the federal government's authority remaining paramount on treaty lands, that is different, in my view at least, than an outright transfer of responsibility for those areas of governance to first nations people -- which I think, in fairness, is what they are looking for. It is a significant point of debate and negotiation, and I'll ask one more time. It sounds to me like the minister is in agreement with the recommendation I have referred to here, that either the federal or provincial government authority would remain paramount and that there would be no transfer of responsibility as a treaty right. I may have misunderstood what he said.

Hon. D. Zirnhelt: I was trying to be clear. There may, on treaty land, be some management role by the first nations, but the principle going into the negotiations -- and the principle that we maintain -- is that they have to meet or exceed the provincial standard. I believe that that recommendation. . . . If it is referring to the remaining provincial Crown land, then the jurisdiction remains as it is.

M. de Jong: One of the benefits of the short intervention we had from all sides of the House was that I was able to find my memo. What good news!

If I can just return to that for a moment, it may have been, in our previous line of questioning regarding those job loss reports that I was clumsily suggesting to the minister, that I was referring to a different set of reports. I just want to make sure we're clear on. . . . This is the memo of January 29, '98, to all regional managers and district managers from the assistant deputy minister, operations division. She says: "The minister has recently requested that we regularly provide him with updates on the number of employees that have been laid off in the forest sector." Is that part of the memo accurate? Did the minister request regular updates on the number of employees that had been laid off in the forest sector?

Hon. D. Zirnhelt: Yes, I did.

M. de Jong: Did that request take place in the early part of January or mid-January of this year? Perhaps he can indicate when he began receiving those reports.

Hon. D. Zirnhelt: In the latter part of last year and in the early part of January, the deputy and I discussed getting a handle on the situation in case we could be of assistance somewhere and so we could have some sense of information on a more timely basis than we were able to get from Statistics Canada.

M. de Jong: I'm not sure that people in these communities were looking for more governmental help, but maybe I'm wrong about that. It says that each region currently reports on mill closures or curtailments, and the minister would like this report expanded to include workers that are affected in harvesting operations. Is that accurate? Is that part of the request that the minister made?

[ Page 8580 ]

[7:45]

M. de Jong: It goes on to say that to facilitate this, resource tenures and engineering branch has amended the current mill status report to include harvesting operations as well. Unless the minister tells us otherwise, I'll assume that that has taken place. It says: "Each district is to provide the additional information requested as accurately as possible. The region will then advise the branch coordinator when the information is complete for the respective regions. First report due by Wednesday, February 11, and then every second Friday."

The only reference I see to anything of a commercial component there, I guess, is the mill status report, which presumably refers to specific mills. I don't have one of these reports. But am I correct in speculating that the report appears in some sort of table or graph form and that there's a reference to a specific mill and then a column that reads "numbers of jobs lost"? Is that what the report looks like?

Hon. D. Zirnhelt: Yes.

M. de Jong: Is it a stretch for me, then, to suggest that if the minister is genuinely concerned about identifying the specific mills -- and he obviously isn't concerned about identifying Skeena Cellulose. . . ? Is it just a matter of deleting in the report the name of the particular mill? Is that the extent of the commercial information included in the report? Or is there other information?

Hon. D. Zirnhelt: As I said, because we collected the information. . . . The industry agreed to provide it provided that it was confidential. We'll have to examine whether or not you can track. . . . It might be one community and one mill, for example. We have to examine whether or not the information can be let back to trace its origin as being specific to one commercial operation. Those are the issues that we have to identify. I'm not sure where the member is going. He started out asking whether we knew how many aboriginal jobs were created, and then he got into this. I'm not sure if there's a connection; I'd be interested if he thought there was.

M. de Jong: If you're an unemployed aboriginal person who was formerly working in the forestry sector, I can guarantee the minister that you see the connection right in front of you, like in your empty wallet.

I appreciate that part of this exercise involves the minister standing up and exclaiming his righteous indignation at an obstinate and uncooperative opposition, but we're talking about a report that I recall this minister saying he was going to make available. We have gone full circle, to the minister now standing here and providing all sorts of reasons why it can't be made available. I mean, how are we supposed to have any faith in anything the minister says, when something as basic as that turns into an inquisition? If the minister doesn't want to release the reports that he said he would release when he was under the gun in question period a week ago, then say it. But this is a game that he seems intent upon playing. "Well, make an FOI request, and maybe in two or three or four or six months, when the information is stale" -- or when it looks good, because now there's twice as many people out of work, so the job loss figures for this month actually look good by comparison. . . . Let him stand up and say so, because people watching this little exchange are left with one impression and one impression only, and that is that the minister is reluctant to let people know the truth.

Hon. D. Zirnhelt: When the members were asking the question, they were asking about numbers under the jobs and timber accord. We agreed that we would use a database that everyone agreed on -- industry, government -- and we debated this in the House. We said that the most accurate measure was the survey of employment, payroll and hours. I said that it was the most statistically valid. The methodology that we are using here is not one that has been agreed on or accepted by anyone. It's quite reasonable that I consider releasing a report in which I know there is commercially relevant information. I said that I'll release the report. The member's trying to make a great big deal out of it; instead, he's wasting a lot of time. He could be asking a lot of questions about what we're doing to get people back to work. We've been concentrating. . . .

Interjection.

Hon. D. Zirnhelt: Why do we want to know? We want to know the magnitude of the situation, we want to know it early, and we want to deal with it. If there's anything we can do on a firm, specific basis, we often do it. We send people out to find why they're down and what can be done about it. Commonly it's markets or log costs or market problems, and if we know what the problem is, we can deal with it. And we have dealt with it. With log costs, we've reduced stumpage by 30 percent since last October. So we've dealt with it.

This side of the House is interested in dwelling on what we're going to do about the problem. That side of the House is not at all interested in dealing with the problem. They have no ideas. They talk in general terms about a Forest Practices Code that's results-based, and they don't know what they're talking about. They talk about reducing stumpage, and they have no idea how much you can reduce stumpage and not run into trouble with the Americans. They pretend and say that it has nothing to do with the Japanese market or the Asia meltdown. Well, they're wrong, wrong, wrong.

They want to waste a bunch of time pretending there's a problem here. The reports, as I said, will be considered for release. I intend to do it, and I'll do it within the 30-day time frame. I just suggest to the members that they should be looking at the StatsCan information, and if they want to have a long-term debate about jobs in the forest industry, we'll deal with the agreed-upon database.

Interjections.

M. de Jong: Was that the member for Columbia River-Revelstoke I heard?

Interjections.

[ Page 8581 ]

But getting back to the estimates. . . . You know, if you listened carefully to what the Minister of Forests was saying, you'd have thought that I ordered these reports on job losses in the forestry sector. Somehow I was ferreting into his territory; somehow I was usurping his authority, and I convinced some bureaucrat to go out there and quietly get me some information from within the ministry. But, hon. Chair, the minister asked for the reports.

This, of course, is the minister who just finished telling us that we want to get out there "ahead of the game." Let me get this right. The minister's idea of getting out ahead of the game, of preventing job loss in the forestry sector, is to count all the people who haven't got a job anymore. Is that what it is?

"Well, we haven't even got to redistribution yet." That's a whole other song and dance. But I thought I heard the minister say, at the conclusion of his remarks, that he's going to release the documents that have been collecting since, I guess, February 11. That's when the first one came due. He's going to release them, subject to his desire to white out any reference to any specific firm or commercial enterprise. I guess that's a start. I'm not going to quarrel with the minister's right to do that.

The minister has also indicated that it will only refer to the StatsCan figures. We will get a true indication of what's happening. . . . Well, he's shaking his head. Maybe he's saying we shouldn't refer to the StatsCan figures. I thought what I heard him say -- and I'll put this question to him -- is that the figures he was relying upon to show how many jobs the NDP has killed in the forestry sector were the StatsCan figures, and he was unprepared to release. . . . In fairness, I guess I should say that he was hesitant about releasing these reports, because he thought the methodology was suspect; he questioned their accuracy. Is that what he was saying? Was he questioning the accuracy of the reports he started to get on February 11?

The Chair: Minister, noting the time.

Hon. D. Zirnhelt: No.

Noting the time, I move the committee rise, report progress and ask leave to sit again.

Motion approved.

The House resumed; the Speaker in the chair.

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

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

Hon. U. Dosanjh moved adjournment of the House.

Motion approved.

The House adjourned at 7:57 p.m.

PROCEEDINGS IN THE DOUGLAS FIR ROOM

The House in Committee of Supply A; E. Walsh in the chair.

The committee met at 2:35 p.m.

ESTIMATES: MINISTRY OF MUNICIPAL AFFAIRS
(continued)

R. Coleman: When we left yesterday, we were discussing leaky condominiums and some of the impacts that different regulations and rules have on those particular issues. Before I continue on with that -- and I've said this to previous ministers and the previous Minister of Municipal Affairs and Housing -- I find it rather disturbing that we have so many agencies dealing with housing issues in this province, relative to: regulation; consumer protection; social housing, which is now over at Employment and Investment; residential tenancy, which is over at the Attorney General; the Condominium Act, which is over at the Ministry of Finance; transition houses, which are at the Ministry of Women's Equality; group homes, which actually touch on three or four ministries; and in addition to that, health-care-type housing with care homes, which is over at the Ministry of Health.

It's awfully difficult to coordinate when we don't have them all consolidated in one place under one ministry and probably one of the weaknesses in the system, which I've identified before, in dealing with housing issues in the province. Therefore we do get these breakdowns, where we have a Condominium Act that's been sitting on the shelves since April 1994 and that has not been brought forward to the House. Frankly, I feel that there's probably no champion -- for lack of a better description -- for one of the largest sectors of the economy as far as job creation is concerned, considering that every 100 homes built create 280 jobs.

I'd like to know what the minister's opinion is of having the consolidation of these housing issues in one location.

Hon. J. Kwan: The member raises a very interesting issue with respect to housing. I have always taken the view that housing is everybody's business and not just one area that falls into one category. There are a whole range of housing needs throughout British Columbia. As government, what we need to do is work toward coordinating and trying to meet those various housing needs. I think the key here is to have an effective provincial strategy that lies not in centralization but rather in coordination.

R. Coleman: What an absolutely inane statement to make! To think that you can take something, put it into seven different ministries and coordinate it better than you could if you had it in one location and knew how the economic impacts of each little change you made would impact on the other side of the coin you were doing business with -- I cannot believe that. It's like saying: "Well, let's take health care, split it into seven different ministries, and we'll deliver better health care." That's absolutely ludicrous.

The next question I have for the minister is. . . . This used to be the Ministry of Municipal Affairs and Housing, and social housing was under this ministry. When this ministry became the Ministry of Municipal Affairs, Housing left and

[ Page 8582 ]

Hon. J. Kwan: I don't agree with some of the statements that the member raised with respect to the issue of housing, in terms of the need for coordination and the wide spectrum of housing needs within our community. But notwithstanding that, the question about the assignments of various ministerial portfolios rests with the Premier. That question should be directed to the Premier.

R. Coleman: If the minister could just answer the question. . . . She has no knowledge whatsoever of any personal conflict that would have required that portion of her ministry be in another ministry rather than with Municipal Affairs?

Hon. J. Kwan: It is not my decision to decide who has what portfolio; it is a decision of the Premier.

R. Coleman: Maybe the minister could answer the question if I asked it in a different way. Is there any conflict that would require this minister not to have Housing in her portfolio of Municipal Affairs?

Hon. J. Kwan: Again, the decision as to who has what portfolio within the provincial government is a decision of the Premier.

R. Coleman: Whose decision it was wasn't my question. My question was a question directly to the minister on whether she had a conflict when taking over the Ministry of Municipal Affairs and Housing that would have required the movement of Housing to another portfolio, because she had a personal conflict.

Hon. J. Kwan: I'm the Minister of Municipal Affairs, and that's the portfolio which I'm dealing with.

R. Coleman: Maybe I'll just ask the question another way. Does anybody in management or on the board of directors of the British Columbia Housing Management Commission have any direct relationship with the minister?

Hon. J. Kwan: I believe the question is actually out of order. We're in the Ministry of Municipal Affairs estimates, and that's what I'm here to answer questions on.

R. Coleman: I submit that there is a reason, and I'll guess we'll canvass that in the upcoming estimates of the Minister of Employment and Investment; we'll canvass it with the Premier and with the other ministry. This minister could have given me the simple answer, and it would have died right there.

Let's go back to leaky condos. Let's deal with the issues to get what we see on the record and to get the opinions of this minister relative to this particularly significant issue that's affecting a great many British Columbians. First of all, we had a federal government set a National Building Code. Then we had the adjustments which were under the B.C. Building Code. Then we had a system whereby construction loans that were given to projects were given through financial institutions that would have you go through a process, usually, with Canada Mortgage and Housing Corporation.

Now, Canada Mortgage and Housing Corporation, when they do an insured loan, have a set of requirements that the people doing the construction are required to meet. It includes things like presales, drawings, designs, and what have you, that have to be dealt with and presented to Canada Mortgage and Housing Corporation before they'll insure the loan. In addition to that insured loan, which is a further cost to the person that's going to do the building. . . . In addition to that, it is also insured back to the financial institution. Having said that, throughout the construction of the project, CMHC also provides certain inspections. Or what they do is have a quantity surveyor basically sign off on what we call the progress draws.

I'd like to ask the minister if she sees that Canada Mortgage and Housing Corporation has some responsibility back to the owners of leaky condominiums. By insuring the loans in the initial process, doing the inspections and approving the plans, did they not give them some approval that would have made the consumer think that these buildings were being built in a manner that wouldn't leak?

Hon. J. Kwan: I know that CMHC is concerned with this issue. They've been conducting a number of studies around this issue. I await Mr. Barrett's report with respect to his recommendations. He has been given the mandate to look at all issues relating to this matter, as well as folks who may have responsibility within it, and I await his recommendations.

[2:45]

Hon. J. Kwan: It is the responsibility of the commissioner to meet with all the different parties, or to get information from the different parties, with respect to the leaky-condo issue. However, I do not keep tabs on what the commissioner has done, nor do I tell him what he should or should not do.

R. Coleman: Would it be safe to say that the commissioner has a proactive as well as a submission-receiving mandate from the ministry?

Hon. J. Kwan: Yes.

R. Coleman: Let's move on, now, to the municipal level of government, where the hon. minister herself actually served prior to entering provincial politics. I've gone federal, I've gone provincial, and obviously we have removed this inspection branch. . . . We took out the ability to inspect and to deal with code issues, and we ended up with a policy branch, which was staffed by four people in 1997, with a mandate to review the code purely from a policy perspective. When the minister was asked to rationalize that decision, it was suggested that staff had been too busy handling daily requests for interpretation of the code to devote to policy issues. Previously the building standards branch was staffed by eight people, who were fully familiar with the code issues.

[ Page 8583 ]

Hon. J. Kwan: We are working in partnership with a number of different parties in the industry. We are aiming to approve the 1998 code. However, after we have approved it, we will not proclaim it for several months, to allow industry and the community to familiarize themselves with the changes in the code. We will work with the B.C. Officials Association, who will be having regional workshops regarding the provincial Building Code -- the new code that's coming in. As well, we will be working with the national code people, who would also like to participate in this process.

R. Coleman: Those are the only two parties in the industry referred to as parties. Are those the two parties you are working with now, or are there more parties than that?

Hon. J. Kwan: We're also working with BSAC, which has a consortium of industry representatives.

R. Coleman: Is the minister aware that the industry corresponded with the Ministry of Municipal Affairs and Housing -- when it was called that -- with concerns that insufficient resources were being allocated to the building standards branch to properly undertake its necessary research to ensure the code changes were effected and reflected housing market conditions? They also advised builders and people who were making inquiries relative to the code that that was being expressed to the ministry -- when the building standards branch was in -- as late as three years ago.

Hon. J. Kwan: Yes, I'm aware of some of the concerns that have been raised.

R. Coleman: Does that not bring concern to the minister and to the ministry itself that the industry was telling the ministry three or four years ago that the service was insufficient to help them deal with the code, and yet in some cases, they were being asked to build under a code that was difficult for them to understand? Does it not concern the ministry that we knew this as much as three or four years ago? We disbanded the building standards branch, got rid of the eight people who were there dealing with this concerning recommending actions and dealing with problems, and then we came up with a policy branch, which is staffed by only four, with a mandate to review the code.

When you think about it, yesterday we heard about two FTEs who are administering $100,000 in some sort of community grants program; yet we have four people staffing a branch that's directing policy for a multibillion-dollar industry. I'm just wondering if the minister has taken any time at all to think about the resources they're putting toward this when they're asking a huge employment body that has to build -- and build by standards -- to react to changes when the changes are not, frankly, with four people on staff, comparable to that community grants program I mentioned a minute ago. It seems a little light as far as the ability to react to the needs of this industry.

Hon. J. Kwan: This is an era in which, within levels of government, we are always searching for new ways of doing business, looking for more efficiencies within the practices in government. With respect to this particular item, we are doing exactly that. Last year we actually brought in the Building Officials' Association Act, which enabled the Building Officials Association to do some of the work that is required in this arena. We have also provided a grant to them, with which they do some training within their field for inspectors and which all contributes to this industry. In addition, we have invited industry to participate with us in creating a best practices guide and a number of other initiatives in that direction.

I just want to also touch on the $100,000 that was referenced for the two FTEs handling the neighbourhood enhancement program. In addition to that, they also work on the court-of-revision issue, which really affects hundreds and thousands of homeowners in British Columbia.

R. Coleman: Thanks to the minister for clarifying that.

Relative to this particular issue, I want to go on to municipal governments for a few minutes. I'd like to give you the experiences that I had within industry and some of the discussions and arguments that went back and forth across the table relative to design panels and planning departments throughout the lower mainland of British Columbia. The first thing that happened, back about seven or eight years ago, was that somebody decided to import what we will call, for lack of a better description, a California design into a west coast temperate rain climate in this particular area.

Planning departments in municipalities -- I want to deal with them first -- have over the years had a tendency not just to be planners but also to actually try and tell architects and builders what they should be building and what it should look like. I have had experiences in the city that the hon. minister is from, as well as in a number of communities in the Fraser Valley and the lower mainland, where I saw actual discussions take place in which a planner was telling an architect to change the design. They wanted to change it for aesthetics, and the architect was saying: "But that building won't work." The comment coming back from the planning department was: "If you want to get it through council, you'd better go with this, because this is what council likes."

I'm just wondering if the minister could comment on the position of the Ministry of Municipal Affairs as to where they feel that the planning departments of municipalities should have an influence on the design and construction of buildings versus the planning of the actual product.

Hon. J. Kwan: That's a municipal issue. We cannot really interfere with municipalities with respect to how they operate on a day-by-day basis. What we do is provide general guidelines on these issues. Each municipality is an independent level of government within their jurisdiction, so on these matters we cannot intervene with local governments.

R. Coleman: Actually, I'm not asking for the minister to intervene. I'm asking for the minister to comment on how Municipal Affairs, which deals with the Building Code and with issues relative to leaky condos, sees the role of planners in municipalities. What is the role of planners in municipalities in the equation, in the opinion of the ministry?

Hon. J. Kwan: My view with respect to the planners' work is that while it is within the authority the municipalities to decide how their work needs to be carried out, clearly it is our hope that they would look at balancing all of these dif

[ Page 8584 ]

[3:00]

If you look at an industry that has a consumer looking for as big a unit as they can for the best price they can, what you do is effectively, when you measure it from the overhang. . . . When that calculation took place -- and I think the minister understands what I'm talking about; I'm sure some people here don't -- we created a situation where in order to get the maximum use of the square footage of the base of the land that you had, you built the building with a flat side with no overhang.

I worked with an individual who had been in the building business for many, many years and actually refused to build a building without an overhang. That was back as early as 1988. His position was: "If we don't give it an overhang it's going to leak, because it's in a west coast climate." And yet we had this calculation take place. I'm just wondering about the minister's familiarity with that particular side of the issue and whether the Ministry of Municipal Affairs or the building standards branch -- or in this case, this other branch -- or the code itself have any involvement with regards to this. This was one of the situations that created some of the problems that we have on the west coast.

Hon. J. Kwan: I do understand the issue very well, as it is an issue, particularly in the city of Vancouver, when I was a councillor in Vancouver. . . . I have actually spoken with the president of the IBC on this matter and asked them to perhaps work with the municipalities to try to come to resolution on this matter. Ultimately, though, this is an issue that is really a shared responsibility between the municipalities, which need to understand that the regulations or bylaws they put in place have certain consequences. The developer who built the structure must also understand that the building must stand up to the integrity required in terms of the Building Code requirements and the whole array of other requirements in place.

R. Coleman: Again, as we discuss the FSR and these requirements and as we discuss basically the responsibilities of municipalities -- and I believe they have a responsibility here with regards to calculation of the FSR -- we're back to the fact that they have a responsibility to the code as well, which goes back to the provincial government; and it goes back to the federal government.

So here we are with these situations where at the municipal level I think we were lacking a few things. Obviously, one was the FSR calculation. It caused us some difficulty, and as the minister knows, the city of Vancouver is one example of that. The other side of it is that we were introducing new materials into the marketplace -- acrylic stucco and what have you -- that weren't necessarily tested in this particular marketplace, and there are some issues about their applications and training. . . . When you have those issues you also have the issue of inspectors -- the training of inspectors and the introduction of new products into a marketplace. I'm wondering if the minister can tell me: when we do introduce new building materials into a marketplace, who has the responsibility for their approval and the certification of them as being products that are able to be used within the code and within the construction of buildings?

Hon. J. Kwan: For national materials it's the CSA. For local materials or things within British Columbia, it's up to each individual municipality's inspections -- the area that deals with that matter.

R. Coleman: So the Ministry of Municipal Affairs. . . . No level of the provincial government has any input into any of that, with regard to materials or approval of materials -- back to CSA or back to the municipalities; it's just basically going straight to the municipalities, and the provincial government is not involved whatsoever?

Hon. J. Kwan: Yes. From time to time the municipalities may come forward and ask for our opinion. However, it's not our decision.

R. Coleman: Just so I can summarize on the municipal government level relative to this issue, planning departments and design panels pushed a west coast design that fits the California climate onto an industry in a wet climate. The FSR calculations that were made basically encouraged that type of design for the maximum square footage of the building. In addition to that, there were different materials introduced into our climate that weren't adequately tested in this particular climate. These would have come down through the CSA standard -- which, of course, is a broad standard, and some difficulties will come when you try and apply a product on a national basis in a country the size of ours.

One of the other issues that took place, of course, was the fact that we had design panels made up of volunteers. In some cases. . . . I think that in the city of Vancouver, it was a panel of architects checking on an architect's design. They were quite humorous meetings when you went to them. I think that the one I actually went to was in Richmond. The inspectors that worked for municipalities, given the boom that was taking place, had to do inspections and sign off on plans and basically relied heavily on the seal of professionals. I just wonder whether the minister would agree that the inspectors were probably not trained in new-product applications and water penetration at the time that this boom took place in the construction industry and that they relied heavily on the seal of professionals relative to the building plans.

Hon. J. Kwan: I cannot comment on whether or not the folks out in the field are properly trained or not when they are people who actually work for municipalities.

R. Coleman: Maybe we should. . . . I agree with the minister that the question was probably poorly worded from that aspect. I guess the best way would be to go to an example. In the city of Vancouver you can go to a CP -- which is a certified professional -- which is an architect that has taken additional training relative to the specifications and drawings and working drawings on a building. You can pay a fee for that, and the city of Vancouver will allow you to circumvent

[ Page 8585 ]

Architects and engineers are governed by professional bodies as far as their own professional organizations are concerned. I'm just wondering who is responsible for those professions on a provincial level. Or is there any responsibility to ensure that those bodies and their seals and what have you are being properly maintained, like we would with real estate agents under the Real Estate Act or similar organizations like that?

Hon. J. Kwan: They are self-regulating. Some of it falls under the Ministry of Advanced Education, Training and Technology, as well as the local municipalities.

R. Coleman: Would the minister know who would fall under the Ministry of Advanced Education, Training and Technology relative to that question?

Hon. J. Kwan: I believe it is the professional architects and engineers, but we can double-check with the Ministry of Advanced Education, Training and Technology with respect to their statutes to see what falls under their ministry in that regard.

R. Coleman: Would the minister be able to tell me what governance model allows for the CP to take place that takes place in the city of Vancouver? Does that fall under Municipal Affairs? Or who does that fall under -- where that additional certification to go ahead without going through the normal building permit process is allowed to take place?

Hon. J. Kwan: It is the Vancouver Charter that allows for that to happen.

R. Coleman: So outside the city of Vancouver where CPs are also being used, what do they fall under if they don't fall under the Vancouver Charter?

Hon. J. Kwan: The rest of it falls under the Municipal Act; however, it is not stipulated within the Municipal Act but rather is an administrative function that arises out of the zoning powers that are given to municipalities through the Municipal Act.

R. Coleman: Would that be zoning or permitting powers? Basically, we're dealing with a building permit, not a. . . . A CP steps in and removes the need for the building permit process, not for the zoning process. A zoning process still has to take place. I just want to clarify that.

Hon. J. Kwan: It could be either, but basically it's up to each of the municipalities to decide how they want to administer those responsibilities within what authority is given to them under the Municipal Act.

R. Coleman: If we could just paraphrase this -- and then I'll move off municipalities -- the CPs are basically stepping in and becoming ex-officio building inspectors for a developer or builder who wants to move the process along for a fee. It's also a cost saving to municipalities, because obviously they don't need the same level of staffing in order to follow the building permit process through. However, that does allow for some concerns within the system that have been expressed to me. Those concerns would be relative to the fact that the same person who the CP -- who is becoming the ex-officio building inspector and permitter -- is at the same time the person who has designed the building and is responsible for the inspections of the building. Does the minister see a need for the separation of those two functions in the professional area of the architectural community?

Hon. J. Kwan: There are some legitimate concerns which the hon. member has raised. To that end, the building policy section of the Ministry of Municipal Affairs is intending to look at the feasibility of implementing a provincial building and plumbing product acceptance process. That perhaps could address some of those issues. But clearly there are some issues that the hon. member has raised that we're going to be looking at.

R. Coleman: Let's move on for a minute to the. . . . When we talk about this issue, I guess my exercise here today is to go through the possible individuals that have some involvement relative to this leaky-condo concern which is facing so many consumers. Obviously there is one big, bad, dirty word out there called the developer. The developer is, incidentally, a person or company that takes the risk on the financing and the building itself, and all the rest of it. When we're dealing with FSR calculations, the mandate that usually comes from the employer to a professional like an architect or engineer is: "Maximize my maximum use of this building, because I paid X number of dollars for the land. It's going to cost me so much a square foot to build it, and I have to sell it for a price that can make a profit, so maximize my use."

[3:15]

The second was that, obviously, in many cases you'll find that in a very good development the first-year warranty is very well taken care of by the developer through his contractor, who ensures that it's taken care of. Even though the first-year warranty is in most cases the responsibility of the contractor that built the building, the developer has to take responsibility to make sure that the warranty is taken care of. They're the people who have ultimately invested the money, done the disclosure statement and filed it with the superintendent of real estate.

I'm just wondering if the minister sees, relative to this. . . . With this expediency for design, is the policy section looking at a way to take a step back and recognize that expediency in the process is sometimes at fault? Time costs money, just like it does on a forest plan or anything else. It's a way of streamlining a process so that the corners of expediency at the planning level, the council level and at the different levels of government, as well as at the developer level, are certainly taken care of. Also, has the minister had any discussion with the policy section relative to having the bonding pass through to the developer to ensure protection to the consumer that's actually buying the product?

Hon. J. Kwan: I would say that not all developers are bad developers. I actually know some developers who are very

[ Page 8586 ]

The issues that the member raises may have some ramifications with respect to the new registration system that has been talked about or the mandatory home warranty programs or other things that may be forthcoming through the Barrett report. I'm looking forward to the Barrett report to see what recommendations there are for us in tackling some of these issues.

R. Coleman: I want to go now to the professionals that are involved in this particular industry -- those being the architects and the engineers. The architects have a responsibility to a professional organization, as do the engineers, but they work for fees to the employer, which in this case is the developer. They are working for a fee that oftentimes pushes them to where, frankly, some of the inspections could have been lacking. I won't say in which particular case they were lacking, but they could have been lacking because of trying to basically cut back on the fees or whatever. Although there's a professional level of fees for service as outlined with the architectural community, they are very often cut and changed to basically make the deal.

One of the comments that I received from a couple of the home-builder organizations and development organizations was that if you can't do the adequate inspections for the fee and if you can't design the building properly for the fee, then don't do the job. I'm just wondering if the minister is going to be in any discussions with the Architectural Institute -- or whether she has been, through the policy section -- relative to the policing of this particular issue so that the fee for service covers the required need for the proper inspections during the construction phase and the design phase.

Hon. J. Kwan: We've had discussions with the architects with respect to this issue. That may well be something, again, that the Barrett commission may reference. I assume that the AIBC has actually appeared before the commissioner, and perhaps they have raised that issue with the commissioner for his consideration.

R. Coleman: Let's move on to the engineers, who obviously have to seal their work, in addition -- whether they be structural, mechanical or electrical engineers. They basically do the plans, and the working drawings are completed, and the architect is responsible for the inspections. Does the minister see any movement towards the engineer who has designed the structural, electrical or mechanical portions of buildings having any inspection responsibilities back to the project after the contract has left them and the drawings have been completed?

Hon. J. Kwan: The individual engineers who sign on through the letters of assurance, by virtue of the fact that they're putting their name to it, ultimately have to be responsible for their actions.

R. Coleman: Well, we actually go through quite a stacked-deck process when you're doing mortgage draws on projects. But it seems that afterwards, that doesn't necessarily fall back on any weaknesses within the construction, and probably there should be tightening up now.

I want to deal with another group that are relative to impact. As you can see as we go through this, everybody's impacting on leaky condos. The contractors are a portion of the industry that for some time have been calling for certification and to have a set-up with them similar to the AIBC, the Real Estate Institute and the Real Estate Council: standards of practice, which the minister has talked a little about, and certification -- where they're certified. If you're not certified, you basically can't build in any community in the province. They are, frankly, the hub of the industry.

I want to go back to a comment the minister made earlier about developers. There's good and bad in every industry we deal with. There are good politicians and bad politicians. There are good policemen and not so great policemen. In every industry we have strengths and weaknesses, and we hope we have more strengths than weaknesses whenever we have a portion of an industry. The difficulty with contractors is that they're not certified and they're not regulated, and therefore they don't have to meet any litmus test as far as their training is concerned. I know it's been a recommendation for a number of years from the Canadian Home Builders Association and also a recommendation of the Urban Development Institute. It's also a recommendation in one of the minister's own reports. The difficulty is wondering when. . . . I mean, do we have to wait until after the commissioner. . . ? Can we actually start moving towards setting up a certification system for the contracting portion of this industry, so that we can move them forward to the professional level that most of them want to reach? The good ones want to be there anyway, and the ones that don't want to do that just aren't going to reach the qualifications and the approvals.

Hon. J. Kwan: The area that the hon. member raised is an area of priority within the ministry. I know that my predecessor had been in discussion with a whole array of individuals who felt that there needs to be a registration system in place. However, through the discussions, they were unable to come to an agreement as to what that registration system should look like. Industry, on the one hand, says that they should be self-regulated -- that is, regulation by the industry. Others say: "We don't think so, and we don't trust that system; perhaps it should be a mixture." And still others say that perhaps it should be government-regulated, and others that maybe it should be a labour regulation, etc.

That question is actually being canvassed, I'm sure, through the Barrett commission. It is a priority within my ministry, and it is a priority for me. We will work towards expediting implementation of these areas upon receipt of the Barrett commission's recommendations.

R. Coleman: For what it's worth to the minister, I personally would prefer to see a system similar to the Real Estate Council and the Real Estate Institute and the training that's provided through UBC, where there's a government body and a disciplinary body. There's some relationship to government through the Real Estate Act and through disclosure requirements, as we have in real estate, which basically regulate this portion of the industry. If we don't regulate this, whatever else we do is going to become redundant, because they're going to have to at some point in time reach that litmus test where they can do it.

As a building gets built, and we have the architect and the engineer and now the contractor starting construction, and we have a CMHC-insured loan under a Building Code from two levels of government, we also have bonding companies involved here. Bonding companies have the responsibility of bonding the job, and they bond the contractor. On the consumer protection side, one of the best terms, whenever any-

[ Page 8587 ]

As contractors reach this certification level, the bonding companies are going to have to raise their level or their bar a little bit, too, as to who they're going to approve for bonding. It's very difficult to deal with bonding companies even when there are real problems, and they're going to have to become much more accountable for their operation relative to that industry. Even when you do have a building that doesn't go bad. . . . If it goes bad, the bonding companies are oftentimes a hindrance rather than a help.

We also, of course, have the trades, which is the labour side of this particular industry. Rather than get into a back-and-forth discussion with regards to labour, I just want to make a statement relative to that. Again, like in any industry, you have good and bad. You also have union versus non-union in this particular area. I have actually toured condominium projects on the lower mainland that leak, which were built by both. The one that really bothers me is when I read in the paper, or when somebody starts to say that it's a result of faulty workmanship. They're actually down near the bottom of this food chain. They are the ones that are building to the specifications and design being dictated to them by the contractor, the engineer, the architects and the planning departments. I think it is really unfair for us to pick on those particular people -- whether they belong to organized labour or not -- because they are oftentimes simply following the specifications that are handed to them and doing a job in a very professional manner. It just happens to leak because it wasn't designed right in the first place.

When we go from here, after these buildings are built. . . . I just want to touch base with the minister on this, to see how the ministry has looked at this regulation as well. One of the things you'll find, especially in strata-title buildings, is that they end up with a one-year budget that's provided to them in a disclosure statement for the operation of their building, under the requirements of the Real Estate Act. That includes everything, right down to a minimum 5 percent that has to be set aside for a building reserve, as well as all their maintenance and what have you. A number of strata councils go forward and basically do what we call self-management. When you get into self-management, you have somebody on the premises. It's a cost-saving thing. Somebody that lives there basically becomes your caretaker, and there are no standards of practice put in place as to how the building should be maintained. You can have all the as-built drawings you want, but if you don't have a maintenance schedule for a building. . . . As we know, even with the legislative buildings themselves, with BCBC taking care of our building and things like that, some schedule of maintenance. . . .

Now, there are two issues here. One is condominium management, which I will get to in a second -- the licensing and management side of that. The other side is the strata councils themselves not following any type of rigid maintenance program. Even when we go to the expanded warranties, which many developers are doing now. . . . As we expand those warranties, the warranties will not be honoured by the warranty companies if the maintenance programs are not in place.

We've got a buyer's guide. I'm just wondering if the ministry has looked at setting aside a standard building maintenance program for strata councils, either as a part of the Condominium Act or as part of the training program for people who are going to be self-managed strata councils -- as a requirement for self-managed strata councils to maintain their building in a specific manner.

[3:30]

I have always said, and continue to maintain, that the issue around leaky condos is not a union-non-union issue; it's very much a construction quality issue. The fact of the matter is that whether it's union or not, the responsibility remains the same, and the quality that we're striving for remains the same.

R. Coleman: I agree with the minister on most of what she says. I think the big concern is that we knew about a problem and that we've taken so long to deal with it. That's something that we're obviously going to have to address over time. I don't know what's going to happen as far as any litigation coming out of this particular issue, but I would think that it's going to be substantive, as we face it as a society.

In addition to the strata councils that go to self-management, there is a property management industry out there. My understanding was -- and I could be wrong -- that people who were in the business of property management had to be licensed under the Real Estate Act. They had to carry licences if they carried a certain number of units and at least a sub-licence if they worked for a company. One of the problems with that is that some of these particular companies. . . . It's not dissimilar to the issue with the contractors, in that the regulations as to how they set their standards of practice and training for the maintenance and operation of buildings -- the physical plant -- right down to whether it's the boiler or to how many times a year the gutters get cleaned and what have you, are not necessarily being followed.

They seem to concentrate more on taking care of what basically would be determined as the landscape contract, and the strata meetings that take place try to hand off other portions of the maintenance of the building in a piecemeal manner -- either back to the strata council or to other contractors. The difficulty with that is that you don't end up with a standard of practice for the management of the building. I'm wondering if there has been any discussion at the ministry level relative to property management and raising the bar for the standard of practice and licensing to where they're self-regulated through a body similar to the real estate situation or something along those lines. It seems to be a portion that the real estate councils and the real estate industry have let slide away from them. They're concentrating more on the other licensees.

I'm just wondering what the position of the ministry is and what discussions have taken place relative to that.

Hon. J. Kwan: Yes, that's also an issue that we've been looking at. Again, I await the Barrett commission's report relating to these larger leaky-condo matters.

R. Coleman: We're giving an awful lot of credence to what's going to come out of one report. These are actually all

[ Page 8588 ]

Also, the mandatory warranty -- which we don't need to discuss, because that's basically been kicked around enough. . . . Most of the industry has adjusted to a warranty that's expanded for water penetration and all the rest of it, simply because they're not going to sell their product unless they do. I think that the push to the mandatory warranty is good, given the fact that we have this difficulty. But at the same time we put the warranty in place, I can see the warranty providers wanting certain standards of practice and changes, and they're probably going to have to go right back to the code, to the design, to the municipalities, to the planning departments and to the contractors -- how they're licensed and all the rest of it. All of the factors I've just discussed are going to determine whether we can actually get the type of warranty on buildings that we want.

At some point in time, the actuarial projections on the premiums have to take care of the fact that someday you're going to pay out. If you want to minimize your risk, you want to make sure that you have an industry that you can go to and say: "All right, we'll provide you with a warranty if (a) this happens, (b) this happens, (c) that happens and (d) that happens. We want overhangs, we want this and that; otherwise we're not going to give you a warranty." That will go right down to the certification of the contractors and all the rest of it, so I think it's important that we recognize that all of these factors are going to have an impact.

The priorities here obviously have to be that after this commission reports out, we have to find some long-term economic solutions for those affected by leaky condominiums, in conjunction with homeowners and industry, because these people's lives are really being damaged by this. We have to set our future priorities, dealing with design and what have you, in the code. We have to recognize that there's a large body that's culpable, a large body that has their fingerprints all over this issue. Not one individual body is going to be able to be identified as a group that here and forever more will be responsible for a situation caused by materials, by design, by code, by municipalities, by architects, by builders and by contractors and all the rest of it. I think we have to recognize that, and that's the reason for the walk through this particular area.

By now we would have liked to have seen the implementation of a number of the recommendations contained in the ministry's report that was completed in January of this year, which is on improving the quality of and accountability for residential construction. As a discussion paper. . . . It wasn't necessary for us to wait from December 1997 to June 1998 and still not have put some of those things in place, to make sure that this industry was being taken care of the way it should have been.

The important thing to remember here is that there are a lot of people out there being affected, being hurt by a situation that was created, frankly, by levels of government and by industry as a result of thinking something would work, and it didn't. It's a bit like having a car that you design: if it's a lemon it gets recalled on a continual basis. Well, we have a great big recall on condominiums. That is a situation that we have to address.

I look forward to debating the Barrett report and having the opportunity to see some of the suggestions that we've put forward over the last three years come forward to improve this industry and to improve how we're doing business so that this doesn't happen again in the future.

Hon. J. Kwan: I appreciate the hon. member's comments. I think that the array of issues he has outlined really demonstrate and reinforce that this is, in fact, a very complex issue. It involves many parties, and it is a very large issue. Some of the issues can be dealt with, perhaps, through my ministry -- that I would have direct responsibility for. Some other areas, such as the Real Estate Act, would actually fall under a different ministry, and I would actually work with my colleagues on these different areas.

The Barrett report that is forthcoming on June 19 is, I assume, going to address the whole array of areas. Whether or not the report will actually deal with each of these components in detail. . . . If it doesn't, it will actually provide us with a context to work in.

With respect to the "Improving Quality and Accountability in Residential Construction" discussion paper that was published in December 1997, the discussion paper really focuses, I would say, on two areas. One is, of course, the registration component, and the other is consumer protection. Again, this is a top priority for me. I am committed to bringing in legislation this session in terms of consumer protection for British Columbians in the future. I'm looking forward to working with the member opposite as we put that legislation in place and move it through the House.

L. Reid: I concur with my colleague from Fort Langley-Aldergrove when he talks about not fragmenting the responsibility for housing throughout six or seven different ministries. I would make the same comment for the recommendations that will flow from the Barrett commission. If the recommendations are given over to a variety of ministries for implementation, again, we will have lost any consensus around follow-through and consistency in terms of ensuring that these problems don't happen again.

This section is coming to a close, and I simply wish to put on the record the presentation that I made to the Barrett commission on May 12: "A Submission to the Public Hearing of the Barrett Commission on the Quality of Condominium Construction in British Columbia." I will condense it.

Our options and recommendations are as follows. Establish a formula for compensation to homeowners affected by leaky condos to include CMHC loan guarantees. We are making the claim that repairs to leaky condos should be GST- and PST-exempt and that property tax deferral changes be made to allow owners to defer property taxes on damaged units and also to have some flexibility around the current valuation system. This hopefully will not restrict the individuals who are able to go forward today to have their property assessments reduced.

We would make a number of future recommendations as well:

1. Adopt the recommendations of the CMHC "Survey of Building Envelope Failures in the Coastal Climate of British Columbia," November 22, 1996.

2. Establish industry self-regulation similar to that applied to the real estate industry for contractors, thereby creating standards of best practice. Registered housing professionals and certified homebuilders -- CHBA -- will have a critical role to play.

[ Page 8589 ]

4. Apply the changes to the Building Code to reflect the west coast climate.

5. Encourage municipalities to consider altering the building envelope guidelines to allow for overhangs to be added to buildings, where applicable.

6. Increase required qualifications for property management monitoring and operation.

7. Tighten up disclosure requirements.

8. Bring in a modern condominium act, reflecting the increased requirements.

9. Adopt the recommendations of the task group on condominium construction to the Minister of Housing, Recreation and Consumer Services, dated January 9, 1996.

I will move to our closing comment. There are no clean players on this issue. The entire system has not met its responsibilities to the consumer. We must establish a viable solution and move forward. It may be best to liken this issue to the urea-formaldehyde foam insulation issue experienced in the construction industry in the early 1980s -- there were no winners, just losers. The responsibility of this commission is to mitigate the losses.

Again, hon. Chair, I presented that on behalf of the official opposition on May 12. I will yield the floor to my colleague from North Vancouver-Seymour and shall return.

D. Jarvis: I wasn't quite aware that she was going to close off so quickly, but we will move on. I would like to make a statement.

I was rather surprised that the minister didn't bounce the answer when it came to the fact that there might be some responsibility inside the Building Code for the leaky condos as a result. You know, we can blame everyone, and I think everyone is in fact to blame in this situation. Having been in the trade and in the real estate end of it as well, I can see that we can fault everyone, but we can't lay the accountability on anyone specific. The blame has to be amortized over all of them. It appears that way, or perhaps the federal and provincial governments will end up paying for it all.

In any event, I think that the minister is perhaps a little bit -- well, I won't say foolish -- unsure of the fact when she says that there is no fault on the part of the Building Code, because it's quite obvious. . . . I would think that when the Barrett commission comes down with their final report, they will say at the end of it that there is some culpability on the part of the code. If she still feels that there is no fault, then she should look at these 15 experts she's brought in. They're there basically for health and safety purposes, not to establish the pros and cons of the leaky-condo situation, and if they have not stated that. . . . Their responsibility is not to state where the problem is. I would say that she should look to her staff and her experts, if the Barrett commission does show that there is any degree of responsibility on the part of the Building Code.

[3:45]

Hon. J. Kwan: First off, let me just clarify what I said about the Building Code. What I said was that the Building Code to date, as it relates to the leaky-condo issue, has not been identified by the range of experts who have been sitting at the table as the primary or significant factor contributing to the leaky-condo problem. I also said that I remain open to receiving recommendations from the Barrett report, and I will just simply leave it at that so that we don't go back and rehash this matter that we canvassed pretty well all day yesterday.

With respect to the audiobook program, the entire budget is $271,914. That excludes space, the information systems component and the telecommunications component.

D. Jarvis: Could the minister break that out? You have three categories; can you break it out for me?

Hon. J. Kwan: The breakout is production at $66,807, post-production duplication at $121,710 and marketing, sales, distribution and administration at $83,397, bringing it to a total of $271,914.

D. Jarvis: You went over that rather fast. I am wondering if the minister could tell me where the narrator fees are in there.

Hon. J. Kwan: The narrator component is $45,000.

D. Jarvis: Is there any change in that from the previous year?

Hon. J. Kwan: From the government funding side, no.

D. Jarvis: When the minister says the government side, I assume that she is not including the donations that have been made by private sponsors. Can she tell me what that was, say, last year and what it has been to date with regards to donations?

Hon. J. Kwan: The donations for the total audiobook program?

D. Jarvis: Yes.

Hon. J. Kwan: Last year we received a total donation of $32,000.

D. Jarvis: There is a feeling out there from different people -- and we receive correspondence to this effect -- that there was a reduction in this program. I think you said that last year it was at some $300,000. So now we're talking about $29,000 to $30,000. . . . The minister seems exasperated when I'm talking about a $29,000 drop, but to a lot of people. . . . There are over 5,000 blind people out there that require audiovisual materials, and it means a lot to them.

Hon. J. Kwan: Perhaps I wasn't as clear as I should have been. The $271,914 excluded items under information systems, space and telecommunications. So if you're adding all of those components to the budget, it actually exceeds $300,000.

[ Page 8590 ]

I want to say very clearly, though, with respect to the audiobook program, that I'm very committed to this program. I know that it's a significant source for our seniors and for people who are visually impaired and that it's a welcome program in the community. I've made a commitment that this year, no matter what happens to our budget, we will make sure that the production of audiobooks is maintained at the average number produced in the last five or six years, which yields about 200 new audiobook recordings. So from that point of view, I just want to assure the member opposite that this program has my full commitment. The budget figure is the round number I have identified.

K. Whittred: Following up on the audiobook matter, as you can see, the North Shore MLAs have been widely canvassed on this particular issue. I must confess, hon. Chair, that I have been a little bit taken aback by this. One, we're not talking about very much money. I mean, out of the great spectrum of things, the amount spent on audiobooks is insignificant. I did want, however, to ask the minister. . . . Audiobooks are getting to be quite big business. I note when we travel and stop at a truck stop that there are racks of audiobooks on sale. My sister, for example, listens to audiobooks when she travels. So they are becoming quite the fashion to use, and not just among the blind or visually impaired population. I want to ask the minister: has the ministry considered the sort of entrepreneurial side of this particular venture? It seems to me that there is money to be made through audiobooks, not just money to be spent.

Hon. J. Kwan: I just want to be sure that everybody is clear with respect to the budget for the audiobooks item. This year the budget is essentially the same as last year's.

In response to the question around entrepreneurship with this program, I'm actually very proud of our staff in this program and the work they have been doing. British Columbia produces very top quality audiobooks. We endeavour to sell and distribute audiobooks in other provinces, as well, and we endeavour to work with and engage other provinces in really mutually beneficial aspects of the production of audiobooks. Several institutions across the country are looking at working with us on that front. As well, we actually sell these audiobooks to the public to get the revenue, and the dollars we get go back into the program.

K. Whittred: That is very interesting. Could the minister tell us if there is revenue being made off the audiobook program? How much revenue comes in, and who does it go to?

Hon. J. Kwan: The selling of audiobooks through the program yields approximately $125,000. Those dollars go back to cost recovery and back into the audiobook program.

K. Whittred: While we're on the subject of audiobooks, just to satisfy my own curiosity, there is also a great deal of audiowork done with textbooks and so on within the Ministry of Education. I'm curious to know whether or not there is any relationship between the audiobook program that services this ministry and that program in the Ministry of Education.

Hon. J. Kwan: No. I don't think that we work with the program in the Ministry of Education. For information about what the Ministry of Education does, you would have to go to the respective minister.

D. Jarvis: I want to ask further on the North Shore and the North Vancouver area: has the minister received any requests or inquiries with regard to amalgamation of the municipalities of the district of North Vancouver and the city of North Vancouver?

Hon. J. Kwan: We have not received any formal requests from either municipality.

D. Jarvis: Does the minister intend to impose any amalgamation of municipalities in British Columbia and/or on North Vancouver city and district?

Interjection.

Hon. J. Kwan: Hon. Chair, I'm being advised by the member for Richmond East to say yes. Tempting as that might be, the answer is no.

L. Reid: I have a number of issues I wish to canvass with the minister this afternoon. The first is regarding the Painter-Barclay sewer system. I know the minister has the correspondence, because I believe they've all written to her as well. I do believe that the minister has offered some correspondence. Would the minister be so kind as to put it onto the record? They have asked -- over a period of five years -- for additional funding to be put into place. They believed that it would happen much earlier than it has. Their concern has been that the current system has been overburdened for a number of years, and they are referencing 25 years in some cases. Indeed, I believe that's the case in the majority of the letters. They talk about a 25-year-old septic tank and field, and they are waiting for those services to be installed.

Their concerns have been addressed to the ministry, I believe, over the last number of years. There are probably ten letters here and many, many more in my office from individuals who have sought some guidance. The last piece of correspondence I saw from the minister's office indicated that dollars were being made available. My question is simply to know if the last announced allotment is in fact sufficient dollars to complete the project. It's the Painter-Barclay sewer system in Campbell River.

[4:00]

Hon. Chair, I wonder if we can take a five-minute recess. My system works just like clockwork, I've got to tell you, drinking all this water. If we can have a five-minute tea break, that would be great.

The Chair: If it's the will of the committee, we'll take a five-minute recess.

The committee recessed from 4:01 p.m. to 4:06 p.m.

[E. Walsh in the chair.]

L. Reid: I want to make maybe two or three other comments regarding this proposed Painter-Barclay subdivision,

[ Page 8591 ]

I simply promised that I would put these items on the record on behalf of these individuals: a Mr. William Herkes, Doug and Nanette Mann, M.E. Lang Collura, Ivan Ward-Moran, and Scott and Liz Eustis -- just concerned parents who were making the case on behalf of the health and safety issues for their children and for the children in the neighbourhood. It is adjacent to the elementary school that was referenced earlier. Mr. and Mrs. Ebbert, and I believe it's Chris Raga and Marie Gubbels, and the last one is Thelma Brawner -- I won't read each of the letters into the record; the sentiment is similar -- wish this issue to be addressed as soon as possible. So, again, I will leave that with the minister for future comment.

The next issue I wish to raise is regarding the regional district of Bulkley-Nechako. I know that the minister is familiar with this issue, because it's the request of B.C. regarding taxation of Alcan improvements in the regional district of Bulkley-Nechako. It's written by Frank Read, the chairman, and encloses a copy of a letter, with attachments, which has been sent to the Minister of Municipal Affairs and to all cabinet ministers. "Any action that you or your colleagues may wish to take in furtherance of our request to the government would be appreciated."

Now, on June 9. . . . Somewhere in this lovely package of materials, it talks about requesting a meeting with the minister. It's my understanding that this meeting did take place. A letter dated yesterday, June 9, 1998, was written to the minister:

"Further to our previous correspondence of April 21 and our meeting at the North Central Municipal Association and conference in Smithers on May 1, you indicated at our meeting that you would be responding to our submission regarding the taxation of Alcan lands in the very near future. We have not heard from your ministry on this topic, and it would be appreciated if you could give us a response at your earliest convenience. Thank you for your consideration of this matter."

Hon. J. Kwan: The issue that the member has identified involves a legal issue; therefore the delay is a result of the requirements for due diligence that we must have in addressing some of those legal matters. Our staff is working on the matter, rest assured. It is not forgotten in any way, shape or form. I'm hopeful that perhaps within the next three weeks we should have all of the matters addressed and be in a position to provide the response.

L. Reid: I will take the minister at her word that hopefully by June 30, 1998, there should be some response to these individuals, because the volume of material in this package will only grow as the delay in the answer continues. So I appreciate the minister's response.

Another issue I wish to bring forward is of a Mr. Johannes Van Rossum from Merritt. He is talking about an additional homeowner's grant available to those who are handicapped or over the age of 65. The amount in his case is $275. With his tax bill from the city this year, he received a letter from the Ministry of Municipal Affairs saying that to determine whether or not he could get the additional homeowner's grant of $275 for those who are handicapped, he had to take a supplementary form to his doctor, have it filled out and return it to the city hall,

When he accomplished this, he was told that he was no longer eligible, because he hadn't had to make any structural changes to his home this year to compensate for his handicap and because he doesn't need physical assistance to get around. He had a massive heart attack and heart surgery in the late eighties. He has had this additional grant every year since at least 1989, because he is considered to be handicapped. So this situation has been underway for eight years.

"If the government and [the Minister of Municipal Affairs] were going to take this grant away from people, why didn't they notify those who would be potentially affected six months earlier instead of waiting to send it in with their tax bill, so that they would have time to raise or save the necessary additional $275? This government is taking away from those who can least afford it."

Hon. J. Kwan: I thank the member opposite for raising this particular case, and I'll direct my staff to look into it immediately for the individual. If the member can provide us with a copy of the correspondence that she has received, then my staff can follow up on it.

On the homeowner program. . . . Generally speaking, I'm very committed to this program. We have municipal collectors who have the legislative authority to request new medical certificates on a case-by-case basis. However, in most cases the existing form is sufficient. I'm also in the process of reviewing this program, because from time to time there are issues of concern that have been raised about this particular program.

L. Reid: I ask the minister to perhaps provide me with some guidance around whether or not the criteria have changed. This is the first year the individual has been turned down, after having received it for eight years. His medical condition has not changed. So why has that decision, which significantly disadvantages him, been taken? His living arrangement is the same; his income is the same; his illness is the same; his inability to work is the same. He complied; he filled out the form. But somehow the criteria have changed, which now disenfranchises this individual.

Hon. J. Kwan: The criteria have not changed. It may be the collector, in their judgment. . . . That might have some impact in this particular case. Or perhaps there are other factors. Perhaps the way in which the medical certificate was filled out might have some impact; I don't know. But on this particular case, as I said, if the member can provide us with a copy of that correspondence, I will have staff look into it immediately.

L. Reid: I certainly appreciate that offer. I would simply ask, perhaps, one further question. Is there an appeal process

[ Page 8592 ]

[4:15]

L. Reid: I thank the minister most sincerely for that.

One of the other issues that has come forward a number of times in the last few weeks is the municipalities' response to enhancing the streams within municipalities on residential properties. Certainly we can talk about Bill 25 as sort of the framework for this discussion. But more particularly, how are municipalities being advised in terms of what is anticipated to be the variation and how that problem is handled across the province?

It's a significant issue in the riding of Richmond; Richmond is a series of irrigation ditches. My riding, Richmond East, is cranberry-growing land. If those ditches are going to be designated as streams, we are in a very, very dire circumstance. Those ditches dissect the riding at very regular intervals, and they are irrigation ditches. They are not fish-producing streams by any stretch of the imagination. They appear to fall under this new responsibility, this new requirement. The Richmond Farmers Institute is seeking some guidance from the municipality, which is in turn suggesting that this is a question to be answered by the Ministry of Municipal Affairs. If there is any guidance that this minister could shed on this issue in terms of what the next likely step might be, I would be pleased to convey that to my farmers.

Hon. J. Kwan: I think the member is referencing the Fish Protection Act, under which the Minister of Environment has introduced a discussion paper. I know that she's committed to a set of consultations and discussions with stakeholders, and she will begin that process very shortly.

As well, through municipalities we have, under section 12, a requirement for consultation with UBCM prior to the establishment of the policy directive. At our last joint council meeting, the Minister of Environment brought the matter to the table, and we had a discussion then as well.

L. Reid: I raise this with the minister today, because the most recent press release of June 9, 1998 -- "Province Seeks Public Input On Protecting Streams" -- was welcomed by the individuals in my riding. But they trust that the Ministry of Municipal Affairs will also participate in this process. The ministry is not mentioned in this press release; it simply refers to the Ministry of Environment.

These are areas of the province in which municipalities still need to garner a living. It would seem that the minister may be well advised to monitor this process and, hopefully, to report back during next year's estimates process as to how this evolved. I think both the minister and I are aware that the power is found in regulation, and it would appear that the regulations will be written after the consultation process. I trust that's the case, but if I could be convinced that the minister will have some involvement in that regulation process, that would, frankly, warm my heart.

Hon. J. Kwan: On this matter, my staff, through the Ministry of Municipal Affairs, has been working closely with the Ministry of Environment in terms of raising issues that are of concern to municipalities throughout the different regions. In terms of the direct stakeholder meetings, I won't be participating in those meetings. However, that information will be brought back and shared with our ministry and with our staff. We will continue to work with them as the regulation is crafted.

L. Reid: As long as we can be assured, minister, that you'll be in direct consultation with the Ministry of Environment, we're happy.

The next issue that we want to bring forward is on behalf of the Gastown Homeowners Association. It's regarding the quality of neighbourhoods. Most specifically, it references the needle exchange program and what it has done to the neighbourhood of Gastown. They are not taking issue with the program. They are taking great issue. . . . Allow me to quote:

"All evidence clearly shows that the needle exchange programs have completely failed in their primary goal to reduce the spread of HIV in Vancouver's downtown core. We now have the highest rate of infection of any city in North America. We recommend decentralizing the needle exchange program immediately. The Gastown Homeowners Association continues working to make our historical community safe and clean for all residents and visitors."

They tell me that they have been in consultation with this ministry, and they believe that they have been fobbed off over a number of years -- that indeed actions were not taken which resulted in a safer, cleaner neighbourhood. I tend to agree with them. I've been on walking tours of this neighbourhood many times, at the request of a variety of residents, and it's not a place that one would wish to take a young child. Frankly, it's not a place that one would wish to take visitors to the city on lots of occasions -- which I think is a missed opportunity. It is a very neat, unique part of the history of Vancouver, and we should be doing some things to ensure that it is a safe and secure community. This is a neighbourhood, and they see themselves as being well within their rights, in terms of corresponding directly with the Ministry of Municipal Affairs, because they see it as a ministry which looks out for neighbourhoods, for communities, for how groups come together and reside congenially, if you will, in terms of interactions among individuals in communities.

So the issue on the table is how we can best make that a safe and secure community. The minister will probably respond that indeed a multiministerial initiative is required. I appreciate that. What these groups are looking for is some leadership on behalf of the Ministry of Municipal Affairs, because they believe that has been lacking in the past.

Hon. J. Kwan: This is a matter that I deal with as a local MLA issue. The Gastown community is not one that's necessarily within the boundaries of Vancouver-Mount Pleasant, but clearly it is a close neighbour, next-door, as that's where

[ Page 8593 ]

The needle exchange program that the member specifically references is a matter that falls under the Ministry of Health, particularly the Vancouver-Richmond health board. I know that they're working towards decentralization in that they have brought needle exchange programs into another area within my riding in the Grandview-Woodlands community -- which has raised a lot of concerns -- and in five other areas as well.

I don't want to digress, because this is really a matter that doesn't fall within Municipal Affairs but rather within a whole array of other ministries. As a local MLA, I'm working on these issues with the various community folks in my riding and outside of my riding.

L. Reid: I appreciate the ministry's comments. I will simply conclude by putting the recommendations of Douglas Whorrall, who happens to be the president of the Gastown Homeowners Association, on the record. I know he would appreciate a response from the minister, and I don't believe that he's received one to date.

"(1) Decentralize the needle exchange immediately.

"(2) Dedicate the funds used to run the needle exchanges to recovery programs that will be established outside the downtown core. This area's environment does not support anyone attempting recovery.

"(3) If any service of this kind is to remain in our community, we want an evaluation tool in place that will measure the community impact. The board of directors should be required to hold regular meetings with the community and address their concerns. If not addressed, the city should revoke their licence to operate.

"Thank you for hearing our views."

G. Abbott: I want to thank the critic for giving me an opportunity, on short notice, to spend a few minutes in here and away from Forests estimates. I want to follow up on a couple of constituency files that I have with respect to assessment board and homeowner grant kinds of issues.

The first issue involves an area on Shuswap Lake called Lakemount-Shuswap Recreation. It's a group of people who own their own homes and property but who are part of an overall development. For reasons that I haven't yet completely grasped -- and obviously the people in Lakemount Estates have not completely grasped to this point -- they have been unable to access the homeowner grant. I'll briefly quote from their most recent letter to me: "We need to understand how come we once met the criteria to receive the grant and now we don't. Specifically, what are the criteria? It is confusing when you compare us to people receiving the grant who live in mobile homes, condos, etc. We all own our own homes -- no-one has disputed that. We also own our land, but we are not claiming the land grant. How do we differ from the mobile home or condominium owners?"

So I'll pose that question to the minister, and hopefully there is a staff member who can assist in explaining to them -- I should note that the author of the letter is Douglas Bullock, who is the spokesman for Lakemont-Shuswap Recreation -- the reasons why, despite owning their own homes, they are unable to qualify for homeowners' grants in that area.

Hon. J. Kwan: The criteria have not changed. The information that the member has given me is insufficient for us to determine what the issue here is. As an example, it could possibly be the issue of tenure and the nature of ownership. It could be any of the technical reasons. Without further information, it's difficult to comment further on that. If the member wishes, he could give us the correspondence that he has, and I'll direct staff to look into it.

G. Abbott: There has been correspondence circulated on this matter in the past. It has yet to be resolved satisfactorily, but it might be the best course in this case to write again and request further clarification.

The other local issue that I have with respect to assessment issues is constituent Doug Leatherdale of Salmon Arm, who has been farming property in the Gleneden area of Salmon Arm for 27 years. He has raised cattle in the past, and he is in the process of converting to horticulture. He is distressed that there is no grace period for farms to move from a livestock-based operation to a horticulture-based operation. Because he has lost his farm classification as a consequence of not producing enough income during the transition years, he finds that it has made it very difficult for him to continue to own and operate his farming operation.

I suppose that that difficulty will continue until the transformation is completed and his trees and so on start to produce a volume where he can again qualify. So his issue is: why can't the -- and I guess it would be the B.C. Assessment Authority in this case, or whoever else is involved. . . ? Why is there no grace period, or no allowance made, for the transition of farms from -- to use Mr. Leatherdale's example -- a livestock-based operation to a produce-based operation?

[4:30]

G. Abbott: I believe he has. I'll just quote briefly from Mr. Leatherdale's letter. He says that they've had farm status over the entire 27 years. Recently they changed from sheep to produce. The change required a significant change in everything -- field crops, barns, fencing, etc.

"I was assessed this year while I was in the process of converting my farm, and because I did not make the required $2,500, I lost my farm classification. This will raise my taxes considerably.

"My concern is that there is no grace period to change over, or if there is, they will not show me, in their policy, what it is. I understand that there is a grace period for tree farms and orchards, for as much as ten years.

"At the court of revision the assessor was vague and evasive when asked to provide the guidelines he uses."

Hon. J. Kwan: Instead of going into details and trying to clarify information from each other through this process, perhaps the member can provide us with that information. I'll again direct staff to look into it. For the member's information, a lot of this work is done in consultation, as well, with the Ministry of Agriculture. If that's acceptable to the member, we can await his information, and then we can proceed.

[ Page 8594 ]

L. Reid: One other issue that I wish to put on the record this afternoon is the involvement of the Ministry of Municipal Affairs regarding the auxiliary policing situation. It's certainly an enormous concern across the province in terms of funding. The communities that have contacted me with their interests in this area have indicated the potential for huge additional summertime policing costs -- for particular events, festivals, etc., that will now be borne by regular officers. Individual officers will have to be hired and overtime shifts will have to be put in place, and they don't have dollars in their budgets for that cost overrun, as a result of this decision.

Could the minister kindly indicate some involvement with the Attorney General -- hopefully, from my perspective regarding resolving this issue in the immediate future? July 1 is less than three weeks away, and July 1 will see festivals, parades and some other types of activities occur all across this province. If auxiliary officers are not part of the process, the additional policing costs required for that single day alone will confound the budgets of many, many municipalities.

Hon. J. Kwan: We actually have no involvement with respect to the auxiliary issue that the member has raised. What we did do is facilitate for the Attorney General to meet with the UBCM at the last joint council meeting, and that matter was raised. There was extensive discussion around it. The AG has taken those comments into consideration. I know that he's awaiting a report to give him further direction or to give him information for consideration. However, our ministry has no involvement in this matter, outside of the coordinating role that we play.

L. Reid: I think the minister will agree that the impact on this ministry is one of funding. Indeed, when these municipalities are not able to cover those policing costs, this minister will become immediately and dramatically involved in this issue. I am delighted that the issue came up at joint council, but I would hope that the minister could advise as to whether or not she's prepared to have these conversations with the Attorney General and whether or not she could provide a time line for when this decision will be public. Again I reference for the minister that July 1 is less than three weeks away, and every community that has contacted me has said that their policing costs on that day are extensive. There are lots of people in festive moods attending all kinds of parades and celebrations and public opportunities to come together that will be confounded by a lack of policing.

Where the ministry is involved -- in their view and, frankly, in mine -- is when it comes to covering the costs of this additional policing because the Attorney General has not yet reached a decision. So some guidance as to the time line would be most appreciated.

Hon. J. Kwan: I'd be happy to discuss these issues, as I have been discussing the matter with the Attorney General's office; however, I have no authority within my ministry, as Minister of Municipal Affairs, to deal with this issue in any way that requires or relates to a decision. It is an issue that falls under the Ministry of Attorney General, and it is their responsibility to make those decisions and set the time lines accordingly.

L. Reid: I will make one final comment on this topic. I believe it becomes everyone's problem. If one of these communities were to have a riot similar to the riots that have occurred in the Okanagan Valley over the last number of years, and if it could be attributed in any way to the lack of movement and direction on this question, that would be an enormous cost to this government and, consequently, an enormous cost to the taxpayer. So I will leave on record that I do believe this ministry has a responsibility to be more dramatically involved in this question. The money for policing for a number of these communities does flow from grants that come from this minister. So I do believe there's an immediate connection that cannot be diminished in any way.

One of the other issues I wish to put on the table this afternoon is regarding the University Endowment Lands fire services centre. I have been told that the actual construction cost is well in excess of $4 million. The speculation of the day was that that was $3 million more than was required; that centre could have been built for appreciably fewer dollars. I wonder why that is the case, and I would certainly ask about the charges. Apparently the cost that BCBC put in place is in the neighbourhood of $430,000 annually for the use of that building -- $15,000 a day. I will need confirmation on that information so that I may ask some further questions.

Hon. J. Kwan: Just referencing the last question around the auxiliary police issue, the Ministry of Municipal Affairs, like the relationship which we have with many ministries, oftentimes very much falls under that coordinating role, where we contact local governments to have their comments brought back to the respective ministries for their consideration. Where issues clearly fall outside the Ministry of Municipal Affairs, we don't have the authority to make those decisions, other than, again, to play that coordinating role and to provide the opportunities for discussion.

With respect to the issue around the fire services centre, the ministry's role in terms of providing fire services or protection to the UEL is through a contract with the city of Vancouver. We pay a certain lump sum to provide for fire protection services.

In terms of the physical facility or how those dollars are spent, that's actually not within the Ministry of Municipal Affairs' jurisdiction.

L. Reid: Certainly I think it's a concern. I would put it on the record that if anyone paid four times more than they needed to for any service or product, that's a question to raise when we talk about accountability within local or provincial government. So I would simply hope that the minister can provide the current rate that's being charged or, if not, direct me to the most likely person who would respond to that request.

Hon. J. Kwan: The fire protection services contract with the city of Vancouver for the year 1998-99 is $3.943 million. That's actually considered one of the lowest costs in comparison with other jurisdictions.

L. Reid: I will clarify that question, because I'm not convinced that that is a reasonable expenditure of any taxpayers' dollars.

One of the other issues I wish to canvass is Crown lands within municipalities. This issue is brought to you courtesy of Port McNeill:

"Whereas Crown land is administered by the Ministry of Environment, Lands and Parks, and whereas there are inordinate delays in accessing these lands for municipal purposes, therefore be it resolved that the Association of Vancouver Island

[ Page 8595 ]

Municipalities and the Union of British Columbia Municipalities petition the provincial government to transfer all Crown land within municipalities in fee simple, and that the land be managed by those municipalities."

Hon. J. Kwan: With respect to all Crown lands within municipalities being given to municipalities, that issue falls under the Ministry of Environment, Lands and Parks. It's very much a policy issue that I am sure falls onto the cabinet table, as well, but not within the Ministry of Municipal Affairs in that way.

L. Reid: Again, I would simply ask that the minister take a greater interest in this issue. Their concern is that there are inordinate delays in accessing these lands for municipal purposes. If these are municipal interests that are being sought for this land -- and the time line is delay, delay, delay -- the cost to municipalities goes up. So that is where I believe the minister needs to become more directly involved. If there's a delay, it's a time issue, but it's also a money issue. None of these delays come free of charge; they cost inordinate amounts of money to municipalities.

One of the other issues that I continue to receive correspondence on is municipal traffic-fine distribution. Could the minister perhaps bring me up to speed as to whether or not any recent decisions have come forward from joint council as to an actual percentage distribution? What is the decision today on this question?

[4:45]

L. Reid: I'm delighted that it continues to be discussed. What the communities wish to know is when the decision might be reached. And indeed, if there's any retroactivity to that decision, will it extend to April 1 of this year? Are we talking about the new fiscal year in terms of revenue-sharing? It was in the new fiscal year that a number of these new responsibilities -- i.e., policing, etc. -- were off-loaded onto municipalities -- without revenue. Can the minister respond to that question?

Hon. J. Kwan: The proposal does not call for retroactivity. As I said earlier, this may well be a matter that would be reviewed under the municipal financing component. In fact, I have had many discussions with the UBCM president on this matter. He understands what the process is, and we're working through that. In terms of the time line, I really cannot say what the time line might be. As I know the member can appreciate, I cannot dictate Treasury Board decisions.

L. Reid: The minister will know that we're not asking her to dictate. We're asking her to advocate aggressively on behalf on municipalities, and we trust that will happen. Can the minister tell us whether or not this decision will be taken in this calendar year? Will municipalities receive any money from sharing traffic-fine revenue during 1998?

Hon. J. Kwan: Of course I'll be a strong advocate, as that is the role I play. I've made a commitment to local government representatives that I will be their strong advocate in a number of different areas and will continue to play that role.

With respect to the question about the dollar figure, I'm not able to provide that information, as it is a cabinet decision and heading toward cabinet's consideration.

L. Reid: I know that UBCM's characterization of you as a strong advocate is going to be truly dependent on whether or not they receive any revenue in the 1998 calendar year. I simply leave that for the minister's consideration.

In terms of the city of Vancouver, in one of their most recent meetings they were indeed advocating to the Premier of this province and reiterating the need for a long-term Canada-B.C. Infrastructure Works program that reflects municipal infrastructure needs. They requested a speedy decision on project awards for the more than $30 million in funding still outstanding under the current program. Certainly a number of decisions have been taken. I believe that your predecessor, the current Minister of Employment and Investment, has been more directly involved.

But in the case of Richmond, where there are 15 projects, it says: "After a careful review of your applications, we must regretfully inform you that the above projects will not receive funding under the program." Because that message is now before communities, the previous issue I raised in terms of revenue-sharing is vital. There are all kinds of projects that individual communities anticipated funding for that are simply not coming to pass, so any speed with which the minister can encourage a decision to be rendered would certainly be appreciated.

I'm raising an issue on behalf of the city of Burnaby. It's from the office of the mayor, Douglas Drummond, and dated March 10, 1998. He was writing to your colleague, but he indeed did not receive an answer.

"On October 2, I wrote expressing Burnaby's concern over the additional administrative burden imposed on municipalities through the requirement to have a separate savings institution account for holdbacks on contracts over $100,000 -- section 5(1)(a) of the Builders Lien Act. I can only believe that the casual dismissal of our request is the consequence of a letter crafted by an insensitive bureaucracy, as opposed to reflecting the regard the provincial government has for its municipalities.

"The additional administrative burdens created by this requirement of the legislation translate directly into added costs from municipalities with no benefits to anyone -- municipalities, their contractors or their sub-contractors. The exemption of the provincial government from the separate holdback account requirement recognizes the unreasonable need for the application of this section to government.

"The fact that the provincial government is resolute in its course to inflict this requirement on municipal governments could lead to the conclusion that provincial government bureaucracies are insensitive and out of touch with the British Columbia taxpayers' demands to decrease the tax burden. I urge the new minister to re-evaluate our concern about the separate holdback account requirement and provide an exemp

[ Page 8596 ]

tion for municipal government from section 5 of an otherwise decent piece of legislation.

"Douglas Drummond, Mayor."

Hon. J. Kwan: Of the two items that the hon. member has raised, one is the IWP program, which actually falls under the Employment and Investment minister's portfolio. He has the responsibility for that, and we'll bring her comments forward to him for his consideration.

The other item is with respect to the Builders Lien Act. As well, that's an area that falls outside the Ministry of Municipal Affairs. However, if the member provides us with a copy of the letter that she has referenced, we'd be happy to bring that forward to the minister responsible, for -- his, I think -- consideration.

L. Reid: I thank the minister for her comment. However, she does have a copy of this letter. It was copied to her as well as to the Minister of Employment and Investment. The reason I bring it up is because this sentiment has pervaded my comments throughout these entire estimates, which is that anything that's an additional cost to municipalities does have an impact on how this ministry runs and how this ministry provides advice. I believe that's logical. Indeed, if there are aspects of government that are putting an unfair burden on ministries across this province, the minister should be directly and immediately involved. I think that's the goal of an advocate.

So I don't believe that it's always prudent to stand up and shuffle it off. I think these concerns are valid. Each time the ministry reduces grants to municipalities and does not take into account their increasing expenditure on the other side of the ledger, that's a concern. The majority of the sentiment expressed today is basically that there are increasing costs to municipalities that are burdens, whether it's auxiliary policing costs or the cost of this new piece of legislation. Indeed, the minister should take some responsibility for some of these, because they are directly impacting on the municipalities that she's responsible for. I firmly believe that.

In terms of regional growth strategies, a number of letters from communities that have received some dollars. . . . I'm interested in the measurement process and the outcome process for determining the validity of the expenditure. Let's take Chilliwack as an example -- $150,000 for phase 2. How is that expenditure evaluated by government in terms of there being subsequent phases of revenue flowing to a number of communities across the province, whether it be Vancouver or whether it be Chilliwack? If the minister could provide some guidance.

Hon. J. Kwan: I thank the member for offering some lessons in being in the role of an advocate. In point of fact, I used to be an advocate before I landed in the world of politics, so I actually understand that role very well. Clearly I will continue to advocate. Having been an advocate from time to time, you win some and you lose some. That's what we do, but we go forward anyway with the goal of what we want to achieve, and we speak in the strongest terms for whatever it is that we're advocating for.

With respect to the issue on the regional growth strategy and the measurement of a growth strategy -- how you determine success and so on -- the product in and of itself is clearly one measurement. The regional growth strategy and the changing nature of a community will give us those measurement tools in making those kinds of assessments. Generally speaking, the ministry provides for a one-time grant in growth planning within different communities, and the grants have averaged around $150,000.

J. Weisbeck: I know that what the minister said about having been a strong advocate in her previous life is true. One of the things she advocated against was gambling expansion. Her views were repeatedly stated and strongly held. I personally am grateful that she's in a situation to help protect municipalities in the event that they hold a different view from the provincial government with regard to gambling expansion initiatives within their boundaries.

So my first question is: does the minister intend to honour the government's previous commitments to respect communities' wishes where they do not wish to see gambling expansion inside their boundaries?

Hon. J. Kwan: This is an issue that falls under the Minister of Employment and Investment, who has responsibility for gaming.

J. Weisbeck: Obviously the minister wishes to deflect the question to the Minister of Employment and Investment, and indeed, he will doubtless be answering a lot of questions about gambling expansion. But this minister has responsibility for dealing with the junior levels of government. There have been commitments repeatedly made, including by the present Minister of Employment and Investment in his previous role, by this government and by the cabinet that this minister is now a part of, not to override community wishes when it comes to questions of gambling expansion. I want the minister to be on the record as to whether or not she will uphold those commitments and protect the autonomy of municipalities when it comes to deciding whether or not gambling expansion will occur within their boundaries.

Hon. J. Kwan: In terms of local government and their different points of view with respect to gaming, in my capacity as Minister of Municipal Affairs I'll take forward their comments and ensure that that information is passed on to the responsible minister for his consideration. I'm sure that the member opposite will have an exciting time engaging in discussions on the issue of gaming with the minister responsible.

T. Nebbeling: Madam Chair, through you to the kitchen -- I mean, to the minister. I was going to say: "Get out of the kitchen if you can't stand the heat."

If a municipality prohibits gaming through zoning, which ministry -- if the government desired to overrule that zoning by the municipality and to allow gaming -- would be responsible? Would it be the Ministry of Municipal Affairs or the Ministry of Employment and Investment?

[5:00]

T. Nebbeling: I'm not talking about a hypothetical situation; I'm talking about a legal question. Whose authority is it

[ Page 8597 ]

Hon. J. Kwan: As I said, the lead minister responsible for gaming is the Minister of Employment and Investment. In that matter, action that falls out of whatever issue will be dealt with accordingly through the process which all cabinet ministers go through with respect to the issues that fall within their respective ministries.

T. Nebbeling: What ministry is responsible for zoning issues related to municipalities?

Hon. J. Kwan: There are many, many statutes that have implications for zoning. Therefore, from that point of view, depending on what the issue is, there are a whole number of different ministries that may be responsible.

T. Nebbeling: I recall when the minister was in municipal government and, as a councillor in the city of Vancouver, when she spoke very strongly against any form of gaming and against the blight, the damage and the hurt imposed on people who could least afford it. She certainly spoke as if she as a municipal councillor could do something about that situation. At that time she recognized that Municipal Affairs was the tool to stop this nonsense of overruling other forms of government.

I'll ask the minister one more time. . . . I'm not talking about the gaming activity. I'm talking about zoning and zoning restrictions that may be put in place by municipalities not allowing further forms of gaming. Will the minister exercise her right to deal with that issue or not? Or is she just going to waver on this whole gaming issue and walk away from her responsibilities, as she has been doing from day one? Will the minister commit here not to use the power of the club she's been given to stop municipalities from working within a democratic situation, which is their democratic right?

Hon. J. Kwan: I've indulged the member in the last couple of questions with respect to this issue. The fact is that the question is actually out of order. The matter falls under the Ministry of Employment and Investment.

T. Nebbeling: Madam Chair, on a point of order, the minister is not in a position to decide what is in order. . . .

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

T. Nebbeling: As I said, Madam Chair, I don't think it is the minister's prerogative to decide what question is in order and what is out of order. So I would like to hear from the Chair.

Interjection.

The Chair: Order, member.

It is the Chair's discretion as to what is out of order and what is in order. Also, the Chair cannot direct the minister how to respond or what to respond to.

T. Nebbeling: By the end of these proceedings maybe we can present the minister with a copy of the parliamentary practices of this House -- and maybe you can take some time to go through it as well. I do believe. . . .

The Chair: To the vote, member.

T. Nebbeling: I'm talking to the vote, Madam Chair.

The issue was raised by the minister. The minister made a statement that I think was incorrect. Obviously the minister continues to hide on the gaming issue. I think we know now that she has been given an opportunity to stand up for the rights and the values she represented as a councillor in the city of Vancouver. But she is not going to use the power she has today. I think my colleague from Kamloops was correct in putting this issue on the record so that in the future and in another position, the current minister can never come back and claim that she indeed is an advocate for the downtrodden, as she so happily has done in the past.

I have a couple of questions on the Islands Trust. The first question I would like to ask is: when an Islands Trust representative is not a member of a municipal structure, which sections of the act direct trustees that are not elected to representation on municipal council but are directly elected? What sections are there to dictate that they work within the constraints set out either by the Islands Trust or by the Municipal Act? I'm talking in particular about meetings that they have to have, like municipal councils have -- be they committee of the whole or regular council meetings. That is my kickoff question.

Hon. J. Kwan: I completely disagree with many of the comments from the member opposite. But I won't go into the details of that, as I believe that falls outside the range of the Ministry of Municipal Affairs estimates. Having said that, though, on the Islands Trust issue, there is no local government connection. The Islands Trust representatives are all directly elected, except for the executive members, and they have their own procedural bylaws which govern their activities.

T. Nebbeling: Let's educate the minister a little bit. When there is a municipality type of jurisdiction on any of the islands, the trustees are actually selected from the elected council members, so there is a municipal link right there. There are also islands that do not have municipal status, and the population there directly elects these trustees.

What I did ask the minister, however, was: how are these so-called elected trustees directed -- by what mechanism and by what act -- to proceed when it comes to their public meetings, their committee-of-the-whole meetings? And how has the frequency of these meetings been directed or dictated?

Hon. J. Kwan: I believe the member is confusing regional district members with Islands Trust representatives. Islands Trust representatives are directly elected; they are not chosen from local governments. There are overlaps with regional districts with which they have a servicing role.

With respect to the issue of the conduct of meetings, Islands Trust members who deal with their own issues and have their own procedural bylaws that would apply. In terms of land use matters, there are also bylaws that go with it. Where it is a land use matter, the procedures generally follow the Municipal Act. For example, on a rezoning issue relating to a public hearing, the procedures would follow those in the Municipal Act.

[ Page 8598 ]

Hon. J. Kwan: The Islands Trust representatives have an affiliated board called the Trust Fund board that deals with the purchase or holding of lands, within which they have a set of statutes or bylaws that would apply to the purchase or holding of lands.

T. Nebbeling: I was actually trying to find out if there's truly a democratic process in place to make sure that community members of the Islands Trust islands have a way of being aware of the issues that are happening, especially when it comes to land planning issues and the expenditure of their tax dollars.

I ask this question because of a situation on Bowen Island. A number of years ago, the GVRD purchased a piece of land that was given the name Crippen Regional Park. Unknown to the population of the island, the regional district has recently been having discussions with the Islands Trust trustees about the possible purchase of that parkland by the Islands Trust. They're talking about money -- between $1 million and $2 million -- so we're not talking about a little: "Here is a cheque, and go away."

[5:15]

The fact that these kinds of things can happen without the community knowing about it, and then when some people ask questions about it, is denied -- and then paper comes to the surface that shows it is indeed happening -- indicates to me that the whole democratic process is pretty well undermined. I do not think that that is acceptable. If the Islands Trust Act allows it, then I think the minister should consider a revision of the Islands Trust Act to eliminate these kinds of situations.

While she's in the process of eliminating these kinds of possibilities, she should maybe consider incorporating in the act statutes that will reflect the manner whereby municipalities have to keep their constituency abreast of what's happening, be it on land issues or financial issues.

My question to the minister is: (a) was she aware that something of this nature was happening, and (b) will she take some steps to get this issue clarified? I don't mind providing the minister with the paperwork that I've got on this case.

Hon. J. Kwan: I'll ask staff to look into this matter. Clearly, on issues of land acquisition, there is a balance that folks go through -- balancing how much information they disclose, therefore risking adverse impacts in terms of land speculation, etc. But I'll ask staff to look into that matter.

T. Nebbeling: One last question, then. Does the minister think there's a difference between finding a balance in what to disclose and what not to disclose and denying that something is happening? Does the minister think there's a difference between these two actions?

Hon. J. Kwan: I am not denying that anything is happening. I'm simply saying that I'll ask staff to look into the matter, citing that on issues of land acquisition. . . . Generally speaking, it doesn't matter whether it's the Islands Trust or local councils or anybody, for that matter -- when it's a purchase for the public interest, they must balance competing issues of disclosure. If too much information is disclosed, or even if the notion of acquisition is disclosed, it would cause problems in terms of land speculation and therefore hurt the public's interest. Those are the kinds of balances that individuals have to go through and evaluate.

D. Symons: Just a question to the minister dealing with housing, if I might. I gather that in the 1996 federal budget, they made reference to giving the provinces the opportunity to manage the federal social housing resources that are in the provinces. I wonder if the minister is aware of that and might tell us where the province is in relation to those negotiations.

Hon. J. Kwan: Yes, I'm aware of it, but this is an issue that does not fall within the Ministry of Municipal Affairs; it is a matter that falls under the Employment and Investment minister's portfolio.

A. Sanders: I want to ask the minister about the greater Vernon parks and recreation district, in the Vernon area, and whether she is aware of the concern among some of the members there, being Coldstream, Okanagan Landing -- which is now annexed into Vernon? Is she aware that there are some concerns among the municipalities -- the smaller municipalities especially -- that there needs to be some correction and perhaps renovation of the voting procedures of the GVPRD?

Hon. J. Kwan: I know that staff have engaged in ongoing discussions with city of Vernon representatives, regional district representatives and other municipality representatives on this issue.

A. Sanders: Has it been brought to the minister's attention that one of the districts, Coldstream, has two legal opinions that the voting procedure within this organization is incorrect? Is the ministry working with those groups to try and ameliorate the system so that there is equity among the different groups involved?

Hon. J. Kwan: The issue is one in which staff has engaged in discussions with the various stakeholders, if you will, and the goal is to try to bring forward ways of ensuring that there are equitable ways of dealing with this issue.

A. Sanders: What's the strategic plan of the ministry and the time frame for dealing with this issue, to make sure that there is an equitable solution?

[ Page 8599 ]

A. Sanders: Are those end results to be derived from consensus, or are they to be arrived at from a majority vote?

Hon. J. Kwan: Consensus clearly is preferable. However, it's really very much a process of negotiations, if you will -- to give and take and to discuss matters and try to arrive at a place where everybody is comfortable or finds the solution to be acceptable.

A. Sanders: In this circumstance, where we have one large community and one smaller community. . . . We will find, for example, Vernon having a gymnasium facility that it decides to save from a demolished school and to fit out as a recreational area. Vernon then gives the gym to the GVPRD, at which point the bill for the renovations for the facility and the operating budget all of a sudden belong to the other municipalities. They haven't been involved at all in the decision-making process as to whether this particular facility was something desirable to them or, in fact, whether they would want it in Vernon at all. They might have made a decision to put the facility elsewhere -- perhaps in Coldstream or closer to Coldstream, in the Vernon area.

These are the kinds of decisions in the regional district that often become everyone's responsibility but in fact were made by one municipality alone and now are forced on the others. This does create for the smaller municipalities a sense of alienation and, certainly in some cases, debts that they did not incur but in fact are now required to pay.

One of the other things that was pointed out to me is that some of the situations existing now in the GVPRD have really come about because only a subset of people vote. This has occurred since the annexation of the Okanagan Landing area into Vernon proper. There will be three different time frames for some of the facilities, and these different time frames will be inconsistent. For example, the operating agreement may be from year to year, but the debt will be long-term, so sometimes you'll find that the GVPRD is paying the debt on the pool but has no operating agreement, or that the operating agreement has run out.

These are some of the concerns that the smaller municipalities especially feel with respect to the equity of the dollars they have, which sometimes are quite a bit less than the larger municipalities. What I would appreciate from the minister is her commitment to look at this problem, to ensure that in the future, should this be something that I need to discuss with her about the GVPRD and how this is going, I will have her ear and interest with respect to the communities involved and the equity issue.

Hon. J. Kwan: The answer is yes.

L. Reid: Hon. Chair, I thank my colleagues. In terms of the last number of issues I wish to canvass this afternoon, one of them is regarding a freedom-of-information request that came in the form of a memo. It's regarding a ministry without grants. I want to enter it into the record, because I think it's quite an intriguing document.

"Before laying out the scenario of what a ministry without grants would look like, I can't help but note some of the implications of eliminating grants. You will almost certainly have already considered most, if not all, of these points. Jotting down some of these was useful to set the stage for the chapter on what the ministry would look like without grants.

"Money equals influence. Local governments' relationship to the ministry and province is significantly affected by the substantial financial contributions made by the latter. Elimination of grants would reduce the ability of the ministry and the province to influence local government behaviour unless alternative sources of leverage can be found or developed.

"Some expected immediate impacts: leaner, meaner local government; elimination of discretionary expenditure; withdrawal from areas of shared provincial-local responsibility; some financially troubled local governments, especially smaller, slower-growing and remote communities; less cooperative, more confrontational local government" -- and they're giving examples -- "refusal to proceed with provincially directed programs expenditures, e.g., sewage treatment plant upgrades; collapse of local-provincial partnerships; resistance to undertaking regional growth strategies; more demanding local governments, e.g., demanding offsetting measures such as reduced provincial constraints on local government and greater freedom to seek alternative revenue sources."

[5:30]

L. Reid: The minister will be aware that many municipalities do believe that there have been reductions -- that the elimination of the conditional grant program, in their eyes, is a reduction. She will know that, because they have certainly made that case very strongly. In terms of full-time equivalents within the Ministry of Municipal Affairs: in 1992, 567; 1993, 552; 1994, 560; 1995, 581; 1996, 498; 1997 and currently for this year, 1998, as well, 456 FTEs. That's 111 fewer positions over the six-year period. My question is: how many individuals are currently on contract to the Ministry of Municipal Affairs? And has that number of individuals on contract been reduced over the same period -- the same six years, 1992 through 1998?

Hon. J. Kwan: Just to clarify, the conditional grants program this year has not been reduced. On the other item with respect to contractors, I wonder if the member opposite could clarify for me what she means by contractors. Does she mean auxiliaries within the ministry or. . . ? Anyway, I wonder if the member could clarify that for me.

L. Reid: I'd be happy to do so.

The Chair: Just a moment, member. Minister?

[ Page 8600 ]

L. Reid: The comment was "a reduction." The minister will be advised to check the Blues. It's a reduction in conditional grants for this year in excess of $20 million. That is a fact. That is borne out by the estimates documents, page 221, if the minister would be so kind. . . .

The question I was asking was directly in relation to the number of people on contract. It's the opposite, frankly, of the number of people who are considered full-time-equivalents. There are 456 individuals today who are considered full-time-equivalents, on page 221 of the estimates document. How many additional bodies are currently being paid through the Ministry of Municipal Affairs and considered to be on contract?

Hon. J. Kwan: Just to further clarify the issue of conditional grants programs, the pay-outs in the programs have been reduced because the commitments have been met. Therefore the dollars which the ministry pays have been reduced accordingly. That's based on former commitments.

On the other question around the FTEs, yes, the ministry has 456 FTEs. That is the number we've been authorized to have, and we do not exceed that number within our ministry. By way of defining contractors, that would be individuals who are not considered FTEs. They're hired for a special project of some type or another but are not part of the staff of the Ministry of Municipal Affairs. We have, perhaps, up to 20 -- fewer than 20 contractors.

L. Reid: Is that 20 for this calendar year, or is that 20 a month? I hope that the information can be provided to me in a relatively timely fashion: who they are, the number of dollars they're receiving and what projects they've been assigned to on behalf of this ministry.

Hon. J. Kwan: We can provide that list for you.

L. Reid: In that the other requests I made have not been forthcoming, could the minister perhaps give me a time line? Will I have it by the end of this week? That would be a wonderful thing.

Hon. J. Kwan: For the member's information, the budget item for contractors within the ministry's budget is one-fortieth of a percent. In our ministry, it's very, very small. We would be happy to provide you with the list, and we'll get that to you as soon as we can.

L. Reid: I appreciate that. Certainly the minister knows that receiving this information within a reasonable time frame is just the professional way to proceed. So I leave it to her to rise to the challenge.

In terms of questions regarding the Assessment Appeal Board, I have numerous questions on this topic. I will take the minister's guidance as to whether or not these questions could be asked during consideration of Bill 21.

Hon. J. Kwan: I guess it depends on what the questions are. Are they in relation to Bill 21, or are they Assessment Appeal Board issues that should be brought to the estimates table? I don't know what your questions are, so it's difficult for me to make that assessment.

L. Reid: I'm going to offer the minister some latitude when it comes to consideration of Bill 21, and certainly we can move more quickly through this estimates process. If the minister's first words during consideration of Bill 21 are that this is more appropriate for the estimates debate, fine; we will simply do it now. But if the minister is prepared to have that latitude in place, I'm willing to respond to that. . . .

Hon. J. Kwan: I would be happy to be as flexible as I can, without knowing what kind of questions the member is intending to ask. We will try to work in a cooperative fashion. Perhaps the member opposite can shed some light on the lines of questioning that she might be pursuing on Bill 21 relating to the assessment matter.

L. Reid: I appreciate the minister's comment. The majority of my commentary will reflect the actual sections we're considering. I'd appreciate it if can proceed in a cooperative manner.

Disincorporation of municipalities is a further issue I wish to canvass this afternoon. The minister will be aware that this issue has been brought forward. My reading of the act. . . . "On receiving requests signed by a majority of the electors of the municipality, the Lieutenant-Governor in Council may, by order published in the Gazette, set aside the letters patent incorporating the municipality and disincorporate the municipality." I am seeking the current thinking of this minister on whether or not any disincorporations will proceed in this calendar year.

Hon. J. Kwan: There is one disincorporation issue. As the member knows, that is Lake Country. A petition was brought forward to me, and we've been in discussion with both Lake Country and various folks on this issue. Staff is proceeding with due diligence on this matter. I await their report to me for my consideration. From that point of view, there is one issue that we're looking at right now with respect to disincorporation, and that is Lake Country.

I would just add, to be very clear, that just because a petition has been put forward for disincorporation, it does not necessarily mean that disincorporation would follow. The ministry is doing its due diligence around this issue. The petition does not necessarily just trigger an automatic process for disincorporation. From my point of view, I would like us to see if we can try and resolve the matter as cordially as we can.

L. Reid: That is also my understanding, because as section 29(2) says: "A municipality must not be disincorporated until the Lieutenant Governor in Council is satisfied that payment and discharge of all debts and obligations of the municipality is provided for." My understanding of the issue in Lake Country today is regarding the installation of a sewer system, which has an enormous cost. Indeed, it was seen that that is the issue. Incorporated or disincorporated, it still needs to be resolved. I trust that it is an issue that's at the top of the agenda.

I have a further question regarding manufactured homes. I'm not clear whether or not this is an issue, but I do know that this correspondence has gone to your ministry and, I believe, to a variety of ministries -- probably the six or seven that the minister referenced earlier as having some responsibility for housing. This individual's name is Leonard Rempel. "In 1997 you promised us in a letter that in the spring of '98 you would introduce legislation re the rent review law, concerning rent charged to tenants in manufactured home parks. As you are aware, current law permits tenants at any time to demand a

[ Page 8601 ]

I believe that this member of the community in Abbotsford has indeed canvassed probably every minister in this government. Is there a response forthcoming from some member of this government?

Hon. J. Kwan: That matter falls under the Ministry of Attorney General. Again, I would be happy to bring forward that issue for the AG's information and consideration.

L. Reid: Certainly your ministry and the Ministry of Attorney General do have this correspondence. Perhaps you could, at a future point, indicate when or from whom this person might expect a response, because he has canvassed all seven ministers within this government and has yet to receive a response.

I have a comment from a Mr. Patrick Simpson, who has provided a document entitled "User-Friendly Homes: A Comprehensive Guide to All the Important Techniques of How to Design and Build Your Future Home." His question simply is: is the minister aware of this document? Will it have any place in the consideration following the receipt of the recommendations of the Barrett commission?

[5:45]

With respect to the document that the member opposite referenced, I have not seen it. I don't know whether or not it falls into the Barrett commission's leaky-condo arena. But if the member wishes to pass a copy of that document to us, we can certainly take a look at it and take it into consideration.

L. Reid: I am pleased to share this document with the minister -- happy to do so.

My final question: can anyone tell me the cost of the Barrett commission, for the fourth and final time of asking?

Hon. J. Kwan: As we canvassed this earlier, the Barrett commission is appointed under the Inquiry Act. Therefore all the contracts and bills, etc., are forwarded to the Ministry of Attorney General office.

Vote 54 approved.

Vote 55: ministry operations, $47,147,000 -- approved.

Vote 56: local government grants, $191,003,000 -- approved.

Hon. J. Kwan: I move that the committee rise, report resolutions and ask leave to sit again.

Motion approved.

The committee rose at 5:48 p.m.

The House in Committee of Supply A; E. Gillespie in the chair.

The committee met at 6:41 p.m.

ESTIMATES: MINISTRY OF LABOUR

Hon. D. Lovick: Good evening, all. I have to begin by saying that I am pleased to be here to discuss the budget and the activities of this ministry. I first want to give, if I may, a little bit of autobiography, I suppose. I was very pleased when I was asked by the Premier whether I would take on this portfolio. I don't have a long or even detailed trade union background -- or worker background, for that matter -- because my family, frankly, came from more of a business orientation. My father was a service manager in the automobile business for most of his career; my mother was a nurse. I was somebody who had lots of jobs and stuff but then fairly quickly went off to university.

My interest, however, in work and workers is a longstanding one, especially the area of workers' rights to protect their own interests. I say that largely because of my experience as a university student who lived in an era when we had an expanding economy and the resource industries were booming. I suspect those days are gone forever, because the economy has been transformed and has changed significantly over at least the last 20 years. In those days one could always get a job. One could get a good job if one happened to be lucky enough to plug into the unionized sector.

I like to tell the story, Madam Chair, about my good fortune in being a member of the IWA for a couple of years and therefore making good enough money so that I could pay my way through university. Sadly, fewer and fewer people have those opportunities today, and that's too bad. I guess the point I'm making is that I have that attachment to workers' legitimate and absolutely necessary efforts to improve their own lives and the lives of their fellow workers. To me, that particular lesson is something we should never forget.

I want to begin, if I might, by simply advising my colleagues across the floor of the people I have with me this evening. On my immediate left is Marg Arthur, who is the Deputy Minister of Labour. On my right is Mr. Gary Martin, assistant deputy minister for labour programs. Behind Gary, we have Mr. Don Cott, assistant deputy minister for labour relations. Seated next to Don is Mr. Bruce Smith, who is the manager of financial policy. I think that among ourselves we can probably answer any questions that might come up.

[6:45]

The second goal is to ensure that workers receive fair compensation and related benefits and that they enjoy a healthy, safe workplace. Ministry people work every day through the employment standards branch and the Workers Compensation Board to achieve these objectives.

The third goal is to ensure that employment pension plans meet basic standards in providing retirement incomes. We therefore monitor the effectiveness of our pension legislation and regulations on an ongoing basis, as well as soliciting input from stakeholders.

[ Page 8602 ]

Finally, our fifth goal is to support economic development and employment opportunities across the province. Our ministry is, therefore, working in partnership with industry to review regulations and to build in more flexibility. This is important to business, and it also benefits working people in the form of increased employment opportunities that obviously result from increased confidence and investment in B.C.'s economy.

Let me touch on a couple of specific categories, if I might, Madam Chair. First, the ministry budget and the structure of the ministry. The Ministry of Labour operates with a proposed 1998-99 budget of $49.934 million and an allocation of 439 full-time positions. Of these, 140 are attached to the employment standards branch. The ministry serves the public through offices in 19 communities across the province. As Minister of Labour, I also report to the Legislature on the activities of the Workers Compensation Board, the Labour Relations Board and the Industry Training and Apprenticeship Commission, all of which operate as arm's-length agencies. In my presentation today, I would like to look briefly at some of the work that we are doing with industry, with workers and with the public to adapt British Columbia's employment standards to the needs of a changing economy. I'll give you some specific agreements.

As I already mentioned in the beginning, the role of the Ministry of Labour -- its mandate -- is to promote good relationships between employers and workers in British Columbia. This is not always an easy task, and I'm sure members can appreciate that. But I am pleased to report that we have made much progress in the last year in that area. Promoting good labour relations involves our ministry in a broad range of issues and activities. These range from workplace health and safety generally to providing support and direction to the government's agencies and Crown corporations in labour relations matters. These activities have also enabled the Ministry of Labour to not only promote good labour relations but develop such relations between the government and its stakeholders. During the past year, for example, the Ministry of Labour has had extensive discussions with stakeholders -- discussions which, I might add, have been well received. The ongoing dialogue reflects our commitment to listen to British Columbians and to work closely with them to achieve our common goals and our common objectives.

I'd like to illustrate that point with a description of ministry initiatives taken in partnership with the entertainment industry. As all members in this chamber certainly know, one of the most dynamic and fastest-growing industrial sectors today is indeed the entertainment industry. Over the past year, the Ministry of Labour has been in close consultation with the industry on a number of issues, such as the timely payment of actors by talent agents. Probably the most high-profile issues were those surrounding the employment of child actors. The industry is now, I'm happy to say, on board with a system whereby a part of every child's earnings is invested in a public trust and held safe and secure by the public trustee.

Another example of cooperation and consultation is in the oil and gas industry -- again, a dynamic sector in this economy. This industry employs over 40,000 people in British Columbia. It has clearly benefited from reduced gas royalties; indeed, production has doubled in the last ten years. While streamlining approvals for exploration has been undertaken by other parts of government, the Ministry of Labour has consulted extensively to ensure that flexibility is being developed in areas affecting employment. For example, during our discussions with employers in the oil and gas industry, they expressed concerns about the need to seek individual time-limited variances for each job. In response, ministry staff consulted with their counterparts in Alberta and developed an industrywide partial exclusion. As in Alberta, workers in B.C. now earn a monthly salary plus bonuses, thereby creating a more level playing field with other jurisdictions and enabling our province to more effectively compete. With this change, we have recognized the mobile nature of the oil and gas industry workforce and the flexibility that is required to attract more long-term and job-creating investment.

One area where we've been especially active in recent weeks is around the question of employment standards for professionals in high-technology industries. These are highly paid, highly mobile people who work intensively for short periods of time, often on an emergency basis. The industry asked for some recognition of this special situation in our employment standards. We responded by naming a tripartite committee to review the issue. The final report of this committee, I'm happy to note, is pending -- sooner, we'd like to believe, rather than later.

I could spend quite a bit of time listing a series of ongoing consultations with industry aimed at providing more flexibility for employers in such areas as log harvesting, silviculture, shellfish and salmon farming, and the operation of tow trucks and tow boats. Without going into greater detail at the moment, let me say that the Ministry of Labour is listening to businesses that invest in our province. The policies of the Ministry of Labour complement and support the goals of the government with respect to supporting and assisting businesses that create jobs. Let there be no confusion, however; this approach is balanced with our overriding responsibility to support and protect working people -- who are, after all, the wealth-creators.

Let me now say just a bit about fair-wage legislation, one area where I'm sure members opposite notice that the budget has indeed increased. Last year, during the estimates debate, members opposite suggested that the government was not acting with sufficient vigour with regard to the enforcement of the fair-wage legislation. I am happy to report that over the past year we have pursued a special audit and enforcement program in this area, with 18 staff conducting a total of 155 site visits. This initiative has resulted in the recovery of almost one-quarter of a million dollars in wages for workers. More important, we are satisfied that compliance with the act has greatly improved across the construction trades and that most workers are now getting the wages they are owed under the terms of the provincial legislation.

Let me now talk briefly about employment standards and special enforcement initiatives. I don't think anybody has any illusions that employment standards aren't difficult and sensitive, and the problems are especially acute in certain industries. It's also probably true to say that British Columbians would be, and are, quite concerned when they hear reports that farm workers or domestic workers are being badly exploited. The government and the ministry share those concerns and, I'm happy to report, have responded. In the agricultural sector, for example, our response has been balanced with sensitivity to the conditions under which farm workers earn their livelihoods, as well as a recognition of the needs of farm operators during harvesting. Any success we have in these areas must be based on cooperation between employers and employees.

[ Page 8603 ]

On another front, the government received a well-researched report last fall from a domestic workers association, showing that conditions in that sector were also very much below acceptable levels for many workers. We have begun to consult with employment agencies in British Columbia to develop a system for registering workers and educating employers about their responsibilities. In this case, we have strong support not only from the domestic workers association but also from some of the employment agencies. We're working very hard to ensure that people who work, whether it's on farms or in the forests or in offices, are protected by the Employment Standards Act. That's its purpose.

Although we may well be motivated -- and I hope we are -- by high principles of fairness, let me be very clear about one other point, though -- namely, that this is not only a moral issue. It is a matter of law; it is a matter of compliance with the law. The Employment Standards Act of British Columbia is the law to which all employers and employees must conform.

Let me wrap up my brief comments now, Madam Chair, as follows. The demand for services on the employment standards branch staff is enormous; there's no question. I have to, for the record, make it clear that if there is one area of this ministry that I would love to be able to find a magic bullet and inject a huge amount of money into, this would be it. I say that because, typically, the clients of Employment Standards are the people who are on the low end of the wage scale. They're the people most likely to be in need of assistance. These are the people, again, who for the most part are not represented by, let's say, a trade union. We're talking about people who don't have any other line of defence; they don't have anybody else advocating on their behalf. If anybody deserves a sympathetic ear from government, it should be them. Let me make that point to begin with.

[7:00]

In summary, then, this government has been diligent in looking for ways to streamline regulations and offer flexibility to employers. We have, I think, done our part to help with creating and encouraging a healthy and growing economic climate. However, we in this ministry -- and indeed as government -- are not prepared to abandon our responsibility to those who have nowhere else to turn. Thus employment standards must be maintained, and thus the service it provides must continue.

I thank members for their attention. I am looking forward to these estimates and to hearing concerns and answering questions.

May I just add that I understand from discussions between staff and my colleague from Vancouver-Quilchena on the other side that they intend to start with Labour programs and that tomorrow we are going to shift our focus to the Workers Compensation Board. Therefore we will bring in the appropriate people for that, and should we, by some wonderful fortune, finish our WCB discussions tomorrow, then we will return to Labour issues the following day. With that understanding in place, then, I welcome the comments from my colleague opposite.

C. Hansen: Certainly the way the minister just outlined it is our intention. We'll start with Labour programs, and I gather that we don't really have a lot of time tonight to deal with anything in great detail. But to the extent that we can at least get started on the Labour programs, we will do that this evening. Tomorrow morning we'll start out with the Workers Compensation Board issues at 10 o'clock. Certainly it is my expectation that we should be able to have dealt with that by late afternoon at least, in the hope that WCB officials can get back home to sleep in their own beds tomorrow night. One of the things I've found in these last three sessions is that when you get into estimates, the timing of things becomes totally unpredictable. So that is certainly my hope and expectation at this time, but as we know, things can take some weird bounces sometimes.

I'd like to start by talking about and following up on some of the things the minister was discussing in terms of the goals of the ministry. Perhaps at the outset of these discussions, I'll set out the principles I use in order to look at programs for the ministry and then try to do our evaluation as to whether or not the ministry is operating effectively.

I think we perhaps have a fundamental difference of approach to programs. I found that whenever I see a government program, the first questions that come to my mind are: what results is this expected to achieve, and how will we achieve those results? I have a considerable concern -- it's not just in the Ministry of Labour but across government generally -- that we get far too involved looking at process rather than at results. The priority is the government process rather than the results it's expected to achieve. I think that over the last couple of years we have seen in the Forest Practices Code, for example, a very process-based set of regulations and legislation. In the end, it certainly did not have the desired results that I think anybody would have hoped for.

My concern is that when you start looking at other programs, you see a similar kind of circumstance, although perhaps not as blatantly obvious as it is in the case of the Forest Practices Code. We certainly had this discussion in the debate on Bill 14, where I felt -- and the minister and I had to agree to disagree on these things -- that Bill 14 was more about process than about the expected result, which is to reduce workplace hazards and injuries.

I have the same kinds of concerns when I start looking at issues such as the Labour Code. The minister was talking

[ Page 8604 ]

If unionized workers are dissatisfied with their working arrangements, they will wind up on strike and will be walking on the streets carrying picket signs. When employers and entrepreneurs wind up being dissatisfied with working relationships, they wind up walking on the streets of Calgary or Bellingham, Washington. I think that's impossible to measure in terms of statistics. It's only when you have both a dynamic economy in terms of job creation and labour peace in the province that you can say that we truly have effective and balanced labour legislation in British Columbia.

When we start looking at issues such as the Employment Standards Act in terms of process versus results, I think that anyone in government has to look at the realities of a small business workplace. I've run a small business with, at the time, about 18 employees. I always had three piles on my desk, each of which was about 18 inches deep. The first pile was the paper I had to deal with as a priority today; pile B, as I always called it, was the material I had to deal with sooner or later, because it wasn't going to go away; and pile C was the pile of stuff that I'd really like to read or deal with, because it was useful information that would have helped my ability as the manager of a company. My philosophy was that at the end of every month, you take pile C and throw it in the garbage, because there's never time to get to pile C -- or pile D.

So when we start looking at the level of complaints that we have being generated under the Employment Standards Act, the knee-jerk reaction is to say that we have a whole bunch of employers out there who are taking advantage of their employees. In reality, I would say that there are a great number of employers who have no idea what their obligations are under the Employment Standards Act. You can say: "Well, if you want to be in business, you've got an obligation to make sure that you are familiar with those responsibilities and obligations." But that's the stuff that goes into pile B, which has to be read at some point.

But it is the volume of regulations, the volume of material, that small business owners are accountable for -- responsible for understanding and knowing -- which overwhelms virtually every small business operator in this province. You get to the point where you've got business owners who are trying to do the right thing -- trying to set up a fair workplace -- so that they can have a successful company that is going to grow. At the same time, they want to treat their employees fairly; they want to pay fair wages and have fair working conditions. They find themselves caught in a regulatory discipline because of something they were not aware of. They can't say that they didn't have an obligation to be aware. It's just that often the common sense of regulations doesn't become part of it.

I think that if the ultimate objective is to protect workers, government should approach it from the point of view of what the achievable results are. The achievable results are a set of regulations and rules that allow the managers in that kind of an environment to effectively deliver a fair and responsible workplace for their workers. I think that what we have to look at is the multitude of regulations that they are faced with. They can't possibly keep up with the regulations, so you wind up not with a compliance process but with an enforcement process. You wind up with employers who basically take the attitude of: "Well, I'm going to get fined by the provincial government, but that's part of the cost of doing business, because this didn't make sense. This was something that I felt made sense for the company and the employees thought made sense for their personal lifestyle, yet here you've got the heavy hand of government coming in to say that what was right for me and right for the employees is not right for government, and therefore I have to pay a fine."

The net result of that is not to achieve compliance; it is to achieve bitterness and frustration. I think that as we start looking at the whole development of regulations, we have to keep that in mind, whether it's under the Employment Standards Act or any other set of regulations we're facing that are coming out of the provincial government.

Certainly the minister mentioned the moves toward some flexibility in how the Employment Standards Act is administered. What we are starting to do is look at specific sectors. When you start to get into specific sectors and sit down and hear the story of what companies are faced with in trying to run their operations. . . . The oil and gas industry is a perfect example. When you start trying to compete in the Peace River area of British Columbia with what they're dealing with across the border in Alberta. . . . There is a transparent border between the two provinces. If you look down the road or across a field, nobody can tell you where that boundary is, unless you've got a geographic plotting system or whatever they call these things.

As a result, you wind up with these two industries in B.C. and Alberta working side by side. The lack of flexibility in our regulations becomes so apparent to anybody who takes a look at it. Yet the same principles apply to virtually every workplace in this province. They may not be as obvious as in the oil and gas industry, but certainly there are comparable stories in every workplace and industry across this province.

So while I applaud the minister for looking at the need for flexibility in the high-tech, trucking and oil and gas sectors, I think there is a need for a much broader look at how we make regulations that will achieve the ultimate objective, and that's the protection of workers -- the minimum standards for workers. To do that, I think you have to make sure that regulations are living in the real world of what small business operators are trying to contend with when it come to understanding and learning regulations. So these are some of the issues that I would like to pursue in greater detail. We'll certainly go into the issue of child actors, and I want to go into the issue of the Employment Standards Act review that's going to be coming up. I want to talk a bit about the complaints that are coming in and the ability of the employment standards branch to deal with the volume of complaints. As I understand it, there's some work being done within the ministry to cope with that workload, and perhaps we can come up with some other ways of dealing with it. With that, I'll turn it over to my colleague, who also has some opening comments to make.

K. Krueger: Listening to the opening comments, it struck me that I was listening to a man who is not measuring by his own results. The expression of a need to promote harmonious relations between employers and workers and being proud of the results to date indicates a lack of understanding of the fact that many workers in British Columbia -- would-be workers -- are unemployed, and many used-to-be employers are out of business or are gone from the province. The expression of the goal to promote entry-level and apprenticeship training flies in the face of the Kamloops economic conference held

[ Page 8605 ]

The expression of a goal of economic development and employment -- one would think the minister would have been embarrassed to voice that goal. We've gone from first to worst in terms of economic development in Canada. British Columbia's results are dismal. The goal to increase confidence in investment -- do we see any evidence of that at all in British Columbia? Quite the contrary. Investors who used to be here have run away -- and understandably so -- and no new ones are on the horizon or approaching British Columbia, nor will they be, because of the combination of overregulation, overtaxation and the dramatic interference in labour-management relations which this NDP government has evidenced for the last seven years.

[7:15]

When the minister spoke of his lack of any actual labour background or union background, it made things more understandable to me. I grew up on a farm on a homestead north of Fort St. John. I had dirt under my fingernails, worked in sawmills, and still rub shoulders with people who have that kind of employment. I was in union leadership for ten years, as shop steward, executive councillor and member of the board. I can speak for unionized employees when I say that it is not in their best interests to have a government that causes the economy to degenerate and unemployment to rise, and shrinks the economic opportunities and options available to the people of British Columbia.

When we measure by results, we have to look at what the workers are saying about the service they receive from the Workers Compensation Board. What are the employers saying? What are both groups saying about the results of the employment standards branch? What do people feel about the balance of things at the Labour Relations Board? If we have a goal to support and protect working people, it's not well served by these results.

We talk about fair-wage legislation. I had a shop steward from a major employer come and talk to me recently. Before he came to this employment, he worked for an Alberta contractor building a school under the so-called fair-wage legislation in Chetwynd. He was obliged to pay that Alberta contractor under the table -- reimburse him for some of his wages. So people are not at all impressed with the delivery of services by this government, or with the results. The interests of workers have been very poorly served. I talked to a woman who, with her husband, owned a trucking company. They had reduced it from seven trucks to the one that they could run themselves, because they're not interested in being an employer in this environment.

I have a friend who has a chain of five restaurants in British Columbia. He and his partners own dozens of restaurants across western Canada. They are diversifying into the United States rather than building in British Columbia. As the employment standards changes came into effect under this government, they have continually cut back in terms of value-added production in their restaurants. Their sauces and so on are no longer made in their own restaurants, as they were before. They had a large contingent of homemakers who liked to come in over the lunch hour and serve as hostesses and servers, made very decent incomes for two hours' work per day and substantial tips, and really enjoyed the occupation. They had to call them all in and ask who could work four hours per day and who could not, and most of them were laid off as a result.

I think that the minister is living in something of a fool's paradise when he talks with pride about his results. There's nothing to be proud about, with what has happened to the economy of British Columbia and to employment in British Columbia in the last seven years. It's insufferably pompous and self-serving to say otherwise.

We don't necessarily intend to grind through a line-by-line examination of this ministry's budget, but we do intend to talk about some issues. Results are the major measurement of the performance of this government thus far. I think a preliminary issue -- speaking of results -- is the employment standards branch that the minister spoke of in his statement that it is the law and a matter of compliance. Small business -- large business for that matter -- was taken by surprise with the introduction of employment standards changes. There was no proper communication plan. There are probably still employers who don't know if they're operating in violation of the Employment Standards Act. We hear from employees and employers alike that you can't get an answer by calling the 1-800 number of the employment standards branch. The people are not answering the phone. Does the minister have a plan to deal with those results?

Hon. D. Lovick: First of all, let me say that, alas, the member opposite still believes that gratuitous insults are a substitute for some kind of reasoned debate. Through the Chair, I hope that that isn't going to carry on, because, frankly, I am not prepared to play that game. I will endeavour to answer questions. But you know, silly comments. . . . I'm sorry, I just don't think they serve anybody's interests, quite frankly.

Just to clarify, the member is quite wrong -- characteristically, I fear -- when he talks about the impact on restaurants of ESA changes. There were no changes for restaurants under the Employment Standards Act -- which, I fear, is just one indicator of the difficulty when I listen to the member opposite.

His specific question about whether we have a plan to deal with the 1-800 number -- yes, I will treat that seriously, because it's a fair question; it's a perfectly legitimate question. As I said in my opening remarks, we have something like 27,000 complaints. We don't have the money to beef up Employment Standards the way we would like to, partly because of a climate that members opposite have helped to create: a climate that says that you're not allowed to spend money; a climate that says, and that members are on record as saying -- I didn't make up this story: we don't need more civil service, the cost to government is too great, there are too many people in government, and we have to reduce the size of government. The opposition applauded the federal government's major cutbacks to education and social services in this country and said: "There's only one thing wrong: it didn't go far enough." Therefore I detect a certain tinge of hypocrisy when I listen to others cry crocodile tears and tell me that we aren't spending enough in program X or program Y.

Now, I hope we don't have to have this kind of interaction for 20 hours or whatever it may be. I will answer ques-

[ Page 8606 ]

C. Hansen: There's a variety of issues under employment standards that we'll want to deal with, including some of the issues that my colleague and the minister were just touching on. I'm not sure that we will have an opportunity in tonight's time to get into great detail on this. I would like to deal with one issue, only because I'm sure that the minister knows it's coming up. We might as well get it dealt with off the top. It may be just an appropriate subject for us to deal with in the time we have -- that is, the hiring practices of the ministry when it comes to hiring officers for investigations of the fair-wage act. This is an issue that came up earlier today in the main House.

I would like to ask the minister about the staffing levels for the fair-wage investigators. My understanding is that there are currently 20 positions that have been filled since about May 1997. I wonder if the minister could tell us what numbers are currently engaged and the time period during which they were hired. I know that the starting date was May. I'm just wondering if the minister could confirm when those 20 positions were in place.

Hon. D. Lovick: The answer is that apparently there were 18 positions filled. The hiring began in September of '97, I understand.

C. Hansen: My understanding is that there were 20 authorized positions. I gather only 18 of the 20 positions were in fact filled last year. Is that the correct interpretation?

Secondly, if the minister could explain. . . . I guess the process of hiring must have started in May. The first officer was in place in September, I gather. I'm wondering when the full complement of 18 was reached, then. How many months did that take? Did it all happen in September?

Hon. D. Lovick: I understand that some were auxiliary, new hires. Some were experienced people already working in the ministry and assigned to the team. We don't have the information right now in terms of precisely when they were hired, but we will certainly undertake to get that information and provide it as quickly as we can.

C. Hansen: This afternoon I tried to find some of the job descriptions from when the hiring was undertaken. Maybe the minister can confirm for me that this is the job description that we're looking at. It's an industrial relations officer, management level 4, that was. . . . The example I have in front of me is for Prince George; I have another example for Burnaby who was hired, basically. . . . One had a closing date of June 25 on it. I'd be glad to send it over to the minister if that would help, but his staff may know what I'm referring to. I'm wondering if these are, in fact, the officers that were hired for the fair-wage act.

Hon. D. Lovick: The new auxiliary employees who were hired are called employment standards officers; they are ML2s. The experienced staff that were reassigned and transferred from other duties were ML4s.

C. Hansen: I gather, from the minister's comments earlier, that he doesn't have a number as to how many of the 18 were new hires. Is there an approximation of that? Was it half?

Hon. D. Lovick: I am advised that there were approximately four new hires, but again, we'll confirm that. I don't believe we have the information right here, but we'll get it.

C. Hansen: Of particular concern, of course, was the issue we raised earlier today regarding the hiring of the officer based in Nanaimo. I gather that was a position that was advertised. I'm wondering if the minister could tell us -- he may not have the details, but in general terms, at least -- how that job was posted.

Hon. D. Lovick: As it happens, I do have some details that I'm happy to provide. In March of 1998, the Ministry of Labour advertised three vacancies for the position of employment standards officer at the employment standards branches in Nanaimo, Burnaby and Prince George. The job postings were sent to all major stakeholders, including the B.C. and Yukon Territory Building Trades Council, the B.C. Construction Association, the Independent Contractors and Businesses Association and the Construction Labour Relations Association. They were asked to encourage qualified persons to apply for the available positions. That was the advertising that went on. Five applications were received for the position in Nanaimo. All were referred by the BCYT, so obviously none of those other people who were advised chose to submit names.

C. Hansen: Could the minister tell us when these three positions were finally filled?

Hon. D. Lovick: Again, my apologies for the delay, hon. Chair. We aren't prepared for this very specific detail, but we will endeavour to be for the future, if we need to.

Late March is our understanding of when the actual hiring took place.

C. Hansen: I gather from the minister's earlier comment that the notice of these vacancies was circulated in March of this year. I gather that's early March and that the hiring. . . . There must have been a closing date on the applications. I'm wondering if the time line was really that tight: that this notice went out in March and the position was filled by the end of March.

Hon. D. Lovick: I will undertake to get a copy of the posting and have the relevant information for the member at the first opportunity.

[7:30]

Hon. D. Lovick: I became aware of the fact that Mr. Cronk had been appointed to the job when and only when the letter from Mr. Hochstein was delivered to me, obviously because that issue was raised by Mr. Hochstein. Then I was given the background on the fact that Mr. Cronk had indeed been hired and the other information that I quoted into the record today. My knowledge that Mr. Cronk was an electrical contractor in Nanaimo came from reading that information

[ Page 8607 ]

C. Hansen: I'm not sure if the minister has had a chance to dig out some of the news clippings from the Port Alberni dispute over the Nexgen construction project. But certainly some of the news reports of the day do not exactly paint Mr. Cronk as being a conciliator when it comes to labour management disputes in British Columbia. I'm wondering if the minister has had an opportunity since to be brought up to date. Has he had a chance to familiarize himself with some of those quotes?

Hon. D. Lovick: No.

C. Hansen: Certainly some of the comments that were attributed to Mr. Cronk indicate that he had a very strong bias against the companies that were involved and that he had a very strong bias against the unions that were involved which were not members of the BCYT. In view of those comments, does the minister feel that he can be an effective officer on behalf of the ministry and approach his job in the kind of unbiased fashion that would be required of an officer?

Hon. D. Lovick: I have had conversation with the director of that particular branch, and he advises me that there have been no complaints whatsoever about Mr. Cronk's performance. Indeed, I understand that he has done perfectly adequate and acceptable service thus far. For those reasons, it would seem to me. . . . The answer is that I have no concerns whatsoever about his ability to perform his duties. He has apparently done so rather well.

C. Hansen: Some of the comments that this individual made in 1994, where he talked about. . . . Basically, even when the dispute in Port Alberni was resolved, he seemingly had a campaign that would continue against the companies and the unions involved. I'm wondering how the minister can be assured -- after a space of just over two months of him being in the employment of the ministry -- that that kind of attitude would not motivate some of his decisions as an officer of the ministry.

Hon. D. Lovick: Madam Chair, I have to make a position very clear here, if I may: I did not hear the question that I believe the member for Vancouver-Quilchena posed in the House today. That has been reported to me, and I think we're getting close to the same question. So I want to just establish, if I'm right in what I understand the question was, if my information is correct -- and I haven't reviewed the Blues, so if I'm misstating what the member in fact said, he has my apology, absolutely. . . . But I understand that the member said in the House that Mr. Cronk is engaged in a "vendetta" against employers while he is carrying out his duties as an employment standards officer. If he said that, what I would have said in the House -- and what I will say now -- is that if he has any evidence whatsoever that that is indeed happening, it seems to me that he has an obligation to report that. Moreover, he should probably take it outside the House and say so, because I think it's absolutely unfair to make that statement using the privilege of the House if one isn't prepared to also make the same charge outside.

Now, I hope that the member didn't do that. But it seems to me that his question is opening the door to precisely that, so I want to give him that same cautionary note now, as I should have this afternoon.

C. Hansen: I certainly can't remember the exact words that I spoke in the House today, but it would have been along the lines of this individual having an opportunity as an officer of the ministry to engage in a vendetta. Like the minister, I'd have to go back and check the Blues as to what my exact words were at the time. But certainly that was the spirit of where I was coming from with those questions today in question period.

The Chair: Could I ask the member to take his seat for a moment, please.

I'd just like to caution members on both sides of the House to keep their comments to the estimates. In this House we do not refer to the activities in the main House.

C. Hansen: I learn something every day.

I am wondering what efforts are made by the ministry when they're recruiting new officers to ensure that they are unbiased and that they have a background that would be conducive to filling the objectives of the act, which are to provide for fair and responsible adjudication of the regulations and obligations that various parties have under that act.

Hon. D. Lovick: It would seem to me that those kinds of questions would obviously be dealt with in an interview. If one takes on a certain responsibility and the obligation is conferred on one to be impartial and fair to both sides, one does so. An oath is an oath is an oath -- whatever variation it might have. If you say, "I am going to live up to my responsibilities in carrying out this office," then you do so. Frankly, what your background or your perceived background is, I don't think, in all honesty, is very relevant.

C. Hansen: Certainly, in any of the hiring that I've done, background is very important and experience is very important. If you start getting into issues such as someone's ethnic origin or whether they're male or female, those are totally irrelevant issues. But experience, background and attitudes become very important, especially to a responsible position such as an enforcement officer. I would think that neutrality has to be the paramount virtue of an enforcement officer.

I am wondering if the minister can give us confirmation that the team that recruited and interviewed this individual were aware of the attitudes that he espoused in October of 1994.

Hon. D. Lovick: I can't answer unequivocally whether those doing the interview knew or did not know; I have no idea about that. I would just remind the member and other colleagues in the chamber at the moment that I was in Port Alberni for a short while during that rather ugly and unpleasant dispute, and there were some nasty, nasty things going on -- on both sides. It was a classic illustration of what happens when the system apparently doesn't work, when it breaks down. There were some very scary moments. And both sides -- as is characteristic and absolutely typical in those circumstances -- are pointing at the other guys and saying: "They did it; we're retaliating." That's how it always happens.

The member might like to know that what I've been told today. Again, this is merely hearsay, but I am told by somebody else who was up there -- another trade unionist who happens to be a member of the Legislature -- that Mr. Cronk indeed was asked to go up there as, I think, the secretary of his union at the time or something, with the view to chilling out the climate, because they were afraid it was going to blow up.

[ Page 8608 ]

In terms of who indeed was the cause of the major violence that erupted in Alberni outside the gate, I don't know -- I didn't witness that. But I do know that both sides were claiming that the other side was absolutely guilty and that they were absolutely blameless, which, as I said, tends to be characteristic.

C. Hansen: It did lead to a very significant lawsuit that was filed by the company, which did not go to court. It was settled out of court in favour of the company, to the tune of $1.5 million in penalties, which were settled on, I believe, on the day that that case was to go to trial. I don't say that to cast aspersions on Mr. Cronk but just to put in context the minister's comments about there being two sides to the blame in this situation.

If Mr. Cronk was to go into Port Alberni to smooth the waters, he certainly didn't reflect that in some of the comments that were quoted in the press. I'm the first one to admit that we shouldn't hold somebody responsible for how the media may quote their remarks, but I certainly think there were enough grounds for the minister to be asking whether or not the panel that did the interviewing explored those attitudes, and whether or not they looked at the comments that were made in the media at that time in an effort to determine whether this individual has the ability to be a fair arbitrator of the provisions of the act. I'm wondering if the minister will undertake to do that: to find out if these issues were raised in the interview process and on what grounds the interviewers were able to determine that somehow these inflammatory comments that were made three and a half years ago would not reflect on the way that he fulfills his responsibilities to the ministry.

Hon. D. Lovick: I would very reluctantly give that undertaking -- indeed, if I did at all. . . . Frankly, I don't think I would. Let me tell you why. For the record, so the member understands it very clearly, the point is that there was a competition for a job. Mr. Cronk competed for the job and was successful by the rules of the competition. That competition is governed by legislation, by the rules of the Public Service Act. Moreover, we need to emphasize that he was not appointed by the minister or cabinet. It's absolutely distant from and has nothing whatsoever to do with a political judgment.

It would not only, in my opinion, be inappropriate for the government -- any government -- to intervene in a hiring decision of the employment standards branch, but it would also, it seems to me, probably run directly counter to the rules of the Human Rights Commission. I think that if one were to say, "I want to ensure that these people have been sanitized, checked out and somehow proved to be okay by whatever the prevailing wisdom of the day is" -- whether that side were government or we were government -- we would be violating somebody's human rights. I know that if we were to go in after the fact now because of somebody's allegation about this member and his behaviour at a given time, therefore rendering him unfit for the job four or five years later, that would certainly be a human rights violation -- as it should be. For that reason, then, I am simply not prepared to give the member the undertaking that he is asking.

[7:45]

I would also like to remind the minister that in his Employment Standards Act there is a provision that says that an employer can dismiss an employee within three months of hiring and that they don't have to give reasons at that point. As I understand it, the reasons for that being in the act are because it allows employers the opportunity to get to know employees and to make sure that this particular person is going to be the appropriate candidate for a job. If there is information that comes to light afterwards that the employer was not aware of at the time of hiring, then that provision is there.

Hon. D. Lovick: You're kidding. Are you serious?

C. Hansen: It's there.

Hon. D. Lovick: You're serious in what you're saying?

C. Hansen: I'm serious. That's exactly what I am saying is in the act. Is the minister saying that perhaps my interpretation of the act is not accurate? Would he want to comment on that?

Hon. D. Lovick: Hon. Chair, what the minister is saying is that he can't believe, in a free and civil society which functions under the operation of a rule of law, that somebody in a duly constituted legislative chamber would be suggesting what the member is.

C. Hansen: What am I suggesting?

Hon. D. Lovick: Hon. Chair, I'll tell you what the member is suggesting, to answer his question. He's suggesting that what we do is talk to the individual, maybe we search out what his or her past affiliations are, and if we discover, "Gee, well, maybe you were a trade unionist, maybe an outspoken one," then maybe we can fire him -- and we can do it without cause. If that is the kind of approach to labour standards, the code and civil rights that the opposition is enunciating and embracing, God help us, it seems to me.

The Human Rights Code stipulates very clearly that you cannot discriminate against a person by reason of his or her belonging to a union. That's what the code says -- and it should say so -- just as the Human Rights Code says you can't discriminate on the basis of various things. I hope the member opposite would agree that those various other things, like race, gender and sexual orientation, also deserve to be protected. Discrimination against an individual on those bases should also be protected against. I hope that's what the member really intends and that he wasn't for a moment embracing what I think I heard him say.

[ Page 8609 ]

C. Hansen: I certainly won't move adjournment until I have a chance to respond. Clearly I'm glad I asked the minister to explain what he thought I was suggesting, because that is not what I was suggesting. I am not for a moment suggesting that somebody not be hired or that they be dismissed because of involvement in a trade union. What I'm saying is that the officers who administer the fair-wage act and do investigations under it have a requirement to be fair and unbiased. And I think it is incumbent upon the minister to ensure that the reputation of the employment standards branch is protected and that they wind up with officers in there who can approach their jobs in a fair and unbiased way. That is what I'm saying.

The reason why I think it's important for the minister to make this kind of investigation now -- to see if perhaps they have hired an officer who does not have the capacity to be unbiased in his approach to the job, because of new information that has come to light today. . . . I would say that it's important that he get on with that, because the ability of the minister as an employer to deal with that is based on a certain time frame. That's why I'm asking the minister if he will undertake some of this investigation. I'm not making suggestions to the minister in terms of what the eventual outcome of this should be. All I'm asking him to do is get to the bottom of it and to make some investigations to determine whether or not there is a bias that is going to be reflected in the decisions of the ministry.

With that, I will accept your direction, hon. Chair, and move that we rise, report progress and ask leave to sit again.

Motion approved.

The committee rose at 7:51 p.m.

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