[ Page 8807 ]

The House met at 2:05 p.m.

G. Abbott: It is a pleasure for me to introduce today a longtime friend and former colleague from the constituency of Shuswap and, indeed, from my hometown of Sicamous. His Worship Gordon Mackie is the first and only mayor, ever, of the district municipality of Sicamous. I'd like the House to make him welcome.

S. Hawkins: Visiting today is a young man whom I hired as a student to work as an aide when I was a head nurse at Foothills. I was pleasantly surprised to find that he is here visiting in the gallery. He just completed his education in San Jose, I believe, in chiropractic. I hope that the House will help me welcome Mr. Drew Van Walleghem.

J. Wilson: We have with us 45 grade 7 students from Bouchie Lake Elementary School. They are accompanied by their teacher, Mr. Winthrope, and ten parents. I ask the House to make them welcome.

Hon. U. Dosanjh: I am delighted to be able to introduce four people to the House who have worked on the taxi task force with respect to driver safety: Norm Hardy of Blue Bird Cabs, Manmohan Kang of the West Coast Taxi Association, Pete Hartnell of Victoria Taxi and Terry Beatson of B.C. Transit. I would like the House to make them welcome, particularly because they have worked with the Crown, the police, ICBC, WCB and B.C. Transit to put together a package of recommendations to enhance driver safety both in B.C. Transit and in taxis.

J. Cashore: On behalf of the Minister of Employment and Investment, the MLA for Port Coquitlam, and myself, I wish to introduce two people who are in the gallery. They are wonderful friends and excellent volunteers: Belle and Dick Barbour from Port Coquitlam. Would the House please make them welcome.

G. Janssen: Joining us today for the first time is my father-in-law Clifford McIvor from Nanaimo and brother-in-law Al McIvor from Port Coquitlam. I ask the House to make them welcome.

I. Chong: With us here today are two Victoria residents who have found time to visit the precincts and, in particular, to watch the proceedings of question period. Would the House please welcome Dennis Madden and Gordon Shaw.

Introduction of Bills

FORESTS STATUTES AMENDMENT ACT, 1998

Hon. D. Zirnhelt: Hon. Speaker, I move that Bill 34 be introduced and read a first time now.

Motion approved.

Hon. D. Zirnhelt: Bill 34, the Forests Statutes Amendment Act, 1998, makes a number of amendments to forest-related provisions, primarily in the Forest Act and the Forest Practices Code of British Columbia Act. The intent of these amendments is to follow through on government commitments made over the last year and to make minor administrative improvements. The main provisions are: to enable pilots of new community forest agreements, to establish incentives that will help industry to create jobs under the jobs and timber accord, to facilitate woodlot licence management and to reduce the administrative burden associated with fire management under the Forest Practices Code. These improvements are part of this government's commitment to improve the forest management framework, to reduce the administrative burden and to create jobs.

I move that Bill 34 be placed on orders of the day for second reading at the next sitting of the House after today.

Motion approved.

Bill 34 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

RESULTS OF JOBS AND TIMBER ACCORD

Hon. D. Zirnhelt: The primary reason is that the Asian market has been in free fall, and we've reached the limit of what can be exported to the United States of America.

The Speaker: First supplementary, the Leader of the Official Opposition.

G. Campbell: According to StatsCan's payroll survey, 12,680 people have lost work in our forest industry in British Columbia since the jobs and timber accord was announced last June. How can the minister say that the accord has been anything but a total failure, when one out of every. . .forest worker in this province has lost the paycheque that supports their family in the last year?

Hon. D. Zirnhelt: Yes, it is regrettable that there is job loss in forest communities when the economy is in a downturn. We have taken steps to address that. We have worked with the value-added industry to ensure that wood gets to them. We have moved to change stumpage, to reduce the overall burden on the cost structure, and we've attempted to make -- and have delivered on -- changes to the Forest Practices Code which will reduce the cost and the administrative burden to industry. When the market returns, we anticipate that there will be an increase in employment in the forest industry.

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

[ Page 8808 ]

Hon. D. Zirnhelt: It was clear when we announced the jobs and timber accord that we would measure it over the four-year time period -- that it would take the full four years to turn around, to get more jobs for every cubic metre. We intend to measure the success of the accord over that length of time.

[2:15]

The Speaker: Order, hon. members. I recognize the member for Shuswap.

G. Abbott: If this is what the government can do after one year, I just dread the thought of what you can do after four.

A year ago the Forests minister promised 22,000 new forest jobs. In November we saw some backtracking. He said: "It's going to be awfully hard to meet. A target is just that -- a target. We didn't say we were going to create those jobs."

Will the Ministry of Forests today admit that the jobs and timber accord is a colossal hoax that's produced pink slips, not jobs?

Hon. D. Zirnhelt: I will not admit that a visionary attempt to increase jobs per cubic metre is a hoax.

The Speaker: I recognize the member for Peace River South. Apologies to the member for Shuswap, but I did recognize the member for Peace River South; he was on his feet. But if that member is ready to acknowledge and give way for you, that's fine.

I recognize the member for Shuswap for a first supplementary.

G. Abbott: Thank you, hon. Speaker. I was nursing the illusion that the minister was going to enumerate the vision that apparently was contained in the jobs and timber accord.

Last year the government promised to create 22,000 new forest jobs. Since then, we see StatsCan telling us that more than 12,000 workers have lost their jobs in the forests in British Columbia. Will the Minister of Forests agree today that he and his government have to create 34,000 new forest jobs if they're to keep their promise?

Hon. D. Zirnhelt: This opposition likes to misquote all the time. They're quoting me as saying that I said those jobs were targets, that we'll stick to those targets. If they quoted me correctly. . . . We didn't say that we were going to create those jobs or else -- or else! -- as they were trying to get me to suggest. They should listen. They wanted to know what threats were in there. The jobs and timber accord is a cooperative effort between government and industry. We agreed to do that.

Interjections.

The Speaker: Order, hon. members.

Hon. D. Zirnhelt: If you go back to the quote, it said that industry and government would have to do it together. They each had a role to play. Industry said they would make the investments if we addressed the economics of the industry and the red tape. They have some responsibilities there. We said we would put more wood to the small businesses, and we're doing that. So when the market turns around, there will be more jobs there. We said there would be 5,000 jobs created under Forest Renewal, moving away from part-time contracts to full-time jobs. We're doing that; we've taken steps to do that. We're delivering on our part of the accord. The economy will have to turn around, and industry will have to do its part.

ASSISTANCE FOR TUMBLER RIDGE

What plans does the minister have to assist the community and the people of Tumbler Ridge to cope with this crisis?

Hon. D. Miller: Indeed, the member is absolutely right. The impact on the community of Tumbler Ridge and on other northern communities, essentially because of the international market, has been very, very dramatic. The problem right now is that the Ridley terminal is full to capacity. They have no more room to take additional volumes from Tumbler Ridge. That will only be resolved when a sufficient quantity of that coal is removed from the terminal via ships for export.

The problem right now is really Japan. All of us have a great deal of concern about the events that are taking place with respect to the currency devaluations. Until there is a real resolution of the problems in Japan, we are going to work with our communities to do the best we can to help them. But essentially, if the marketplace isn't there, then British Columbians and communities like Tumbler Ridge are going to suffer until we can get that market back.

The Speaker: First supplementary, the member for Peace River South.

J. Weisgerber: A supplemental for the Premier. In 1992 the now Premier introduced Bill 11, the Natural Resource Community Fund Act, committing that the fund would "provide a stable source of funding to address the problems facing communities dependent on a single-resource industry in the event of closures or downsizing in that industry."

The 1998-99 budget projections show expected revenues for that fund in excess of $9 million and expenditures of a measly $10,000. Will the Premier commit today to ensuring that this fund is used for its intended purposes and that money will be available to the people of Tumbler Ridge to deal with this emergency?

Hon. G. Clark: The fund was really set up as a contingency fund to deal with closures, as was the case in Cassiar.

[ Page 8809 ]

Having said that, I want to assure the member that through the job protection commissioner, the Ministry of Northern Development and the Ministry of Employment and Investment, all the tools that we have at our disposal -- including the natural resource community fund, the Job Protection Act or any other tools that we have -- will be brought to bear to try to work with communities like Tumbler Ridge to ensure their continued survival and viability, not by just waiting for the market to turn around but by trying to ensure that those industries and those towns have a future in British Columbia and that they are poised to take advantage of an eventual market recovery. We certainly want to reaffirm to you and to the people of Tumbler Ridge the government's ongoing work with that member, using all the tools to try to assist them.

GOVERNMENT REACTION TO B.C. FERRIES WORK STOPPAGES

Hon. D. Miller: At the time of the dispute I had very harsh words for what had occurred.

Interjections.

The Speaker: Order, hon. members.

Hon. D. Miller: The dispute was relatively short-lived, thanks in part to the assistance delivered by Ken Georgetti at the B.C. Federation of Labour in trying to get that issue resolved. The corporation and the Ferry and Marine Workers have now reached an agreement. In fact, in my recent discussions with both those parties, I think there was a serious attempt by both of them to try to develop a better working relationship. The statement by Mr. Ward this morning is an indication of a more positive working relationship. So I think the future looks good for B.C. Ferries and its workers.

The Speaker: First supplementary, Opposition House Leader.

G. Farrell-Collins: Well, this wasn't the first wildcat strike, and it's not the last labour disruption. In fact, on the weekend B.C. Ferry workers denied access to a number of vehicles that were involved in a labour dispute completely unrelated to B.C. Ferries. This dispute cost the people who pay for B.C. Ferries, the taxpayers, $27,000 in compensation and now $30,000 paid into an education fund. How can the minister tell us he's so confident that he has stopped any more future job activity at B.C. Ferries when on one day they paid $30,000 to buy them off, and two days later they blockade the ferries for a number of private citizens trying to use the ferry service to do business in this province?

Hon. D. Miller: I must confess to being somewhat puzzled that the opposition would get on their high horse, in high dudgeon, around what they perceive to be a problem with respect to $27,000 of the taxpayers' money; yet when northern doctors refuse service to patients and the price tag they're asking for is $100 million, this opposition is on their feet every day demanding that the taxpayers pay the bill. A relatively minor dispute with a trade union causes them to go apoplectic over $27,000. But when citizens of British Columbia are denied medical treatment and the doctors have their hands out for $100 million, we know who the doctors' friends are. They're all sitting over there.

Orders of the day

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

ESTIMATES: MINISTRY FOR CHILDREN AND FAMILIES

(continued)

C. Clark: This morning, when we were talking about the budget, the minister confirmed that $18.8 million was new in this budget for staff salaries and benefits and that another $11.4 million was new money in the budget for this year. So that's a $30 million increase for this year's budget, which the minister talked about this morning. The most pertinent question, when we're looking at the amount of new resources -- $30 million -- that we have in the budget this year, is: is that keeping up with demand, and how do we measure if that keeps up with demand? How do we ensure that the new money that we're allocating meets the new needs that are coming into the ministry?

What I'd like to pursue for a little while with the minister is the question of how the ministry determines whether the new money that they're allocating is keeping up with demand, and what kinds of measurements they use to ensure that they're meeting their goals.

Hon. L. Boone: I just want to make it clear that. . . . I understand what you're saying, that the $60 million is not really an increase, because we in fact are only covering the special warrant. But that special warrant has been fully covered in this year's budget. That was in last year's budget, but that special warrant -- those additional dollars to cover the moneys that were in special warrant, the money that we spent -- has been transferred over here, so that we actually have dollars to cover those things. So those are additional dollars

[ Page 8810 ]

[2:30]

C. Clark: My question was: with the $30 million that we've got new in the budget. . . . You don't just have to look at a pot of money. You have to look at the number of people that are requiring services from the ministry and make a measurement. What I'm asking of the minister is how her ministry measures whether their spending keeps up with the demand for services. I don't know how the ministry breaks it down, but perhaps they break it down on a per child basis. Is there per capita spending such as we might use when we figure out education spending per pupil? Is there some other measurement tool they use to ensure that their spending and allocations are indeed keeping up with the demand for service in the ministry?

Hon. L. Boone: We have a number of different tools that we use. One of them is that we look at the projection of the number of kids coming into care. We're very hopeful that the number of children this year will be less than last year because of some of the changes that have come about -- for example, the changes in legislation that we just proclaimed, where we do not actually have to take a child into care in order to do supervision orders. We also believe that the increase in population in British Columbia is not going up as it was before. We had tremendous increases in population in British Columbia for many years, and that is not happening right now. We're hopeful that we will see a reduction in the number of children coming into care.

But yes, we do base our budgets on those assessments, plus recognizing that we are hopefully going to have fewer numbers of children in care than we had before. On top of that, we now have the workload assessment tool, which we developed with the B.C. Government and Service Employees Union, that enables us to determine how many staff will be required. That is how we worked it out and came to the 250 extra staff who will be required in the ministry. We have a number of different tools we utilize to try and figure out where our dollars are required, where we can save money, where we can direct some of those savings back into programs and all of those things.

C. Clark: When the ministry looks back at previous years, do they figure out how much money they're spending on each child who comes into contact with the ministry? What I'm wondering is if there's a way to do a running measurement of the funding the ministry provides to children versus the number of children who are coming into contact with the ministry. I think it's useful for all of us to have a historical perspective of how much the ministry has allocated over the year to the children who come into its care. But I would argue that the ministry should not just look at the number of children who are in its care. After all, it's an estimates process -- a forward-looking process -- and we 're guesstimating about what's going to be happening in the years ahead.

I would argue that the ministry needs to look at other figures like population growth, economic issues and poverty. I would argue that there needs to be a whole number of factors that go into predicting how much the ministry intends to spend per child. I don't know if the ministry has not even just a method of doing that but tries to figure out and allocate money per child, outside of the children. . . . There are children who come into care; there are children who have special needs who require education; there are issues around early intervention that don't have anything to do with children coming into care. I understand what the minister is saying when she focuses on children in care, because that's perhaps one of the easiest services for the ministry to measure and, to some extent, even to predict. There's a lot more money the ministry spends outside of children in care, and I wonder where the ministry's measurement tool is to predict those kinds of numbers.

Hon. L. Boone: We don't look at the province and say that we are going to budget X number of dollars for services for every child. It is demand-driven. The other services we get. . . . Last year in the province we averaged approximately $22,472 for those children that were in care. Sometimes those children, then, drive some of the other costs in the other services. We do not take the number of children in the province of British Columbia and say that we have, in our budget, X number of dollars per child for other services there. That is demand-driven.

C. Clark: If it's demand-driven, then the budget for children in care would certainly look different today than it does. The child, youth and family advocate says that over the past five years, the population of children in care has grown by approximately 45 percent. She asks: "Has the allocation of resources kept pace with that growth? Has the budget increased? Have more trained guardianship workers been added to carry out the work?" From what our office has seen, the answer is no. So even if the measurement tool that the ministry uses to predict future budgets is to look back and say, "What did we do last year? What were the numbers last year? That's what we'll use to predict what we need next year," the ministry is still not doing a very good job of that. The number of children in care has grown so dramatically, and the budget for the ministry hasn't grown by 45 percent. The budget for children in care hasn't grown, I would suggest, by 45 percent. Perhaps the minister could give us the numbers, then. Last year we spent $22,247 per child in care -- that's after it had grown by 45 percent. Is that number -- that total dollar amount that we spend for children in care -- shrinking every year?

Hon. L. Boone: Last year's budget for children in care. . . . It went from $161,707 to $198,705; it has gone up substantially. The children-in-care dollars have gone up a little bit. It's not a substantial amount in terms of the amount of increase per child, but that depends on the number of special needs children we have and the various requirements of the children in care. It would be nice if it was a scientific thing and you could say X plus Y equals Z, but unfortunately it's not. We're dealing with human beings here, and there are a lot of factors that change and a lot of factors that affect the amount of money we spend and the amount of money that is required for each child.

[ Page 8811 ]

I'm looking for a historical perspective on how much we spend per child in care. Obviously it changes depending on the needs of a child, but I suggest that probably the number of children in care this year, although it's greater, probably represents the same split amongst the needs of those kids. If there are 15 percent high-needs this year, it might be around 15 percent high-needs last year. The minister in her answer might be able to demonstrate to me why each child is so much less needy that they require so much less money from the government. Perhaps I'll sit down and wait for her response.

Hon. L. Boone: You're asking for a historical thing going back five years. These binders that you see here are one year's worth of binders. We do not have historical information going back five years. But if you're interested in that, we'll do the necessary digging and get that for you at some other time. We do not believe that the estimate per child, the amount per child, has gone down substantially over the years. But we will get that information for you. We expect that this year the amount per child will go down slightly because we are hiring more social workers. We will have more ability to deal with issues and to get children returned home, to get more into foster care rather than into expensive care such as hotels, etc. So we are very hopeful that our cost per child will actually be reduced a little bit this year because of some of the initiatives that we will be taking to try and reduce those costs.

[2:45]

C. Clark: The minister is quite right. The child, youth and family advocate does talk about a five-year period when she talks about the number of children that have come into the care of the government. Of course, the number is 45 percent, which is a huge number. The minister has mentioned a couple of new tools that the ministry has that should reduce that number a little bit. Is she suggesting that those new tools that the social workers have are going to stop this exponential growth, or at least. . . ? Are they going to stop it? Is it going to slow the growth? How much growth is the ministry predicting in the number of children that come into care? It seems to me that unless social workers or unless the ministry has some magical way of stopping that growth, which has been phenomenal over the last five years, early in the budget year, there is still going to be a substantial growth in the number of children that come into care. I can't understand how the limited tools -- worthwhile, nonetheless -- that the minister has mentioned will slow that to a dead stop, so that we actually have fewer children coming into the care of the ministry. It seems to me there must be many other trends that have an impact on this, such as population growth, which seems to be the most. . . . Population growth, the number of young people as a percentage of population growth, the high needs of aboriginal people in British Columbia -- all those other things contribute to the numbers of children that will be coming into the care of the government. Perhaps the minister could expand a little bit on why she thinks the tools she's mentioned so far are going to bring this explosion in numbers of children in care to a dead stop.

Hon. L. Boone: The member actually pointed to one of the main tools, and that's population. There was a huge increase in population two or three years ago and in the past years. Population is not growing right now in the province. We are seeing an actual decrease in the rate of growth in the number of kids. We are very hopeful that we will see a decrease not just in the rate but actually in the number of kids coming into care. Everything that we see points to not a massive increase that we've seen in the past few years, with the huge population growth that we saw.

We will be doing a number of different things. We'll be working with the aboriginal community -- you mentioned the aboriginal group. One of my goals is to reduce the number of children coming into care from those communities. We are working closely with those areas to put in place some protocol agreements to work with them, to put in place some of the tools to help them stop their children coming into care. Clearly the number of aboriginal children in care is not acceptable. We will be working very closely with those communities to try and reduce those numbers.

We do not see a huge influx of children coming into care in this next year. If we're proven wrong, if the economy turns around and suddenly there's a huge growth of population in the province, then we will deal with that. But at this particular time we do not see the growth in population or the growth in numbers coming into care.

C. Clark: I do want to talk a little bit about aboriginal children and the services that the ministry provides to them. But I think I'm going to leave that for a little way down the road, because there are a couple of things I want to clear up that we didn't quite finish with this morning -- some basic questions about the budget. One of them is the growth in the budget of "other expenditures," which has gone up by $15 million. It appears in the budget that those are mostly under program management and child care services. I wonder if the minister could tell us what those other expenditures refer to.

Hon. L. Boone: There are two major areas that were formerly included in another STOB. Now they're included in this one here, shown as other expenditures, because other ministries are doing these services for us. Program management in this is an increase of $7.25 million; this provides for legal services provided by the Ministry of Attorney General, formerly funded under STOB 20. Then this day care funding is for the administration of the child care subsidy system by the Ministry of Human Resources, formerly funded under salaries and other STOBs.

C. Clark: I appreciate the minister clearing that up. The issue of legal services is an interesting one. In my opinion, the ministry spends a great deal of money on legal services and, I

[ Page 8812 ]

But when you get a case like the Murphys, where they had to fight so hard for their child, where they had to fight this ministry every step of the way to be able to adopt their child. . . . The legal costs that were attached to that for the Murphys were enormous, onerous. The costs that would be attached to that for the taxpayer, for the ministry to drag that out as long as they did -- to finally make the decision, after a year, that they promised a whole year before they would make, and even before that to have dragged it out month after month, and then in the end to finally make the right decision that the parent wanted -- seem to me to be a waste of taxpayers' dollars. The Murphys shouldn't have had to have been dragged through that process. Neither should other parents that are in their situation.

At the foster parents' convention, I heard lots of stories like that. I'm sure that in some -- in many -- of those cases, the ministry is making the right decision. But I'm sure that each of us can also point to some examples where the ministry really did the wrong thing. When Tim Murphy's case was mentioned in this Legislature, I think it consumed three or four days' worth of question period. The government finally backed down and agreed to do the right thing. It took the ministry a year to do the right thing; but finally, at least, they did it.

What I'd like to explore with the minister now is the breakdown of the legal costs this ministry has charged, so that we can get a sense of how many parents and how many families have been affected and have had to endure a long court process as a result of decisions made in the ministry.

Hon. L. Boone: You know, I certainly agree, in that I would like to see less money going into the pockets of lawyers too. But I also recognize that we need to make sure that the system is legal and that we follow the law. So for every child that is taken into care, we in fact have to go to court initially. Then a number of those have an agreement with the family with regards to care; some actually have to go to court. You're right; we do have to go to court in order to determine how we are going to be proceeding and to get actual court approval to have those children removed, either on a permanent basis from the home. . . .

As to how many of those have gone to a full-blown court case, I don't have those numbers here. We can look; we can get some of that information. But that would take a tremendous amount of work to actually determine, for each and every one of those cases, how many of them actually went into full-blown court cases. The Attorney General ministry actually billed us $7.25 million for legal services. It's a substantial amount of money, but it is necessary for us to go through the legal steps in order to make sure that those children are removed from their homes in the proper manner and that they're given the legal rights to go before a court. It is their right to do so.

C. Clark: Well, my question was really related to the rights of parents like Tim Murphy, for example, who, when faced with a government that has what appears to him to be a bottomless pit of money, certainly compared to him. . . . Here's a guy and his wife, with a mortgage, who are trying to keep their daughter, who they've raised in their home. When a citizen like Tim Murphy is faced with being dragged through the courts by the government in order to keep his child. . . . The minister is right: there's also an issue of the rights of the child. How can parents care for their child in the face of continual -- I wouldn't want to characterize it as harassment -- ongoing effort on the part of the ministry to drag their case through the court to take their child away from them, to make sure that that child doesn't get to stay in their home, even though it would appear, I think, to any reasonable person that it's not just in the parents' best interests, but it's in the child's best interests that that baby stay in that home?

When government has, or seems to have, a bottomless pit of money -- $7.8 million budget for legal services -- it's important for us to know how much the ministry is spending on each of these cases. I suspect that the vast majority of cases, as the minister seemed to indicate, are routine legal proceedings that don't cost a great deal of money. But there are certainly some proceedings, like Time Murphy's case, that would appear to me to cost the government a great deal of money. So maybe that's the place to start. How much did the Attorney General bill this ministry for legal services on the Tim Murphy case?

Hon. L. Boone: I'd like to preface this by saying that I really hope that we do not get into case specifics. This is really not an appropriate arena for us to be discussing individual children or families and their situations. I do not intend to do so as a minister. I will say that the Murphy case did not go to court; it was before the children's commissioner. And the Murphy's were foster parents, not the legal parents. In fact, the province of British Columbia was the legal guardian of the child. But I do not intend to get into an argument with you over specific cases, anymore than I would do as an MLA.

[3:00]

I make sure that system is there, that it's working for them and that they know which avenues are available. I make sure that they know that the children's commissioner is there, that they know where they can go in those areas and that they know what the child, youth and family advocate's situation is.

But I hope that the member takes this in good faith and recognizes that it is inappropriate for us to discuss individual cases in this Legislature.

[H. Giesbrecht in the chair.]

C. Clark: The fact is that we discuss individual cases in this Legislature every day. It happens all the time. And the reason it happens all the time is that the public is increasingly

[ Page 8813 ]

That's why the political level is there. That's why we run for office. That's why people participate in elections. It's so that they can hold politicians accountable for the decisions that they make -- and they expect politicians to make decisions. Sometimes that means dealing with individual cases. It doesn't mean saying: "I'll only deal with things on a systemic level. I'll only deal with things if it's system-wide and it's a big issue that affects hundreds of thousands of people." Sometimes it's just for one person. That's what each of us does in our constituency work in our offices when we try to inquire on someone's behalf about why they didn't get their cheque on time or whatever it is. Those are individual cases, and sometimes we do need to raise those in the Legislature. Sometimes they tell us what's wrong with the system.

In this case, the reason I'm drawing attention to Tim Murphy's situation is partly because he's given me permission to do that and partly because the last time it was raised in this Legislature, the previous minister did exactly what this minister says that she will not do, which is make a decision about an individual case, bring some political pressure to bear, make a commonsense decision in the face of a wider policy and change the outcome. That's exactly what happened with Tim Murphy's case last time. An individual case was raised, a politician made a decision and changed the outcome. It's exactly what happened. Maybe that would change the system -- who knows? But it certainly points out some things that are wrong in the system.

The reason I'm inquiring about the legal services bill for this ministry is because I think that it points out something that's wrong with the system. The reason I'm inquiring about Tim Murphy's case specifically is because it's an example of something that's wrong with the system. I think it's entirely appropriate to raise it in this Legislature, because that's what we're here to do.

When the minister says she refuses to tell us what her ministry paid for legal fees on that particular case. . . . Whether it went to court or not, I assume that there were some legal costs attached to it that were charged back to the Ministry of Attorney General. The minister can tell me if I'm wrong. I know how much Tim Murphy spent. Tim Murphy's family certainly knows how much he overextended himself to try to pay his costs in the face of big government. I don't think it's inappropriate for the minister to tell us how much she spent trying to make sure that that child left the Murphy home and went back to Saskatchewan.

Hon. L. Boone: I think what we've got here is a real problem, because the member doesn't understand that it's not adequate, nor is it right, for us to make political decisions regarding children. Those are entirely inappropriate. The member. . . . You may not know it, but there have been members of your own caucus who have come to us, to my office, on particular cases in their ridings, and we have in fact taken the necessary steps to assist them, to give them the information that is required. But it is entirely inappropriate for a minister to make a political decision with regard to what takes place in a family life. You are pointing to what I would say is a very dangerous precedent if in fact you want us to step in and say This is right and that is wrong.

The decisions with regards to children. . . . This decision was not made by the courts or by the minister; it was made by the children's commissioner, who did a review on that particular case and determined what was in the best interests of the child. We have the children's commissioner, a child and youth advocate, a service quality advocate and the ombudsman. We have a number of different areas with people who can review these things. But I don't think that there are many people out there who would be very happy to know that a politician was interfering and making decisions on children's lives based on political interference.

Children's lives should be based. . . . They have privacy, and they have the same rights to privacy as you and me and everybody else. Decisions that are made for those children should be based on what is best for that child and based on the information that is coming from the professionals -- not from you and me, who are not the professionals in the field, who do not have adequate information to recognize these things, nor the skills to assess and determine what is in the best interests of the child. There are individuals out there who have those skills. There are individuals out there with professional information who can do those things.

I intend to make sure that people are treated fairly. I intend to make sure that they know the avenues that are open to them. But I do not intend to make political decisions with regards to children's lives.

C. Clark: I'm not talking about. . . . The minister's quite right. It's an issue of fairness; it's not about political interference. It's an issue of fairness. The political level has a responsibility to ensure that the system is treating people fairly and equitably. That's what the political level is there for: to make sure that the system is working well at all. That's why people get elected -- to change things. If you want to take the minister's argument to its logical conclusion, you might as well not elect anybody. You might as well just let the system run on its own, because politicians shouldn't make any decisions about things. They shouldn't interfere in the bureaucracy and in the system and try and change it at all. Then why have them? Why have politicians if they're just there to take orders from the civil service? That's not a knock on the civil service. But we need balance in the system, where you have a non-partisan civil service and an accountable, elected level that balances that off.

At the end of the day, there's only one accountable end. The person accountable for the decisions that the ministry makes -- in this ministry and in every ministry -- is the minister, the politician at the top. So when something goes wrong in the ministry or when a systemic problem is exposed, the minister has a duty to try and fix it. That's not political interference; it's not the equivalent of calling a judge or calling the Agricultural Land Commission. That's not what that's about. It's about making a decision to change the system. That's what politicians are there for, so when something's not working, you make a decision. When the government appointed the Gove commission, it was in response to a problem that the government recognized -- or that the public demanded that the government recognize. Would the minister call that political interference -- the appointment of the Gove commission to go and search around in the ministry and find out what's going wrong? I don't think so. That's what we're

[ Page 8814 ]

The Murphy case is a good example of that. If we explore what happened in the Murphy case, then maybe we can get to the bottom of what's happening in the ministry and whether the ministry is treating people fairly. Spending $7.8 million on legal services is a lot. Maybe the place to start is to find out how the Attorney General breaks down its bills to the ministry. Or how does the ministry break down this budget for legal services? Or, on the other hand, is it just a bottomless pit for the ministry -- that they can charge up as much as they like? They get a final amount -- a big number -- at the end of it, and it's completely unitemized. Goodness knows, if my credit card bill came back like that, I'd sure be unhappy about it.

Hon. C. McGregor: I seek leave to make an introduction.

Leave granted.

Hon. C. McGregor: It's my great pleasure to introduce some students from my riding who are here in the precincts today. We met outside in the sunshine a few minutes ago. They're from Qwiq'welst Elementary School in Savona; it's the Skeetchestn band elementary school. How did I do with this -- okay? The students are Sonny Gregoire, Charles Gottfredson, George Ignace, Trish Adams, Laura Humphries, Natalie Wolfe, Atoine Archie and Marshall Gonzales. They are accompanied by their teachers: Bernie Renneberg, Reg Draney and Jack Miller. Would the House please make them welcome.

Hon. L. Boone: I would question whether there is a systemic problem with regard to the ministry. You point to one case as a problem, and that was a case that was clearly done last year.

I just want to go through some figures here with you. The legal counsel, as I said, is required in all cases where a child is brought into care by the court process. As we saw last year, we had the special warrant because we had a larger number of children coming into care than were required. . . . Part of that special warrant was in fact for legal costs. Initially, everybody has to go to court. This includes voluntary or special needs agreements. Seventy law firms provide coverage for 90 Provincial Court locations. Most lawyers are paid a monthly retainer based on the previous monthly average of court and preparation.

In exceptional circumstances -- usually when a conflict of interest occurs or for small northern communities where there are not enough cases -- a firm will be hired on an ad hoc basis, case by case. They are paid $80 per hour for Provincial Court work. We approach this in a number of different ways, but I would question that there was a systemic problem with regard to how the ministry is proceeding.

You are right: we have to go to court in order to get a child removed from their family. Because of some of the changes that we've made to the act, we are very hopeful that we won't have to go to court as often; we can get supervision orders without actually removing a child. But every time we do have to go to court, whether or not it be just in the initial application, that costs money. I have not seen anything systemic that says that our employees are not acting in the best interests of the children or that they are taking a position that is unreasonable.

[3:15]

When you take the Murphy case, that's just an example of one case where we felt that the ministry was wrong, and we were asking for an account on that particular case. You could take another case where the ministry. . . .

I think that this helps to show the ministry that it's important to take a look at how their legal bills are paid. Take a look at how badly the government workers treated those children up in Arden Park. They were abused badly, and the judge came down in that case and put a lot of the blame on the workers. The children weren't listened to. The case went to court. The children were adults when they went to court. They were each awarded a certain large sum of money. Then the ministry decided that it was going to appeal this case.

I put a question to the minister: why would the ministry, on such a dreadful case, waste the taxpayers' money by appealing? To me, that is looking at the legal services billed and saying: "What are you doing?" When does the ministry say that enough is enough when taking people to court? When does the ministry decide that maybe it is wrong sometimes? I'll leave that for the minister to answer.

Hon. L. Boone: You're going back many years. I know what you're talking about, but I can't help but think that if we had just turned over the. . . . The amount awarded was very high. If you think that government should. . . . I can see it. If we just automatically paid everything that came along, then you'd be standing there saying that we're not responsible and that the taxpayers are footing the bills. We have a responsibility to the taxpayers. When we think something is excessive, then I think we have a responsibility to appeal those decisions. That was the situation. This is before the courts, so it's not something that we should be discussing in this House right now.

B. McKinnon: I agree with the minister that you have a right to appeal; every case should have that right to appeal. But my question is: when does the minister finally say that enough is enough -- "Actually, we shouldn't be stomping on these people any longer"? Look at these children; they were badly abused. Okay, I won't talk about that case, but I could go on to different cases. The Murphy case is another one. And there are other cases where families are driven to court, and their lawyer bills are fantastically high, until they actually have nothing left. I think the question we're trying to get through to the minister is: when are you accountable? When do you say that enough is enough?

Hon. L. Boone: We are accountable. We're accountable to the courts, and we're accountable for making sure that children are safe. If we did not take the situations. . . . If we didn't go to court, I can see that the opposition would be standing there saying: "You didn't protect this child. You didn't take the necessary steps. You should have done that."

As I say, we have professional people who are in the field who do use their expertise to determine when a child should be removed from a family and what is in the best interest of that child. We also have a number of different avenues that this government has put in place to allow people to have

[ Page 8815 ]

In the high hopes that you guys ever form government -- Lord help us -- I don't even think that you would ever stand there and make those decisions as to which one you should appeal and which one you shouldn't appeal. You have to make those decisions based on individual cases. I think that to ask when we as a government are going to stop doing these things is not really a very responsible question.

C. Clark: I take my colleague's point. When she asked when enough is enough. . . . Maybe the way to put it that might illustrate it for most people is using the way ICBC operates. Someone has an accident, and ICBC decides that they want to go to court. In some cases, they will drag that individual through the courts as long as they can. Each of us will probably have a personal experience with that -- maybe not ourselves, but certainly a family member or friend -- where all it takes is one person in that organization, and you've got a big legal bill on your hands. ICBC has got a bottomless pit of money to drag it through the courts. In the Ministry for Children and Families it's a much, much more serious issue, because we're not talking about cars but about children and families.

The question I think my colleague was getting at when she said, "When is enough enough?" is: how does the ministry make the decisions about which cases they're going to drag through the courts and which ones they're not? In the Tim Murphy case, it went on for a long time. It cost Tim Murphy an enormous amount of money, and it appears that the ministry had a bottomless pocket to dip into to pay for their legal fees. That was a case of a policy that was being applied. I wouldn't put that down to a bull-headed bureaucrat out there who decided that they wanted to go and get Tim Murphy; I'd put it down to a policy that was being applied against all common sense. When does the political level decide -- and this is the issue here -- when enough is enough, when the policy really doesn't make any sense, and it's not worthwhile to punish these individuals and drag them through the courts?

I want to give you another example. One of them is Alison Kampman, who I'm sure the ministry will be familiar with. She informs me that she spent $60,000 trying to get her foster home reopened after some false accusations had been made. In the end the ministry admitted that they were wrong, but not until it cost her $60,000. That's peanuts in the big scale of government, but $60,000 is a lot more than most people make a year -- maybe more than she makes; I don't know. That might be a whole year's worth of income for her. There is a case where we have one individual trying to face down government -- David and Goliath; Goliath finally admits that he's wrong, but not before the little guy has to pay all those costs.

That's why I want to find out from the minister how the ministry breaks down its budget for legal services, so we can get a sense of how much the ministry spends on these individual cases. It's certainly important to them, but it's important in the system as well, because if the ministry and the government have a bottomless pit of money and are prepared to spend it and drag it out as long as they want. . . . That's a real issue for children and families out there that are struggling to get along. Perhaps the minister could comment on Alison Kampman. And maybe we can get back to Tim Murphy and find out how much money has been spent on that case.

Hon. L. Boone: I want to dispute something that you just said with regard to it being a foolish policy. I don't think it was a foolish policy, and I still don't think it's a foolish policy. That policy is that aboriginal children should be adopted by aboriginal families. I don't think that's a foolish policy. I think that's one that aboriginal families have been looking for for years. We've watched as governments have systematically taken away aboriginal children, removed them from their families and their communities, and had them adopted out to white families far away from their communities. They can't even find their communities; they can't even find their families again. That is something that we as a society have done over the years to the aboriginal community. To say that that was a foolish policy. . . . I really dispute that. That was not a foolish policy.

Did it work in this particular case? Was it right in this particular case? Again, I don't think it was up to you or me to determine this. The children's commissioner determined that, and I accept that this was right. But I will never, ever say that this is a foolish policy. I think it is the right policy that we should be following, and I think that we have got to make sure that we try and recognize that we need to deal with some of the issues around aboriginal kids and keeping those people in their communities. I will continue to do that, and I make no apologies for doing that, hon. member.

C. Clark: The minister can try getting it right. I was talking about Tim Murphy. I was talking about a case that went contrary to the ministry's policy. The ministry in that case decided: "Damn the torpedoes. Damn what'll make common sense in Tim Murphy's case. Let's just go ahead and apply the policy across the board." What's foolish is when you have a government and a bureaucracy that is so inflexible that they can't accommodate situations like that. They feel they're forced to apply a policy across the board -- which might make sense in most cases -- so that a guy like Tim Murphy gets shortchanged, so that his child gets shortchanged. That's what doesn't make any sense. That's what is foolish. It's foolish when you have a system that is so inflexible that it can't respond to people's needs. When you have a political level that's so concerned about appearances that it's unable to respond, that's foolish too.

I'll tell you that Tim Murphy and people like him have a right to know how much the government spent on his case before they discovered that they were wrong. We are talking about David and Goliath here. When the government has $7.2 million to spend on legal costs to fight parents, those parents have a right to know how much was spent on them, how much was targeted at them. That's what Tim Murphy has a right to know. I know how much he spent. He knows how much he spent. His family, who probably paid the price -- and they were hurting for cash, because they were strapped -- have a right to know how much this government spent on his case.

Alison Kampman has a right to know how much the government spent on her case. Those numbers should be publicly available. It is not good enough for the minister to just say, "Well, they can go get it through freedom of information," because -- you know what? -- this government is just as likely to charge them five grand to try and get it through freedom of information. It'll probably cost them what it would cost them in legal costs in the first place. It's not good enough

[ Page 8816 ]

Can the minister at least tell us how the Ministry of Attorney General itemizes its bill, so that we can move on to the next stage of questioning about this. I'll tell you, I'm getting a little tired of the minister saying: "Well, I don't have any answers for you. I just have these big lump sums, and I don't feel like breaking them down." Can the minister at least tell us how the Ministry of Attorney General breaks it down? Do they break it down by service? If they do break it down by service, can the minister tell us how much they were billed for, for each service from the Attorney General's office?

[3:30]

Do you think that staff take children out of their families just for the fun of it? Do you think that they are removing these children just because they like to do that? They're removing those children, they are going to court and they are being upheld in the court system because they have severe concerns about the risks these children. . . . They believe that those children are at risk. That is what our people are going to court for. It is not a bottomless pit out there to fight every family and every mother and father out there. It is a pool of money that the ministry uses, that is available to enable the ministry to go to court and get the necessary orders to protect children. That is the bottom line that every single worker out there utilizes, and I really object to your indicating that we are at war with families. We are not at war with families; we are out there trying to protect the children in British Columbia.

C. Clark: Those are the minister's words, not mine, when she talks about the ministry being at war with families. I don't think the ministry is at war with families. I wouldn't use the words the minister has used. Those are her words, I guess. If she wants to go down that road, I suppose she can, but I'm not prepared to follow her.

When I talk about the information being available to the public, I mean available to those families. I mean, if you're going to have a fight, make it a fair fight. Let those individuals know what they're dealing with. Certainly Tim Murphy wants to know; Alison Kampman wants to know. Their only option in the face of the minister saying, "Well, I don't feel like giving you the information today," is to go through freedom of information. Then maybe they'll get it; maybe they won't. Maybe they'll have to put their house up for a second mortgage; maybe they won't. We know how expensive access to information is under this government. We know how freedom of information has been stopped in its tracks by this government, how it takes three weeks just to sever an item that's requested in some cases under freedom of information -- just to sever it, just to take away the information that you paid for in the first place. It's three weeks of people-hours. It's ridiculous. That information should be available to those people who want it. They should know how much is being charged by the Attorney General's office to fight them in legal cases.

That's what this is about; it's about accountability. It's not about inferring motives; it's not about suggesting, as the minister says, that the ministry wants to go to war with families. It's not about suggesting that bureaucrats are out there waiting to steal children away -- of course not. People that go into social work do it because most of them want to change the world. They decide that it's a worthy profession where they can care for children, and they can make their communities better. That's why people go into it. Now, unfortunately, in British Columbia, they have to work in one of the worst environments in the country for social workers. They have to work with some of the worst morale problems of any department in the country. Unfortunately, they have to work with some of the highest caseloads of any department in the country. That doesn't make their jobs any easier. It doesn't make it any easier for them to live up to their ambitions to change the world.

What we're talking about here are the legal fees that the ministry charges. My question is this: how does the Ministry of Attorney General itemize its bill when it charges back to the ministry for legal services it has provided?

Hon. L. Boone: As I was saying, those people who are brought in on an ad hoc basis have a billing that shows the ad hoc charge that's there. The rest are done on a monthly retainer, as I stated earlier. The breakdown here is: 2,388 new cases were set for court; 17,582 matters were set for hearing; 16,278 matters proceeded; 7,480 orders were made. The total time spent on Children and Families services matters was 6,621 hours; the total amount of time spent on Children and Families services matters in 1996 was 5,149 hours; an average of 0.89 court hours was required for each order made. . . . I mean, this is a lot of court time that was spent. As I said, a lot of it is done in preliminary hearings in the first stage. Sometimes it's done in the second stage. There are family case councils that have to happen. It is a very complicated process. I wish the courts were less complicated. I wish the lawyers charged less, but they don't, and we're faced with the situation we have, hon. member.

C. Clark: I feel like we're getting somewhere here. The minister talked about ad hoc cases and a retainer. Could the minister just give us a quick breakdown of the costs for the lawyers that they have on retainer versus. . . ? What percentage of the $7.2 million are we talking about here that is for the ad hoc cases versus the lawyers on retainer? I'm assuming that that is the way that the ministry organizes the information, based on what the minister has just told me.

Hon. L. Boone: We estimate about 90 percent, the vast majority, of them are done by retainer; the others are done on an ad hoc basis. As I stated earlier -- and I read this into the record, but I'll do it again:

"Most lawyers are paid on a monthly retainer based on the previous year's monthly average of court and preparation time, times $80 per hour, plus disbursement -- usually 10 to 15 percent of retainer for travel, transcripts, etc., for provincial work. In exceptional cases, usually when a conflict of interest occurs or for some smaller northern [community] locations where there are not enough cases, a firm will be hired on an ad hoc case-by-case basis and paid the same amount, $80 per hour, for provincial court work."

"The Ministry for Children and Families paid the legal costs to the Murphy's of $12,016 and to the relatives in Saskatchewan, legal fees of $8,243. The Ministry for Children and Families legal fees were the hours of in-house counsel provided by legal services."

[ Page 8817 ]

Hon. L. Boone: We will get that information, and we'll get it to you.

C. Clark: I want to move into some questions about staffing and the budget that's been provided for social workers for this year. It would be helpful to get from the minister a breakdown by category of the kinds of social workers that have been budgeted for in the additional $30 million that's been added to the budget. I guess $18 million is for salaries and benefits. Could we get a breakdown of what kinds of workers that will provide for? When I say "kinds of workers," I mean guardianship workers versus case assistants versus child protection workers versus. . . . And there is another category which doesn't come to mind at the moment, but that's the breakdown I'm looking for.

Hon. L. Boone: We will be hiring 250, as you know, and 211 of those will be going into. . . . Some of them, 103, will be going into child protection, 62 into guardianship and 25 into youth probation. Of the child protection people, some will be child protection workers, but there may be some that will be case aid workers. It will be decided at the regional level what the best use of their workforce is in that area.

C. Clark: Surely some of that decision will be made for them, based on the budget that they receive for the new staff. Unless I'm mistaken, case aid workers are paid at a different wage scale than child protection workers. I think I'm right about that. So surely, wouldn't that decision be made in advance for the region? If they get a budget of $100,000 hypothetically, and a social worker costs $50,000 and a case aid worker costs $25,000, I suppose their only choice would be to hire two social workers or one social worker and two case aid workers. I don't see a lot of flexibility in that system. I wonder if the minister could just elaborate on it for us.

[3:45]

C. Clark: Can the minister tell us how much those 211 workers will cost once they are on-budget for a full year?

Hon. L. Boone: It will be about $12 million.

C. Clark: When does the ministry anticipate that these new workers will be coming on line? Has the ministry set any goals? For example, are a third of them to be hired by September, a third to be on by December and then the rest of them to be on by the end of the year?

Hon. L. Boone: We are in a hiring process right now, so we are reviewing the various applications that we've had. And we've had a number of them, which is contrary to what everybody thought would happen. Everybody around here thought we wouldn't get any, but we do have a number of applications. We are currently reviewing those. We will be putting them on stream, and then we must go through a 20-week training period for the child protection workers to make sure that they have the necessary training to go into the field. We will have a number of people actually in the field, in place, by the fall.

C. Clark: Thank you for that answer: there's going to be a number of them in place for the fall. But I'm sure the ministry must have a more detailed answer available than that, given that they have to work out their budgets based on the number of months people will be employed at the ministry. If the ministry has figured out that there will be 130 full years of employment in the budget this year for new workers, then the ministry must have estimated when those people are likely to come on line. I wonder if the minister could perhaps give us a little more detail on that.

Hon. L. Boone: As the member knows, we are trying to backfill some positions in addition to the hiring of the new social workers. We stated that that was the first step that we did. We were hiring 100 new social workers, and I announced that in the early part of March, I think. Since February we've hired 102 new social workers and are putting them through the training process. We are very hopeful that we will have a large number that will be hired in the fall. We expect that we'll have the majority of the 250 in place by the new year. It does take a while to go through the hiring process, go through all the applications, make sure that individuals have the necessary skills and then, as I said, to get them the training. We have hired 102 individuals since February.

C. Clark: It is my understanding that the ministry has 100 vacancies to fill, and that information was as of a month ago. I wonder if the minister could first confirm whether that's correct, and then confirm whether those in the group of 250 new positions will be expected to first fill the 100 vacancies that currently exist within the ministry.

Hon. L. Boone: We initially announced that we were going to aggressively try to fill the 100 positions that were vacant, and we acknowledged that there were 100-and-some-odd vacancies in March. We said we were going to start an aggressive process to fill those. We have hired 100 new individuals to come into those. We are still recruiting. We are hiring people and have applications coming in, but we aren't saying: "You are filling these positions that are vacant or you are coming in to fill new positions." The people we are hiring on are hiring on as ministry employees. We've got 100 new people who have come in, and they are probably filling some of the vacancies that were there. The 250 are new positions, and we are filling them as fast as we can. We expect to have a number of them in place by the fall, and the majority of them in place by January.

C. Clark: Again, we're getting into this distinction between positions and people. From my perspective, I'm talking about the positions that are there. What I am trying to determine is whether these 250 new people will equal 250 new positions. The natural conclusion from that is that the ministry is going to be hiring 352 new people. Can the minister confirm if that's correct?

Hon. L. Boone: Yes -- 350 new people, but only 250 new positions. A hundred of them are in back positions, as I said,

[ Page 8818 ]

C. Clark: I wanted to clarify that because I have to admit that there has been some confusion about what would happen with those vacant positions and whether they would be filled by this new hiring process or not, with the 250 new people who are coming on line.

Last year, the ministry spent in its. . . . It appears, based on the estimates and then the revised estimates, that the ministry vastly. . . . Well, not vastly, I guess, in the larger scheme of government. I think it was about $7.7 million less, based on the revised estimates, than had been originally estimated. Can the minister confirm that for me and tell me why there was a disparity between the estimates and the revised estimates that would result in the $7.7 million difference?

[W. Hartley in the chair.]

Hon. L. Boone: Can you explain. . . ? The $7.7 million difference in what? In salaries and benefits?

C. Clark: Yes.

Hon. L. Boone: That was dollars that were moved. It was in STOB 95, and we moved it from salaries to STOB 95, and that had to do with day care. It's just a movement from one area to the other area.

C. Clark: On the vacancies that exist in the ministry, the 102 positions, can the minister give us a quick breakdown of what positions those are? Among the vacancies, how many of them are in child protection? How many are guardianship positions? How many of them are case aid workers? How many of them are the fourth category that I can never remember?

Hon. L. Boone: They've all been hired as child protection workers to do child protection social work.

C. Clark: The 102 vacancies that have existed in the ministry -- and I don't have any sense of how long some of those vacancies have existed. . . . Some of them, I suspect, might have been vacant for a year; some of them might have been vacant for a month. I have no way of knowing that. But there must be savings attached to those vacancies, because, of course, you're not paying workers that had originally been budgeted for at the beginning of the fiscal year. Perhaps the minister could tell us how much the ministry saved by not paying out those 102 FTEs for the period they were vacant.

Hon. L. Boone: We didn't actually save anything, because we used other people on overtime. We paid dollars for overtime to get the work done, plus we brought in auxiliary clerical people to assist those social workers with their paperwork so they could be free to do the other stuff.

C. Clark: Well, what's the price tag on that, then, for the. . . ? If it's an equivalent, the ministry must have a number for it. So what's the number attached to either the savings that would have been there or to the additional costs of not filling those vacancies?

Hon. L. Boone: Each and every vacancy has not been there for the same length of time, so we'd have to go back and. . . . If you really want the ministry to go back and do that kind of work, we'll do it; we'll get it for you at a later time. Some vacancies may have been there for a month; some may have been there for a longer length of time. Actually determining how much was spent on overtime. . . . We can get that for you, but I think it's money and staff time that would be spent doing other things rather than getting that information.

C. Clark: All right. Then, perhaps the minister can give me a price tag on all the overtime that the ministry spends in child protection offices every year. That must be a number that's readily available.

[4:00]

C. Clark: If the ministry is spending an amount of money on not filling vacancies that's equivalent to what it would on actually filling the vacancies, it's a mystery to me why the ministry waits to do its hiring. I mean, if some of those vacancies had been there for a year and some of them for a month, and the ministry didn't start doing its hiring or didn't find a budget for it until February, it's a mystery to me why the ministry waited to start its strategy, because it sounds to me. . . . When the minister talks about filling these vacancies, she talks about the fact that they started their recruitment and hiring strategy in February. Of course, that's at the end of the budget year. If there were many millions of dollars spent not filling the vacancies, why didn't the ministry start actually filling the vacancies a lot earlier than they appear to have done?

Hon. L. Boone: I hope you're not thinking that the ministry wasn't trying to fill those vacancies, because they were. The regions were doing individual. . . . The regions were trying to recruit -- and sometimes they are successful, and sometimes they are not. Sometimes they fill vacancies. . . . It's like everything else. It's not easy, sometimes, to fill any particular professional field when you get into some of the regions. They were trying to fill those. We, as a ministry, stepped in, as I said, in March and started an aggressive recruitment program to try and fill the existing vacancies. We were concerned that they weren't getting filled fast enough. The recruitment was being done at the regional level by the regions. They weren't sitting around not trying to fill those positions; they were just unable to fill them.

C. Clark: That's a pretty big number -- 102. That's a lot of vacancies. That's almost half of what the minister's announcement was for all the new workers, which was surrounded by a great deal of fanfare. That is a big number. For it to take the number to get to 102 before the ministry twigs to the fact that there is trouble out there and that they're having trouble recruiting people is an amazing statement in and of itself. Surely the ministry has some method of ensuring that vacancies are filled before we get to 102. Surely the ministry has some way of going out and recruiting people before we get to these huge numbers, where the existing social workers end up picking up the slack and paying for it in terms of their health, their work environment and their morale. Perhaps the minister could comment on that for us.

Hon. L. Boone: In fact, yeah, we did have a strategy. We had 65 vacancies in March and April, but we anticipated that there would probably be another 37 from April to September.

[ Page 8819 ]

As I said, we as a ministry were not happy with what was taking place in the regions. We recognized that the regional ability to fill those positions. . . . In fact, they were sometimes spinning their wheels. They were sending teams out and going to the same places, not recognizing that there had already been people there.

We, as a ministry, decided we were going to do an aggressive recruitment program at the central level, at the provincial level, so that we could reach out into all of those areas. We have done so. We've had success at getting a number of applications through. As I said, we now have to vet those applications to make sure that the individuals are the best for those jobs, make sure that their qualifications are good, make sure that they go through the skills. . .and that they have the necessary personal skills to do these jobs. We will be hiring them. It's not something that has been ignored. It's something that was done at the regional level and something that we have now decided we need to take a much more aggressive stand on.

C. Clark: When the ministry predicts vacancies and staff leaving. . . . I appreciate that different circumstances will have different costs attached to them. But I suspect that for the budgeting process, the ministry must know how much it costs them, on average, when an employee leaves -- their severance, their vacation pay and all those other costs that are attached every time an employee leaves. Can the minister give us a number on either how much that cost overall last year or the average that the ministry uses for its budgeting purposes?

Hon. L. Boone: We don't really have costs associated with people leaving. There are ongoing costs of employment. If somebody leaves, we may have to pay out a vacation, if they haven't taken it, but often they have already taken their vacation. There are not ongoing costs that we have budgeted for. We haven't severed somebody or laid off a social worker for many, many years -- Les can't remember when the last time we laid off a social worker was -- so we don't have severance pay that goes with that. The costs associated with people leaving are generally just costs that are already included in their salary and benefits packages.

V. Anderson: I've been listening to the discussion over this time with a great deal of interest. What I'd like to do is explain a case that is of concern, without giving names. I'm not asking the minister to deal with this particular case, but it's very symbolic of a lot of different cases that we've had to deal with over the last number of years.

It's a case in which the ministry had concerns about the children of a family. There were three children in this case. They were able to apprehend the children and take the children through the process of the courts, and the children were taken away from the parents. Ever since then, the parents have not been able to have any access to or information about these children, so the children have been deprived of the relationship to their parents and their knowledge of that. Regardless of what the incidents were, under the international covenant, children have a right to know who their parents are.

That was before, when we got involved in this particular situation. Then another child came into the family, and shortly after that child was born, the same process started. For four years now, that has been in and out of the court -- with the court and the family trying to deal with this. Part of the time, because the husband was unemployed, they were able to have legal aid assistance. Then the husband got a job in order to look after the family and provide the kind of facilities that would enable at least the latter child to come and live at home. But when you get a job, then you no longer qualify for legal aid. So the fourth child was apprehended by the ministry and placed in care, and again the relationship. . . .

The whole three years of that struggle, before the final apprehension took place, was just a horror story -- of trying to have visitation, of trying to have meetings between ministry representatives and the family. For instance, on occasion the mother went to visit during the visiting hours which were allowed. The custodial person responsible would bring the child late and would not bring any food for the child, so the child would get restless, and the mother would not be able to visit because they'd take the child right home again.

At one point in the process we arranged for an advocate -- a minister in the community -- to go with the mother so that she could have some support. And they refused to allow the advocate to be part of the visit. That was unsettling to the mother and to the visit. We protested that, and eventually that was allowed to happen. But time after time there are these kinds of things.

So they took that child away from the family again, put a watch on them, and advised everybody that if they were in the family way again, they would have to report them. When they got in the family way again, being aware of this kind of surveillance of their life -- every moment of their history -- they kept out of the way. So they were able to have the child, bring it into the world. Then the father took the child, at about two or two and a half months old, for a walk in the park. Someone recognized the father, saw him with the child, and, as we understand it, the child was then apprehended from the park and taken by the ministry again. All the while the father has been trying to go to court on his own, and he's trying to hold down a job. Just today, when I discussed the situation with him. . . . The hearing is on Thursday. He was advised that he could go in today and get the presentation papers in order that he could work on it at night, because he has a daytime job and he's not able to get legal assistance. So he went in today to get the presentation papers and, as a layperson, to try to struggle through this in the evening, and he was told he can't get them until Wednesday afternoon. The court case is on Friday, so there's absolutely no time for him to present a case.

This is the kind of thing that's happened for four years, again and again and again. This isn't the only case where we've had the same kind of process, but this particular family. . . . We've never been able to say what is the right or wrong of the decisions that have been made, but I'm perfectly convinced that the process has been rotten. The process has been unfair to the parents and to the children. The knowledge and the expertise that should be available to the children by an independent advocate or somebody speaking on their behalf, which our law provides, has not been available to them. The opportunity to meet with them. . . . We have met with the doctor that cared for the family, and the report that we get from the doctor and the reports that we hear through the ministry are not the same thing -- or the reports that come out in the documents.

[4:15]

[ Page 8820 ]

Hon. L. Boone: I'm glad the member recognizes the difficult situation in terms of trying to deal with cases on an individual basis. I appreciate your not mentioning names and all those sorts of things; I don't think that's appropriate to do.

Not knowing the background of that particular case, what I'd like to do is offer to you that if you got the approval of the family, we'd be happy to arrange for you to meet with the director of child protection to review the case and to see how we can work out some solutions around that. It's often difficult for staff and for all of our people to deal with situations, because they can't reveal information that is confidential. So it's often hard for us to deal with you on an individual basis and to give you the necessary information that's required to help that family. But if you can get that approval, then we'd be happy to work with you on an individual basis to see if we can try and search through this thing -- okay?

V. Anderson: I appreciate that. We have the approval; we've had it for a long time, and we've tried different processes to deal with it. The same would have been true prior to this last child coming into the picture -- the family despaired of getting any positive response, from their point of view. They've asked that we make it available to somebody who will review the process, because they don't want this same thing happening to other people. Even if their situation can't be resolved, they don't want this happening to other people.

So we have their permission, and we will come and make that arrangement. We'll bring it up to date. Whether or not this particular family get their children back -- which, of course, they would like to do -- at the very least, they want to make sure that the process that they've had to go through. . . . It has been real hell -- and I say that honestly -- and they've done the best they can to be part of the process, but from their point of view there has not been support for either the children or the family in the relationship, whether they're together or apart.

At one point the father said to me: "Can you at least somehow get a message across to the children that we love them, and that we did not discard them from our household of our own will? If the children can get even this, we will feel better." That's a cry of despair, a cry of hope; it's a cry of concern for the children. The process has not enabled those children to know that the love of the parents -- even if the love of the family is inadequate -- is there for the children. And the children have the right to know that -- to have the opportunity to know that even if their parents were not able to care for them, which I'm not sure is the case here. . . . But even if they were not, the children have a right to know that the parents love and cared for their children.

So I will take up the minister's offer, and we will arrange that as quickly as possible.

B. McKinnon: Could the minister tell me: if a child protection worker has a number of families under her care and a woman is pregnant and about to have a baby, and she's on drugs and alcohol -- and this family's under the ministry's care -- does the child protection worker make the ministry aware that a child with FAS is going to be born or give you any inkling that a baby in trouble is going to be under your care? Do you have any system which counts or looks at what's happening with babies being born with FAS?

Hon. L. Boone: If there is a situation where a family is involved and a protection worker knows that a child may be born with FAS, then we would try to make the necessary connections to the community so that they know that this child is being born. They may actually have to do a risk assessment to see if that child is at risk, as well, depending on the severity of what that child is going into. But we'd work with the community.

This is one of the things that the Gove inquiry recommended: integrated case management. As I was saying, it's a struggle to get there; we're working towards it. In some areas, integrated case management is working quite well. In others, it's still a struggle trying to get people to talk to each other and to recognize that we need to work on it as a unit, to try and make sure that services are available to those children. But the short answer is yes; they should be doing those things.

B. McKinnon: Do you, as a ministry, keep a record of it? For example, if I asked you if you knew how many babies with fetal alcohol syndrome were going to be born by the end of October at the Victoria hospital, would you know that and be prepared to look after those babies in your ministry? You'd have to find foster care for them. Would you have any idea along those lines?

Hon. L. Boone: We would only be aware of those that were brought to our attention. If the hospital or a physician brought it to our attention that a child was going to be born with fetal alcohol syndrome, that there was a particular problem with that mother, then yes, we would be aware of it, and we'd have those numbers. But we do not know of all children who are born with fetal alcohol syndrome. There may be moms out there who are still drinking, and their physicians may not even know about it. They may not show up in terms of being involved with alcohol. So we are not aware of every child who is born a fetal alcohol syndrome child.

B. McKinnon: I understand that. That's impossible for you to know. I'm more concerned about the families who are in the care of the ministry that you already know about -- for example, pregnant mothers who are drug-addicted, that are alcoholics, and that. You know that, say, this woman in particular is going to have a baby in August, June, July or whenever. Do you prepare ahead of time to deal with that baby when it is born? You actually know that your ministry's going to be taking care of these children, because they're going to be born in a few months, and you know what the mother's condition is.

Hon. L. Boone: Yes, we do.

B. McKinnon: Just for an example, could you give me an idea of what is happening, say, in the Victoria hospital up to the end of the summer? Do you have any idea of the number of babies on record that could be born with FAS?

Hon. L. Boone: We could get that information. We'd have to go to the regional operating officer and ask that person to review cases to give us the numbers of individuals out there

[ Page 8821 ]

C. Clark: When the minister says that the ministry is made aware of children who are likely to be born drug-affected or alcohol-affected, is she referring just to children that are in the care of or known to the ministry? Or is there a protocol whereby the ministry would automatically be notified by the hospital when they become aware of a situation where a child who is likely to be born drug-affected or alcohol-affected is on its way?

Hon. L. Boone: If the family physician was concerned, then the family physician would report it to the ministry.

C. Clark: My question, though, is: is there a protocol that the ministry has with the Ministry of Health, I assume, which physicians would refer to? Or is this just on an ad hoc basis? If you happen to have a doctor who remembers to call the ministry, the ministry might find out that the child was about to be born. I mean, there are two distinctly different scenarios here. Unless the mother of the child is a client of the ministry, it doesn't seem to me to be automatic that the physician would let the ministry know that the child is about to be born -- unless there's a protocol in place that governs that.

Hon. L. Boone: We currently have a protocol with all physicians to inform us of children in need of protection. We are working on a joint committee with representation from the Ministry for Children and Families, the Ministry of Health, BCWH -- British Columbia's Women's Hospital -- and the medical profession to develop a discharge planning protocol for infants with FAS or NAS. That protocol, which will be developed by this committee, is seen as a first step in identifying the range of supports needed by these children from birth to adulthood. That will be in place by the fall.

C. Clark: I take it from the minister's comments that what's envisioned as a result of that protocol is that physicians would automatically notify the ministry when a situation comes to their attention that might require a child to be taken into care or to have contact with the ministry after it's born. Is that correct?

[4:30]

C. Clark: I want to get back a little bit to the issues around social workers and the support that's provided for them on the front lines. I wonder if the minister could tell us how many social workers are working today. The number I'm looking for is the number of people that are actually working. I suspect that would be the total number of FTEs -- just so the minister can be clear about this -- minus the number of people that are on sick leave or on vacation. Those burn FTEs as well, but. . . . So you've got the position that's there and it's filled, but there's nobody actually doing the job. I wonder if the minister would give us an idea of what those kinds of numbers are.

Hon. L. Boone: The cheeky response that my cheeky deputy gave me was: "All of them are working, we hope, today." We will get that information to you, because we have to dig a little bit to find some of that. So if you'd like to ask another question, I'd be happy to get it.

C. Clark: Okay. The next question is: how much time was consumed for sick leave by social workers in the ministry last year?

Hon. L. Boone: As of May 11, 1998, the number of protection social workers -- and that includes regular and auxiliary -- was 1,258 regular and 95 auxiliary, for a total of 1,353 people in all of the regions. On our reports of those for the '97-98 fiscal year, an average utilization of sick leave for eligible ministry employees was, for all employees, 10.7 days. For all social programs officers it was 10.5 days; for all child protection workers, 10.9 days; and for all government employees, 10.7 days. It says that there is a perception that child protection workers are absent from their duties more than other social workers or ministry employees. But I guess the average rate of STIIP use across all government ministries over the '97 year was 10.73 days per employee, so I don't think it looks like child protection workers were absent much more than other employees.

C. Clark: Could the minister also share with us her regional breakdown of those sick days?

Hon. L. Boone: That is information that we'll have to get to you. We don't have that breakdown here.

C. Clark: The reason I'm interested in the regional breakdown -- and I suspect that the minister is anticipating my questions -- is because I'm interested in how many sick days were taken in the region that includes Quesnel. The situation up there was an enormously difficult one for the community, for the workers and for the ministry. The workers took a lot of sick leave, because they couldn't manage the volume of work that was being thrown in their direction, particularly given that they didn't have enough staff support being thrown in their direction as well. That's the number I'm looking for in particular when we talk about sick leave. I'm interested in finding out if and how much the Quesnel experience differs from the other regions, because I think that is an excellent way for us to predict where problems might occur in the future.

The audit of the Quesnel office -- the two audits -- were precipitated by a whole number of complaints, in part from employees. I want to talk with the minister a little bit about how the auditing process works and about what, in particular, happened in Quesnel when the auditing process was triggered up there.

Maybe a good place to start is to find out when the ministry twigged to the fact that there was a problem in Quesnel for the first time, and what their initial response was to try and deal with it when it first came to their attention.

Hon. L. Boone: We started to identify problems in that area in June and July, when the children's commissioner's first report on some deaths in that area came down. It was decided then that we would do an audit in the fall of that year to discover whether there were systemic problems in that area.

I want to point out to the member that. . . . She talks about workload. I've made it very clear that workload is a problem not just in Quesnel but for all of the ministry staff who were facing tremendous problems with regard to the restructuring in the ministry, the changes in the mandate of

[ Page 8822 ]

C. Clark: One of the important points that the children's commissioner makes and every informed commentator makes is that when we look at workload, it's not solely the number of cases that we need to look at. It's the kinds of cases that they deal with as well. It is my understanding that in Quesnel, the kinds of cases that social workers were dealing with were different from those in Williams Lake. To suggest that it's not a workload issue is to suggest that the social workers just weren't doing their jobs. Either it's a workload issue or it's not a workload issue. Either they were being asked to do too much with too few resources, or they just didn't know how to do their jobs. It's a simple question. I side with those who suggest that it was a resource issue -- that they didn't have the resources they needed to do their jobs properly. That's my view of what happened in Quesnel.

My understanding from social workers, when I've met with them in Quesnel and when I've spoken to them on many, many occasions since then, is that they informed the ministry repeatedly that there were problems brewing in that office and that something needed to be done. They informed the ministry about these problems long before the children's commissioner did, and they warned officials that there were going to be problems if they didn't act quickly. And what happened? Real problems arose in Quesnel.

My question isn't about when the children's commissioner was informed about it or when she informed the ministry about it. My question is about when the social workers first notified the ministry that there was a problem in that office.

Hon. L. Boone: I want to make this quite clear again. The children's commissioner found in her investigation that "the Quesnel audits were an important means by which [the Ministry for Children and Families] monitored and addressed significant child protection practice problems in that office." It was the child protection practices that were the problem. She wrote:

"The audits correctly disclosed many serious cases of children left at risk through inadequate child protection practices and poor management in that office. The audit did not address legitimate workload issues raised by the staff. However, the level and the extent of problems in practice, judgment and supervision of the Quesnel office cannot be attributed solely to workload. Similar problems were not found in the audit of the Williams Lake office, with comparable workload challenges."

C. Clark: It sounds to me like the minister is admitting that there was a workload problem in Quesnel and that there were other problems. There were practice issues. I think that to some extent it's probably fair to say that practice issues will be more likely to arise when you've got a workload problem. Judge Gove pointed out in his report that social workers are more likely to try and find corners to cut and ways to go about doing their jobs that might not fit into the rule and regulation that's written out -- but at least it's a little quicker, and they might be able to get a little more service in for children while they're doing their jobs. Certainly practice issues can sometimes be unrelated to workload. But when there are workload problems, practice issues are much more likely to arise. I don't think that's going to be a point of great debate here.

In addition to that, though, the minister has admitted -- I think I've heard her admit it -- that there were workload problems in Quesnel and that it wasn't just practice issues. When the children's commissioner says that not all of the problems can be attributed just to workload, what she's saying is that a lot of them can be attributed to workload. My question for the minister is: when did the ministry first become aware of the workload issues in that office? Social workers say that they let the ministry know as long ago as December 1996. That's when they first started complaining to the ministry. So I'll ask the question again about when the ministry first became aware that there was a workload problem in the Quesnel office.

[4:45]

Before I do this, I want to go back, because I think you're misunderstanding me when I say that there were severe practice issues. The practice issues go back not necessarily to workload but to a difference in philosophy between that supervisor and the ministry. The children's commissioner recognizes that, and she makes that very clear. In fact, the supervisor in that office made it clear that she did not agree with the direction the ministry was going in. So her directions to her staff were different than what other staff were giving -- for example, what the supervisor in the Williams Lake office was giving to their staff. We did not have the practice difficulties or the concerns in the Williams Lake office that we had in the Quesnel office. This was not strictly a workload issue. This is a difference in philosophy between the existing supervisor and the direction the ministry was going in. I want to make that very clear.

As I said, the supervisor made some concerns known to the regional operating officer in April. They made some changes within their structure there. I think there were some leaves that were granted to try and deal with the workload issues and the pressures. They were trying to manage it internally within that region. It was decided in the spring of that year that we would have the audit in the fall, and that's when the audit took place. That's when the practices that were taking place in that area came to the attention of a higher level of the ministry.

C. Clark: When did the ministry first become aware that there was a significant difference of philosophical opinion between the supervisor and the ministry? If the ministry

[ Page 8823 ]

Hon. L. Boone: That came out in the audit.

C. Clark: So we're still back in April when the ministry first heard from the supervisor that there was a problem in the office, at least with respect to workload. Can I assume that all of the workload grievances from the Quesnel office came after April? Or were a significant number of those grievances lodged about workload with the ministry before the supervisor put in her official notice with the ministry that there was a problem with workload?

Hon. L. Boone: I'll have to check that and get that information for you.

C. Clark: When the supervisor let the ministry know that there was a problem, did she advise verbally? Did she advise them in writing? Was it a formal process? Was it a grievance?

Hon. L. Boone: I understand it was done by e-mail and by telephone conversations with the regional operating officer, but the regional operating officer was getting mixed signals from the supervisor. On one hand, she was saying she needed help; on the other hand, she was saying that she wanted to let people go on leave. At that time, as a manager, the regional operating officer was taking these messages as mixed messages and was not quite sure how she should be perceiving them.

C. Clark: I have to admit that I find it difficult to understand how the minister, on the one hand, can say that she supports her staff and thinks her staff are doing a great job and that the ministry is doing a terrific job, and on the other hand, is quite willing to lay the blame on the supervisor, who is also a member of the staff in Quesnel. She's not exempt, you know. . . . She's a member of the minister's staff, and it doesn't sound very supportive to me when the minister says that the supervisor didn't know what she was doing, that the supervisor had a difference of opinion and didn't follow policy, and that it was the supervisor who made all the mistakes.

It seems to me that the honourable thing to do would be for the minister to admit that there's a problem on her side, as well, in the failure to provide resources to the office in Quesnel. It's not just the supervisor's fault because she didn't know what she was doing. It's not just the supervisor's fault because the ministry didn't respond to her requests for help. Some of the blame surely lies at the political level for the minister's failure to provide resources to her ministry or to ensure that that office was adequately staffed and adequately resourced.

It's ironic to hear the minister get up every day and say: "I don't blame staff for anything. Gee, you know, the staff are doing a great job, and I would never say they're doing anything wrong. I really support my staff." On the other hand, when it comes to Quesnel -- when it comes to a big problem -- the first thing that happens is that the staff get blamed. The line of first defence is to say that staff made a mistake: "Oh no. The problem doesn't lie at the political level."

It's all very well and fine to say that you support your staff -- except when there's a crisis, and then it's all the staff's fault. That seems to me to be what the minister is telling us about Quesnel: that the blame lies at the feet of the supervisor in Quesnel and that she's the one at fault.

How can it be that there wasn't a workload issue in Quesnel, that there wasn't a resource problem in Quesnel, if it took 20 new workers, or somewhere in that neighbourhood, to come into that community to try and close the gap that had been created there -- 20 new workers, when they were down to four or six before the crisis hit? They had to fill that gap with 20 new workers to do the work that previously far fewer had been doing. That says to me that there must be a workload issue in Quesnel. It must be more than just the workers' fault. There must have been a resource problem in that office. The community of Quesnel paid the price for the minister's failure to meet the challenge there and for the ministry's failure to listen to the workers in that office when they first warned that there was a problem, as far back as April.

The audit didn't happen until the fall, until after the children's commissioner had demanded it. But when the staff were asking for it -- when it was only the staff that were letting the ministry know that there was a problem -- that wasn't good enough for the ministry. It seems that in this case they waited for one of these independent bodies to come forward and ask. Why isn't it good enough for staff to let the ministry know when there is a problem -- for the ministry to act on the knowledge that the staff are offering them? Surely they know more than anyone else what happens on the front lines. Surely they're the ones in the best position to advise the ministry about how to fix the problems.

That's where they should be asking and looking for help. But in this case, rather than saying that there was a workload and resource problem or even just saying, "I'm sorry; I fixed it," or "I'm trying to fix it," the minister says: "It's all the workers' fault. There is a crisis in Quesnel and I'm going to stand up for my staff, except when there is a problem. When there's a problem, that's where I'm going to lay the blame -- at the feet of the staff who are already under-resourced."

Then she wonders why there is a problem with morale in this ministry. Because there is a serious problem with morale.

There's an 83 percent turnover rate, according to the BCGEU, amongst the new workers that the ministry hired on its last big recruitment drive -- within two years. That's an astonishing number. The BCGEU says that it's 25 percent on average for new workers in the ministry. That's another astonishing number. I bet you that the fry section at McDonald's doesn't have numbers like that for turnover. The Ministry for Children and Families is a ministry that attracts employees who go into it because they want to change the world; they want to make a difference and be in the people business -- they want to make a career choice for the rest of their lives. When 83 percent of them leave within the first two years of working in the ministry, that tells us there is something very, very seriously wrong.

I would argue that the biggest problem that employees are facing in this ministry is a lack of resources. Then, when they can't do their job because they don't have the resources, the political leaders in the government, the ministers and the senior ministry people say: "It's all the workers' fault." Well, that's not good enough. The ministry needs to take some responsibility for the problems that happen in this ministry and for the lack of resources at the front lines. The ministry has to take some responsibility for that.

The social work supervisor in Quesnel first let the ministry know that there was a problem as early as April. If that was the first time the ministry knew about that problem -- and we don't know yet about how many grievances there were in that office; I hope we'll get that information by this evening -- how many other times between April and the end

[ Page 8824 ]

Hon. L. Boone: I want to correct some things here. The member likes to quote numbers all the time, whether they are right or wrong, but we'll give them to you anyway. The ministry has conducted a review of the turnover of the 325 regular social workers hired in the '96-97 fiscal year and has concluded the following. Of the 325 hired, the total number of terminations during the '96-97 fiscal year was 23, which represents a 7 percent turnover rate. Of the 325 hired, the total number of terminations during the '97-98 fiscal year was 47, which represents a 14 percent turnover rate. The overall turnover rate for social workers during the '97-98 fiscal year was 7.2 percent.

I have never said that workload was not an issue. Without question, it is an issue in the entire ministry. I have acknowledged that. When we said that we were hiring more social workers, I said that workload was an issue.

Clearly the issue in Quesnel is different. There is a workload issue in Williams Lake. The population is 23,000 in Quesnel and 27,000 in Williams Lake. There are 50 intake calls per month in Quesnel and 54 in Williams Lake -- child protection workers in Quesnel, 6.5; child protection workers in Williams Lake, six. The issue does not have to do strictly with workload; it has to do with practice issues. As I stated quite clearly, it is not an issue of the individual workers in that area; they were merely following the directions of the supervisor.

The children's commissioner clearly states:

"The Quesnel audits disclosed disturbing and deep-seated shortcomings in the child protection practices and management of the Quesnel office.

"The Children's Commission review confirms the presence of many deficiencies identified by the audits, including: a failure to adequately assess or monitor risk to children; inappropriate use of voluntary care agreements; a failure to support families in reducing risk factors; and the absence of protocols with first nations to guide relationships and practice for aboriginal children."

As I have stated clearly over and over again, Quesnel was a separate issue; the practices that were taking place in Quesnel were not taking place in any other area. We have done other audits in other regions of this province. We have not found those practices taking place in any other area, even though they have the same workload issues, the same staffing ratios, that Quesnel had.

[5:00]

Yes, we did have to do that. We did what we thought was necessary to make sure that the children in that area were protected. I make no apologies for making sure that the staff did that.

C. Clark: I want to start by giving the minister the source of some of the numbers I was using. The 83 percent turnover rate is the number that John Shields from the BCGEU quotes when he talks about the 300 workers who were hired in the ministry's last hiring blitz. Those 300 new workers are who I'm talking about -- who John Shields is talking about. I suspect that the BCGEU has as good information about its members as anybody else. I don't know; maybe the minister doesn't trust John Shields. Maybe she's prepared to get up and say that she doesn't trust him, she doesn't believe his numbers and she thinks he's wrong -- I don't know. I'm getting my numbers from him. That's his number, based on his membership. When he looks at his roll of 300 workers who joined his union as a result of the ministry's last hiring blitz and 83 percent of them are gone, he concludes that there is a retention problem in this ministry, that they can't keep workers.

When the minister talks about these retention rates that she has across the ministry, she's including all the people who have decided to stick it out -- who have been in the ministry for many, many years and have had years of dedicated service. But the fact is that the new workers who have made less of an investment in their career with this ministry and with this government are more likely to leave. They have less incentive to stay, and when they don't have that incentive to stay, they leave. According to John Shields, 83 percent of them left last time. There doesn't appear to be any particular reason to believe that that number might be different this time. I don't see the ministry operating any differently. I don't see the minister sounding any different from her predecessors when she says: "The workers were not doing their jobs properly; they were not living up to ministry policy. It's not the workers' fault; they were just following orders from the supervisor."

Well, the supervisor is a worker too, but that aside, the minister is prepared to blame just one worker rather than all workers in this case. Won't the minister at least concede that her ministry bears some responsibility for the fact that the supervisor in place wasn't following ministry policy? Won't she at least concede that her ministry bears some responsibility for the fact that the supervisor in place wasn't following ministry policy? Won't she at least concede that her ministry bears some responsibility for the fact that the supervisor must not have been adequately trained or that the workers weren't getting the training they required in order to be able to meet the direction of the ministry? Won't she at least concede that the ministry bears some responsibility for what happened there? Who is responsible, then, for the fact that the social worker wasn't doing -- or couldn't do -- her job? Who takes responsibility for that?

I don't think the minister can just blame this on some idea the supervisor had that she was acting alone, because she wasn't. There was a reporting structure in this ministry, and it's supposed to work. And if it wasn't working, why did it take so long for the ministry to find out that it wasn't? That supervisor had been in place for many months before the problem first came to the attention of the ministry -- even the workload problems. Why did it take so long for the ministry to realize that the supervisor in the Quesnel office wasn't doing her job in the way she was supposed to be doing it and that she didn't have the skills, the tools, the training or whatever was necessary to make sure that she could do her job properly?

An Hon. Member: How many more places is that happening in?

Hon. L. Boone: The member over there asks how many more places that is happening in, and I think that's an inappropriate question. As I said, we've had audits in other areas,

[ Page 8825 ]

Interjection.

Hon. L. Boone: Are you listening, member? Even though you don't like to hear it, I have said that there is a workload problem. Do you want me to say it again? I have said that there's a workload problem. Yes, there's a workload problem; we have a workload problem. We had a workload problem. We're dealing with the workload problem; we're hiring new social workers. Yes, there is a workload problem. Now, have you got that? There's a workload problem out there; our people are dealing with it. We're hiring new individuals; we're hiring new social workers. We're not hiring new social workers just because we want to hire more staff; we're hiring more social workers because we recognize that there's a workload problem out there.

Having said that, I hope we can get that finished and out of the way. There's a workload problem. Have you got that? There's a workload problem. We're now dealing with that as best we can by hiring more staff. We are hiring more staff, and we believe that those staff will stay there, because these are additional staff. There are 250 new staff coming on, who are going to be trying to deal with the workload problem that we have out there.

We have accepted the fact that we had problems in Quesnel. It was the ministry's audit that discovered the problems that took place in Quesnel. We did this audit as a result of concerns that we heard from the children's commissioner, who did a review in Quesnel. We did the audit as a result of that. That ministry audit identified the concerns that we had there. We had the second audit to confirm it -- a more in-depth audit to identify where the areas were. So it was the ministry that acted.

Should we have acted sooner? Maybe -- probably. It would have been nice if we'd done that sooner, but we didn't; we acted after the audit. I can't tell you why the problems with regard to the supervisor weren't identified sooner. I can tell you that this is a ministry that has been in operation for only 18 months. I can tell you that tremendous changes have taken place in the ministry -- in the structure of the ministry and in the mandate of the ministry. I can tell you that each and every regional operating officer has been in those areas for only a very short period of time. I can tell you that stress has been put on all our staff and all those individuals who are working out there in the communities. Maybe as a result of those things that took place, maybe because of the restructuring that took place, the situation with regard to that supervisor -- that one staff person -- was not identified sooner.

I would have liked it to have been identified sooner. Then we could have maybe avoided all of these issues. But it didn't; it wasn't. We recognized it in the fall of the year, after the audit. I think we can move forward from there.

C. Clark: The minister is right: it would have been nice if the ministry had acted sooner. It sure would have been nice if the ministry had acted sooner in Quesnel. That would have been really nice. It would have been nice for the people of Quesnel. It would have been nice for the families that were torn apart in Quesnel. It would have been nice for all those people who had no idea what was going on while the ministry was, all of a sudden, apprehending children. That would have been very, very nice. If the minister had acted in time -- if the minister had paid attention to what the staff were telling her -- that would have been really nice. It would have been really nice if the people of Quesnel would not have had to go through this pain and sustain these wounds so that now they have to go through this period of healing. That would have been really, really nice.

Next time it happens -- if it ever happens again -- it will be really, really a shame to have the minister get up and say: "You know, it would have been nice if we'd acted sooner." What we're trying to do here is find out why the ministry didn't act sooner, because what happened in Quesnel wasn't nice. It wasn't nice, and it wasn't right. It was not right to let those problems in Quesnel fester as long as they did, to let that office be starved for resources or to let those workers struggle for months until they got into a situation where social workers had to be flown in from across the province to one office, where they started apprehending children, all of a sudden, and instilling fear into the community up there.

Of course, it didn't come to light for the rest of us until months later, but at the time there was a palpable sense of fear in that community. It would have been nice if the ministry had acted before they got to that stage -- yeah, it would have been nice. It would have been nice if the ministry had acted before the Baby Molly or Baby M case. It would have been nice if the ministry had acted sooner. It would have been nice if the ministry had acted sooner with Matthew Vaudreuil. That's why we're here. When these problems arise, the idea is to take what we can learn from them and apply that to the way we operate in the future, to try to find out what went wrong in those cases so that we can make sure that it doesn't happen again.

It's not just a case of saying: "Well, it would have been nice. Gee, I wish it had been better. Gosh, I wish I'd done things differently, but it's all water under the bridge now." It's not just a matter of saying that and of sweeping it under the carpet and hoping it goes away. It's about finding out what happened there, taking lessons from it and applying them to future policy to make sure we change the way this ministry works.

The minister is right: this is a new ministry. We need to take every lesson that we can from our experiences in the past with this ministry. That's what we need to do. We need to take those lessons and apply them to the way the ministry operates, because this is a new ministry and mistakes will happen; there is no question about that. Problems will arise; there is no question about that. But when they do, we should learn from them. The minister's responsibility is to stand up and tell us what went wrong, what she's learned and how she's going to take what she's learned and make sure it doesn't happen again.

But all we're getting tonight is: "Well, gee. I wish I hadn't done it. It sure would have been nice. Aw, shucks." That's not good enough. It is not good enough to say that to the people of Quesnel who had to pay the price for the mistakes that happened up there. There should be for them, at the very least, the knowledge and the comfort that something is going to be gained from what they've gone through. The question is: why did it take a children's commissioner's report to get the ministry moving on an audit of this office in Quesnel, when they had been notified by the supervisor and by the workers up there many times before? Why didn't the ministry act sooner if they knew at least as early as April? According to social workers up there, they knew at least as early as Decem-

[ Page 8826 ]

Can we assume, then, from the Quesnel experience that the only way to move this ministry to action, to make an audit, to go in and find out what's happening in a situation like Quesnel is if the children's commissioner or the child, youth and family advocate intervenes or if the newspapers report on an issue? Surely, repeated reports and complaints from workers in an office should be enough to twig the ministry that there is a problem. My question for the minister is: why did it take so long for the ministry to act on complaints from that office, particularly since they'd been hearing about them since probably December of the year before?

The Chair: Members, the Chair needs to caution members in regard to repetition of debate. Also, would members wishing to take part in debate please take their proper seats in the chamber.

Hon. L. Boone: The Quesnel area, as I said. . . . You keep going back, even though I have read it to you, and you've read it, and you have copies of it. It clearly states that the issue in Quesnel was unique, that it was not strictly the workload issue in Quesnel that caused the problems, but differences of practice. The member still goes back to it. Why is it that you cannot get it through your head that it was not strictly a workload problem in Quesnel? When we're getting into "would have," it would have been nice, hon. member, if you hadn't gone into Quesnel and held a public meeting, when you raised the issue and got everybody's fears up.

It would have been nice if the member that represents Quesnel had recognized, after I met with him, that in fact the workers were doing their jobs. The new workers that were coming into Quesnel had severe problems that they were dealing with. They had to act as they did. Instead, the members opposite go around Quesnel, raising fears, saying that the ministry is acting in a high-handed manner, that staff are acting in a high-handed manner, that they're apprehending kids, that they're going into Williams Lake, stating to the media: "You too could be next." It would have been nice, hon. member, if you'd had a little bit of responsibility and actually taken those things into consideration. If you'd recognized that the workers there were doing those things, if you'd phoned me once and said, "What is the situation in Quesnel? Why are those children being apprehended?" I would have been glad to have shared with you the information that the children's commissioner. . . .

The Chair: Minister, through the chair, please.

Hon. L. Boone: I would have been happy to share with the member opposite, hon. Chair, the information that the children's commissioner had with regards to the children that were being apprehended, so that she wouldn't go out raising the fears in Quesnel, so that she wouldn't go out raising the fears in Williams Lake. I would have been happy to share that information, and I would have trusted that the member from Quesnel, who was given that information, would share that information with you as well. If you had had a little bit of responsibility, then maybe we wouldn't be in this situation.

[5:15]

But rehashing Quesnel is not moving us forward. That is not moving us forward. We have taken substantial changes as a result of the audit, and we are moving forward. I would suggest that you get on this bus, or this bus is going to leave without you.

J. Wilson: My community has received a lot of adverse publicity because of what happened there -- publicity that we don't deserve and that we don't need. I hope that through this process we can avert that from happening again. This publicity was the result of the inability of this ministry to do the job that it's intended to do. That is a sad but. . .

An Hon. Member: True fact.

J. Wilson: . . .true fact. It's been established time and time again. Hopefully, by going through this estimates process, we can prevent that from occurring again in that community or in any other community in the province of British Columbia.

I have a few questions I would like to ask the minister. They'll be very simple, very short and to the point. Out of this 130 FTEs that the ministry is now hiring, how many will be hired for audit purposes?

Hon. L. Boone: None.

J. Wilson: Of these 130 new employees that the ministry is now going to. . . . I believe that is what it is. It's 250, but when it comes down to FTEs, it is 130. That is the number she gave us before lunch, I believe. How many of these new positions will be administrative?

Hon. L. Boone: We went through this earlier. I went through the numbers that were going into guardianship and into child protection workers. I would suggest that the member look back into the Blues for those numbers.

J. Wilson: I believe that in 1996 the ministry called for a cut in the budgets of the contractors. Would the minister give me the figure -- the percentage -- that they were asked to cut in 1996?

Hon. L. Boone: Could you repeat your question? I didn't quite understand it.

J. Wilson: Contractors were asked to cut their budgets that they presented to the ministry -- their contracts. These were contractors. They were asked to come up with a reduction in their costs in 1996. What I'm asking for is the percentage that they were asked to cut.

Hon. L. Boone: The information that I have -- of course, the ministry has only been in existence for 18 months. . . . But in 1996 there was no across-the-board cut to contracts. Contract services are often asked to come in with a tighter budget, but there was no across-the-board cut in 1996 to contracts.

[ Page 8827 ]

J. Wilson: I believe that the minister has identified the issue that I want to discuss. In the fall of 1996, as this ministry got started, they were asked to come in with a reduction. Then again in 1997 they were asked for a further reduction. What I would like to know is what the reduction that they were asked to come in with added up to in those two years.

Hon. L. Boone: Well, we're trying to figure out what you're talking about. The only thing that we can identify is that in the CPR, in the contract and program restructuring, some of the regional operating managers, instead of going into a contract and program restructuring, asked some of their contractors to find some efficiencies within their operations. But that wasn't done across the board. That may have been done within your region, but I'm not aware. . . . There was no cut taking place across the board in the entire province.

J. Wilson: The efficiencies that the minister suggested were asked of contractors in Quesnel. I got this as firsthand information from some of them. The efficiencies added up to a considerable amount of money over a two-year period. Is the minister able to give me the efficiencies that were found within the system and what they would add up to in a dollar value?

Hon. L. Boone: I'll have to get that information from the region, and I'll get that to you.

J. Wilson: Once we get that figure, perhaps we can then determine whether or not this $30 million that the ministry is now going to spend over and above what it did last year -- and they've budgeted it in -- will in effect offset those savings that the ministry has asked for from the contractors. My concern is that perhaps we're ending up at the same level of service that we had before, without any improvement. If they're asked to find efficiencies and savings within their contracts in order to support the ministry, and the ministry in turn hands out more money, will the money that is now being disbursed to these contractors be enough to make up for the savings that they were asked to come up with?

Until I get the figures from the minister, there's no way of determining that. But to me, right now, it looks like we may not be going forward fast enough to keep these support services running properly to do the job that is necessary in order that this ministry can function. The issue we had last month with the delay in payments to a contractor makes me wonder whether or not they're really serious about what they're saying.

Right now in Quesnel our unemployment rate is running well over 14 percent. It's probably one of the highest rates in the province, and this means that the ministry must be prepared to put into that community whatever resources are necessary to deal with problems that are going to arise. It's a known fact that the higher the unemployment rate, the more people there are out of work, the more it affects families and the more problems it creates in homes. If it were down at 6 or 7 percent, the minister's job would be way less than what it is when it's up in the high 14 percent range.

I may have missed this, but another figure that I would like to get from the minister is the amount of additional moneys that are being spent. I understand we're getting more staff. We should be getting more money for the contractors in my riding. I would like a breakdown for the region as to how much is going into front-line workers and how much will be going into contract service.

[5:30]

J. Wilson: I would appreciate that -- and I hope in the next day or two, if possible. The other question I had was how many new employees we can expect to work out of the Quesnel office in the coming year.

Hon. L. Boone: As I said earlier, we're still working on determining where all the allocations of staff are going to be, but we anticipate that there will be a minimum of two additional staff in Quesnel. That's the anticipation.

J. Wilson: I would ask the minister, when they consider their allocation of staff, to bear in mind the economic situation that we have in Quesnel and the high unemployment rate, which is going to put a much larger demand on her ministry than it could in other places where the employment is greater.

Hon. L. Boone: We'll take all of those things into consideration when we determine where the staff will go, using the workload assessment tool, which looks at a number of different variables.

C. Clark: The issue of what triggers an audit is something I'd like to get a little more information about from the minister, because in Quesnel we have a situation where the children's commissioner triggered the audit -- from what I understand, based on the minister's comments earlier. But there had been earlier complaints about workload and about the situation in that office, and I suspect that those workload complaints included descriptions of what was happening and the fact that people weren't able to get their work done or whatever. A whole range of things would have been attached to that, which the ministry would have been made aware of in advance of the children's commissioner doing her report. My question is: why, in the Quesnel case, didn't those previous complaints from staff trigger an audit of the office in Quesnel?

Hon. L. Boone: It's practice concerns that trigger an audit. As I said earlier, we first became aware of practice concerns after some concerns were raised by the children's commissioner; then concerns were raised when our child protection manager came on staff there. She only came on staff around June of last year. We are looking at having regular audits, and I believe we'll be doing 72 audits this year on a regular basis, so that all our offices are audited on a regular basis to make sure that they are functioning properly. So when you talk about learning from something, I guess those are some of the things we've learned.

C. Clark: Don't workload concerns ever trigger an audit?

Hon. L. Boone: No, they are dealt with through the regional operating officers and through the concerns that are addressed there. But they're not addressed by an audit. The audit addresses only the practice concerns.

C. Clark: It seems to me that an audit should be ordered in response to concern that the ministry isn't serving its clients

[ Page 8828 ]

It seems to me that workload should equally be an issue to trigger an audit within the ministry. Workload can have as much, if not more, of an impact on the quality of service that children and families receive from the ministry in practice. I recognize that practice is something that needs to be paid attention to. Concerns about practice are certainly something that should trigger an audit. Staff should certainly be doing their job according to the letter of the law and the regulations; there's no question about that. But equally, workload has a huge impact on the quality of service that people get as well.

Perhaps the minister can tell us why workload isn't something that would also trigger an audit, given that serious workload concerns can result in just as diminished a quality of service being delivered to children from an office as practice concerns would.

Hon. L. Boone: If workload were resulting in practice concerns, then we would have an audit. But we do have -- and this is just now coming on stream -- the workload assessment tool, which we developed with the union specifically to recognize and address the concerns of those who believe they have a workload problem.

In the past we were dealing strictly with caseloads. I think everybody recognizes that caseloads are not an adequate way of dealing with workload. You can have a low caseload and have an extremely high workload, or a high caseload and a much lower workload -- depending on the cases that you are dealing with, on the services that are available in your community, on the amount of travel that you have to do as an employee, etc. So the workload assessment tool will enable us to determine where there are problems and allow us to then put the necessary resources in to deal with them.

C. Clark: It seems to me, though, that this differentiation between workload concerns and practice concerns is a false one. Take the Quesnel case, for example. I suspect that when the workers and the supervisor notified the ministry that there was a workload problem, they didn't just say: "We've got a workload problem." They said: "We've got a workload problem, and as a result, we're not able to do this and that and this and that" -- whatever those might have been. "We're not able to do all the paperwork that goes with every case," or: "We're not able to see the children that are in our care as often as we need to see them." I suspect that every time a workload concern is raised, a practice concern goes along with it. The only way to demonstrate that you do have a workload problem is to say: "I can't do my job as a result." I don't understand the differentiation that the minister makes between workload and practice concerns, because it seems to me that every time a workload issue is raised, a practice concern would also be raised with it.

Hon. L. Boone: Not necessarily. I stated quite clearly, there was the same workload issue raised in Williams Lake, but there were no practice issues there. The practice issue was in differences in how they practised, what they did. It's the issues that took place in Quesnel. So you may, in fact, have a situation where the workload was causing some practices, but that was not the issue in the Quesnel area. All you have to do is look right next door at Williams Lake, and you can see that they had the same workload pressures, the same population size, etc. They did not have the same practice concerns, so they were handling their caseloads in a different manner than they were in the Quesnel area.

We will be able to now, with the new workload assessment tool -- which is being looked at by ministries across Canada as being something that they may be interested in utilizing within their own jurisdiction. . . . We can, in fact, determine what the workload is, where we should be putting our resources and how we can address those things. Just doing it on a caseload basis was really not an adequate way of dealing with things. The union recognizes that, and I'm very grateful that the union has worked with us in developing this tool which will help us and help them recognize where our resources are best put.

C. Clark: The Freedom of Information Act is something that the government likes to say every jurisdiction across the world is looking at and adopting, but that doesn't mean it works very well here -- in fact, we know it doesn't work very well here.

The workload assessment tool, though, is something that we'll watch and see if it does work well. I'm quite hopeful about it. Although, you know, you can have the tool, but if you don't use it, it won't be worth very much. The idea with the workload assessment tool is to determine how many employees are required, but according to John Shields, we're still falling well short of the number of employees that are required to meet what the tool tells us are needed. So you can tout how valuable the tool is. But if you don't use it, if you don't take the lessons that it's there to teach you, how useful is it going to be for the government?

My question about Quesnel in particular is. . . . And I appreciate that not every workload issue results in a significant practice issue -- I understand that because I know that every single office in British Columbia probably has workload issues that they've raised with the ministry. But in Quesnel, clearly, the workload issue was acute, and the practice issues in Quesnel were also acute. When is it that the ministry takes workload complaints and tries to determine whether there is a practice issue that arises out of them? I think the minister would agree that workload issues will frequently, but not always, mean that there are practice issues that arise out of them. When does the ministry decide that those workload issues are also practice issues or could also be practice issues? Or does the ministry always wait for the children's commissioner or some independent body to come forward and identify practice issues before they do an audit?

Hon. L. Boone: As I said to the member earlier, we are being proactive on audits right now. We are doing 72 audits, so we are not waiting for issues to come out and for us to say that there's a problem area. We are going in and auditing them. As a result of those things, hopefully we will be able to identify problem areas before they reach the situation they had in Quesnel -- before they get acute. I'm very grateful and I'm glad that we are doing those things, and I'm sure we'll see some good actions coming as a result of that.

C. Clark: It seems to me that the ministry is anticipating that there will be problems arising outside the normal audit-

[ Page 8829 ]

I'm assuming that the ministry anticipates that there will continue to be unexpected audits apart from the ones that it has planned for well in advance. I can't imagine why the ministry would create a rapid response team if the ministry anticipates that all of the problems will be anticipated well in advance as a result of regular audits and everything is going to go along just fine. I'm still left with the question of what triggers the audits that occur outside of what is promised to be the normal planned process of regular auditing.

Hon. L. Boone: I just want to clarify the issue with regard to the rapid response team. The rapid response team is not there just to deal with Quesnel -- and I certainly hope we never find another Quesnel. It is there. . . . On an ongoing basis at different times we have had shortages in staff. I mean, that's a regular occurrence. If you get anywhere outside the lower mainland, you find that there are times when you just don't have the necessary staff, because people tend to gravitate to the lower mainland or elsewhere. I know a time probably about eight years ago in Prince George when the senior person there was somebody with six months' experience. We've always had those difficulties. So the rapid response team is to go in when we have a difficult situation.

[5:45]

As I said, we are doing the audits on an ongoing basis, but there may be a situation where concern is raised with regard to practices in a particular area. Then we will do an audit as a result of that, but I'm hopeful that we won't have too many of those.

C. Clark: What's the plan for the audits? How often are they going to happen? Over how long a period. . . ? How long will it take to complete the first round of audits of all the offices in British Columbia?

Hon. L. Boone: We will be doing all the offices over three years.

C. Clark: How much provision is the ministry making for these unexpected audits, like what happened in Quesnel, where it might have to go in and do a quick, unexpected audit?

Hon. L. Boone: In addition to the audits that we are going to be doing on all the ministry offices over three years, we are having the regional manager do audits on a regional basis. So we're hoping that can identify some problems and nip them in the bud as well. We do have provisions in the director's office to do 15 of the special audits, should they be required.

C. Clark: So for those 15 special audits -- I'm back to my question. . . . Would a complaint from a worker be able to trigger one of those audits, or would it always, in every case, require a report by the children's commissioner or some independent agency to trigger one of those 15 audits that the ministry has contingency plans for?

Hon. L. Boone: There are processes in the collective agreement for that worker to address those concerns, which would then be addressed by the deputy minister. There are articles within the collective agreement to address some of those workload complaints.

The special concerns would be raised through a special audit. As I said, we will be doing audits on a regional basis through the regional manager. We'll be doing them on a provincial basis. If there were concerns raised by the child, youth and family advocate or by the children's commissioner, or if the director of child protection saw some incidents where children were injured or situations that were coming up on a regular basis that triggered a concern of his, then he would launch a special audit based on some of those concerns. But the special audit would not be based on a workload concern of a worker.

C. Clark: I understand that the children's commissioner or the child, youth and family advocate -- or one of the independent agencies -- can trigger an audit. I'm now given to understand that the child protection manager can also trigger an audit, and I'm wondering what criteria the child protection manager would use to make the decision that one of the special audits needed to occur.

The Chair: Minister, noting the time.

Hon. L. Boone: As I said, it's the director of child protection that would do the audit as a result of concerns that were raised -- maybe a number of children were injured, or various concerns were brought to his attention.

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

Motion approved.

The House resumed; the Speaker in the chair.

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

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

Hon. D. Lovick: I move that this House do now stand recessed until 6.35 p.m. and sit thereafter until adjournment.

Motion approved.

The House recessed from 5:53 p.m. to 6:37 p.m.

[The Speaker in the chair.]

[ Page 8830 ]

Interjection.

Hon. M. Farnworth: I can see that that's just made the hon. member's day.

Interjection.

Hon. M. Farnworth: Yes, something unusual.

With that, in Committee A, I call the estimates of the Ministry of Employment and Investment -- myself. In the House, I call the estimates of the Ministry for Children and Families.

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

ESTIMATES: MINISTRY FOR CHILDREN AND FAMILIES

(continued)

C. Clark: I want to continue with this issue of audits for a little while, if we can. The audit team. . . . Or, first of all, is there an audit team that's permanently assigned to do the audits and that travels around the province? Or is there some other way the ministry has structured it's auditing process?

Hon. L. Boone: Yes, there is a permanent audit team of four that is within the director's office.

C. Clark: What are the qualifications of the audit team? Specifically, I'm curious to know whether they're social workers or whether they've been drawn from the general public or from within the ministry. What are the qualifications that the ministry has set for the audit team?

Hon. L. Boone: They're all very senior ministry social workers and child protection officers or supervisors.

C. Clark: I take it, then, that each of them is a former social worker. I wonder, first, if the minister would confirm that. Second, what criteria did the ministry use to select the four individuals that are on the audit team?

Hon. L. Boone: They were all drawn from the field through a competition for practice analysts.

C. Clark: Were they specifically trained by the ministry to do audits? Or is there a pool of people that have practice analyst experience that the ministry draws on to choose the members of the audit team?

Hon. L. Boone: One of them came from the old audit review team of the former ministry and has assisted in training the others.

C. Clark: Now that the audit process has sped up and there are, I think, a lot more audits on the agenda for the next three years, does the ministry anticipate that these four people will be able to handle an increase in the volume of work that they are doing?

Hon. L. Boone: No, we will be hiring more people on a contract basis, probably up to eight, and we'll be training them this summer to do this job.

C. Clark: Will those people that are hired on a contract basis be drawn from within the ministry. Or will there be an open competition, and the people will likely come from outside the ministry?

Hon. L. Boone: It won't be through competition. They will probably be former employees or retired employees who will be contracted to do a small number of audits on a contract basis throughout the year.

C. Clark: I should ask: how many audits were conducted over the last fiscal year?

Interjection.

C. Clark: The ministry has 72 audits lined up over the next three years, and I suspect that will cover every office in British Columbia. Could the ministry make available a list of the order in which the ministry intends to audit those offices?

Hon. L. Boone: Yes, we'll make that list available to you.

C. Clark: I understand that there was an audit started in Kelowna that was never completed. That's something that I understand from local folks up there. I wonder if the minister could confirm that for us and, if that is true, maybe tell us why the ministry embarked on the audit and then never completed it.

[6:45]

C. Clark: How is the information that's collected during an audit shared? I'm interested in how that's shared within the ministry and whether or not the public or any interested members of the public -- the media or individuals -- would gain access to information contained in the audits.

Hon. L. Boone: It is given on a regular basis to the regional operating officer, who then shares it with the office staff and, if concerns are raised -- we're hoping that they won't be raised, but if they are -- makes sure that they deal with the concerns that are raised in the audit. That information, because it doesn't deal with any particular names, is available through freedom of information.

C. Clark: I understand that in Quesnel there was an unusual. . . . This is based on the children's commissioner's report. The way the information was shared was a matter of some controversy for workers up there. The audit was done. The results of the audit were not shared with the staff, and then they were shared with the supervisor -- if I remember correctly -- and certain members of the staff. Then it wasn't until, I would guess, four or five months later that the whole staff was made aware of the results of the audit. I wonder if that's normal practice for the ministry, if that's the way the system is supposed to work -- or, if it's not, what went wrong in the Quesnel case so that the audit results were shared on an uneven basis.

[ Page 8831 ]

C. Clark: I thank the minister for that. I understand, further, that the previous deputy minister said that he shared the results of that audit with the workers in Williams Lake before he shared the results with the workers in Quesnel. Can the minister tell us why that happened?

Hon. L. Boone: The chronology of events, as I understand it -- and I'll read this into the record for your information -- is as follows. From October 20 to 24, audits were conducted in two Williams Lake offices, and from October 27 to 31, an audit was conducted in the Quesnel office. On October 31 the supervisor of the Quesnel office, the regional operating officer and regional child protection manager were briefed verbally on the results of the audit. On November 7 the regional operating officer and regional child protection manager debriefed the Quesnel office staff regarding the audit. From November 10 to 19, the child protection supervisor, four child protection social workers and one support staff member went on sick leave. The director of child protection and the regional operating officer agreed on the need for an audit of remaining files and the staffing required to provide service. In late November, the regional operating officer and the child protection manager provided a second debriefing to Quesnel office staff. Staff received a copy of the audit report, and independent debriefing counselling was provided. From December 1 to 12, the second audit was completed. That's the chronology of the events that I have. I'm not sure if you have any further questions with regards to that.

C. Clark: When were the workers in Quesnel finally advised of the results of the second audit?

Hon. L. Boone: It would have to have been after the staff returned to work. The information is that two social workers returned to work on January 5, and it would have been after that. We would not have been able to contact them at home as they were on stress leave and under doctor's orders. So we wouldn't have been able to share it with them at that time.

C. Clark: Could the minister advise, then, when they were made aware of it and the process by which they were made aware of it? When they came back to work, did the supervisor inform them of it? Did the deputy minister? Did the regional operating officer? How were they made aware of the results of the audit when they did come back to work?

Hon. L. Boone: We'll have to get the exact date for you. It was after January 5, but we do not have the exact date. It would have been the regional operating officer that would have done that. We'd have to get the exact date for you.

C. Clark: How much is the ministry budgeting for audits this fiscal year? I hope the minister can tell me how much the ministry spent on audits this last year, and give me some historical context, versus what's projected to be spent on audits next year.

Hon. L. Boone: For this year, $1,160,000 is budgeted, and we would have spent about $150,000 last year.

C. Clark: Can the minister tell us how much additional cost the ministry incurred in Quesnel as a result of the problems that happened up there? How much extra had to be added in to that office's budget to make up for the crisis that was allowed to get out of control in Quesnel?

Hon. L. Boone: It's $637,000 to March.

C. Clark: Does that include the cost of the community consultant that the ministry sent to Quesnel?

Hon. L. Boone: No, that came after March.

C. Clark: What's budgeted for that?

Hon. L. Boone: We believe that it's in the area of $36,000.

C. Clark: Does the $36,000 include just the salary of the individual? Does it include expenses? Does it include travel costs that would be incurred by the ministry for this individual? Does it include accommodation costs? Could the minister give us a fuller picture of the total cost?

Hon. L. Boone: I believe it's the total cost. If it differs from the information that I've given, I'll get back to you. I believe it's the total cost.

C. Clark: What is the term of the contract for the community consultant?

Hon. L. Boone: It runs to the end of June. We're expecting that there could be an extension in the time line, but not in the contracted dollar amount, that's being spent there.

C. Clark: So would that be about a four-month term for the contract, give or take? The $36,000 would include this individual's total pay, all of his accommodation costs, at $65 to $75 dollars a night, his per diems for food, the costs of. . . . Actually, when you include all that, $36,000 is less than I might have expected to be the total cost for the community consultant. I would be interested to find out from the minister the exact details of what the $36,000 is supposed to cover, because I suspect that it probably doesn't cover the total costs that will be incurred by this individual. I don't think he has a home in Quesnel, and I suspect he'd be incurring accommodation costs while he is up there.

Could we also get from the minister the terms of reference for the community consultant?

Hon. L. Boone: Yes, we'll get that for you.

C. Clark: The Quesnel situation is expensive in and of itself, just because the situation was allowed to get out of control: $600,000 for the new workers to come in, all those additional costs that were added in that office. I'm trying to get a sense of what the $600,000 in additional costs in that office includes. I'm assuming that the ministry would have a breakdown of how much, for example, accommodation per diems represented and how much they might have spent on travel -- getting back and forth. I'm also interested in finding out from the minister how many people in total went in and out of that office after the ministry decided to send new workers in to address the problem. I understand that the ministry didn't send in 20 workers or ten workers for a two-month period. I understand that some workers went in for a couple of days at a time, then came out; and other workers came in, who were replaced again. There was a whole host of different people and faces that went through that office.

[ Page 8832 ]

Hon. L. Boone: Of the $626,000, there was $8,000-plus that was for additional training-contract dollars; management contracts, $91,607; community support contracts, $27,856; additional family care contracts, $157,500; staff borrowed from other regions, $197,736; overtime estimates, $49,434; travel vouchers, $93,765.

[7:00]

Hon. L. Boone: About 55 workers went through. One of the problems we had in terms of getting individuals onsite had to do with the fact that the ministry cannot force people to go outside their area. So we had to ask for volunteers from within the ministry, which is one of the reasons we need the rapid response team. We had to ask for volunteers to go there. Some of them went on a short-term basis; others were there on a longer-term basis. That's why we had the numbers going through. The expectation that we could take people and move them into Quesnel for a long period of time. . . . It's very difficult for those who have families and obligations in other parts of the province.

C. Clark: On the list that the minister gave me on the breakdown of the $626,000, it appears to me that community support and family care are the only two items that would have been with contracted agencies delivering services to clients. First, I'll just ask the minister to confirm whether that's correct.

Hon. L. Boone: You're correct. Those are the only two.

C. Clark: The reason I ask is because the amount that has been allotted for community support -- the $27,000-plus -- doesn't appear to be a very large number. The family care, I am assuming, is foster care situations for children in care. It seems to me that when the ministry has apprehended an unusual number of children in a short period of time, the necessity for additional community supports would be much, much greater, and the stresses on the system would be bigger. We would need to have more community supports, more parenting programs, more staff delivering those services on the front lines, out through contracted agencies. So whether it's parent education, whether it's prenatal programs, whether it's home support -- whatever it is -- it seems to me that it should be a lot more than $27,000.

I'll ask the minister if my assumption is correct: the $27,856 allotted for community support is the only new money that went into Quesnel to support community agencies that were delivering services to clients of the ministry.

Hon. L. Boone: To March, yes, that's correct.

C. Clark: Then it shouldn't be hard for the minister to break down for me which agencies got that money.

Hon. L. Boone: Just one agency got that, which is the Quesnel Contact Line.

C. Clark: How did the ministry, then, live up to its commitment to provide more parenting programs for families in Quesnel who'd had their children apprehended, if it didn't add any more money to the system?

Hon. L. Boone: We used the existing contracts and agencies to capacity.

C. Clark: But the existing agencies, I'm assuming, were funded to capacity already. I know the ministry makes a great deal out of the fact that they like to get service for the money they provide, and they contract for spaces. So is the minister telling us that before the crisis in Quesnel there was an overabundance of spots for people wanting parenting courses and courses in child care, that there were more than they needed, and that suddenly, when the crisis happened in Quesnel, it was just lucky that they happened to have exactly the spaces needed to meet this huge new increase in demand?

Hon. L. Boone: No. As I said, we provided $27,856 more. You may say that it's not enough; the opposition always says it's not enough. There's not enough money for anything, as far as you're concerned. We try desperately hard to live within the budget, within the means, that we have, and those are the dollars that we provided. That is just to March.

C. Clark: The problem in Quesnel was an unusual one. The minister said that the problem was a unique problem. The ministry required, in some cases, that for parents to get their children back, they take parenting courses. There were certain requirements that social workers put on parents who needed. . . . Those parents needed to get into those courses to get their children back. One of the things that I heard from parents when I went to Quesnel was that they couldn't get the courses they needed to meet the ministry's requirements to get their children back. So when these parenting and home support courses got full, when they were at capacity -- based on what I learned in Quesnel -- the rest of the people just had to wait in line. They couldn't access those programs because the ministry didn't put any new money into Quesnel.

That's a surprising admission from the minister. When the community was in crisis, that's when additional money should have been pumped into those community supports. The children's commissioner, the children's advocate and Judge Smith in Quesnel very clearly said that there was a lack of follow-up, a lack of support after the fact -- after children had been apprehended. What the minister is telling us today is that with $27,000 in new money that they provided to these -- no, in fact, with zero money that they provided to these agencies, with the exception of a phone line. . . . That's the reason. The ministry did not provide any additional support in that community when they needed it. They didn't ensure that the courses were available for families, in order to get their children back. We can, therefore, assume that the parents who said that they waited in line, couldn't get into the courses and couldn't get their children back as a result must be telling us the truth.

It surprises me that the ministry didn't see the need to step in immediately and do something about this problem. We saw the situation with the agency up in Quesnel that almost shut its doors after the director put his personal line of credit on the line, put up his own personal bank notes, against the next payroll to keep his agency open, because of a little bureaucratic tangle that he got into. It seems to me that the ministry should be paying more attention to those agencies in Quesnel, particularly now that attention has been drawn to the crisis up there.

[ Page 8833 ]

Hon. L. Boone: I was in Quesnel one day after the member was there, and I heard similar concerns to those she is raising. The community consultant's report is going to come down with recommendations as to additional resources that should be put in there. We have put some additional resources in there since March. I was there in March; you were there in March. I'm not sure what the breakdown is. We'll get that information for you. I certainly recognize the concerns that you are raising, and I heard those concerns as well when I was in Quesnel.

C. Clark: For the minister's information, the thing that prompts my question is reports out of Quesnel in which the ministry suggested that there was new money coming into that community for community supports. When service providers in Quesnel saw that, the phones started ringing for them, saying: "We haven't received a penny in extra money. We haven't received one red cent." So the minister should be aware that her ministry is reported as saying that there is new money going into those agencies in Quesnel now.

Now the problem is that those agencies say that they're not receiving it. But again, there's another communications problem with the money situation in Quesnel. I understand that PACT counselling service and the native friendship centre have received some additional money. I wonder if those are the two organizations that the minister is referring to when she said that a little more money has come in. If that's the case, can she tell us how much has gone to each?

Hon. L. Boone: You're correct. Those are two agencies that did receive some more dollars. We'll get the exact amount for you.

C. Clark: The minister has talked about the workload assessment tool that she's worked out with the BCGEU. I am going to be interested to see how the workload assessment tool is applied, because that's going to make all the difference between talking the talk and walking the walk. If the workload assessment tool isn't actually used and applied, and if the outcomes from it aren't put into practice, it's going to be completely meaningless. So I'm curious to find out how the committee that's managing the workload assessment tool is being structured and how those decisions about what goals the workload assessment tool will set for the ministry will be met.

Hon. L. Boone: The individual who's actually responsible for this committee is not in the chamber with us. I'm sure he'll send us information to advise us what the actual structure is. It is a union and management committee, where we choose our members, of course, and the union chooses theirs. Then we will initially be working on a pilot basis to try it out and assess how it's working. That's all I can tell you right now, unless I get different information from anybody that may be listening.

C. Clark: I'm sure they're all glued to their sets.

I don't want to pursue this too far. I'm not sure how much information the minister does have about the workload assessment tool, so I'm happy to defer some of these questions. My next question is: are the decisions that are made by the workload assessment committee decisions that bind the ministry? Is there an agreement or a protocol that the workload assessment committee has signed with the ministry to ensure that the decisions that it makes are carried out? Or is the workload assessment committee a purely advisory committee, and the ministry can choose to accept or not act on its recommendations?

[7:15]

C. Clark: The workload assessment tool is a fairly heavy document; it's fairly detailed. It presents a number of different components that need to be taken into account. It attempts to be as analytical as possible. It attempts to be as objective as possible -- takes as much subjectivity out of the process as it can -- and I'm not sure how much room there is in this for consensus.

I understand that there will have to be some consensus around what factors would be weighted in to making a final decision. But once it's determined, for example, that. . . . Well, let me give you an example. The expected percentage change in the number of intakes from the previous year is a serious factor that needs to be considered when using the workload assessment tool. I assume that it's set in the process. You end up with a book like this where you've got all the assumptions worked out very carefully, where each of the assumptions could be assigned a point or a number or something, and at the end of that, you would end up with the total workload assessment in a region.

It seems to me that you could argue about what you want to include in the tool to build the tool. But once the tool is built, the ministry is going to end up with some numbers when the tool is applied to offices around the province. So my question is: once the ministry and the BCGEU have determined how to build the tool and what it's going to look like, how is the ministry or this committee going to set the final number? Or once the committee sets the final number, how is the ministry going to respond to that number? Is it going to be a number. . . ? Say if the ministry says that, based on the workload assessment tool, the Burnaby office requires three new intake workers and two new case assistants, is that going to be a number that binds the ministry and that the ministry is required to act on?

Hon. L. Boone: As I'm sure the member understands, the ministry can't have something that binds it in terms of hiring: "Thou shalt hire new staff." Otherwise our budgets would go out of sync altogether. What we have said is that we will adjust our policies to keep them in line with what is required. As I said, the expectations of the ministry may change, and we may change our policy and our workload expectations of individuals so that the workload is kept within what the workload assessment tool has identified.

[ Page 8834 ]

Hon. L. Boone: Yeah, that's one of the things. We can try and ask them to do less; we can try and deal with some of the paper workload; we can. . . . You know, there are a number of different things that we can try and do to work with the union to recognize the workload, so that the workload is reduced and kept within what the assessment tool has recognized as being a fair workload.

C. Clark: My concern about this is that the ministry appears to be giving up a fair amount of decision-making to the committee about what its policies and procedures will be. When the Gove report and the Children's Commission came in, and when we have all these reports that come in that recommend specific policy and procedure changes for the ministry, the ministry is obliged to some extent to meet those recommendations. There is certainly a moral obligation there, and there's no question that whenever the children's commissioner comes out with recommendations, the public responds and invests some credibility in the recommendations she makes. What I'm concerned about is that when the workload committee decides that the ministry should do things differently, that it should change its policies and procedures to meet the expectations of the workload tool. . . . Until now, of course, I assumed that the workload tool was going to be talking about staffing numbers, not significant changes in policy and procedure. So how does the minister see that conflict being resolved if on the one hand, for example, the ministry has decided to accept a recommendation of the children's commissioner that's completely at odds with the workload committee because it might add a whole raft of new work to front-line workers in the offices in British Columbia?

Hon. L. Boone: I hope the member didn't misunderstand me. We didn't say that the committee would be making decisions. I said that they could make some recommendations. We can adjust our policies according to how we feel we can reduce those workloads. I mean, we may in fact say: "Yes, we need more staff." We may say that we need to shift some of the staff from one area into another area. Those are decisions we'll be making, but we as a ministry will be making those decisions. The workload committee may in fact recommend to us that there is something that we could do, but we will be making those decisions as to how we allocate our resources and what changes we make in policies to address some of the concerns.

C. Clark: Is there any agreement with the BCGEU about the use and application of the workload assessment tool? Is there any protocol? Is there any agreement? Or is this really just a casual arrangement with the BCGEU to set up the committee based on goodwill -- if it works, it works, and if one party decides to walk away, that's what they decide to do?

Hon. L. Boone: It's a letter of understanding between the president of the BCGEU and the deputy. Here are some examples, just for your information. The sort of thing that one might look at is investigations within 35 days instead of 30 days. I mean, we can adjust various things to the frequency of documentation that comes in. We can adjust some of this stuff so that we can reduce the workload and recognize those things, as I said, or reallocate resources within a region to say that a particular region has a high workload. The workload is less in another area. Therefore we may be able to reallocate resources. There are a number of different ways that one can recognize the workload issue, and we will work with the union to identify ways we can do those things to make sure the workload doesn't increase for our employees.

C. Clark: I would ask the minister to forward a copy of the letter of understanding between the two parties, if she would. Second, how does the letter of agreement envision resolving differences between the ministry and the BCGEU about dealing with these workload issues? Is there a process within the committee to resolve differences when consensus can't be reached? Or can we sort of assume that the process might just break down and that both parties would walk away from the table, and that's the end, thank you very much, of the workload assessment tool?

Hon. L. Boone: There is no sort of dispute resolution recognized within this area. The union recognizes that the employer -- the government -- has the mandate, the obligation and the right to manage its resources. What this does is give them an opportunity to participate, have a say and actually assist in assessing workload. The union, I think, is very happy to actually have an opportunity to sit down and deal with that, but I think they also recognize that the ministry has the ultimate decision-making power and responsibility.

C. Clark: The president of the BCGEU has indicated that the workload assessment tool has already shown that there's a shortfall of 700 FTEs in the ministry. Could the minister comment on that and confirm whether Mr. Shields is correct?

[7:30]

C. Clark: Mr. Shields equated the minister's announcement of 250 new social workers to "putting out an inferno with a water pistol." I think that is what he said. It was at the same time that he said that the ministry needed 700 more workers. He didn't say whether those would be social workers, caseworkers, assistants, whatever; but he said there were 700 more FTEs required in the system. Does the minister dispute that? If she does, what is her estimate of how many new workers are required in the system?

Hon. L. Boone: I'm not going to get into a dispute with John Shields. John Shields is a very good union person and represents his members extremely well. That's what he should be doing. He's there to say that we need more social workers, and all of those things. That's his job, and he does it very well. I think that his workers and his union members certainly appreciate the stuff that he does there.

It's my job, of course, to try and manage my budgets -- to live within the means of the taxpayers. So we as a ministry have looked at the range, and the committee said that the ranges went from 52 at the low end up to 350 at the high end. We have chosen 250 new employees. We believe that's an adequate amount. If we're shown differently, then we will deal with that at the time, but right now we are still struggling

[ Page 8835 ]

C. Clark: It sounds to me like the minister did use some kind of assessment tool or process to determine that 250 additional workers were needed. Could she tell us how she came to that conclusion?

Hon. L. Boone: The committee on workload assessment ran different scenarios using different policy options, and that's how we got to the 250.

C. Clark: I could have inferred that the ministry did use a bunch of different policy options and looked at a bunch of different numbers, but I'm asking the minister what those options were. What was the process that they used to determine that 250 new workers were required? From the minister's answer previously, I inferred that there was a process, because she said: "We determined that we needed somewhere between 200 and 350 -- a range of workers. We determined that, and we settled on 250." What was the process they used to determine the range of workers that might be required by the ministry?

Hon. L. Boone: There's a number of different policy areas that they looked at. I'll give you an example, and they use these variables. If you saw a child four, six or eight times a month, we chose six times per month, which is what we ran it at, based on those variables -- how the intakes are brought in. How much time is required to do each child protection task was determined by a committee using its expertise. All of these various things were taken into consideration by the committee looking at the variables that are there -- how we change the policy and what policy decisions we make. That's how we came to the decision that if we went with one policy -- for example, with the four, then we would be requiring an additional 52 workers. . . . If we went with the eight, then we were looking at the 350. We went with the six visits per month, and that's how we got the 250.

C. Clark: How did the ministry gather that data? Did they do a questionnaire of all the social workers, or did they go to each of the regional operating agencies in the province and gather that data? Or did they do it on just a sample pilot basis?

Hon. L. Boone: The committee of experts based it on a focus group type of situation, where you look at what would be an acceptable level of service and what would be an excellent level of service -- and the amount of hours, for example, for an investigation or the amount of times that you have contact with a child. Where we found that we couldn't get information or we thought that we were not in agreement on those things, we looked to other jurisdictions to find out what their situation was. That way we were able to find what we felt was a reasonable expectation for service delivery.

C. Clark: Before I again forget to ask: will the minister commit to providing us with a copy of the letter of agreement about the workload assessment tool?

Hon. L. Boone: Yes.

C. Clark: I understand, too, that in February the previous deputy indicated that the ministry would be testing the workload tool in a couple of offices in British Columbia. I think he specifically said South Okanagan, northern interior and Vancouver. Can the minister tell us whether those tests are complete and what the results of those tests were?

Hon. L. Boone: Vancouver is done. They're in Prince George today. South Okanagan is next.

C. Clark: Could the minister tell us: what were the results of the Vancouver test?

Hon. L. Boone: We'll get that information to you.

C. Clark: One of the important staffing positions that's going to have to be filled. . . . We touched on it a little bit earlier. We talked about the rapid response teams providing relief for employees. Could the minister tell us how much in this budget has been provided for relief workers, or can that solely be accounted for in the rapid response team budget?

Hon. L. Boone: There are ten individuals on the rapid response team -- about $750,000, I think. Each region, though, has auxiliaries that they can utilize. We would have to get you those numbers on a regional basis. There are 20 regions, but each region has auxiliaries that they can use, so that you don't have to send the rapid response team into every single area because somebody's on leave for a couple of weeks, or something.

B. McKinnon: I would like to change the subject just a little bit and talk about a case that has come to my constituency. I won't name names or anything. I do have the permission of the person, but I do not want to mention any names in the case. It is a bit of a problem. This mother went to the ministry with her 14-year-old daughter and asked them to take over care of her because of the alcoholic father. She was worried about the child being abused. The ministry put the 14-year-old daughter into foster care, and shortly thereafter the foster care family moved up to the interior. The daughter wished to go with them, so they took the daughter with them without giving any information about the move to the parents.

I wrote to the ministry about this, and they came back and said that was wrong, and they apologized. But I have a great concern here, because the mother is tremendously worried. The daughter did not want to come home again, because she had so much more freedom with the foster family than she would have had at home. So far she's become addicted to drugs and is doing a lot of drinking. I think the mother is really concerned about what is happening to her daughter and the care that she's actually receiving.

So my question to the minister is: when children of the age of 14 are put into foster care, what controls do the foster parents have over these children? Obviously, from this particular case, it certainly hasn't been to the benefit of either the daughter or the parents that this child went into foster care. Could I get some response to that?

[7:45]

[ Page 8836 ]

As you may or may not know, there is a committee that's right now looking at secure treatment for children with regards to whether we want to follow the rule that is going on in Alberta, where children who are having difficulties can be forced into treatment. But these are issues that we haven't come to deal with. However, in your particular case, if you would. . . . I was just talking to Ross Dawson, who is the director of child protection. If you would like to meet with him separately, he would be happy to meet with you and go over the particulars of that case, so that we can see if something can be done for that particular child.

B. McKinnon: I would actually be pleased to do that, but I would just like to ask a couple more questions not necessarily on the case itself, but in general on a 14-year-old child in foster care. Well, I suppose I have to refer to this case as a case scenario. The mother has asked the ministry to take over for a short period of time because of her worries, whatever they may be. How much emphasis does the ministry put on what the child has to say about where the child wants to live or be? In this particular case, the child didn't want to be at home because she didn't have the freedom she had in foster care. So would the ministry listen more to the child than actually to the parent wanting the child back and saying that they now have a safe environment for the child?

Hon. L. Boone: If the child was in care by agreement, which is what it sounds like this child was, then we would listen primarily to the parent. However, I think it's important that you recognize that we could in fact tell this child to go back to the parent. The child may in fact run, which is what happens in many cases when children are forced into situations they don't want to be in. You have children that run when they're living at home, and you have children that run when they're in foster care or in group care. If they choose to run, there is nothing we can do to stop them and force them into staying in any particular area.

B. McKinnon: When you have this type of case, a social worker is usually given a particular case. Now, say that this particular case moves to the interior. It's still that social worker's case, so in order for the social worker to speak to this child, they have to go to where the child is living. So she would have to fly to the interior to make contact with this child. Is this a policy of the ministry, or do they change social workers?

Hon. L. Boone: You're talking about a unique situation. It doesn't happen very often, because usually that would be transferred with the child so that the child would be. . . . The child's social worker would go to the region so that they were dealing with that, but the other part would have to stay with the parent, with the same social worker that they were dealing with, in order for the parent to have contact with the social worker too. So it's not a situation that you find very often, where children are moved with their foster parents to areas and where in fact they're in care by agreement.

B. McKinnon: It sounds like this case is a comedy of errors. This social worker, at the expense of the ministry, took trips to the interior to visit this child. The mother, who is working very hard, had to take the bus and go late hours and then go to work in the morning -- to even visit her child. Are there any particular moneys allocated to social workers for travel expenses per year?

Hon. L. Boone: There's travel money in the region, which is attached to the regional budget but not attached to any particular worker.

I wouldn't say it was a comedy of errors. It sounds like a tale of horror to me. I would really urge you to contact the director, so that we can try to straighten out some of the situations you're talking about, because clearly it's not working properly. We need to work with you to see how we can make it function best for the child and the parents, so that the concerns are addressed. I can imagine the terror that is going through a parent's mind. It's bad enough when your child is in your own home and you know there is nothing you can do about that particular child who's acting with behaviour that you don't like, but to see that type of behaviour going on outside your home. . . . I recognize that it could be an extreme sense of frustration for that parent. I urge you to work with us so that we can try and work through some of these problems.

B. McKinnon: I will definitely do that when the estimates are over. I would definitely like to work with you on this case. The case has brought me to a question about. . . . We're not really into foster care, and I don't know if I should ask it later. But do you know who monitors the effectiveness of the guardianship when a child is in foster care?

The Chair: Minister, noting the hour.

Hon. L. Boone: It is monitored first through the supervisor, then through the regional operating officer. Then it would be through an audit, if the audit was in there.

Always mindful of the Chair, I'd like to 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. C. Evans moved adjournment of the House.

Motion approved.

The House adjourned at 7:57 p.m.

PROCEEDINGS IN THE DOUGLAS FIR ROOM

The committee met at 2:31 p.m.

[ Page 8837 ]

ESTIMATES: MINISTRY OF EMPLOYMENT AND INVESTMENT
AND MINISTRY RESPONSIBLE FOR HOUSING
(continued)

G. Abbott: I'm here to ask the minister responsible for Skeena Cellulose some questions about that. I want to begin by making some general inquiries about the nature of that acquisition, particularly given that the provincial government, when it was formerly led by the NDP between '72 and '75, also acquired ownership of this company under a different name. I'm interested in exploring the motives and interests of this government in acquiring a majority ownership of Skeena Cellulose.

The first question is: was it done exclusively to protect jobs, or did the government have some broader goal in terms of using SCI as a tool to achieve some economic or social goals?

Hon. M. Farnworth: It was strictly jobs.

G. Abbott: One of the things that intrigues me with respect to the government owning a majority share in this particular enterprise is that it does appear to pose some distinct dangers in terms of the government being in conflict of interest around forest policies, economic and investment policies, and so on. Has the government given consideration to these possibilities and taken precautions to ensure that it does not end up in a conflict-of-interest situation?

Hon. M. Farnworth: I guess there are two points. One is that there are a number of subsidiary companies that are run, which it's operating through. So the government is not running it. The second is that we have a CEO in there, Bill Steele, who makes the management decisions regarding the company, and he's been making them at arm's length from government. I'm not running it; the Minister of Forests isn't running it. Management is making management decisions as they need to be made.

G. Abbott: As the minister knows well from being involved in local government over time, conflict of interest is not necessarily a direct, hands-on problem; it's also a matter of perception. Perception becomes a forceful part of conflict-of-interest concerns. There are many examples that could be cited here, but I'll give the minister one. This government, earlier in the 1990s, committed to seeing every pulp mill in the province reach a target, by the year 2000, of zero AOX emissions from pulp mills. Let me ask the minister, first of all, whether the government is still committed to that goal. Are they committed to it for Skeena Cellulose? And does the minister agree that in terms of the broad regulators, the directors of public policy in this province, this would be one good example where, in the sense of at least a perceived conflict of interest, this government may quickly have a problem?

Hon. M. Farnworth: I want to make two points. The issue around AOX with regards to Skeena Cellulose. . . . There's a capital expenditure program in place there, which is dealing with emissions in the same way that they're being dealt with in other pulp mills around the province.

On issues of policy regarding AOX for pulp mills or for other mills, I would suggest that it would be more appropriate to ask those questions of the Minister of Environment, seeing as they are the ones who are responsible for it. That's not within the purview of this ministry.

G. Abbott: Would the minister, nevertheless, acknowledge that the government's decision around whether in fact they will continue to keep in place the zero AOX target for 2002 will in a very fundamental way affect the interests of the pulp mill in Prince Rupert that they own?

Hon. M. Farnworth: Well, if there are regulations in the province, any pulp mill is going to be affected by them. What the exact target is, whether the target is in place, what the goals are in terms of targets -- whether extended or not extended. . . . That really is within the Ministry of Environment, and that is the appropriate place to ask that question.

G. Abbott: And I will.

What I want to hear from the Minister of Employment and Investment is an acknowledgment that there is an enormous potential for the government to be perceived to be in a conflict-of-interest position around its ownership of that enterprise. If the government decides that zero AOX is no longer going to be a target achieved in the year 2000, it will have very material and substantial implications with respect to the future of Skeena Cellulose. I'd like the minister to acknowledge that there is a potential conflict of interest with respect to this.

Hon. M. Farnworth: We would expect any company, whether we have ownership in that company or not, to govern itself by the laws of the province, regardless of what those laws are. But I categorically do not accept the member's proposition that government is somehow in a conflict of interest. I think you need to go back and look at what conflict of interest means and what conflict of interest is all about. Too often it is bandied about to apply to all kinds of things. Conflict of interest is when you or I benefit personally; it is not the Crown that benefits. So this idea that somehow government is in a conflict of interest is nonsense. What's important is that a company is run according to the laws of the province, whether the company is private or not -- that it obeys the laws of the province.

Conflict of interest -- the way I have always understood it and the way local government always understands it -- is quite simple: it's whether you as an individual have a direct or indirect or perceived benefit. The fact of the matter is that none of us here does -- none of us in government and none of us in the opposition. Who is the beneficiary? The beneficiary is the Crown, which is the province as a whole.

G. Abbott: I can't accept that argument on the part of the minister. What we've got here is potentially a huge problem involving the government. . . .

Interjection.

G. Abbott: Pardon me?

The Chair: Through the Chair. Order, members.

G. Abbott: What we have is a potential problem involving the government, on the one hand, as the legislator and regulator of industry in the province and, on the other hand, as a participant and competitor in the forest industry. There are two sides to this. On the one hand, it is the landlord, the regulator and the legislator; and on the other hand, it is a competitor with other forest enterprises and a participant in the industry. That is where the conflict is.

[ Page 8838 ]

Hon. M. Farnworth: First, the statutes that govern the issues the member raised reside within a number of different ministries. This minister, who is responsible for Skeena Cellulose, doesn't manage those particular statutes -- okay? They come under different ministries.

Second, and more importantly, I don't acknowledge the point that the member is making. I disagree with his assertion that government is in a conflict-of-interest situation; I fundamentally disagree with that. I don't buy this argument of a broad-based idea of conflict of interest. Conflict of interest applies to an individual; it does not apply to the Crown.

G. Abbott: If the minister had a different pair of shoes on, and if he was the president or CEO of a pulp and paper company in the province and he was facing a situation where one of his competitors was owned by a government that set the regulatory playing field for him, would he not be concerned -- at least theoretically -- about the possibility that the role of legislator and regulator was going to collide with the role of participant and competitor?

Hon. M. Farnworth: No, because the regulator -- in this case, a government which sets the rules and regulations -- doesn't set a specific piece of legislation that applies to one particular company; rather, the rule and the legislation apply to all companies who are operating within the province. There isn't a particular section, a piece of legislation, that will say that Skeena Cellulose is exempt from all other statutes that apply to private industry throughout the province. That would be the same whether you were talking about a private ferry or any other private enterprise.

The fact is that if there are standards or regulations in place through statute, they apply equally to the private sector and to Crown corporations. The member wants to raise it as though there is some conflict. There isn't a conflict. You're trying to paint a broad definition, and it's one that I do not accept.

G. Abbott: If, as the minister argues, statutes and regulations affected every enterprise in the province in the same way, then yes. But that's not the case. Laws, regulations, affect different enterprises in different ways. As a consequence, the regulations and the laws that a government puts forward can alter the playing field in very substantial ways for different enterprises.

But I don't intend to spend the whole day arguing about this theoretical point. On the financial side, clearly the government has already tilted the playing field by acquiring an enterprise that is in competition with others in the marketplace. That's a fundamental problem that this government is going to have to address.

Let me try a different, but connected, question: given that the government, according to the minister, has moved into acquiring the majority ownership of Skeena Cellulose in order to protect jobs, would the government prefer to cede or sell all or a portion of its interests in SCI rather than to retain them into the future?

Hon. M. Farnworth: In fact, the government and the Toronto-Dominion Bank have both agreed to hire Goepel McDermid, who are investment bankers, to sell our respective shares in Skeena Cellulose.

G. Abbott: Can the minister advise me what the terms and conditions of the sale of those assets are?

[2:45]

G. Abbott: The minister, then, is saying that this government has a general predisposition to move those assets, provided they get the right terms and conditions. I think, then, that the minister is also saying that an integrated forest company like Skeena Cellulose is a rather different thing than a power company like B.C. Hydro or a railway like B.C. Rail. Is the minister saying that this government is viewing an integrated forest company differently than the latter two objects?

Hon. M. Farnworth: I'll make a couple of points. First, this is an integrated forest company; it's not a public utility. Second, when we got involved with Skeena Cellulose, we made it clear from the beginning that it was not our intention to own, run and operate an integrated forest company on a permanent basis, but that we wanted to see it returned to the private sector. That is still our goal.

G. Abbott: At different points during the chronology of the acquisition of Skeena Cellulose, we heard from the then minister that there were private interests in the wings that were very interested in the acquisition of Skeena. Are there private interests in the wings that are currently contemplating a purchase of the government's share in this enterprise?

Hon. M. Farnworth: Yes, there are private interests that have expressed interest in Skeena Cellulose.

G. Abbott: Could the minister advise whether there were private interests in the wings prior to the government's purchase of a majority ownership in Skeena Cellulose?

Hon. M. Farnworth: As far as I am aware, the only private sector interest at that particular time was in the tenure in the sawmills.

G. Abbott: The question was: were there any private interests in the wings prior to purchase? The minister responds that there was interest in the private sector only on the solid-wood side of the company. Could the minister advise us who the private interests were and why they did not have an opportunity to come in and purchase a portion of the company?

Hon. M. Farnworth: Some of the companies that were interested at that time in the timber operations are now actu-

[ Page 8839 ]

G. Abbott: I can appreciate some of the concern around confidentiality with respect to ongoing negotiations. Could the minister advise of the nationality -- or provinciality -- of the interested parties?

Hon. M. Farnworth: Given the nature of the industry, I can't do that -- other than to say that there's national and international interest.

G. Abbott: The minister may have a good point there. Some of the interested purchasers may have interests in British Columbia and outside of British Columbia and, indeed, outside of Canada. Is that another way of saying what the minister has just said?

Hon. M. Farnworth: I thought that's what I said. There are companies in Canada that are interested, and there are companies outside of Canada that are interested -- and probably some companies that have a foot in each camp.

G. Abbott: It would appear from the minister's comment that there is some intensity of interest around the acquisition of the government's shares in Skeena Cellulose. Can the minister advise us -- in an approximate way at least -- of the number of forest companies or other interests that may be interested in acquiring the government's shares?

Hon. M. Farnworth: It's kind of hard to say. The role of the investment banker is to go out there and see what's out there, and you can get expressions from a whole range of companies. In some cases, it may be nothing more than just that -- an expression of interest -- and some are a lot more serious. So I think we'll probably have a better idea later on this fall. But right now the investment banker firm are out there doing their job, and the report back that we're hearing from them is that there is interest out there. That's what's being explored right now.

G. Abbott: I would just be interested in the number that might be categorized as serious. That would certainly satisfy my curiosity with respect to the number. If the minister could provide that, it would be useful.

Hon. M. Farnworth: It's more than one and less than seven. It really is hard to say who's really, really serious, and who's mid-serious, and who's "Yeah, if the situation is right, maybe we might do it" -- not really serious. But there's a limited number of forest companies and resource companies; it's definitely below ten.

G. Abbott: It's definitively somewhere between one and ten, I guess. That's fair enough; I don't think we're going to get too much closer.

The point here, though, is that the government, through an investment banker, is looking for opportunities to shed its shares in Skeena Cellulose. Does the government, through its management team in Skeena Cellulose, have an exit strategy or a disentanglement strategy? Is there a strategy that's being built around making this company more attractive to private investors? How is the government setting about putting an attractive package on the table that people will want to purchase?

Hon. M. Farnworth: I'll address this on two fronts: one being that of the larger issues around the mill in general, and then some more focused ones that will apply specifically to the mill.

Clearly, some of the things that make the mill more attractive are commodity prices, and the fact is that the pulp prices are starting to firm up. So that will play a big role in who ultimately decides to purchase Skeena Cellulose -- that's one. The issue around the mill itself: there is a capital expenditure program taking place that will improve the mill and make it more efficient -- that's something else. Within the mill itself, on the day-to-day operations, the CEO has been very aggressive in getting costs under control and bringing costs down. That's another component that makes the mill more attractive. Finally, over the years that the mill was in operation, before government got involved, there was a substantial amount -- $400 million approximately -- in tax losses that have built up. That would make it an attractive proposition to a number of companies.

Those are some of the things that are in place or underway that will improve the marketability of the mill, and key amongst them is the price of pulp.

G. Abbott: Regrettably, the price of pulp is something that we have remarkably little influence over, apart from companies, I guess, tailoring their production to try to maximize values in times like this.

As the government pursues an exit strategy in attempting to divest itself of the assets purchased at Skeena Cellulose. . . . I think it's $329 million or $330 million that has been invested by the province to this point. On what portion of that does the government expect full recovery?

Hon. M. Farnworth: The amount that has actually been committed is around $200 million, not the $320 million that the member's talking about. The best estimate right now is that if Skeena Cellulose were sold today, we would probably come out between a wash -- break even -- or somewhere around a $20 million loss.

G. Abbott: Maybe we need to take a minute, first of all, to get the amount right. My understanding, as of February 14, 1998, is that we were looking at $206 million in loans and loan guarantees, most of which will go to capital expenditures and increasing the company's line of credit from $110 million to $120 million. There's $206 million in loans and loan guarantees, $65 million in FRBC loans, $34 million in wage subsidies, $20 million in stumpage deferrals and $4 million for logging roads. That's the $329 million total that has been widely used, at least in the press. Could the minister try to reconcile the two figures there -- how that works?

[3:00]

[B. Goodacre in the chair.]

Hon. M. Farnworth: I'll do that. I'll start with one expenditure and remove that first, and that's the $65 million for FRBC, because that's gone to contractors; it has not gone to Skeena. That's separate. The purchase of the Royal Bank shares is $31.3 million, the loan for payment to unsecured creditors is $14.5 million, the capital expenditure loan is $122 million, the operating loan is $8 million, the additional operat-

[ Page 8840 ]

G. Abbott: I appreciate that explanation. The $7.2 million that the minister outlined -- I gather that there's no expectation of recovery on that?

Hon. M. Farnworth: The only two where we don't expect anything back are the wage offset, which is now off the table, and the roadbuilding, which is the $7.2 million.

G. Abbott: Of the roughly $200 million that is out there in loans and loan guarantees, the minister is saying today that these assets will not be moved unless the potential purchaser can get somewhere between full recovery and perhaps $20 million, or a 10 percent drop in recovery from the full amount. Is that what's being said here -- that we are still looking for either full recovery or something within $20 million of full recovery on that roughly $200 million in loans and loan guarantees?

Hon. M. Farnworth: That would be as of today. Of course, conditions can change over the next little while.

But I'd like to just back up a sec. On the $200 million, that's what's committed, but what's actually gone out the door is $74.3 million.

G. Abbott: I appreciate that particularly the expenditures on the capital expense side have not gone out the door yet, for the most part. On what portion of the loans and loan guarantees is the government prepared to drop the roughly $20 million or incur that roughly 10 percent less than full recovery amount?

Hon. M. Farnworth: I guess the best way of framing it is this: right now we don't expect to lose anything -- as I said, break even. This is like an estimate and it's based on what we think people may be prepared to bid or pay for the company. At the present time, we're not saying we're going to write down any particular component at all; this is just a ballpark estimate of possible scenarios we see unfolding.

G. Abbott: Could the minister advise whether any additional expenditures -- above and beyond the $200 million anticipated at this point -- will be necessary to bring the enterprise to a point where it is viable and attractive to private sector investors?

Hon. M. Farnworth: I guess the best answer I can give is that right now we are assessing the current financial situation and the state of the company. As I said, we have a program in place around capital expenditure, and there are a number of measures that are designed to make the company attractive for sale. Now, we've also got the investment banker out there shopping, making inquiries and marketing it for us. Right now I can't give you commitment there. There may be something that comes up in negotiations that. . .look, if you did this, it would make things a little more attractive and make it easier to sell. That's probably the best answer I can give you right now.

G. Abbott: The answer, as I understand it, is that the government is still open to additional expenditures if it makes the package more attractive to private investors. Is that correct?

Hon. M. Farnworth: Let me put it this way: I'm prepared to look at things that will make the company more attractive. Right now I'm not contemplating going out and spending a whole ton of money to do that. We've got a capital expenditure program that's underway and it will continue. There are issues around the price of pulp which will have an impact; there are efficiencies which have been achieved within the mill; there are tax losses. All of those things make a package. Now, whether or not at the end of the day that's enough to close a deal and maybe something else needs to be done, I can't say. What I'm saying is that I'm prepared to look at things like that, but I'm not going to give some commitment that we're going to go out and spend a whole ton of money.

Hon. D. Miller: I have a quick question, Mr. Chairman, relative to this current topic of valuation and what ought to be done to either enhance or potentially detract from the value of the asset. The question to the minister may appear to be obvious, but it's an important one.

The Leader of the Opposition promised to completely shut down the pulp mill, and I'm wondering if the minister might have some views as to whether or not that would enhance marketability and improve the opportunity to recover government investment, or whether that would be the most foolish thing that one could even think about, let alone talk about, regarding Skeena Cellulose.

Hon. M. Farnworth: The answer is that our own investment bankers have told us: "Look, if you shut down the mill, you will basically eliminate its marketability, and that will mean it will have either no value or a negative value." The banks are aware of that, and we're aware of that. We think it's extremely important to keep it up and running.

G. Abbott: Could the minister advise, pursuant to the other minister's question, what portions of Skeena Cellulose are operating today?

Hon. M. Farnworth: Right now there's a maintenance shutdown underway for the pulp mill, and that should be completed by June 22, in which case the A line will be up and running. The mills that are shut down will be up and running by June 22 as well.

G. Abbott: So in fact, very little of Skeena is actually operating today?

Hon. M. Farnworth: The mill is currently under a six-week maintenance shutdown. Maintenance shutdowns occur within the industry; that is standard. The industry realizes that, and potential purchasers will realize that. What is of concern -- and I understand the direction the discussion is heading in -- is the fact that the mill is capable of running and producing pulp, which is what the market is going to be looking at. That's what the government wants to see happen, and that is what is going to happen. The maintenance that's taking place right now is standard, and it's work that needs to be done. It is maintenance that will, in fact, enhance the ultimate marketability of the mill.

G. Abbott: One of the concerns that is sometimes raised -- warranted or unwarranted; the minister can fill me in on that -- is the potential liability in relation to the ability of Skeena Cellulose, and particularly of the pulp operation, to meet current environmental standards in the province. On occasion, and I think perhaps recently, the operation has been

[ Page 8841 ]

Hon. M. Farnworth: Again, I'll address the question in two parts. In terms of the actual emission standards, that's best addressed to Environment. In terms of the capital expenditure program, the work that's being done is to bring the mill into line with industry standards up and down the coast. Clearly there will be some impact from the capital expenditure program on emissions within the mill. That's happening not just at Skeena but also at other mills.

G. Abbott: The big difference between this mill and others is that -- at least to this point in time, until we find those private investors to come in and do the job -- we're going to be debating public dollars and their expenditure here. My question to the minister is: within the existing capital expenditure program that's part of the roughly $200 million in loans and loan guarantees -- and I know it hasn't gone out the door yet -- is there, as far as the minister knows, sufficient capital in that package to bring the mill into compliance with existing environmental standards in British Columbia?

Hon. M. Farnworth: As far as I'm aware, the answer is yes.

G. Abbott: The issue of zero AOX emissions by the year 2002 is an issue which I raised briefly in Forests estimates, and I want to raise it briefly here. I appreciate that the Ministry of Environment sets the regulations and so on, and I do intend to raise it with the minister there, but I want to call this minister's attention to it as well, given that I think that if the province is in the position of continued ownership of Skeena Cellulose come 2002, the zero AOX regulation is going to have some very profound effects on the pulp industry, and it's going to have a profound effect on SCI as one of the participants in the pulp industry.

[3:15]

Given that, has the minister -- as the minister responsible for this enterprise -- given any thought to what the social or economic implications of zero AOX are going to be on Skeena Cellulose, come 2002?

Hon. M. Farnworth: I guess that the one comment I will make to the member's question and statement is that in terms of pulp going to Europe, which is one of the key markets, we have not had expressions from the marketers about going to zero AOX.

G. Abbott: The minister says they haven't received any concerns about going to zero AOX. Have they received any requests, pleas, appeals to move to zero AOX? Or have they heard absolutely nothing about zero AOX in 2002?

Hon. M. Farnworth: I would put it in this context. I mean, the AOX standards in the province are the standards in the province. I'm quite sure that there are those who think that they should be relaxed or whatever and that they should be changed. What you think the level should be is something to deal with the Ministry of Environment on. But from the point of view of this ministry and Skeena Cellulose Inc., the AOX standards are out there. That's what the target is to meet. The capital expenditure program is designed to get to those targets. That's probably the answer I can give you.

G. Abbott: I won't pursue that further. I would suggest to the minister, though -- as the minister responsible from a business perspective, if you like, for this enterprise and as a member of the cabinet -- that he have a look at this issue. I think the one thing we need to avoid -- and I'm not an expert here either. . . . I'm suggesting to the minister that he may want to look at whether we are setting up a situation where we have a dozen pulp mills in the province in 2002 producing a product that the rest of the world is either indifferent to or outright not looking forward to. I'll leave that with the minister as something he may want to look at from the business perspective.

Has the government, as part of its disentanglement or exit from Skeena Cellulose, looked at the three solid wood mills that are a part of the SCI organization as viable entities on their own? Is the government looking at a sale which necessarily keeps all of those elements together, or could they be treated as separate entities in a sale?

Hon. M. Farnworth: I guess I'll make this point. One, it's a vertically integrated operation, so every component is integral to the whole. The best advice we have from the investment bankers is that we will get the best price if we market the complete package, as opposed to spinning off a couple of the mills and then being left with a pulp mill. The fact of the matter is that all the components feed into each other, and that's the best way to market SCI.

G. Abbott: Has the government contemplated what appears to be the widespread view of forestry experts in the province that we probably have two or three too many pulp mills in the province of British Columbia? That doesn't have too many consequences up there in terms of fibre supply; that's not a problem. But it does in terms of the amount of product that is put on the markets.

Hon. M. Farnworth: We are aware of that view that is out there. But the fact is that we also feel -- and our investment bankers feel, after having looked at SCI and the potential for the operation and the assets that go with it -- that this mill can be as competitive as any other mill in British Columbia.

G. Abbott: I guess the big question is whether it can do that without a lifeline from government. It will be interesting to see.

One of the concerns that found its way into a headline in relatively recent weeks was around SCI selling a fair quantity of pulp in Korea at well below market rates. That drew the ire, as one might expect, of other pulp producers. Is the government concerned about that? Again, I guess this goes back to the initial proposition I had of the government being sort of forced into this perceived difficulty around its role as regula-

[ Page 8842 ]

Hon. M. Farnworth: I understand the point the member is getting at. The fact of the matter is that the prices Skeena is getting for its pulp are not inconsistent with other mills within the province. You do get a certain lower price in Asian markets, but the real discount taking place is coming out of Indonesia, where you're seeing discounts down to $300 a tonne. That's where the real attempt to undercut the market is taking place.

G. Abbott: In terms of the corporate structure of Skeena Cellulose, there were some recommendations in the Torney report around the appointment of a board of directors. Have those recommendations been implemented now? Is there a board in place?

Hon. M. Farnworth: In terms of the governance operation, there's a CEO in place. The board basically consists of two people, one who represents the bank and one who represents the province. The view is that we shouldn't put a board in place until such time as the company is fully stable, ready either to proceed for sale or in a position where you have a board that -- I don't want to use the word creative -- has a lot more options in the directions it would like to move.

G. Abbott: Looking at Skeena's current ownership structure, the province's interests in Skeena are reflected through a numbered company called 552513 British Columbia Ltd. -- a provincial holding company. Is that where the two directors come in, or are there directors of that numbered company in place?

Hon. M. Farnworth: The numbered company that the hon. member mentions holds the province's interest. We have two directors on that.

G. Abbott: Those two directors, I gather, are distinct from the two directors that the minister mentioned earlier -- the one representative of the bank and one from the province. If that's correct, could the minister advise who the two directors of 552513 British Columbia Ltd. are?

Hon. M. Farnworth: One director of 552513 is Mark Lofthouse, and he is also a director of Skeena Cellulose. The other director, who is currently being appointed, is Doug Callbeck. He will be appointed within the next week or so.

G. Abbott: I gather, then, that Mr. Torney's recommendation around the appointment of a board of directors is not going to be implemented in the foreseeable future. Is that correct?

Hon. M. Farnworth: To use a phrase that I used last time, certainly not in the short fullness of time -- not in the next month. There are still some issues around how you choose particular directors from within the unions, for example. The unsecured creditors have yet to nominate anybody. So I'm certainly not anticipating any developments within the next month on that front.

G. Abbott: I think this is one of my final questions, and this is a straightforward one from "Budget '98 Reports." On page 99 under "Self-supporting Debt -- Commercial Crown Corporations and Agencies," we have a line for Skeena Cellulose. We have a budget estimate for 1999 of $245 million and a revised forecast for 1998 of $120 million. Can the minister explain the composition and genesis of those two figures in "Budget '98 Reports"?

Hon. M. Farnworth: Just a quick clarification. Were those debt figures that you were talking about, hon. member?

G. Abbott: That is correct -- self-supporting debt.

[3:30]

Having said that, what I will do for the hon. member is check that those statements are accurate and get him the full technical detail as to how we arrived at that.

G. Abbott: I would like that.

Given that those figures represent a write-down of the debt of the two banks, why is it then listed as a self-supporting debt, as opposed to government debt?

Hon. M. Farnworth: What's left will be those numbers for our debt, and we view that debt in Skeena Cellulose as self-supporting.

T. Nebbeling: When we finished this morning, Mr. Minister, we were talking about the investment climate in the province -- some of the barriers and some of the actions undertaken by the government to fight some of these barriers. We focused primarily on the role that the Premier played by enticing foreign investors to establish businesses in British Columbia and create the jobs that we're all focusing on. We talked about the high taxation and high regulation that I believe is deterring businesses from establishing themselves here. There's the fractiousness of labour relations in this province, which I believe also puts fear into the minds of many potential investors. And no doubt the huge debt load that we face is a further deterrent. These elements together have created this sense of: "B.C.? Thank you but no thank you."

There was a survey done recently -- and I'm sure you've seen it -- in which the numbers clearly show that choosing B.C. as a province for investment had the highest negative percentage; it was 49 percent. At the same time, the positive element for investing in British Columbia. . . . In that survey, B.C. was the lowest. It was only 3 percent.

My question to the minister is: when we see these numbers, and we know that we have tried to entice investment into this province through various programs, including the immigrant investment fund program. . . . Can the minister give me some idea where the immigrant fund stands today? How many people actually signed up for that program in 1996-1997, and what kind of dollar value came with that?

Hon. M. Farnworth: A couple of points. I am familiar with the survey the member talks about, and the only comment I'll make on the survey is that the questions were asked of stockbrokers, basically. So since the question "What do you

[ Page 8843 ]

T. Nebbeling: Asking an NDPer if this government is doing well?

Hon. M. Farnworth: No, it would be kind of like asking an NDPer what they think of the opposition and if they think they are doing a good job. Probably 3 percent might say yes and 52 percent would say no. I wouldn't be surprised about that. We can talk about polls too.

Interjection.

Hon. M. Farnworth: Exactly. You would rather not, because given everything that has gone on, the fact is that you are still only around where you were on election day, which suggests to me an inability to capitalize on the all of the challenges that government has faced. So I don't think the opposition wants to talk about polls.

Anyway, on the question of the immigration fund, there are approximately 100 units available, of which 82 units are either completely or partially filled right now -- have deposits on them. There are 40 that are actually filled, where the $350,000 has been committed and invested on the dotted line, and then there are another $42,000 where deposits are in place and they are busy getting to the $350,000 level.

T. Nebbeling: The minister is well aware that in 1996, 52 percent of all Canada-bound investors under this program landed in British Columbia. In 1997 it was about 38 percent, so there was a serious reduction. But what is more important -- and I think the minister should be able to answer this question -- is: with the percentage of Canada-bound investors under this program being 38 percent, of the dollars that came with that 38 percent, how many dollars actually finished up in British Columbia?

Hon. M. Farnworth: Very little of the money ends up here in B.C. It has everything to do with the way the federal statute works. In fact, it tends to focus the money toward going into Quebec.

T. Nebbeling: Shouldn't that be an indication to the minister that there is something fundamentally wrong with British Columbia? If an immigrant comes to this province and decides to live here but is not willing to take the money that he or she brings with her and invest it in this province but decides to invest it in Alberta or Ontario, would that not indicate to the minister that there are indeed barriers here that stop people from doing what would be the natural thing, which is invest in this province?

Hon. M. Farnworth: I think the fundamental problem is not the province. I think the fundamental problem is the process and the way it has been set up by the federal government. The fact is that most of the money doesn't go to British Columbia, Alberta or Ontario. It goes to Quebec and the Maritimes. The program is structured in such a way that it encourages that inequity. The problem is not investing here in British Columbia.

T. Nebbeling: Maybe we are talking about two different things. I'm not talking about, let's say, 1997, when we did get 38 percent of the immigrants coming to Canada. I think the minister is talking about the 62 percent that decided to reside in other provinces. Where their money went, I don't care. But I would like to hear from the minister how much money went into the fund in 1997, delivered by the 38 percent of immigrants that came to Canada and decided to live in British Columbia.

Hon. M. Farnworth: A couple of points. Of the 38 percent the member is talking about, approximately $13 million to $14 million came into British Columbia. But the way the program is structured, that 38 percent could be in Alberta. The money would still flow to Quebec and the Maritimes, because that's where you get the cheapest visa. It's $250,000 there, as opposed to $350,000 here.

Having said that, you also have to look at the entire immigration program as a whole. This particular portion of immigration actually counts as a rather small amount. There's the business class -- entrepreneur class -- which contributes a whole other source not only of immigrants but of investment dollars to the province. The key issue around this particular program -- and it's been identified as such not only here in British Columbia but in other provinces as well -- is that in some ways it penalizes the wealthier provinces. The poor provinces have lower thresholds. You get a cheaper visa that way.

T. Nebbeling: There is an element in the whole program where the immigrant can decide where his or her money actually goes. There is no mandate that if you land in Montreal and there is either a cheaper visa or the program requires a lesser contribution, the money has to stay there in perpetuity. Once the immigrant is here, there is some flexibility as to where that money will be placed. I am sure that if indeed things were truly. . . . There is a time frame where that money is allocated in escrow or in an investment fund, but after a period of time that money can be removed and spent on other individual choices, so to speak. That is similar in British Columbia as well, I believe.

I think that the individual can still, at a certain point in time, make the decision as to how his or her money is going to be used. If the climate in British Columbia was better than it is today as far as investment is concerned, we would most likely see more money coming this way.

Having said that, I would now like to focus on the British Columbia Investment Fund. Who is the fund manager of the British Columbia Investment Fund?

Hon. M. Farnworth: A couple of points, one in terms of who manages the fund. There are three: there's the marketing, which is done by CIBC; then Canadian Western Capital, which is a merchant bank; and ACM Advisors, which deals with real estate.

I just want to make the point, and perhaps this will bring it home: there is a huge amount of Asian immigrant investment in this province. My constituency is living testimony to that. That investment boom has fuelled the growth in my constituency, which has grown from 51,000 people in the 1991 census to 82,650 as of the 1996 census. It's seen the population go from 2 percent of Asian origin in 1986 to 9 percent of Asian origin in 1991 to over 15 percent of Asian origin in the 1996 census, and it's still climbing.

[3:45]

[ Page 8844 ]

When we are discussing, as we did this morning and a little bit last night, the philosophy of enticement to indeed create prosperity in this province through an influx of foreign investment, we have to agree -- and the minister agrees, but for reasons different than mine -- that we have a problem today. We have a problem, the minister thinks, because of the Asian market having collapsed and, with that, the consequences having an impact on our provincial financial growth. At the same time, I feel that the impediments are more caused by the barriers that have been thrown up over the last six to eight years by this government. I explained that earlier; I'm not going to repeat it again.

But if indeed the minister was right and it was clearly the Asian market and nothing else, then can the minister explain to me why the minister believes that provinces. . . ? How can the minister explain provinces such as Ontario and Alberta, which are prospering beyond what we have seen in the last six or eight years? There seem to be no breaks on that growth that these provinces are experiencing. They have lower unemployment and high investment levels -- foreign investors and, funnily enough, also local investments again, people living in these provinces who believe it is worthwhile to invest in their own provinces, which is not happening here. So maybe the minister can explain the differences, or explain why these differences are so remarkable.

Hon. M. Farnworth: I may take a few moments to explain this, because this is, I find, really quite fascinating and something that. . . . The member and the opposition party stand in the House and in estimates and say the problems in the British Columbia economy are due to this government. They blame this government. However, when the Alberta economy is now in a little bit of trouble, it has nothing to do with. . . . The price of oil is in the tank. The entire Alberta economy is based on the price of oil, you know, hon. Chair. They want to have it both ways. The fact is that the Alberta economy is every bit as dependent on the price of oil as the British Columbia economy is dependent on the prices that our commodities get on the world market.

The fact of the matter is that this province exports more to Asia -- in particular to Japan and Korea -- than all other provinces combined. So when there's a downturn in Asia, it impacts on British Columbia far more than it does on Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and the territories all combined.

T. Nebbeling: You forgot one.

Hon. M. Farnworth: Well, in 1999, Nunavut.

So that's the difference between British Columbia and Alberta and Ontario. There are other differences as well. Alberta, as I said, is dependent on oil. It's right next to the United States, as are the other provinces. They have a far greater share of their trade with the U.S. than we do. In the early nineties. . . .

Interjection.

Hon. M. Farnworth: I can hear the hon. member. He goes: "It's always that way." The fact is that when the United States was coming out of its recession, eastern and central Canada were still in a recession. B.C. wasn't, in part because of the strength of the economies in Asia and the demand for our products in Asia.

Well, the situation now has changed. You have a booming economy in the United States, and that's what's causing the benefit in Ontario, in Alberta and to some extent in Quebec. You will see that if the United States economy goes into a slowdown, that will impact on the economies of those provinces. That's the difference between British Columbia and Alberta and Ontario.

The fact is that we came through the last recession that affected the rest of the country. Ontario went into a deep recession, which is why the Ontario Liberal government called the election when they did. It was because they saw the impact that the recession in the States was going to have on Ontario, and they went to the polls a year ahead of time to avoid it, so that they wouldn't get tagged with it. The successive governments in Ontario have been dealing with that recession. Ontario is starting to come out of that recession, and it has more to do with the booming economy in the United States than it necessarily does with the actions of the government in Ontario. So that's the difference between B.C., Alberta and Ontario. I'm quite sure that the hon. member will have something to say about that, and I look forward with interest.

T. Nebbeling: First of all, I do not believe for a second that the minister believed what he was saying. The reason I say this is that he was not able to utter one word without a smile on his face, because he knew it sounded like comedy. I mean, give me a break. Here he uses Ontario and sees the recession caused by the Liberals, of course. That was followed by NDP governments. Look what happened to the NDP government under Mr. Bob Rae -- decimated. Why? Because Mr. Rae did exactly the same as this government is trying to do to British Columbia: overtaxation, overregulation, fractious labour relations. I would like to hear what the minister has to say about some of the labour amendments that we are going to receive in the very near future, what the impact would be and, again, how the investment climate in this province will be seen by overseas investors.

But the bottom line is that what happened in Ontario under an NDP government is the best example for us in this province to be very cautious, because we are doing -- or the NDP government is doing -- exactly the same. I believe the result will also be the same. I think we see that happening already. I never thought I would see labour leaders in this province standing up and saying: "Enough is enough. Unless this government is going to give in to our demands, we're going to walk the streets." I know that the Premier of this province is walking home on a daily basis thinking: "How can I avoid it? I'd better give in." So I feel for this province when it comes to these kinds of situations.

When the minister talked about Alberta, and then said that we had Korea and Japan, and that was our breadbasket -- that was where we made our money, and that was what gave us our prosperity. . . . In '95-96 Korea and Japan were doing extremely well, but the economic decline of this province really started then. And the minister, when checking the records or looking at reports of that period, will know that is indeed the case. So an attempt to blame everything on the Asian flu for the last year or year and a half. . . . Sure, it has had a very negative impact. But it was a negative impact on a situation that was already bad, and that badness was created by the NDP government. It was created, again, because of the factors that I have repeatedly stated: high cost of living, fract-

[ Page 8845 ]

We cannot blame the Asian flu for everything. If the minister truly wants to see changes, then he truly has to get into the frame of mind that we have to do what the other provinces have done. They have left more money in people's pockets by lowering income taxes. We will have to do that in this province if we want to make a difference.

We have to look at industry and say: "Okay; what is it?" Finning, for example: "What made you go to Alberta? Is it just because the industry moved over there and there's more industry there that needs the equipment? Or is it the tax regime as well? Is it the corporate capital taxes? Is it the 7 percent tax on equipment?" The minister has to ask all these kinds of questions, and he is not doing it.

I would like to ask the minister if he goes over these elements in his deliberations with his colleagues, if indeed he does recognize that this government will have to come forward with tax breaks that are directed at the industries whose success is definitely measured by how much equipment they buy -- and they're not doing it today.

Hon. M. Farnworth: There are a lot of points there to address. I guess I'm smiling. I smiled during my last answer, and I'll smile during this answer, in part because I always find it amusing to listen to the opposition when they talk about Alberta, Ontario and B.C. When there are problems in Alberta and Ontario, it has to do with the global economy; when there are problems in B.C., it has to do with everything here in British Columbia. They want to deny that British Columbia operates in a global economy the same way that Alberta and Ontario do. When the price of oil drops, it has a big impact in Alberta. If the price of oil stays where it is for the rest of the year, you watch them scramble in Alberta. It will have nothing to do with regulation; it will have nothing to do with taxation policy; it will have nothing to do with any initiatives the government of Alberta has taken. It will have everything to do with the price of oil and how much revenue they get from that.

In British Columbia we have the same problem, and that is that commodity prices are down and our largest markets are in recession. That has a large impact. Clearly there are issues that need to be addressed, and we do recognize some of those issues. The member raised some concerns around taxation, and we recognize that. We started to make moves around that issue in the budget. I think we need to look at sectoral issues, in terms of what types of industries we're promoting within the province. That clearly has an impact on high-tech, and that's one of the key areas that has been identified. We're moving on that.

We looked at the film industry. You've seen taxation issues addressed with regards to that, and you're seeing them addressed on a sectoral basis. Of course, regulation needs to be dealt with. It doesn't matter whether it's here or whether it's in Alberta or Ontario. Regulation is something that constantly needs to be addressed. In many cases, it has very little to do with political stripe. Alberta can be just as regulatory and just as constipated as British Columbia when it comes to regulation. I can give the member examples of industries that suffer from regulatory problems in Alberta, and in British Columbia they're getting a different approach.

The member raised the issue of debt levels. The fact of the matter is that this province has the lowest per capita debt of any province in the country. We and Alberta are very close; it's nip and tuck between the two. But the fact is that we're substantially below the debt levels of other provinces -- substantially below the debt level of Ontario. So to paint the picture that British Columbia is somehow out there all by itself on a whole range of fiscal comparisons vis-à-vis the rest of the country is simply not right.

[E. Walsh in the chair.]

There are issues around taxation, and when they come into full play, the marginal tax rate will be in the middle of the provinces. Do I think we should continue to look at it and, if necessary, do something to bring it down even further? Yes, I do. But the fact is that when we met with industry -- we talk with industry on a regular basis -- they said, "We want you to start to move in this direction," and that's what's happening.

[4:00]

We operate in a global economy. There are certainly things that we can do in this province to help things and to improve particular areas of industry, and we need to do that. But on the overall economy, we're very much tied to what happens in the rest of the world. When our largest trading partners have economic problems, we feel it.

T. Nebbeling: Obviously I don't agree with the minister, and I do blame this government for the economic demise that this province is suffering. I blame the minister, because the ideology of the government will just not accept that there is indeed a global market out there. That's part of the problem. They know it is there, but they will not accept it as a major factor and as a concern. I can make this statement, Mr. Minister, because the fact is that when I look at the forest industry. . . .

Interjection.

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

For the last five or six years, we as opposition have tried to show the Minister of Forests and this government that all their policies and all the regulations that they have introduced into this House over the last six or seven years have done everything to destroy -- or almost destroy -- that industry. It's primarily because this government, through regulations and overtaxation, forced that industry into a position where it could not compete financially on the global market. The global market was there and was going in a certain direction. The minister's government rejected what was going on and stayed on the course that it has been following since it got into government. How much can we drain the forest industry financially? How much can we take out of it? At the same time they were doing that, the rest of the world -- the global industry -- was going in a different direction, insofar as what could be charged for their product. That's one of the reasons we're in the economic mess that we're in today.

[ Page 8846 ]

My point is that I will not take from the minister the statement that this government is not responsible because fluctuations in the global market have caused the decline of the Asian market and have traditionally been part of how commodities work in the system. We know there are ups and downs. A good government, when things are going well, knowing that there are fluctuations in pricing and returns on the commodity, incorporates that element into its long-term strategy. This government has never done that. When times were good, they took as much as they could. Then when times were bad, they continued to take as much as they could, to the point where we see the problems arising in this province today.

When the Asian market crash happened, sure it didn't help us. It added to what was already a very bad situation. But there is always something of that nature happening on a global level. The problem with this province was that, because of the rules and regulations and the extraction of funds out of our natural resource industries, there was no cushion to absorb that global pressure, that Asian flu. I think that is the problem.

I would like to ask the minister, knowing that fluctuations will continue to happen, that prices will change, how he is planning today to avoid future incidents of this nature happening. We can't be blinded by expecting that we'll get through this one and then start to go towards higher markets again. How is the minister accommodating today the need for future proactive action to deal with future fluctuations in markets for the mining activities?

Hon. M. Farnworth: The member and I will have some fundamental disagreements on this issue, and that's fine. That's what it's all about. But the fact of the matter is that we do recognize that we are in a global economy. We do recognize that British Columbia competes in a global economy. Part of the reason that we have the problems we do is because of the effect of recession on our trading partners in Asia. That is a key component; it's part of the problems here in British Columbia and part of the problems that are facing the forest industry.

But another part of that problem is that we expect to operate in a global, competitive industry. We expect free access, in many cases, to markets; that's what we're supposed to have. That, for example, is what the North American Free Trade Agreement was supposed to accomplish, and in many cases it has. But one of our problems is that we were too successful in competing with, for example, the United States in sending lumber down to the United States. We saw an ever-increasing share of the U.S. lumber market being procured by British Columbia forest producers.

The effect of that was for the United States to insist on a number of things. One was tariffs, countervails and the issue of stumpage. The second was to see a lumber quota applied to Canada, which limits how much lumber we can ship from British Columbia to the United States. So when markets in Japan are down, we don't have the ability now that we used to, to ship the lumber that was destined to Japan into the United States. That is something that has big repercussions here in British Columbia. It is not of the government's making. The fact of the matter is that one of our main market's producers resented the fact that we were more efficient, more cost-effective. They got a high-quality product at a cheaper price from British Columbia than from their own suppliers. The end result was to find ways of putting up barriers to ensure that we could not ship more and more product into the United States. That has a big impact, but the main impact and key impact is the global economy.

The member talks about rules and regulations. The fact of the matter is that in the case of the forest industry, whether it's pulp or lumber, of all the provinces in this country, British Columbia in particular has been increasingly subjected to outside attacks from within the United States and Europe about how our lumber and pulp is produced. In order to keep markets, changes have had to be made. Yes, the government imposed regulations. Many of those regulations came about to keep our markets secure, to keep our access to those markets in place. When you have major consumers of pulp in the United States, such as the telephone companies, saying, "Either change your practices on how the pulp is produced and how the trees that are harvested are produced, or we go to a supplier elsewhere," we and industry can choose to put our heads in the sand and say, "We're not going to change; we're going to go by the same regulations we've always have" -- and we'll lose the markets -- or we can say: "Okay, we've got to deal with a global perception and global pressures, and adapt and make changes."

Some of those changes have taken place. What in fact you are now seeing is companies taking the initiative and even going beyond what the government called for in terms of regulation, like MacMillan Bloedel in their decision to end clearcut logging. I mean, we recognize only too well that it's a global marketplace. Part of that, as we talked earlier on the opening day, is getting out there and talking with the suppliers and letting them know what's really happening in British Columbia in terms of forest practices and regulations that are in place, and securing access for our markets. That needs to happen in Europe and in the United States. Part of it is to recognize that there are problems in Asia around the recession in Japan, the financial difficulties in Korea and the currency devaluations that have taken place. The demand for products is down, not just in British Columbia but worldwide.

We also have to look at the impact of decisions by the United States Commerce department and the United States government itself and how they impact on the British Columbia economy. We have to work to ensure that our interests are represented by the federal government and that issues around lumber exports to the United States are addressed. So if we are looking at quotas on a shipment of lumber product into the United States, and then you have value-added products -- 2-by-4s that are predrilled for construction, which is what the industry in the United States is asking for -- the first thing that happens is: "Oh, those damn British Columbians have been innovative. They're exporting more product, and it's being exported more cheaply, and firms down in the United States are wanting that." The first reaction is to try and put up more barriers and to say that they don't want them there. The job of the government is to make sure that we fight those attempts. We're very much aware that we operate in a global economy. We're very much aware of the cycles that occur in the global economy and the fact that they impact us.

Having said that, there are a couple of other points I think we need to make: (1) we all know that there are cycles; (2) you can plan for cycles to a large degree. I mean, you can have a sense of when things are starting to peak and the fact that there may be slowdowns or that we've hit a plateau. Govern-

[ Page 8847 ]

I can tell you that it's not an exact science. No one predicted that Asia was going to go into the slump that it did. Because it was so precipitous and so fast. . . . That was one of the reasons why the APEC conference at the end of last year focused almost exclusively on the crisis in Asia and its impact, on trying to contain and manage it, on trying to lessen its impact on the rest of the economy and on trying not to drag the rest of the world economy down with it.

All those things come into play. We are acutely aware of that. A lot of those factors are outside our external control, but we are aware of them. The key for us is to make sure that we diversify the economy so that we're not reliant solely on one industry or on one export market, but that we have access to markets in a number of places. Ten years ago there was a real heavy focus on Asia, you know. Well, now we've got markets in Asia, and they're established in Asia. They're going through some challenges.

[4:15]

I think it comes down to the debate between the opposition, which seems to want to internalize everything to here in British Columbia, and this side, which feels that yes, there are things that need to be done here in British Columbia but that we are part of a global market that has significant impacts on a daily basis, a monthly basis and an annual basis in British Columbia.

T. Nebbeling: I'd like to respond to some of the points that the minister raised and where I believe the minister has gone wrong in his analysis. Let me state first of all that we on this side are totally committed to diversification of our economy. We know that there are new opportunities available today that, if we manage them properly, will reap great rewards. Yes, the knowledge-based industries and high-technology industries that we hopefully can entice to establish themselves here in British Columbia can make tremendous contributions to our economic base and may well become part of the new pillars of our economic society. So the diversification of our economy is paramount.

But I have to also say to the minister that we'd better change some of our philosophical approaches in how we deal with business, with investors -- and change some of our philosophical attitude, as the government sometimes reflects that it is wrong to make profit. As long as the government has that attitude. . . . I'm going to stipulate some of these points in my rebuttal to what the minister is saying.

I'd like to make this point. The minister is blaming all kinds of groups and parties and nations for all the wrongs that we're facing now: Greenpeace; the Sierra Legal Defence Fund -- let's put them in there; Vicky Husband. . . . Look at her: she has done so much damage; they have done so much damage to British Columbia. The softwood lumber deal -- so much damage to British Columbia; the Asian flu -- so much damage to British Columbia. . . . So these are really the factors that have put this government in a position to bring the prosperity and economic well-being in this province to the level it is at today, which is considerably lower than it was a number of years ago.

What really is difficult for me to accept when we have this "they are responsible" attitude is that the minister is not recognizing that it is regulations and overtaxation which, to a large extent, brought an industry that was the base of our economic well-being to its knees -- before the Asian flu happened, before the Asian crisis started. The minister is totally ignoring the fact that when this government came into power, it introduced the Forest Practices Code. That Forest Practices Code became the new measure for the environmental movement to make checks and balances when it came to evaluating what was happening in this province. It was the Forest Practices Code that stipulated on what basis the values were going to be established and how the forest industry was going to work.

I remember, in the couple of sets of estimates I did with the Ministry of Forests, how proud the Minister of Forests was in 1996, in 1997 and before that about how tough that Forest Practices Code was. So if the environmental movement has taken shots at this government and has mobilized companies abroad to reject what British Columbia is doing in its forests, it is in part because this government introduced the Forest Practices Code that they said was "the measure you have to measure us by." And they did; the environmental movement did indeed use the Forest Practices Code. The Minister of Forests, knowing that this was happening, still kept standing up and telling the world how fabulous it was that we had this Forest Practices Code.

While this was all happening, the industry began to ring very serious alarm bells, because. . . . It was not just that they had to live by the Forest Practices Code; it became clear that the cost of living by the Forest Practices Code was incredible. The minister said: "It's only about $5 per cubic metre in additional costs. Isn't that worth it?" Well, the KPMG study done a year ago showed that it was in fact much more dramatic and much more damaging. At the same time, the government introduced taxation. The regular stumpage rates were fairly high, but then they also introduced the superstumpage fees and Forest Renewal B.C.

I'm not going to go into what Forest Renewal B.C. has not done, because then we would have to expand these estimates. But one thing became clear: the combination of stumpage, the Forest Practices Code and the superstumpage fees made the cost of our lumber so high that whatever came out the end of the mill -- be it 2-by-4s or high-quality planking -- was of such a cost that it could not compete in the global market. The industry has been saying this to the government for years, and the government has ignored it and has not been willing to recognize that the global element is ultimately where our success in selling our product is going to be determined.

Secondary manufacturing, which we talked about earlier, is down. It is not at all as successful as we had hoped it would

[ Page 8848 ]

I dare to say that this government, in the last seven years, has had no respect for what happened in the global market. I dare to say that by ignoring it, for whatever reason. . . . My suspicion is that if the government had recognized that the global market has indeed been rejecting our product. . . . If that happens and the government has to react to it, the government would have to come to the table with dollars. They would have had to reduce stumpage and start much earlier to look at the Forest Practices Code and at hindrances, and I don't think that this government was prepared to do that. They wanted the dollars for their programs and their agenda. In spite of everything that has been said, I think that that is part of the reason we didn't see any action.

I know that the minister indeed recognizes that the global market is a very fundamental element in how we, in the future, will drive the province and will drive our economy, and in how the well-being and the quality of life of B.C. citizens will be. If we are not going to be part of the global market, we may as well put a little fence around this province and start a barter system, because we will not be able to do what the rest of the world will do.

I don't want to get into trade agreements and trade arguments, because then I will go into the area that I want to talk about tonight. But I don't accept this minister's claim that the minister understands the global market. He's aware of it, but he himself, or the government that he represents as minister, has rejected to participate for reasons that I can suspect. . . . But I'm still guessing, because I don't know what happens in cabinet.

I think we've missed a lot of opportunities as a province. When it comes to the softwood lumber deal, always remember that this government was part of the deliberations. In the two or three times that changes have been made to the softwood lumber deal over the last six to eight years, this government participated. Again, I don't want to go into much detail about why this government was not stronger in fighting for British Columbia if that was needed, but they made a deal. The government at the time that this deal was made was very proud of it. We got 56.8 percent of all the lumber that goes to the States. We did a fantastic deal for British Columbia -- 56 percent of all lumber from British Columbia, so we did well.

The government at that time didn't foresee that other global actions could materialize whereby we would have production that would far exceed what the agreement allowed and that we could sit with excess timber in our mills because of the restriction that British Columbia accepted at the time. Maybe we should have the gall to start all over again and say: "Okay, let's open this deal, because this isn't working." That's the minister's decision to make. The minister has a lot more information on that subject than I do, but never let it be said that the softwood lumber deal as it is today was not done in cooperation with the government of British Columbia.

I am much more interested in listening to the minister give me some idea of how he is going to tackle this. We have recognized what the problem is. We have tried to put the blame on everybody other than this government, and that's unacceptable. The minister knows there's a global market out there. That global market will dictate whether indeed we're going to be successful. Maybe the minister could spend some time telling us on this side how he thinks he can get out of the malaise that we're in now and how we can bring ourselves to the level where our product is available in the global market but also marketable in the global market. That will mean, in my opinion, certain steps. But before I share my thoughts, I would like to hear from the minister how he sees the development from now on to make our product, especially in the resource areas, available on the global market at a price that is marketable.

Interjection.

Hon. M. Farnworth: I was just about to say that I would not complain about that.

The Chair: If it's the will of the committee, we'll recess for five minutes.

The committee recessed from 4:28 p.m. to 4:35 p.m.

[E. Walsh in the chair.]

Hon. M. Farnworth: I understand where the member is coming from. I think there are some disagreements, and we recognize those. The key question is: how do we approach the issue of economic diversification in the province? How do we approach the issue of what needs to be done to ensure that we have long-term investment that will result in stable industries creating long-term sustainable jobs in this province? I think I've outlined on a number of occasions how I see that happening.

Clearly we operate internally within British Columbia and externally in a global market. I think we've dealt with that and had a really good discussion on that. I have never suggested that government does not have a role to play or that there aren't things that government can do to make things better or to remove roadblocks and to deal with red tape and regulations. I think that has to be a focus, and the fact of the matter is that we are addressing that.

But we also have a responsibility to address what's happening and, as I said earlier, not to just stand pat but to recognize that we have to make changes and that industry has to make changes. A lot of those changes that will take place were jointly agreed to to deal with threats in overseas markets, and we've discussed that issue. I think what we need to focus on, and what we're trying to focus on now in the ministry and in government, is: what are those key industries that we need to attract to British Columbia, and how do we do that? How do we ensure long-term, stable investment and employment in those industries? I think you're seeing some success take place.

We've talked about what's happened in the film industry. That has grown over the last seven years to become a major economic engine in this province. Government has been sensitive to the needs of that industry and has shown a willingness to look at what's happening in other jurisdictions and to ensure that it stays competitive here in British Columbia.

We are looking at developing an aluminum industry in this province. The early indications are that we are taking the right steps, that we are communicating the right messages and that what the industry wants to see happen is what's happening.

[ Page 8849 ]

We've looked at wanting to put in oil and gas, for that to play a greater role than it has in this province in the past. Changes have been put in place around those issues that are concerned with the oil and gas industry. Those have been developed within the province, and there has been participation in that by industry. We have the ability to deal with and set some of the ground-rule regulations, and I think we're starting to be successful with that.

Things don't just change overnight; it takes time. The fact of the matter is that those changes have been put into place, and you're starting to see developments happen. You're starting to see the reaction from industry. Whether it's mining, oil and gas, film or tourism, it is positive. You're seeing public investment to cement our hold on the new industries that are growing in British Columbia. That's why you are seeing the investment in the trade and convention centre and on the new cruise ship terminal -- to cement British Columbia's hold on that industry and to make it grow even more.

That's why you've seen the government make changes around the airport. We see Vancouver International Airport as the gateway into not just British Columbia and not just Canada but also western North America. That's why you've seen a massive growth in the number of jobs at the airport. We've put changes in place to allow that to happen. That's what the role of government needs to be. That's an example of how we recognize the changes that we've made.

Around high-tech industry, it's addressing the issues that we talked about earlier: taxation and making sure that we have access to a skilled workforce. We're making sure that we have one of the key components for knowledge-based industry -- that is, first-rate public education and advanced education systems in place that can supply not only the graduates but access to facilities that high-tech companies require. We've made all kinds of investments there.

A big part of it, when you market British Columbia, is being able to show that you've got the necessary infrastructure to attract people here in the first place. That means investments not just in your basic infrastructure, schools and hospitals, but also in roads, transit and transportation systems -- they are all part and parcel. Those things are taking place. Is it perfect? No. Would it be perfect if the opposition were sitting here? No.

The opposition wants to stand here and somehow say that because it's this government in power, things are inherently bad; because it's this government in power, every time there's a problem or a downturn in the economy, it is the fault of this government.

A Voice: Exactly.

Hon. M. Farnworth: The member says "Exactly." And that seems to indicate an unwillingness to recognize what we recognize and what the rest of the country recognizes: that we participate in a global economy. What happens in the economies around the world impacts on British Columbia.

We know there are things we have to do here in the province, and we're moving to address them. But there are things outside the province over which we have very little control. The member raised the softwood lumber agreement with the United States. Ideally, we wouldn't have to have a softwood lumber agreement, because ideally, under free-market access, we could export all we wanted.

A Voice: So why did you accept it?

Hon. M. Farnworth: Because, quite frankly, the alternative. . .

The Chair: Though the Chair, members.

Hon. M. Farnworth: . . .was that either we come up with an agreement, or we see huge tariffs at the border and a dramatic halting, almost, of lumber from Canada to the United States, with a devastating impact on the industry in British Columbia -- far more than even the challenges that Asia has given the industry.

There are provisions in the agreement that British Columbia has been able to take advantage of to ensure continued access. And we talked about that earlier on -- the pre-drilled studs, which is what the industry in the United States wants. Yet again, we see challenges to that. That's not covered by the agreement, yet that's being challenged. When British Columbia industries come up with something innovative, it's challenged. Those are the facts of life and the constraints that we have to deal with, and those are some of the challenges. That makes things difficult, but the fact is, we have to deal with them. We understand that and we accept that.

I think the challenge for the opposition is to get past this sort of blanket view that the government's bad and it's all their fault, and get with the program, which is to diversify markets, which we need to do, and to diversify the economy, ensure opportunity and recognize that there are new industries establishing themselves in British Columbia. It's our job to put into place the framework that can allow them to grow. And when that happens and as these new industries take off -- I know the member's particularly interested in this -- then that will grow on itself. And that's where you'll see a lot of small and medium-sized businesses benefit from investments in high-tech, in the film industry, in oil and gas, in the aluminum industry, and they will also benefit from the public sector investments in the way of the infrastructure that is required to make a lot of this happen.

[4:45]

The minister says: "It's not our fault." That's ostensibly what he's trying to say. Except if you go back a few years into the '91 period. . . . This NDP government took over from a Socred government that, in trying to win an election, had raised the debt in this province to approximately $15 billion or $16 billion and put us into a very uncompromising position.

Then this same government came in -- yourselves, the NDP -- with no business experience whatsoever. Not one member of the NDP side had ever had to meet a payroll. They didn't know the first thing about wealth creation. You walked into this government during a very high business cycle, I might add. It was a chance to build on the cycle, and all you could do, because you had no strategy, was to basically spend and spend and tax and tax. You continually did that until you drove. . . . You put more rules and regulations in, and you drove our resource industries almost to the ground. You heavily impacted the future wealth of this province.

I was going to bring out another aspect, like when Bob Williams was ostensibly in control. I think he's in one of your Crowns right at the moment, trying to interfere there. I can remember him talking down at the B.C. trade centre. He was

[ Page 8850 ]

You're now suddenly realizing that this is what we need to create wealth in our province. We need that base in hand. You thought you could get away without using them. It's like saying that. . . . Remember years ago when they said B.C. was going to be the next Silicon Valley? Well, it never occurred. It never happened; it never came.

The new global society that we have before us now and that's all around us. . . . You're trying to say that we can exist by just getting into that little sphere itself. Well, that can't happen. Most of those areas are far more sophisticated than B.C. is and are way ahead of British Columbia. You have no strategy for getting involved in that. Your one thought was a political philosophy. . . .

The Chair: Member, I'll remind you to direct your comments to the Chair.

D. Jarvis: I am. I was talking through the Chair.

Your one thought was to drive the wealth creation end of our province to the ground. It was a philosophical idea that you do it. It was in the mind of the NDP government that mining and forestry were bad for British Columbia. There's no question; you did say that. You bought into the environmental world's philosophy that it was bad. Or else, why would you have done it? Why would you have driven them to the ground?

The Chair: Member, I'll have to interject again and ask you to please refer to the minister in the third person.

D. Jarvis: Yes, he certainly is a third person, Madam Chair.

The Chair: You are to refer to him in the third person.

D. Jarvis: So I'm looking at you and I'm saying: what are you doing, Madam Chair? What are you and the minister doing? You're creating a problem in this province, Madam Chair. We may come out of it; we probably will come out of it. But we are being overtaxed. . . .

The Chair: Hon. member, I'll just interject once more to inform you that the rules of the House state specifically that when you refer to another member in the House or to a minister in the House, you refer to them in the third person. And you'll direct your comments to the Chair or through the Chair.

D. Jarvis: So, Madam Chair, through you to the third person.

I'm a little surprised at the minister. This government did nothing to prepare us for what we're going through now. The fact is that they came through in a high business cycle, with a philosophy behind them to change the growth of this province, and they didn't have a strategy come out of that.

Now he keeps repeating all the time: the film industry. Is that your ace in the hole? Is that how we're going to change the strategy of this province to create wealth, through a film industry that technically cannot surpass or replace the high-wage industries -- for example, forestry and mining? Where are you going to create a replacement industry for those two industries? How are you going to train them? Where are you going to put them? You've created massive unemployment in this province, and it's rising. It's almost up to 10 percent now, and heaven knows where it's going to go. Hopefully, it will go down.

After all they've done in the province, they're now trying to blame other people. Can the minister tell us whether they have any strategy whatsoever, outside of destroying the resource industry, for entering into this new society?

Hon. M. Farnworth: Where to begin? When the hon. member across the way starts bringing up 1972 and '75 and Bob Williams, I must be striking a nerve somewhere. He's going back to when I was in high school, when I was a kid. That's like me saying: why don't we go back and revisit the problems of the province in the Liberal. . . ?

Interjection.

The Chair: Order, members.

Hon. M. Farnworth: Hon. member, you were going way back into the Dark Ages. That's how far back that is.

A Voice: Dinosaurs.

Hon. M. Farnworth: Not quite that far back. I'll go back to the dinosaur age now, which is. . . . That's like me saying that the real root cause of the problems in the province go all the way back to the 1930s when you had a Liberal government in power, which could have put in place different timber practices at the time. But that's ridiculous.

The fact is that we have to look at what's here and now: what we're trying to do and what needs to be done in the economy. The hon. member has made some absolutely outrageous statements. For a start, he questions the place and the role of the film industry in British Columbia. I put the same question to him that I put before: does he not think that the film industry is an important economic engine in the province? Does he not think that the film industry has an important role to play? He made statements about the rates of pay in the film industry. Has he looked at what wages are in the film industry? They're pretty attractive; they're high-paying, skilled jobs. The fact is that the industry is booming in British Columbia and has a tremendous opportunity. Is it the only thing that should be taking place? Of course not. It's one pillar.

I'll repeat the message again. We need to diversify the economy, and that's what's taking place. There's a whole host of areas where activity is happening: the film industry, oil and gas, tourism, high-tech. There are challenges in the resource industry that we need to deal with, and part of that involves diversifying even further. We've talked about aluminum as being one of them and about silicon metal as being another. All those things have been put in place. The framework has been put in place over the last couple of years and before that in some of the other industries.

We need to diversify world markets, a process that was started a number of years ago -- before we got elected -- with a focus on Asia. What we're saying is that we need to go further than that. We need to start to look not just at Asia but

[ Page 8851 ]

In terms of what's happening in British Columbia, I will say again -- because the hon. member does not seem to want to grasp this -- that there are things that we need to do in the province around regulation. We need to address that. But he seems to think that's the only factor influencing when and where investment takes place. He wants to completely ignore the fact that there are economic cycles in this province. He wants to completely ignore the fact that there are global economic cycles. He wants to ignore the impact that the downturn of the Asian economy is having on British Columbia. We recognize that all of those factors are at play here today.

D. Jarvis: You did nothing to prepare for it -- nothing.

The Chair: Order, members.

Hon. M. Farnworth: The member says we did nothing to prepare. You know, since the recession in 1982-83, the focus of successive governments of British Columbia has been on diversifying the economy. That focus has been primarily on expanding trade with Asia and on seeing other industries develop -- trying to bring new industries to the province. The film industry basically started from nowhere in 1990-91 to get to the point where it is today. Oil and gas exploration has increased at double-digit rates under this administration. High-tech is growing at a rate of 20 percent a year under this administration. There's a whole series of things happening, and the member doesn't want to acknowledge that. That's fine. But we do.

We also acknowledge that there are problems internally in British Columbia that we've got to deal with. We acknowledge that there are issues around regulation. We've talked about that, and I've said we have to address those issues.

The hon. member talks about taxes. I'll repeat the message, because the member opposite raised this issue again and again. I have replied with the answer, and I will repeat the message again and again as long as I have to. The fact is that on a sectoral basis we have been looking at taxation policies. We have addressed issues around the marginal tax rate which are key to industries such as the high-tech sector. The hon. member shakes his head. He probably thinks we should move further and faster. Maybe we should. But the fact of the matter is that we went out and discussed with industry what requirements are needed, and those changes were started. That's been seen as a very positive step. The issue, hon. Chair, is: what changes can we make internally? And the fact of the matter is that identifying changes and implementing them is underway.

The bigger question, the bigger picture, is the global economy and the impact it has on British Columbia. The fact is that when you have a recession in Japan and a downturn in Korea, and when you see the Korean won lose 35 percent of its value overnight -- and that's not something that anyone can predict -- that has a significant impact on the economy of this province. You can sit and shake your head all you want, hon. member, but that's simply a fact of life.

D. Jarvis: You're in denial. You're blaming everyone else except your own. . . .

The Chair: Order, members.

Hon. M. Farnworth: That's the problem right there: he doesn't want to accept the fact that British Columbia relies on overseas markets and that what happens in those overseas markets impacts on British Columbia. I've repeated this message at least a half a dozen times, and I'm more than prepared to repeat it another half a dozen times or as long as it takes.

D. Jarvis: How about our European markets?

Hon. M. Farnworth: Oh, hon. member. Now he mentions the European markets.

The Chair: Hon. minister, if you could take your seat for a moment, please.

To the hon. member for North Vancouver-Seymour, I would like to mention that you have every opportunity to ask any questions that you may wish to ask of the minister once the minister has finished answering the question that was posed to him. I would encourage you to do so.

[5:00]

So, hon. member, if there are any more regions of the world you want to throw out and have me comment on, now is the time to do it. The fact of the matter is that we live in a global economy. We are concerned about what's happening, and we are aware of it. There's a lot happening. I don't know how much more I can say or how many more times I can repeat it, but. . . .

T. Nebbeling: The response by the minister almost forces me to become repetitious. As the minister keeps repeating his arguments, for defence reasons, on why things are going well, I'd like to bring him back to the reality of what is happening.

When the minister talks about the film industry as a shining example of. . . . You know, here is something that wasn't there during our time in government. Look at the film industry and what it's doing. It provides a tremendous number of jobs -- high-paying jobs, the minister said. I know that people in the film industry. . . . A hairdresser takes home about $4,500 or $5,000 a month. That's a lot of money, but that hairdresser goes on the set -- and may be there for 20 hours -- hangs around, does the job once in a while and sits there. And they get four or five hours sleep, go back to work and hang around for 20 hours more. So certainly you take home some good money, but I can tell you one thing: you work for it. I make that point, because by that I state. . . .

Here we go again: the minister has to be advised. I thought he would know this, because he is knowledgable about the film industry.

[ Page 8852 ]

The point I want to make about the film industry and its success is that this film industry, from day one in this province, made it very clear to this government: "I'll let you play ball with us and be a partner with us; if you try to undermine us or impose rules on us, we'll move." And that threat has been made in the past. This government, our NDP government, was forced by the film industry to let the film industry do what it had to do in order to be successful in British Columbia. It was not because we have great locations, but because they would not allow government to interfere in how they run their business. Government, knowing the value of the industry, has accepted that. And I congratulate government for that. The film industry is actually an industry that shows that government doesn't have to interfere in every area of a business -- control or regulate every area of a business or put red tape in every area of a business.

So we have examples of why it works. When you allow a business, working within certain rules, to do its thing, it will succeed. That, to me, is one of the big prizes from having developed the film industry in our province and from continuing to develop it more. Our climate allows the industry to do what they need to do. I guarantee that if we start to do to the film industry what we've done to other industries, including the forest industry, the film industry in British Columbia will go to Alberta. It's just as attractive. This morning the minister made the case that one of the reasons that British Columbia is so high on the list of the film producers is our location; we're close to L.A. Well, so are Alberta and Ontario. If we overregulate that industry, you will see them leaving this province in no time. They've indicated that time and time again.

Why don't we learn from that experience and try to apply the relaxation of regulation used in other industries? Tourism is in the same category to a certain extent. Tourism, because it is driven by small or medium-sized businesses to a large extent, has very few regulations. They're often not unionized, so they can work with their staff in a flexible manner, which is important in small or medium-sized businesses. They have wages that are not as deplorable as some members opposite would like to stipulate. They're acceptable. Often in the tourism industry your performance dictates how much you make. You have a base salary, and the tipping system is part of the tourism industry.

So the tourism industry is a good example. When government doesn't have a stranglehold and doesn't control it through regulation, it can do magnificent things. We talked about Whistler this morning, but we don't have to talk just about Whistler. We can talk about the Capilano Suspension Bridge. We can talk about here on the Island -- the $7.2 billion income. That is a remarkable industry. I believe that the government not totally regulating and controlling what happens in the tourism industry has given it the opportunity to flourish, and I think that there are many other businesses that could flourish like that, if only given a chance.

When I come back to the industry that we talked about earlier -- the forest industry -- and its rules and regulations. . . . When the minister talks about the future of this province and he talks about aluminum. . . . And let's be fair. That is maybe ten or 20 years from now, but it is on the horizon. It could happen, but it is a long time away. We talk about the knowledge-based industries. We want to encapsulate them, massage them and develop them, because we know that there is tremendous opportunity. But again, that's the future. Every year it grows a bit. It's the same as high-tech. We want to entice the high-tech industry. There's another industry that we want to massage, and that's the gaming industry. The gaming industry has suddenly become a very interesting tool to create revenue for the government. I know that on Thursday we are going to spend the whole day on gaming, so I'm not going to introduce too much of it now. But again, it is a new industry that the government takes hold of and is going to bring to a whole new dimension.

All these industries have one thing in common. They're almost like straws for this government to grab for and say: "Hey, listen, if we can develop this and this and this -- and hang onto it -- we can recuperate from the malaise that this province is suffering from." We have destroyed a traditional resource base, the resource-based industries. It is really telling that every time we talk about how we are going to get out of this pit that we are in and create some more hope and jobs in this province, not once have I heard the minister give an indication of how our traditional resource base is going to be revived -- how the jobs will be brought back to a certain extent and what the elements are to get foreign investors to come back to British Columbia and invest in our resource base. Not once today have I heard the minister talk about that.

The minister has focused exclusively on new elements, and it's almost as though our traditional resource base has been discarded. When the member for North Vancouver-Seymour said, "You don't want to have anything to do with it anymore," I think, like me, he picked up on something today. We have asked a number of times: how are we going to create a strategy in this province that will allow our resource industries -- particularly the forest industry, a $17 billion industry -- to become working participants in the global market that the minister also keeps talking about?

In all the minister's reasons why we should be optimistic, I have not once heard him talk about the role of this resource industry in the long-term plan of this province. I wonder if the forest industry, in the mind of the minister and of this government, has been discarded -- that it is a has-been, and we're going to go in a different direction. If that's the case, the government had better start talking about it and deal with people who still rely on that industry today and who are still hoping that one day there will be a turnaround.

The members for North Island and for Alberni are sitting there, and I hope they will listen to what I am saying, because not once today have we discussed what we are going to do and how we are going to do it. I've asked that a number of times. I'm really concerned. It's going to take some doing by the minister to convince me that there is not a thought process on its way to maybe not totally eliminate the resource industries but certainly to bring them to a level that cannot be used by foreign organizations to give this province a black eye. I hope I'm wrong, but I think the minister has to spend some time explaining why.

Hon. M. Farnworth: I thought that that was what we had been doing this afternoon. Now I see that the member wants me to focus exclusively on the forest industry. The discussion

[ Page 8853 ]

We've been discussing a lot of the new initiatives and the new industries that we want to see grow here in British Columbia. But within that has always been a recognition that forestry continues to play an important role in the province's economy -- approximately 17 percent. The fact is that a lot of our discussion this afternoon has taken place around markets that are important to the forest economy and the forest industry, and how we deal with the challenges faced by the forest industry.

I've talked about what happened in Europe, the impact that has had on the forest industry and how we need to be aggressive in dealing with that, because it is key in terms of securing our markets for the forest industry. That's what we talked about. We talked about the fact that you have Greenpeace and the Sierra Legal Defence Fund out spreading misinformation about forest practices in this province, and the need to counteract that to secure access for those markets.

We talked initially about the importance of secondary manufacturing. I have said that that is part of the future of the forest industry in this province. The fact is that the industry has had an approach that tended to relegate secondary manufacturing to just that: a secondary position. We need to secure a supply of timber and wood for secondary manufacturing. We've talked about all those issues, and all those issues are key.

A Voice: But no answers.

[5:15]

The other issue that's of critical importance to the forest industry in this province is what is happening in Asia and Japan, because if Japan isn't buying high-grade cedar. . . . They're not buying it, and that's a problem. That will come back. Some of the structural changes that have been put in place -- and a lot of this is addressed in the Forests estimates which have just ended -- in terms of regulation around roadbuilding, in terms of environmental standards, are best addressed in those estimates.

But from the perspective of this ministry, the key elements are securing markets, dealing with regulation and environmental standards. And there are ministries that deal with them. We've talked about those issues, I think, at great length. You have to look at how the government has dealt with ensuring where the forest industry is going. We recognize that there is government involvement required. That's why government got involved in Skeena Cellulose -- because they recognized the importance of it to the economy of the province. We hear in the House that we should let it go under. At the same time we get comments from members opposite up in Skeena and Terrace: "Well now, we would have bailed it out." It was that decision to get involved in Skeena that I think is reflective of our commitment to the industry in the province.

Evans Forest Products in Golden is another one that saw a restructuring and added investment and that's seen a workforce increase. There is a whole host of things in the forest industry, of which the government is a part, that are being addressed. We can talk for hours on that, but a lot of that has been dealt with here -- a huge amount in forest estimates -- starting yesterday and today. I really don't know how much more we can say and how much more we can go over the impact of issues such as globalization, environmental challenges, protectionism of markets, access to supply in timber and all those things.

T. Nebbeling: Like the minister just said, we could go on for hours, and I don't think we're going to get any closer on how I used the statements by the minister, how I interpret them and how the minister thinks I should interpret them. However, let's put it this way: during the day I have asked a number of times how the minister would deal with an investor who comes to British Columbia -- who maybe used to be here and has not been willing to invest for a number of years because the investors said: "Listen. Your labour relations are very fractious. I'm not going to get involved with that. You've got an enormous debt load, so taxpayers will have to pay for that. I find that worrisome. You've got high taxation."

In particular with the forest industry. . . . I'll focus on that a little bit now, because I do not want to see that industry discarded. I want it to be part of that package, to be the pillars of our economic well-being in the future. I believe that it can be, without the environmental organizations and members being outraged about what happens in British Columbia. I believe that it can be done. Changes will be needed, but we will have some fundamental changes to take care of.

When I look at an investor. . . . As they come back to invest in British Columbia now, as investors, they are going to look at all these elements. They are going to say: "No, thank you very much. You overtax, you overregulate, you have fractious labour relations, and you're heavily in debt as a province. It's not a province where I, because of its track record in the last eight years, can have a fair return on my money." So I have asked the minister how he is going to deal -- and I've done this during this day -- with corporate capital tax, which is a big deterrent for companies to come in here and invest. How are you going to deal with the marginal tax rate? How are you going to deal with new equipment and taxation? Is the minister going to create a package that deals with these questions and not just be saying: "Well, you know, when things are going well in this province you will make enough profit to accommodate these requirements"? It will not happen; an investor will not come back.

How are you going to deal with the cost of the Forest Practices Code? We will never eliminate the Forest Practices Code. We know that. There will always be a cost associated with it. But how are you going to deal with that cost? I, as an investor producing a product, cannot afford all that excess cost on that product. I will not be able to go into the global market, where the minister truly is committed to see that product go to, because I cannot compete. So what is the minister going to do with taxation, regulation, stumpage and other costs in that industry today that have eliminated us from being a global competitor -- from being in a situation where our product can indeed be competitive?

[ Page 8854 ]

Hon. M. Farnworth: A large part of what I'm going to say has already been said today. Look, investors make their decisions based on a whole range of issues and concerns. You know, I've heard the member throw up issue after issue after issue. I just want to deal with some of those issues.

He talks about regulation. Well, the fact is that there have been changes made in regulations. I mean, you can completely throw out all the regulations you want. What we've attempted to do, and what the government is attempting to do as part of its economic strategy, is address regulations on a sectoral basis and work with industries, and I've given examples of where that's happening.

The member raises issues around taxation. One, I have no control over taxation. That's the responsibility of the Minister of Finance.

Interjection.

Hon. M. Farnworth: Well, that's right, but in terms of. . . . You're saying: "What are you going to do?" Let's get that on the record: I don't set the rates of taxation. But what I can tell you, what we've been doing, is looking at -- again on a sectoral basis -- some of the requirements that occur within different sectors of the B.C. economy, looking at how tax policy implements it and looking at making changes. I've given examples of that.

The member has raised issues around marginal tax rates and high levels of personal taxation. Well, I can tell you that there have been changes made around that. But what I do find particularly interesting on this particular subject, hon. Chair, is how the focus is always on that high end, and it's never on the taxation system overall and how it impacts on the vast majority of people in this province -- who don't earn $100,000 a year, who don't earn $80,000 a year. They never want to talk about that, when that investor comes to British Columbia and looks at tax rates at the high marginal level. And yes, there have to be changes made there. And yes, the government's making changes and if necessary, quite frankly, I think they should. You know, if need be, if we have the opportunity and conditions are right, then let's accelerate them. Going from 54, the highest in the country, down to 49.9, which is in the middle. . . . Maybe we can do better, and who knows, maybe we will. But they don't want to focus on it. The vast majority of people aren't at that level. The vast majority of people in this province pay the second-lowest income taxes of any province in the country. That's lost in the debate. That's something that an investor will realize when they come here.

Interjections.

The Chair: Order, members.

Hon. M. Farnworth: The issue around debt level has been raised by the member as somehow discouraging foreign investment. The fact is, as I've stated already, that British Columbia has the lowest or second-lowest -- it's jockeying for position with Alberta -- taxpayer-supported debt of any province in the country. The fact that Ontario is significantly higher, that Quebec and Manitoba are significantly higher, never seems to enter into the debate. Somehow they have these high debt levels, yet they still have investment. The fact of the matter is that we have a very good debt level in this province, in terms of where we stand with other provinces.

The member across the way doesn't seem to want to acknowledge that a large part of the reason that debt is there is capital investment in infrastructure. That's another thing that an investor looks at in this province, and why they choose to locate here. One of the reasons Nike short-listed British Columbia is because they believe that their employees should have access to good educational systems, because they're a high-tech industry. They believe that their employees should have access to good health care facilities and a livable environment. That investment, that infrastructure, is part of that. I haven't seen the member opposite -- I'm straying a little bit, but I'll take the opportunity -- say: "Don't build a school. Don't build the Westview interchange. Don't build all those things that the public wants." They're all part of the overall package. They're part of what attracts investors here. They want to know that when they're producing a product there's a transportation system in place that can move that product. They want to know that they can move easily and accessibly throughout the province and get their product from where it is to the market it needs to go to. All those issues need to be looked at. All those issues have to be addressed.

Interjection.

Hon. M. Farnworth: Once again, hon. Chair, the member for North Vancouver-Seymour makes revealing comments. The port of Vancouver is one of the busiest ports in North America, shipping literally millions and millions of tonnes of grain a year. That's. . . .

Interjection.

The Chair: Through the Chair. Order, members.

Hon. M. Farnworth: The member says we say we did it all. I have never said that once, hon. member. I have never once said that the government takes credit for all that. What I said is that government has made investments that have encouraged industries to invest and allowed opportunities to take place. That's what we need to do. You don't want to acknowledge that.

Let's look specifically at some of the initiatives that this government has taken to facilitate specific investment that maybe the member can point to. I won't go all the way back to the previous. . . . I'll start now. We talked about the film industry. One of the things in the film industry was the investment by the government in North Shore Studios and in Bridge Studios. That government investment generated a great deal more private sector investment, and it has built on it. That's been one of the cornerstones of the industry in this province.

Interjection.

The Chair: Would the member for North Vancouver-Seymour please come to order.

[5:30]

[ Page 8855 ]

Interjection.

Hon. M. Farnworth: I'll agree with the hon. member on his comment -- which probably hasn't been picked up by Hansard. But the fact of the issue is, hon. member, that there's a whole host of issues that have been put in place that we need to work on. We fully recognize that government doesn't do it alone and that, by and large, the large proportion of what drives investment is private sector initiative and investment -- and people do work a long time. The member gave some examples around the hairdresser, and when he said that, I was going to say: "Well, if they were sitting around waiting to do my hair, they'd be waiting an awful long time."

A Voice: He'd still get the 5,000 bucks.

Hon. M. Farnworth: He'd still get his 5,000 bucks. But the fact is that it is private initiative that makes a lot of what happens take place. It makes the majority of what happens take place. But there are key elements of government involvement that have to be there at the foundation, and that is what's taking place now. That's what is going to allow a lot of future development to happen.

We've been going over and over and over this, and I don't know how many more times I can say it. But that's the way it is. I understand where the member's coming from, and I understand his difficulty in grasping the concept.

Maybe this will sum it up for him. Here you go, here's a word for you: profit is not a dirty word. That's something I've heard the member say a number of times today. The fact is, it's not a dirty word. That's something the opposition has yet to seem to want to grasp.

It's getting late, and we're coming close to 6 o'clock. The key issue. . . . If you can grasp this, hon. member, we'll have made some progress: a lot of policy changes have taken place around issues of regulation and taxation; there's a lot of effort and initiative in terms of identifying key sectors of the economy that we can build on; there are traditional sectors in the economy where we can do a number of things in areas around regulation. But at the same time, a lot of that is dependent on overall global economic conditions and prices for commodities and whether or not we have the markets which are purchasing those products. And when you have a downturn in Asia, gee, we're impacted.

That's probably about the eighth time that we're gone through this now, so hopefully you'll learn.

T. Nebbeling: Thank you very much, to the minister.

Interjections.

The Chair: Order, members!

T. Nebbeling: When the minister talks about the lack of grasping the message that the minister's trying to give us, I don't think it's a matter of us not grasping the message. What I think we're doing on this side is, in a civil manner, trying to tell the minister that his message is not such a good message. The reason I say this is that the message that the minister tries to. . . . No, I shouldn't say "the message." The picture that the minister is trying to paint about prosperity and hope for British Columbians as far as opportunities are concerned is a long-term picture. And I will never argue with the minister that we have to kick-start these opportunities. However, it's going to take time for these opportunities to come to fruition and, in a sense, to deliver the goods -- to create the benefits that ultimately will come from these new opportunities that we hope we can create, develop, massage and bring to fruition.

What the minister is forgetting, and what he is not grasping -- or I think he's grasping it, but he doesn't want to deal with it because it is reality -- is the fact that we need action now. We need not just action; we need recognition now. The minister has to recognize that unless the government that he is part of -- and I hope he plays a very key role in bringing a message to that government -- is going to accept the fact that some fundamental changes have to happen when it comes to the enticement of investment and how we set up a strategy that upfront and proactively deals with fluctuations in markets, we're never going to catch up. We cannot discard what this province's economic base has been for so many years.

In spite of all the new opportunities that will pay off down the road, we live in 1998. In 1998 we have to do some very fundamental things, not only to save some of the existing industries, but also, indeed, to bring to fruition the new opportunities. When it comes to the investment climate in this province, I truly doubt that the minister grasps what the needs are. That's why his answers have become repetitious, and maybe our viewpoints have also become repetitious. The minister is still -- and I use the member for North Vancouver-Seymour's expression -- in denial. The minister will not accept that now is the time for action, when it comes to saving what we've got. Now is the time to kick-start some new ways to deal with future opportunities.

I really regret saying this, but I feel the minister is totally focused on future opportunities and forgets about what we've got. As long as the minister's frame of mind is like that. . . . I should add something to that: I'm not even sure if it is just the minister. I think the minister understands a lot more than he can indicate here today. I think the minister is afraid that he can't sell it to his cabinet members. For that reason, he is, in a way, obstructive -- or in denial, in other words -- when it comes to recognizing that steps have to be taken right now.

We've talked about the demise of the resource industries. The minister has not once talked about the recognition that one of the reasons investors will not come back to British Columbia today is because there's no security of tenure. By that I mean a long-term commitment by the government to cutblocks or harvesting licences. And then, through other circumstances over time, the rights to this timber are being taken away. MacMillan Bloedel is a good example. Small loggers are a good example, especially on the North Island. Lands that have been maturing, that have been cultivated by these companies over the years, have just been taken away from them without compensation. We can talk about what the influences were, but the fact for the investor is that this province is shown to have very little regard for contractual agreements that were made in the past, when it comes to our resource industries.

[ Page 8856 ]

So I have no problem seeing our students going abroad to share our knowledge. But I do feel uncomfortable when it goes to develop our opposition in the long run, making our industry even more subject to attack, as we have seen, from other countries like Indonesia, the pulp industry. The minister is aware of this.

I don't know how much longer we can go on with this one. I'm not going to repeat again. I'm disappointed that on this particular subject -- the investment climate in this province -- the minister has not been able to understand that what is here today needs as much protection and attention and some fundamental changes in how the government thinks in order to make it survive. It is much more focused on the new elements that should be adding onto the prosperity that we should be experiencing, rather than becoming the tool to bring prosperity back again.

Having said that, if the minister wants to quickly respond, that's fine. Otherwise, I will start talking about trade and in particular, just as an intro, his knowledge about what's happening in Europe in relationship to trade amongst countries and the whole European economic market. Earlier on, the minister talked about what's happening there and how we in this province have to be ready to tackle it and to position ourselves in such a way that we can deal with what's going to happen in Europe. I would like to hear from the minister, either now or after our break, about the strategy that this government has in place, or has been discussing, for how we're going to deal with the European trade market.

The Chair: Noting the hour, minister.

Hon. M. Farnworth: Being cognizant of the time and noting the hour, hon. Chair, I will keep my remarks to the member's previous question, and then we can probably deal with trade after dinner. You know, this ministry is part of a team of ministries that deal with economic issues in the province. The remarks of the member opposite, I understand. . . . I mean, it's almost like we should be responsible for every single. . . . It's almost like we should be doing forest policy out of this ministry. The fact is that we don't do that in this ministry. There's a Forests ministry that deals with forest issues. We work with them on a number of issues.

This ministry is a proactive ministry, and one of its key mandates is to identify and target new areas of opportunities for British Columbia -- new industries to diversify the economy -- because that's the overall philosophy: we need to diversify the economy. A big focus of this ministry is to look to the future -- it's not to look to the past -- and to recognize what's here already. There are ministries in place that, by and large, deal with what's happening here and now, whether it be Forests or Mines. Finance deals with taxation issues. We have discussed and dealt with a lot of those issues this afternoon. We have shown where changes have been made, and we have shown why changes come about. The government does have a strategic vision of where we need to go and what we need to do to ensure the sustainability and the long-term viability of key sectors of our economy, whether it be forestry, mining or oil and gas -- any of the traditional areas of the B.C. economy.

We've also spent a great deal of time talking about what's happening with emerging sectors of the economy, what's happened with them over the last number of years and what needs to happen to ensure that they continue to grow -- things like high-tech and the film industry. We've also spent a lot of time talking about where we need to go. What are the future opportunities? What are the future industries that are new or that may have a small presence at this time? We can implement the regulatory requirements that are needed to encourage particular investment, whether we need to put in place certain infrastructure requirements to encourage particular types of investment or whether it's a question of marketing British Columbia to particular industries and saying, "Look, we have what you need," and targeting them and being aggressive in going after them. We are ensuring that we've got what's here today, but there is work being done to ensure that we're having growth in new economic industries and new economic potential for the long term.

[5:45]

We have a lot of traditional industries in the province right now, and we can make regulatory changes that will have a positive impact on them. But some of the key issues facing some of the traditional industries in the province are related to offshore events and conditions. So we'll continue, I guess, to have a fundamental disagreement. But, you know, I can give my assurance to the member that we do follow what's happening globally. We do recognize that there are global forces at work and that we need to deal with them. We do recognize concerns and issues around regulation and the need to deal with those.

With that, noting the hour, it's probably a good time to recess. We'll come back after dinner -- I don't have time to go for a run, I don't think -- and then we'll follow up with trade. I move the committee rise, report progress and ask leave to sit again.

Motion approved.

The committee rose at 5:48 p.m.

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

The committee met at 6:40 p.m.

[ Page 8857 ]

ESTIMATES: MINISTRY OF EMPLOYMENT AND INVESTMENT
AND MINISTRY RESPONSIBLE FOR HOUSING
(continued)

T. Nebbeling: We concluded the afternoon session by quickly touching on the minister's intentions towards the trade aspect and the trade policies of British Columbia. Although it is not going to be the focus tonight, the minister talked earlier about what's happening with the European Common Market and all the elements that make up the trade arrangement in Europe. I don't want to spend too much time on this today, but at the same time it would be interesting to hear, by way of a brief summary, what the government is doing today to be ready when that trade power called the European Common Market is in place and is functioning. Are we doing anything at this point, or are we sitting back and saying, "Let's see what happens," and then acting accordingly?

Hon. M. Farnworth: I'll make a couple of points. In terms of Europe as a whole, we follow with considerable interest, not just provincially but in concert with the federal government, what is happening, and we recognize the integration that's taking place. We also recognize that it has a great potential and opportunity for us, but at the same time it also presents some great challenges. Some of the key things that we have been doing are identifying what those challenges are as well as trying to identify the opportunities.

One of the problems in regard to the European Union as it's currently structured, and until everything starts to shake out in 1999, is that we're in some ways defensive. We're reacting to initiatives on the part of the union. That's particularly appropriate when we're talking about some of the traditional industries in the province. Forestry is clearly the main one, but also certain aspects around the agricultural sector -- wine being the obvious one there. One of the challenges is to try and get past the defensive and on to the offensive on some issues. There are other issues where we are able to have a more proactive policy around opportunities in some of the newer European Union countries -- some of the potential new members -- and in some of the key industries within Europe, pharmaceuticals being the key one.

T. Nebbeling: It's interesting that the focus is obviously on industries that we are trying to develop in British Columbia, like the wine industry -- successfully so far, I should say -- and that you look at what's going to happen in Europe. Has the minister taken a position in regards to that particular agricultural activity, and what would that position be? What would the strategy be to deal with the potential threat or, if it is not a threat, the potential market opening. . . ?

[6:45]

T. Nebbeling: That was indeed what I wanted to hear: that your strategy actually is to let the federal government represent British Columbia to a certain extent. Without going too far into the relationship between the federal and the provincial governments when it comes to trade arrangements -- I will come back to that part a little later, because there are some elements I'd like to discuss -- how does the strategy of British Columbia today incorporate that contact? How does communication between the federal and the provincial governments materialize today -- already in this very early stage of the European market, of course -- and how do you create these links with the federal government?

Hon. M. Farnworth: There is a number of elements that I'd like to touch on. Clearly the first is policy within the province. Second is the effort of the federal government on our behalf and on behalf of other provinces in, first off, trying to see. . . . One thing is: are there common positions right across Canada? That makes it easier for the federal government. On a number of products -- particularly wine, for example -- there are.

Is the federal government acting on our behalf through a variety of sources? Whether it's through international trade organizations or through our embassies and consulates that we work with -- but in concert with the federal government -- there is clearly a strategy in place there.

Also important, is the relationship directly between the province and Ottawa? Since being appointed to this ministry, I have met with Minister Marchi, the external trade minister, on a couple of occasions, and we have developed a good working relationship. For all the criticism you hear between the province and the federal government, there are an awful lot of areas that we do cooperate on and that we do try to keep each other informed on. We do try to come up with approaches to a lot of these particular issues around access to markets so that we are both singing from the same song sheet.

Governmentwide you see that with, for example, the Team Canada approach -- an attempt by the province and the federal government to present a united front for Canada overseas. We have seen that work successfully in Asia and in South America, and this year's Team Canada mission is to eastern Europe and to Russia. It's outside the European Union, but it's that type of approach that is taken, and I think it is the right approach to take.

T. Nebbeling: I'm really sincere when I congratulate the minister for building not a bridge but a good strong connection with the federal government for needs that are obvious -- representation through the federal government. Having travelled to a number of embassies throughout the world, when I deal with the trade attachés, it's always good to see how often, when they have a little display room of Canadian products, there is very good representation of British Columbia products. The one I'm always looking for, of course, is the Whistler brew -- a good pale ale. Once in a while I actually see a little sample from the Whistler Brewery.

Hon. M. Farnworth: Well, that must be surplus, right? Because usually the production is drunk here first.

The Chair: Order, members.

T. Nebbeling: I'm very happy you called the minister to order, because obviously I had the floor, and to be interrupted in this manner. . . . I didn't get if it was complimentary, Madam Chair.

[ Page 8858 ]

When we talk about the trade opportunities with Europe. . . . The minister has indicated that when it comes to the wine industry, for example, we have to make sure that we have access. Are there any hindrances or any barriers put up today to stop British Columbia from bringing its wine to Europe? I'm asking this because British Columbia wine is winning more and more prestigious awards at wine contests throughout the world, and the Europeans -- being the way they are -- like good wine. I'm sure that British Columbia wines would be very much welcomed in certain areas of Europe, particularly the German counties, because they really relate to the type of wines we produce here.

Is there today any problem with access in European countries, or does the minister fear through information that there may be some problems?

Hon. M. Farnworth: One of the key irritants regarding access to the European market, not just of British Columbia wines but of wines across the country, is around the issue of appellation -- how you describe particular wines like port, champagne, brandy. There is a lot of. . .

T. Nebbeling: Turf protection.

Hon. M. Farnworth: . . .turf protection, exactly. The European Union has very strict definitions as to what those particular terms mean. In Europe, champagne comes from the Champagne district of France. Here in Canada, we don't have a champagne district -- right? We make Canadian champagne or British Columbia champagne.

A Voice: Cold Duck.

Hon. M. Farnworth: I think that was probably the first thing I ever got drunk on.

Interjections.

The Chair: Order, members.

Hon. M. Farnworth: It was very sweet and very syrupy and gave one heck of a hangover.

Interjections.

The Chair: Order, members.

Hon. M. Farnworth: I guess that's probably stricken from the record.

The member is right. There's the labelling issue around the origin and type of product, and that's one of the key irritants. In fact, the European Union has gone so far as to say that if we don't deal with that, they will revoke what limited access we have around appellations.

T. Nebbeling: I would then presume that the same would apply to our Canadian beers when we try to enter the German market, where there are very strict regulations about the percentage of alcohol. Maybe this goes too deep into it. I can maybe have a discussion on that at a later date, because I have some concern about Canadian beers also being banned in the future. I'm talking primarily about the small-brew industry.

Hon. M. Farnworth: I guess that is technical. We can get more information and have a detailed discussion on that. But I can tell the member that even within the European Union itself, that particular topic is very controversial within the member states. I think that's an issue that has not shaken out yet as to its ultimate conclusion. Whatever that conclusion is, it clearly has the potential to have an impact here in British Columbia.

T. Nebbeling: Getting away from Europe, one of the things that I think has always been lacking in the past, and I don't know if the minister has done anything about this in recent times. . . . There has been very little coordination in the past between investment opportunities for British Columbia companies abroad, and the economic strategy that should go with that. So if the ministry or any of the agencies. . . . Maybe I shouldn't say if. Has the ministry or its agencies developed a strategy where investment and an economic strategy are being combined, integrated, coordinated?

Hon. M. Farnworth: The approach that's taken is to try and identify what some of the key linkages or areas that we have in common are that we can build on. One of the examples that I can use where the ministry took a fairly aggressive approach -- that I can give information on to the member -- is around the ski industry and the outdoor recreation industry. The fact is that the ministry has been very aggressive in working with the industry, particularly the Germans and the Austrians, to show opportunities here as well as opportunities for British Columbia in those two markets. So there is a lot of that taking place, and that's probably one of the better examples that I can give to the member.

T. Nebbeling: Are these initiatives -- for example, ski investment opportunity policies -- driven by the ministry itself, or is this a function of the B.C. Trade and Investment Office?

Hon. M. Farnworth: Historically it's been in the Ministry of Economic Development. It's now located in B.C. Trade.

To follow up on my previous comments, I guess it's a question of identifying opportunities and then being aggressive in going after them. Another one is the wine and brewing industries -- identifying brewers and vintners and basically poaching them from Germany, Austria and France and having them establish an industry here to bring technical expertise here to British Columbia so that we can have some decent alcohol on the shelves, instead of Baby Duck.

T. Nebbeling: You almost enticed me to say something, but I don't think I want to see it on record in Hansard when it comes to Baby Duck. I'll tell you later.

Now that we have entered into the B.C. Trade and Investment Office, maybe the minister, for my benefit, can give a short summary of some of the activities that the B.C. Trade and Investment Office is involved with. Rather than getting up and getting another segment, maybe we can talk a little bit about the staffing. How many people are involved? What kind of initiatives come from the trade office? In general, how do they implement some of these strategies? A bit of an overview of what's happening in the trade office.

[7:00]

[ Page 8859 ]

A lot of it is building on, as I just mentioned, the strategic alliances and looking at how we fit in with the rest of the world. Part of that is doing things like trade missions. Part of that is using our embassies with the federal government. We still have a presence overseas. We have an office in Europe, although we don't have the agent general's position anymore. We still have an office there and people working there on our behalf. As well, we have a presence in Asia. So those are some of the key components. I would say that it's a small budget and small resources, and we have to do the best we can. I think one of the most effective and efficient ways we've been able to do that has been through working with business in forming strategic alliances.

T. Nebbeling: You mentioned some agencies abroad. How many foreign agencies do you actually operate today, and where are they located?

Hon. M. Farnworth: I guess the budget is around $1 million. The key office -- or certainly the largest office -- is London, and I think that's also the oldest office. We also have representation in Tokyo and in Taipei as well as in Hong Kong.

T. Nebbeling: When you say representation, do you mean just a trade mission representative or actually an office?

Hon. M. Farnworth: In London, Taipei and Tokyo we actually have offices. In Hong Kong we have contract representation.

T. Nebbeling: I would presume that you evaluate the effectiveness of these various offices. What kind of check-and-balance system do you use to make sure that British Columbia gets the benefit from having these overseas offices operating?

Hon. M. Farnworth: There used to be a lot more offices. Basically, what's happened is that they underwent an evaluation process as to what activities were taking place and how much benefit we were getting from them. Then a reorganization, I guess you can call it, focused resources on those key areas where we were getting a demonstrable benefit from those offices. I can tell you that we used to have offices in Bangkok and Singapore, Seoul, Seattle, Los Angeles and Frankfurt. Clearly it makes sense that you use the office in London to cover Europe. Clearly the office in Japan can handle north Asia. Hong Kong deals with Singapore and Bangkok. We have a lot of trade with Hong Kong and growing trade with China. The trade with Singapore and Thailand I don't think, at this time, justifies offices there. In regards to the States, we have an active consul general down in Los Angeles, and you can just as easily deal with Seattle and L.A. from here. That's what's happened over the last number of years in terms of. . . . Basically, I think that's probably a better approach than having limited resources scattered through a wide variety of locations.

T. Nebbeling: I'm not sure that I totally agree with the elimination of many of these offices. The reason I say this is that over time, I've visited a fair number of these agencies, either as part of a trade mission or as the mayor of Whistler -- visiting certain countries. I think that in most of the places I've been, there was a clear benefit. The minister mentioned that L.A. is now represented by a consul and that the consul is doing a fairly good job highlighting British Columbia from time to time. Again, I've had the pleasure of having been invited to a number of these functions in L.A. where British Columbia was being sold in regards to the ski industry. I know that the consul in L.A. is effective for a one-man operation, but you also know, of course, that he has got many other. . . .

A Voice: She.

T. Nebbeling: Well, it was a he at one time.

The Chair: Through the Chair.

A Voice: It's now Kim Campbell.

T. Nebbeling: Oh, God. She used to be a friend. I thought she was beyond the consul. Anyhow, the consul, in my time, was a very effective individual but restricted in what he could do. I'm talking about when I was there.

One of the offices which I think it was a mistake to close down was L.A. The other office that I still don't understand why the decision was made to close it down was Seattle. The argument that it is close by is not very effective, considering that that office in particular was very much focused on what I think is a very important component of the northwest -- that is, to find trade opportunities between Oregon and Washington, and British Columbia. The Cascadia concept has been talked about for a long time. Having an office in Seattle clearly helped not only to organize the bridges that we needed to start talking as one, but more importantly, I think it was an opportunity for many people to walk into the office or contact the office to get information about British Columbia. Where I can understand that moneywise you had to restrict yourself to a smaller number of offices, having lost the direct contact and the focus in the Pacific states, in the States, was a mistake, in my opinion, because we lost that direct contact that was possible before that.

Having said that, I don't want to draw too much on the offices. It was just an interesting point, because I remember from the past that it was really part of the strategy of the province of British Columbia to have fairly strong representation in certain areas. I believe it was effective, and the closure of some of them was questionable.

Talking again about the B.C. Trade office, how many divisions do you have within your organization? By that I mean -- to clarify so you don't have to ask -- I take it that you have a division that goes out in the world to try to make contact with other governments or other organizations to sell our product, and at the same time, I believe that you have a division that will entice people to come over here and establish businesses. Are there any other divisions?

[ Page 8860 ]

T. Nebbeling: Or the international marketing group. It's self-explanatory. The sectoral group maybe. . . ?

Hon. M. Farnworth: The sectoral group looks at the sectoral areas of the economy, particularly in terms of emerging industries and technologies. You would have a focus on biotechnology that looks at pharmaceuticals and the biotech industry or a focus on aeronautics and aerospace; the Ballard fuel cell would be another one that would come under that -- any of those sort of emerging technologies that require a specific focus.

T. Nebbeling: Just for further clarification, this is still with the objective that in the end a product will be available for marketing that will thereby enhance opportunities for British Columbia, I take it.

Hon. M. Farnworth: It's both industrial development here in the province and international marketing overseas.

T. Nebbeling: This is interesting. Does that actually mean that product development can happen without the end necessarily being evaluated within the system of B.C. Trade -- without it actually having a targeted marketing objective? Maybe how I've said that is difficult. . . . When you talk about new product development, I would expect the trade office only to come into play if there is a trade opportunity. But I thought that the minister said that that was not necessarily the case.

Hon. M. Farnworth: Let's say we have the issue of cleaning the carpets here, and you develop a technology that can do it faster than anybody else. The technology is developed here in B.C., and then they want to find marketing opportunities overseas. That's how they'll do it.

T. Nebbeling: What does the international services branch do?

Hon. M. Farnworth: Most of their activities are focused around the area of trade agreements and trade disputes.

T. Nebbeling: To illustrate what its function really is, could the minister provide us with some of the issues that the international services branch has dealt with?

Hon. M. Farnworth: I guess some of the key ones -- and I've got a stack of paper here. . . . In a nutshell, it looks at the implications of trade agreements and disputes from a British Columbia perspective. The federal government is clearly taking the lead in terms of agreements. What is the impact going to be on British Columbia of a particular agreement? What are our concerns? That's how that information gets up the ladder to the feds. Likewise, if there is a trade dispute, it could be a national trade dispute -- where a number of provinces are involved -- or it could involve products that relate primarily to British Columbia, where we need to get out the British Columbia position. Those are the primary activities.

[7:15]

I see that the minister was given a rather thick document, and rather than ask him what is on every page, would the minister be willing to share that document with me so that I'll get insight into that agency that I would like but do not have?

Hon. M. Farnworth: I would be more than happy to do that.

T. Nebbeling: Thank you. Then I do not have to ask more questions on that particular agency. I will most likely find the answers in there.

I would like to talk about trade missions. I believe the agency is involved in organizing trade missions as well. Through the Chair, the minister's nodding his head to me that indeed trade missions are part of the agency's objective.

The Premier made a trip to Asia in November 1997. Can the minister give me a bit of a rundown about what really happened there? Because it's one trade mission on which very few people understood what happened, because of some unusual things related to the trade mission, including the Premier going off on his own without notifying the press, which has led to not necessarily suspicion but questions about why the Premier did take off and not announce it to the world. . . . That's very unusual for a trade mission, as trade missions in general are team efforts. The minister did say that trade missions are, in general, opportunities for business groups to go to a country or continent and make deals. The presence of the Premier or the Prime Minister often is the clincher of a deal. So for that reason, what was the reason for the Premier of this province to take off in November without a trade delegation, and what happened in the time he was abroad?

Hon. M. Farnworth: I guess there are a couple of points. One, not having been minister at the time and not being familiar with all the intricate details, I can't really comment on that. I can comment on some of the key elements. One, the trade mission was on short notice. I would say that it wasn't your traditional trade mission in the sense of taking a large group over there. It was less than a week. It was primarily -- I think, in fact, almost exclusively -- in China. I think the main purpose of the mission was to set some of the groundwork in place for the APEC summit, and to get the groundwork done on some of the issues from British Columbia's perspective regarding China and for them to be dealt with at APEC.

T. Nebbeling: Well, it was certainly a very unusual trip to be given the label of a trade mission, considering the elements that the minister has already recognized. What made it an unusual trip was that it was at a week's notice. Trade missions, traditionally, I believe, are planned. There is a team built around them and there is an objective. So to see the Premier taking off without any of these elements really being in place did make a lot of people wonder if this was an effective way of doing a trade mission. I think that most people would have concluded at the time that no, it is not -- as long as we focus on what a trade mission is supposed to do. Then the question came up, and I've never heard it answered -- it is not part of my routine, but it came up while the minister was talking: what did this trip cost the taxpayers of British Columbia?

Hon. M. Farnworth: The exact cost is a matter of public record, and we can get that information for the member.

[ Page 8861 ]

I can tell you that in my participation at APEC, I had a scheduled set of events and a scheduled set of meetings that I was scheduled in at and participated in. At the same time, I was also ready. . . . On a number of different occasions I had to make a short-term change in plans to be able to meet with particular individuals -- or, in some cases, trade ministers from different countries -- to deal with British Columbia issues. One of them involved Madeleine Albright in her pyjamas. That's a story I'll tell you another day. It was quite interesting. They key thing was that you had to be prepared to be able to juggle your schedule and to react on short notice. I think that's in large measure what. . . .

Interjection.

Hon. M. Farnworth: I heard that, John.

That was one of the key elements in the Premier's trip -- taking advantage of some of those things.

T. Nebbeling: I don't want to know about the minister's sex life.

Interjection.

The Chair: Order, members.

T. Nebbeling: He's interrupting me again, Madam Chair. Anyhow, we'll remember that line. I've really been thrown off. I will try to recuperate here for a moment.

The Premier took off, disappeared for a period of time and came back. Obviously, an explanation was given for the need of this trip. I think at the time the explanation was that the Premier felt that there were some business opportunities, and they really had to be consolidated in China before they could have a signing agreement in Vancouver during APEC. So his need to do the initial step -- which included that trip to China -- was justified, because during APEC we in British Columbia would see some signing of agreements. Did any agreements between China and British Columbia, be they business or provincial government, take place during the APEC conference following?

Hon. M. Farnworth: I'm not sure of all the different agreements that were signed, but I know that a number of them were. I know specifically of one that was signed -- a memorandum of understanding between the city of Shanghai, in China, and the government here in British Columbia. At that time I was Minister of Municipal Affairs, and we were ready to sign an agreement with the Malaysian government. The Malaysians were anxious to try and get an agreement around some gas technology with the Ministry of Municipal Affairs. So there were several agreements. I think there was another one signed with the Ministry of Education. There were a number of agreements that were signed. So that's my recollection.

T. Nebbeling: When I talked of agreements, I was really looking for agreements that would have created a big benefit for British Columbia. Actually, I'm trying to find a justification for the Premier taking off to China. If an agreement was signed between China and the Minister of Education it most probably was to get some of our knowledge base towards China, so it would be a benefit for China. I don't think that would justify the Premier going to China, to set up an arrangement like that. It should be the other way around. I don't know what the arrangement between the city of Shanghai and the British Columbia government is, but is it so important that it merited the Premier to take off at considerable cost to spend some time in China? There were how many nations here -- 18 nations, 20 nations? Most likely some of the other nations and the Premier did sign agreements as well. So no need to go to these nations.

I haven't really been given a satisfactory answer why the Premier felt the need to go to China. I don't think it was to butter up the last elements of a deal that could have been an economic boon for British Columbia or an economic contributor.

Considering the time, I think we have to move on, although I have a number of further questions. . . . The minister has made much during these two days about the need for being a participant in the global arena when it comes to trade. I've listened with much interest to the arguments that the minister has made, and I've agreed with some and disagreed with some, as the minister knows. But while the minister was speaking, I was really wondering if the minister believes so much in this need for trade beyond our borders. I think the minister does; he's been very clear. It doesn't make it clear to me or very understandable to me why, when they're trying to do something on a national level, the minister rejected being part of a trade agreement between the provinces. I'm talking about the Agreement on Internal Trade. I have seen some statements by the minister on why he did not feel that British Columbia should be part of that internal trade agreement. I have seen him speak on the issue and make statements on the issue, and up to now I clearly cannot understand the rejection, when the minister recognizes that we have to expand our boundaries when it comes to selling our product and letting other people into this province to sell their product. So maybe the minister can spend some time on giving me a rational explanation without talking about aluminum or other futuristic opportunities that he sees for this province.

Hon. M. Farnworth: I guess a couple of points. The first is no, we have not rejected an internal agreement on trade with other provinces in the country. We want to sign an agreement on, as much as possible, our terms and conditions. That is something other provinces -- Quebec, for example -- do every day of the year in this country. We have by and large managed to remove most of the trade barriers between provinces. Over the last few years, there has been a substantial reduction, and we're now down, I think, to the final ones. Some of them are in sectors and areas of the economy of importance to British Columbia. I can tell the hon. member that some of the key ones that have been removed are some of the largest barriers that we've had in this country -- the brewing industry, for example. We have seen the removal of the interprovincial trade barriers around alcoholic beverages, beer in particular. That was a very hard-fought decision, but it was the right one to take.

We're now down to some issues around Crown corporations and some issues around tendering policies and the

[ Page 8862 ]

T. Nebbeling: So since the time that this issue was prevalent was about two months ago, I believe -- when the last rejection was, or at least what was perceived as a rejection of the internal trade agreement. . . . Which exceptions, for which areas, were you looking for then?

[7:30]

T. Nebbeling: The thing is, of course, that the other provinces, who have just as much interest in preserving certain rights and values in these MASH areas -- I still like MUSH better than MASH -- had the ability to recognize that there were better values to achieve by being part of this Agreement on Internal Trade than to do what British Columbia did and say: "We won't sign." For a minister who is so focused on and so committed to this global trade aspect of need that we have in this province to not see a way of overcoming some of these areas identified by the minister as being the block to the interests of British Columbians. . . . I really have a bit of a problem with his true commitment, then, to trade beyond our borders.

If there are elements in the MASH section -- chapter 5, I think it was -- that are of concern to the minister. . . . I think he's talking about some of these elements, such as a company in Ontario being able to bid on a job for the government of British Columbia. That shouldn't happen, because jobs should be available for British Columbians. I agree that jobs should be available to British Columbians; but by allowing Ontario companies to bid on jobs in British Columbia, we open the rest of Canada up for British Columbians to bid on jobs in these other provinces. If you look at it that way, British Columbians, in the end, will be the big winner. We are a small province, and there's a huge market out there that we should be able to tap into. The other provinces now have a mechanism where that can happen, and I'm afraid that British Columbia, because of the position taken by the minister and the government, is denied the opportunities there. How does the minister see this materialize, because it must be a concern?

Hon. M. Farnworth: There are a couple of issues. First, what's happening on the Agreement on Internal Trade is that there are issues being resolved. We have concerns, and we're negotiating in what we believe to be the best interests of British Columbia. Part of that is that we get feedback from different sectors of the economy that are impacted. As I said, we've removed a great many of the trade barriers -- in fact, most of the trade barriers -- between the provinces. We're now down to some of the last remaining ones. I think one of the issues that we have to look at is what are the practices that occur here in British Columbia and what are the practices that occur in other provinces. Clearly we won an exemption on the MASH agreement. Other provinces came around to our way of looking at the issue. So now we've dealt with that issue to British Columbia's satisfaction, I think. Now what we're working on is the energy sector. There has been good progress on that. I don't think negotiations are quite complete yet to bring forward to a ministerial level, but that's an area that needs to be dealt with.

One of the fundamental issues, one of the final issues, is around whether we are going to recognize that within the federal system there are opportunities where the federal government subsidizes other industries in other parts of the country. Should they have the ability, then, to take what is, in effect, a federal subsidy and use that at the expense of British Columbia industries to be able to bid on or procure contracts? That's the type of concern we have. By and large, we've dealt with many of the major issues. We've resolved the MASH issue. We're waiting to deal with the energy issue, and we are making steady progress. I think it's important that we represent it and look at it from what is in British Columbia's interest in the same way that other provinces look at it from what's in their interest. That's something that, as I said earlier, Quebec does all the time.

T. Nebbeling: What Quebec does all the time is really of no matter to me. I would not like to be like Quebec, necessarily, when it comes to certain issues. For me it is more important that there seems to be a lack of recognizing the value to British Columbia companies if we as British Columbia are a full-fledged partner of this deal. No deal is 100 percent for everybody; we know that. Every other province most likely will be able to find something in what they have signed that they're not necessarily too happy about. But as a total package, the advantages are such that the little that is not all to their satisfaction is acceptable.

When the minister just said, because of some subsidized trades in the east, for example, should we have to compete with that, here in British Columbia, when it comes to job opportunity. . . . Well, that sounds a lot like the Americans talking about our lumber. This afternoon, when we talked about the softwood lumber deal, the minister really expressed his dislike for the American lumber industry fighting British Columbia lumber because there is a perceived subsidy involved there.

So you fight it when it comes to the softwood lumber deal. You're using the same argument that the American industry does with our lumber to stop this internal trade deal, because you fear that a subsidized company may make a bid on a job in British Columbia in certain sectors that would be unfair competition for British Columbia companies. That's how I translate what you said. If it is not so, then maybe you can give me a clarification on that.

Hon. M. Farnworth: I guess the point I'm making is that we want to make sure that when we have an internal trade agreement here in British Columbia, that we have a level playing field -- that all provinces are competing equally and that we address practices that are taking place, so that each province knows exactly what the rules are and each province has the ability to know that their industries are competing on a level playing field. The difference, I think, between what's

[ Page 8863 ]

I'll come back to the key one, because I think that was the most contentious one. That was not so much around MASH; that's one of the last ones. But beer was clearly the biggest and most symbolic trade issue, because each province had their own brewery. To bring those tariff barriers and trade agreements down placed a highly paid workforce in jeopardy in the province. There was a rationalization that took place. But the fact of the matter was that it was done and, I think, to the benefit of the industry as a whole. We're now down to the final, few issues that need to be dealt with, and I'm confident that they will be dealt with. In fact, we already have dealt with one of them, and there are a couple still outstanding.

T. Nebbeling: Without belittling the point, the softwood lumber deal is driven by the subsidy issue. The minister knows that. The argument that the minister used earlier for not feeling comfortable about British Columbia companies having to compete with out-of-province companies that are subsidized was one of the reasons that we haven't seen the signature yet. That's what the minister said, and Hansard will prove that. So there is a link there that I don't understand, considering the position the minister took this afternoon on the softwood lumber deal and the unfairness of using the trade deal like that to keep British Columbians from doing what is needed -- the tradespeople.

The statements by the minister do indicate to me that he sees us signing the internal trade agreement in the very near future. At least, that's the feeling I get. I hope so, because the minister is aware that the trade opportunities that are within that internal strategy represent about $30 billion annually in trade opportunities. To exclude British Columbia companies from that potential field of trade opportunities is very irresponsible. Having gotten to know the minister a little better, I think, in the end, he would agree that we cannot afford not to be a part of an internal strategy for Canada like that.

It is my hope that the minister will indeed find some solution to some of the issues that are still out there for the minister to deal with and that it is not going to be long. The sooner this internal trade is in effect, the better it will be. Right now I think many British Columbia companies would benefit dramatically from finding business opportunities outside our province. To deny them access to that right now is, in my opinion, not acceptable. There are too many companies today that search for work just to keep the workforce in place. Many of these smaller companies in particular, who still can go out, are not having an opportunity to find the jobs to cover their employees in British Columbia.

I urge the minister to really take this seriously and don't be the last -- holdout is the word. Sometimes I have to look for words as English is my second language, as you no doubt have figured out by now. Having said that, when does the minister think that he will be able to find enough good for British Columbia in an internal trade agreement that can lead him to recommend that his government sign it and to start deriving the benefits from it?

Hon. M. Farnworth: The key issue that we talked about. . . . I mean, basically we have signed on by and large to most of the clauses of the agreement that have been negotiated so far. The outstanding issue has been around MASH, which is government procurement and is not private sector procurement. You know, that is a sticking point for us, but there are other sections of the agreement that are still being negotiated. British Columbia is not standing out by itself; in fact, other provinces are -- how can we say? -- holdouts. I'm thinking in particular right now of the energy clause which is currently under negotiation, where Quebec and Newfoundland and, I think, Nova Scotia are the holdout provinces with concerns that they want addressed.

There are still a number of outstanding issues that need to be dealt with. We think MASH has been dealt with, and that the energy one is rapidly being dealt with, and then we'll go from there.

[7:45]

Now would the minister like me to go into B.C. Hydro, or would he like to defer that to later?

The Chair: Noting the time, minister.

Hon. M. Farnworth: My sense is that we can do that one later. I mean, it is quarter to eight now, and I think we're sitting at eight. . . .

Interjection.

The Chair: Through the Chair.

Hon. M. Farnworth: My understanding is that we're doing B.C. Hydro Thursday.

Interjection.

The Chair: Through the Chair.

Hon. M. Farnworth: Yes. So we go into gaming next, and I would suggest now that we rise and report progress. I'll just say that I think we've had a good debate around the issues, around trade, investment and the ministry, and I too would like to thank the staff for their assistance and for their indulgence of both of us.

With that I move that the committee rise, report progress and ask leave to sit again.

Motion approved.

The committee rose at 7:46 p.m.

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