[ Page 8919 ]

The House met at 10:05 a.m.

Prayers.

R. Coleman: In the precincts today is a group of grade 4 students from Betty Gilbert Elementary School in my riding, along with their teacher, Ms. Friedenstab, and a number of adults who are travelling with them. I understand that I'm going to get the opportunity to visit with them shortly. One of the things they want to lobby me about is a proper track behind their school. It should be an interesting discussion shortly after the sitting. Would the House please make them welcome.

Hon. D. Streifel: Touring the precincts today -- and I'll be joining them shortly -- is a group of grade 7 students and their teacher, Ms. Wardell, from West Heights Elementary School in my constituency. I bid the House make them welcome.

B. McKinnon: Visiting the precincts shortly will be a group of grade 5 students from my riding of Surrey-Cloverdale, from Frost Road Elementary School. They're with their teacher, Mr. Kalair, and a bunch of parents to help supervise. This is the school where my grandson attends grade 1, so I'm very pleased to introduce them today. Would the House please make them welcome.

The Speaker: The minister tables a report.

As I mentioned during first reading, the changes being proposed for construction here today are those recommended by the construction industry review panel, made up of Steven Kelleher and Stan Lanyon, two former chairs of the Labour Relations Board and both respected arbitrators in British Columbia. Their mandate was to consider what legislative framework should be structured for the construction industry. I believe they have accomplished their task with considerable skill. As everyone in this House will certainly be aware, this panel was appointed after government withdrew Bill 44, Labour Statutes Amendment Act, 1997, last summer.

The construction panel made its final report to government on February 25, 1998. The report, along with their legislative recommendations, was released to the public on the same day. I would like to take this opportunity, if I might, to commend the considerable efforts made by this panel in deliberating on these difficult issues. Steven Kelleher and Stan Lanyon, who made up the construction industry review panel, have performed good and valuable service, it seems to me.

During first reading, I mentioned that we would not be proceeding with the package of legislative changes that was recommended by the other panel, the section 3 panel. Let me emphasize that this is in no way a reflection on the efforts of that panel and its members. That panel was comprised of Vince Ready, Stan Lanyon, Jim Matkin and Miriam Gropper. They too, it seems to me, have done good work, and their work is also appreciated. We are not introducing recommendations that that panel made, simply because neither the business community nor the labour community accepted what the panel recommended. Therefore we concluded it was wiser not to do anything with the recommendations.

The construction report, with its legislative recommendations, is, in my considered opinion, moderate, reasonable and balanced. I know these amendments are balanced, because I've had almost the same number of complaints from the business community as I have from the labour community -- not a bad indication of balance, it seems to me. Some business groups, I am well aware, say that they see shades of Bill 44 in these proposals, and on that basis alone they may want to throw out the entire package. Indeed, I've heard that argument. I've also heard business leaders raise concerns about the implications of changing labour legislation on their current economic climate. Hon. Speaker, I accept entirely that this issue needs to be discussed, and I hope that we will have an opportunity during this debate to outline our views on ensuring that B.C. does have a favourable climate for business. We don't want to retreat from that.

Let me make one small point if I might, though, to start that debate now. The point is this: I think this legislative amendment, this change to the Labour Code, is in many respects a timeless amendment. I say that just to make this point. It's timeless and it's not partisan. Whatever government is in power, whatever the political agenda might be, whatever the economic climate might be, legislation of this sort tends to obtain. The example, the paradigm case I would offer, would be Ontario. Ontario has had this provision in its legislation since 1978. It has withstood various governments of various stripes and hues, and it has also withstood all the economic vagaries and ups and downs of the last 20 years. I would make that point to begin with.

On the other hand, there are some labour representatives who want to argue the case that this legislation does not go nearly far enough. They claim that Bill 44 was indeed a step in the right direction towards rectifying what they perceive to be some very real problems that they and their membership have experienced in recent years. Again, we retreated from that. I think we as government made the right decision in consultation with business and with labour. We heard both sides, and we said: "We will endeavour to balance your interests."

Here is the compromise position. Indeed, that's what government is about. It's about balancing interests; it's about a compromise position between two different points of view.

Overall, then, I am confident that we do have here a reasonable and balanced package of changes that does deal with identified and real problems. Unfortunately, there are those who take what I must, in all fairness, call the Chicken Little approach -- namely, that the sky is falling. "If we do

[ Page 8920 ]

[10:15]

Section 2 of the bill introduces a new part 4.1 into the code that specifically deals with collective bargaining structures for parts of the unionized construction industry in British Columbia and establishes a new collective bargaining framework for employers and trade unions that are organized along a craft basis.

Interjections.

Hon. D. Lovick: I'm just gesturing to my colleagues, because their important conversation was a bit loud, and they have kindly acknowledged it.

This new construction part addresses a longstanding commitment by government to recognize the unique nature of this important industry. The unique nature of the industry has been recognized for some time. Indeed, if we go back to the review of the Labour Code in 1987, when the then minister, Lyall Hanson, made a report to the Premier, he stated at that time that the construction industry's labour relations did require some special consideration under the law. I would remind everybody that Lyall Hanson and the Bill Vander Zalm government of the day were hardly what I would call terribly biased in favour of labour.

The construction industry, we all recognize, is an important source of skilled jobs in our province. Indeed, approximately one in 12 jobs in B.C. is dependent on construction. It is also vital, we recognize, to the economic health of our province and our ability to create the infrastructure needed for future economic growth.

Again, I am sure that there will be some on the union side -- and I've already heard from some of them -- who say that this part does not go far enough to resolve the problems that currently exist in construction. They would have preferred the more comprehensive and far-reaching approach of Bill 44. I can understand, indeed, some of those concerns.

I'm also sure that some of the business community, and especially non-union contractors, will proclaim that this legislation is simply a modified version of Bill 44 and that it will wreak havoc on our economy, etc. My view after a great amount of thought, concern and consideration is that this bill is indeed a major step back from what was proposed in Bill 44.

Interjection.

Hon. D. Lovick: Hon. Speaker, I'm trying to resist the temptation to respond to all the sounds on the other side, because this is second reading debate, and I am trying to get some points onto the record. I will restrain myself for a while. I give you notice, member for Kamloops-North Thompson. . . . He's a very good target, hon. Speaker, you know. But I'll try to ignore him for the moment. I know he's looking for his 20 seconds of immortality.

In its report, the construction panel certainly expressed the view that this is indeed a major step back from Bill 44, and I agree with them. This is a moderate, workable package. It's designed to resolve some very specific and unique problems within this very unique industry. The panel expressed the view that their proposals were consistent with the specialized legislative treatment that is in place in virtually every other jurisdiction in Canada. I agree. It is something of a surprise to me that B.C. has indeed waited for such a long time to provide this legislative recognition of the unique situation in construction, recognition which has long been the norm elsewhere in this country.

What this legislation does not do is enforce a rigid and all-inclusive bargaining structure on all parts of the construction industry. There are two aspects of the construction part, and I would like to speak to both. The first division will apply across all union construction. The second and more contentious aspect is the more specific bargaining structure, and that will apply only to craft bargaining units in industrial, commercial and institutional work -- a.k.a. ICI.

Division 1 -- "General Construction Provisions." The first division of this new part will apply across all construction. It establishes a consistent and meaningful raiding period in construction. For those who aren't familiar with the language of unions and contracts, the raiding period refers to the time frame in which employees can actively change their trade union affiliation. We're changing the time to a period that will coincide with when employees and their contractors in the industry are most actively working, instead of having a raiding period happen in the dead of winter when nobody's working. Obviously you book the raiding period when people will be there, so that a raid can be meaningful.

The new part will also require that all future voluntary recognition agreements will need to be ratified by the employees who will work under them, and that those agreements, in future, will need to be filed with the board. This will prevent union officials and an employer from establishing a "sweetheart deal," as it's commonly known, which does not have the support of workers who are in effect covered by those agreements. I would like to make clear that the intent of this section is not to curtail the process of voluntary recognition or to eliminate any existing voluntary recognition agreements that are currently in place. Rather, it is simply to ensure democratic procedures from this point onward. This part will also allow for the introduction of a project collective agreement, which would be in effect for the duration of the construction project. This is the new section 55.15. This section will allow the Minister of Labour the discretion to permit a major project agreement when there exists solid economic benefits for the province in doing so. Obviously the question is: why is this necessary, and how would it work? Let me explain.

[ Page 8921 ]

I want to be clear, however, that we recognize that a project agreement will have implications for collective bargaining elsewhere within the affected subsector. As a result, I would not envision this particular section being utilized to any great extent.

The first division of this new part will also require that the existing industry-based plan for resolving jurisdictional disputes within the industry has application to craft units over the entire unionized industry. The panel has recommended this to ensure stability and to avoid jurisdictional conflicts disrupting ongoing work.

Finally, this section also introduces a new section 55.17, which deals with special enabling arrangements in union construction. What we are requiring here is that wherever a trade union allows for enabling in one place -- and what is meant by enabling is simply changes to, cuts to, a collective agreement to allow the contractors to be more successful -- they must provide the same arrangements to all their employers who might want to bid on the same project. There can, in short, be no special deals -- a good measure.

Let me turn now to division 2, headed "ICI Construction Collective Bargaining" -- industrial, commercial, institutional; the more contentious part of this bill. This new part establishes multiparty collective bargaining in the ICI part of the unionized construction industry for those parties which are primarily organized along a craft basis. We think this is both desirable and realistic for this industry, and for this part of the industry in particular.

The government recognizes that one size does not fit all. We accept that; that's a legitimate argument. Just as construction as a whole has unique needs, so the industry itself is not homogeneous when it comes to collective bargaining. This point was made to us by the construction industry review panel in their recent report. They stated: "Non-union, craft union and industrial union models currently exist in the industry and the legislative framework must reflect this diversity." We accept that point.

Indeed, hon. Speaker, for the sake of historicity, I should advise that one of the recommendations made by the Business Council of B.C. in the wake of Bill 44 was that we should provide that freedom of choice to workers in the industry. That was one of the major suggestions made by the Business Council of B.C. that we accepted. And we accepted the other two suggestions made as well: namely, no sectoral bargaining and the creation of an independent apprenticeship and training body at arm's length from government. In short, we listened to business; we accepted their recommendation.

There are some hon. members of the opposition who have argued and who may argue -- I think that's fair game -- that this legislation is intended to unionize the entire construction industry. I want to make it clear that this government supports workers' rights to form or to join unions; we have never said otherwise, nor would we. We do believe that the best interests of workers will be protected if they have the option of a collective voice and collective action. That's a given. But I do want to say that this legislation does not force trade unionism on anyone. If workers do choose to organize, however, they should also have the ability to choose the type of union structure which fits their needs. As the construction panel stated: ". . .two models of trade union representation do exist within this industry. In our view, the employees should have the choice of which model they support." We accept that premise.

The principal provisions for dealing with employees' free choice respecting trade union representation, be they in the construction industry, the forest sector or any other industry, are dealt with in part 3 of the code. Those provisions are not changed by the introduction of this bill -- the new part 4 we're introducing here today.

[10:30]

Under these proposed changes, those two parties will have the authority and the responsibility to negotiate the collective agreements which will apply to all craft-based union contractors in the ICI area -- that is, to all unionized firms that are organized along a craft basis. I want to point out that this is a very standard approach for collective bargaining in Canada, especially in ICI construction, where there is recognized to be a widespread interaction and integration of work between different contractors and trade unions on construction projects. In this respect, British Columbia is not breaking new ground. We are simply following a model that has been tried and been proven effective in most other jurisdictions. Alberta, Saskatchewan, Ontario and elsewhere all have broadly based collective bargaining models for their construction industry.

Interjection.

Hon. D. Lovick: I'm going to deal with that comment at some point.

In Quebec, just for the members' information, the prevailing model goes much further than anything we are proposing. In fact, it establishes the collective agreement rates as the standard for the majority of the industry within both the public and the private sectors. So if one wants to look at other possible models to choose from and suggest that B.C.'s model is somehow wildly out of sync, I suggest that members might want to consider that example.

But each jurisdiction does have different dynamics and important differences in its industrial makeup. As a result we

[ Page 8922 ]

I think there is a public interest in stable and effective collective bargaining in construction, especially in the important ICI portion of this industry. The legislation we're presenting here today provides a pragmatic framework which balances the need for free collective bargaining with the public interest for stability in this important part of the economy. I've stated earlier that this new construction panel will incur stability in bargaining for competitive collective agreements within the ICI part of the construction industry.

I'd like to point to a couple of additional features of this new part that will also focus in this same direction. Section 55.26 in the collective bargaining division of the bill also requires that any collective agreement which is established within the construction industry must be established for a three-year duration. We believe that this will provide added stability and certainty for the industry. We also believe that this will allow those who might be involved in purchasing construction to look at the longer term when they are investing in future construction projects.

Hon. Speaker, after working through this for some while now, I think this is good legislation for the construction industry in British Columbia. I think it will encourage the industry to look at the long term with respect to skills development, for example. I want to make a plea, if I may, to others in this chamber to consider the bill, to look at what the bill says. I wasn't encouraged in the House yesterday. I've been in this place for about 12 years, hon. Speaker, and I have never seen a division on first reading -- a vote against first reading.

Interjections.

Hon. D. Lovick: Oh no. I'm saying I've never seen a division at first reading except by those people. I want people out there watching this to understand what that means.

Interjections.

The Speaker: Hon. members, take it easy.

Hon. D. Lovick: First reading is the mechanism whereby we say the government wants to present legislation so it can be discussed. A vote against first reading effectively says the government has no right to introduce legislation. That's the understanding of parliament and democracy the people opposite would seem to have. I, for one, tend to think that's a little bit questionable.

Interjections.

Hon. D. Lovick: I see that I have awakened the sleeping giants. How nice to know that.

What I am suggesting to members opposite is that they consider reading the bill, first of all. Then I want. . . .

Interjection.

Hon. D. Lovick: Oh, I see. But then they were complaining that they didn't have time to really get their act together. What an interesting dichotomy!

What I'm asking members to do is simply consider what we're actually debating here. They all got dressed up. They put on their battle armour, and they said: "We're going have a war in this province." Do you know what happened? We took away the primary reasons for their war. We took it out of the campaign. But guess what: they're still dressed up, and they still want the war. I want to suggest to them that they ought to talk to the people directly affected by this. Don't tell me about small business. Don't tell me about Suromitra, because Suromitra isn't affected one whit by what we're doing here today. Go and talk, rather, to the big construction companies who do ICI work in this province. Go and talk to Farmer Construction; see what they have to say. Go and talk to PCI; see what they have to say. Then we'll find out whether these people really want to debate this bill or whether they want to use this as an opportunity to have a holy war because they think it is good politics.

I'm suggesting that the legislation is reasonable. It offers a viable, realistic choice between union and non-union approaches, maintains a competitive environment and offers choices between different styles of unionism.

Hon. Speaker, I truly believe that this legislation will ensure that we have a strong and stable industry to build our future, and I would encourage all members to think a bit about it, to read a little bit, to learn something about it -- especially the member opposite, who hasn't learned anything in the last three years. Then I would encourage all members to be realistic and support this excellent piece of work.

C. Hansen: I want to start by commenting on the minister's remarks that he made a few minutes ago about the first reading vote. We certainly recognize the parliamentary tradition of first reading votes and what they mean. A first reading vote is to enable a piece of legislation to come before the Legislature.

In all of the consultations that this government did in the early spring, when they were trying to convince the public that they were actually genuinely seeking answers to how to solve the problems of the B.C. economy, virtually every business leader and every economist in this province gave them the advice: "Do not touch the Labour Code." There were great pictures of the Premier on the front page of the Vancouver Sun, standing beside some of British Columbia's most influential business leaders. Out of those meetings there were two messages. If you want to get the economy back on the rails in this province. . . . The first message was on taxes: we are being taxed to death in this province. The second message that came out of all of those consultations was: if you want to get the economy back on the rails in this province, do not touch the Labour Code.

When we stood up in this House yesterday and voted against first reading of Bill 26, it was because we are on the side of economic recovery in this province. The minister was right when he said that by voting against this on first reading, we were saying that this piece of legislation should not even come before this chamber. He's right. That is exactly what we

[ Page 8923 ]

Hon. Speaker, I didn't plan to start on that note, but I did want to respond to the minister's comments about first reading. Where I had planned to start was by discussing why we are here today at 10:45 a.m. on the day after this legislation was introduced. I would challenge the minister, with his great knowledge of the history of the Legislature and the last time there were divisions on first reading, to tell me when the last time a significant piece of legislation such as a change to the Labour Code was brought into this House and then rammed through this Legislature the very next day. When was the last time?

I've got some theories as to why we are here today debating second reading the very day after it was introduced for first reading. The reason is because that party, the NDP, is afraid of the public. They know what public opinion says about changes to the Labour Code. Let's go back a year; let's go back to June 25, 1997. On that day there was a piece of legislation brought into this chamber called Bill 44. Why was it brought in at the end of June? It was brought in at the end of June because this government did not want public discussion on that piece of legislation. They brought it in, basically, once summer had started. We had passed the summer solstice. People were looking to the beach. Kids were finally out of school. I think everybody knows that public interest in political debate diminishes in the middle of summer. They brought in that piece of legislation at the end of June because they were afraid of public discussion. They wanted to bring it in and pass it while the public wasn't paying attention.

They got a rude shock, because when they brought in Bill 44 last year, they found that there was an enormous outcry from all over this province about the implications of Bill 44, and they had clearly not anticipated the kind of anger that erupted within days of Bill 44 being introduced. When that public anger grew to the point that they realized that the public was paying attention in the summer, they announced that they had better back off. They had better back off -- why? -- because they were afraid that they were going to have to sit here all summer and be unable to get home to their constituents, to spend some time in their hometowns and communities.

H. Giesbrecht: How many letters did you get from workers?

C. Hansen: The member for Skeena was just asking how many letters I get from workers. I get a lot of letters from workers. I get a lot of letters from workers who work in trade unions. I get a lot of letters from workers who work in small businesses. I get a lot of letters from workers who run small businesses. They are fearful of what is going to happen to the economy as a result of this piece of legislation and of what's going to happen because of the other disastrous policies that this party is imposing on the public.

[10:45]

Interjection.

C. Hansen: Raising Cain -- thank you.

Fast forward a year to June of 1998. Here we are on June 18. Most of the public schools in British Columbia are wrapping up; again, the public is looking to the summer. Here we have a government that has waited until the end of June to bring in this piece of legislation.

But are they prepared to have the public debate? No. Are they prepared to allow Bill 26 to be shown to the public, for them to get an understanding as to what is in this piece of legislation? No. The very next day after Bill 26 is introduced, they call for second reading debate and want to ram it through before there's a public discussion. I believe that is cowardly. If this party and this minister were proud of this legislation, we would have the public debate. They want to ram this legislation through before the public gets a sense of what's in it. They want to ram it through before the public starts demanding that this bill, too, be pulled from the agenda, just like Bill 44.

A few minutes ago the minister made a comment regarding the timing of this legislation. He mentioned the fact that there were some groups that had expressed concern about the state of our economy today and whether or not this was the right time. Later in my remarks I will comment on what the panel itself said in that regard. But a few minutes ago in his opening comments, the minister said: "I accept that this needs to be discussed" -- the timing of this bill and whether or not this bill is going to have an impact on the economy. The minister admits that he accepts that this needs to be discussed -- never mind the content of the bill. The minister might want to argue that the panel report has been out there and that somehow we should have anticipated that this was exactly what they were going to bring in. The minister said a few minutes ago that he accepts the need for discussion on whether or not this is the time to introduce this legislation and whether the economy can sustain it.

Yet what is he doing? Is he allowing time for public debate as to whether or not Bill 26 is appropriate given the state of our economy today? No. They bring it in at 2:15 on a Wednesday afternoon, and they call it for second reading at 10 o'clock the following morning. That is not what democracy is about. That is what a coward would do. That is what a party would do that doesn't want the light of the day cast on this piece of legislation. If this party were proud of this legislation, they would take Bill 26 and go to the chambers of commerce in their communities and try to defend it. They would go to the community groups throughout this province and try to defend it. They would go to the media and encourage public discussion about the wonderful things that are in Bill 26. The reason we are here debating this today is because they know that they can't defend it. They know that the public is opposed to this type of legislation.

Hon. Speaker, I want to tell you a little bit about what this bill is about. This bill is about the popularity of this government and this Premier. We just had some polls come out recently that showed that the Premier's popularity is now down in the low 30 percent range. He's not yet the most unpopular Premier in history, but he's pretty close to it. But I've got a message for the Premier: he may be at 30 percent in his personal popularity today but, as my colleague from Okanagan-Penticton would say in this context, he's going down.

Interjections.

C. Hansen: And there's a message for every other member of the New Democratic caucus here. The latest popularity poll shows that the New Democratic Party in this province. . . .

[ Page 8924 ]

The Speaker: Hon. member, I wonder if you'd, just for a moment. . . . All members, slow down a wee bit. We've got a long way to go on this bill, probably -- maybe -- and we're going to have lots of time to discuss it, so let's take it easy.

C. Hansen: I appreciate that maybe I hit a little bit of a sensitive point there, but actually, the next point may be even more sensitive. The popularity today of the New Democratic Party in this province is at 20 percent. Only 20 percent of the public in British Columbia would vote for this party if there were an election today. I've got a message for all 39 members of the NDP caucus when it comes to their popularity: it's going down as a result of Bill 26.

I was astounded when Bill 14 came in recently. Bill 14, of course, is the amendments to the Workers Compensation Act, where they're introducing a whole new layer of red tape on small businesses in British Columbia -- new red tape and new costs. They brought in Bill 14, and what astounded me was that they had not done any economic impact studies on what effect Bill 14 would have on the economy of British Columbia -- none. They clearly didn't care what the impact was on the small business community of British Columbia.

They didn't care what impact it was going to have on the economy, because they didn't take the time to do their homework. We raised that during the Bill 14 debate, and the minister had to admit that nothing was done. Now we have another piece of legislation -- Bill 26 -- which is going to introduce profound changes to our Labour Relations Code in this province, and we discovered yesterday that they have done no economic impact studies.

That is the problem with so much of the legislation that this party introduces in this chamber. They don't look at the impact it's going to have on our economy, and that is why our economy is in a tailspin today. That is why we have the worst performance of any province in Canada when it comes to the economy and job creation.

I have often heard members of this government talk about the stability in our labour environment in British Columbia today. Frequently what members of the NDP will talk about is the number of days lost to strikes in British Columbia. They'll talk about how few union members are walking on a picket line in British Columbia today.

Interjection.

C. Hansen: And the member says: "That's good news." That is good news. We like to see that kind of labour stability in British Columbia. Certainly it's important to make sure that we have a healthy economy, but what I think this member doesn't realize is that there are two dimensions to labour stability. In order to have people walking on a picket line, they have to have jobs in the first place.

There are two sides to labour stability. It's not just a question of how many trade union members are walking on a picket line; the other dimension to the formula is how many entrepreneurs from British Columbia are walking on the streets of Calgary or Edmonton or on the streets of Bellingham, Washington. That's the other side of the component, and I don't see any effort by this government to measure the number of job creators in this province who are walking out of this province today. That's the problem we have.

The Minister of Finance said something very telling. The Minister of Finance put out a press release on June 3 this year, in which she was talking about the foreign asset reporting proposal that is being discussed by the federal government. We on this side of the House share the concerns of the government with regard to the initiative of the federal government regarding foreign asset reporting. Actually, I recall the day last September when we put out a press release on the same day as the previous Finance minister regarding foreign asset disclosure, urging the government in Ottawa not to proceed with the legislation with that provision.

Now the Minister of Finance has put out this press release talking about a letter she has sent to her federal counterpart, the federal Minister of Finance. In that letter, which is quoted in this press release, she says: "Given the challenges facing the provincial economy, this is not the time to take a chance on introducing measures which could damage the investment climate."

I haven't agreed with very many things that the Minister of Finance has done since she's taken over that portfolio, but I must say that I agree with her on this one. It is vitally important that this government not do anything that will further erode investor confidence in this province. But where the hypocrisy comes in is that she doesn't realize that she should take her own medicine, that she should look at herself in the mirror when she says those words, that those words apply more to her initiatives than they do to the initiatives of the federal government. Clearly what we know for a fact is that Bill 26 will do enormous damage to the investment climate in British Columbia.

I want to look at what some people have said about our investment climate today. This is from a document from the Business Council of B.C. They talk about government policies. "Provincial government policies have played an important role in restraining business investment since the early '90s." Since this party has come to power, the policies of this government are the huge factors in destroying the investor climate in this province today. It goes on to say: "Examples abound of how Victoria has implemented measures which have hurt the investment climate." Then it goes on to specifically mention the enactment of pro-union labour and employment laws.

This Minister of Finance and the Premier have talked about the fact that they have consulted the business community on this legislation. What we hear is that they have consulted, but they have not listened. I read an article recently that I think was about the Gitxsan in northern British Columbia. One of their problems in dealing with government was that they were dealing with people with tin ears. They had ears, but they didn't listen. I think it's a great analogy for what's before us today.

I want to refer to some of the recent investment stats that we have coming out. This is from StatsCan. They talk about an investment recession that has taken place in British Columbia since 1994. StatsCan talks about the amount of new capital spending in B.C. this year, which will be $20.2 billion. That is less than what it was in 1994. What we have seen is the erosion of numbers over these last few years. It's interesting. It goes on to say that there are only two provinces in all of Canada that find themselves in the same situation -- that is, declining capital investment. Those two provinces are Prince Edward Island and Newfoundland. It's interesting as to why. We have three provinces -- only three provinces in all of Canada -- that have declining investment.

In Prince Edward Island the reason for that decline is that they completed the Confederation Bridge. The Confederation Bridge was what was driving that investment boom in Prince Edward Island. That's finished; they've had the grand open-

[ Page 8925 ]

Newfoundland was the other example. Again, there's a very good reason why capital investment in Newfoundland has declined, and that's because of the completion of the Hibernia projects. They did have a great infusion of capital into their province because of Hibernia. In the last two years that hasn't been there, and as a result, they too have had a decline in the amount of capital investment.

[11:00]

I know that in years gone by, when I was working with the Asia Pacific Foundation, I was astounded by the number of business people in British Columbia who felt that they had to go to Hong Kong or Germany in order to find someone to partner with, somebody to assist them with their export program.

One of our greatest assets that we have today in this province is the wealth of new Canadians, the knowledge of new Canadians. I don't mean the financial wealth -- although that is obviously significant, as well -- but I mean the intellectual wealth that they bring to this province. If somebody in this province wants to do business with Latin America, we have new Canadians who understand the Latin American economy. We have individuals who understand the Asian economy. While we're going through trials and tribulations in terms of the Asian economy today, there are still markets to be found there. We may have to work harder to capitalize on them, but they're there. And we have next-door neighbours who have the expertise that can assist B.C. companies with building those worldwide markets.

We also have access to investment. There is significant interest in British Columbia from investors around the world and from new Canadians who have come to this province on the investor immigrant program, who have access to significant wealth that they could bring to this province, to this new country that they have moved to. But they're not willing to do that, because of the policies of this government. They're not willing to invest money in this province because of our tax rates and because of labour laws.

I heard of a company that was looking to establish a new manufacturing plant. They had in mind several possible sites around North America. They asked a firm in Vancouver to supply them with background about the B.C. economy and what the attributes of British Columbia are. They were very impressed when looking at our transportation system. They were very impressed with the industrial land that they would need for this plant. They looked at all the factors.

What took British Columbia off their list was that they asked for a copy of our Labour Code and for a copy of some of the rulings from the Labour Relations Board. The Labour Code itself was not the biggest impediment. We recognize that the Labour Code is tilted in favour of the trade union movement as a result of the changes in 1992. What this company was most concerned about was the way the Labour Code was being applied in British Columbia. They said: "Take British Columbia off the list." They went somewhere else. Those are some of the reasons why investor confidence in British Columbia is eroding.

We can compare ourselves to Alberta. I'll read this section here, because I think it's quite interesting: "Although capital spending in British Columbia rose in 1997, the rate of growth, which is about 5 percent, was less than half of the national average." Here we have a province, British Columbia, where we're used to being number one. I think most British Columbians believe that we have the best province in Canada. Yet here, in terms of the growth of capital spending in this province, we are less than half of the national average. We are at 5 percent; the national average is at 12.2 percent.

It's even more dramatic when you compare this to our neighbouring province of Alberta. In Alberta the growth in capital spending is at 24 percent. Yesterday the Leader of the Opposition outlined some of the capital projects being built in Alberta today which are driving that economy, capitalizing on the dynamism in that province. If we had even a small percentage of those projects, we would be able to put British Columbians back to work today.

I would like to bring this really close to home for the NDP. Let's look at Saskatchewan, under an NDP government with Roy Romanow. Do you know what that province has in terms of growth in capital spending? They're at 22.7 percent; we are at a pitiful 5 percent. This minister and this government should be ashamed of those kinds of numbers.

The other thing that was looked at in the StatsCan report was investment intentions in 1998. I talked about the fact that when it came to numbers in investment growth for last year, we were declining. The only other two provinces to decline were Prince Edward Island and Newfoundland. Well, when it comes to future intentions, there is only one other province that is as bad as British Columbia, and that's Prince Edward Island. Nobody's willing to come here to create jobs, to put the 197,000 unemployed British Columbians back to work. The reason is because of legislation like Bill 26, which we have before us today.

In the article about this study, it talks specifically about the NDP government. It says: "The NDP administration has also enacted numerous laws and policies to strengthen the position of trade unions, thereby boosting labour costs and reducing workplace flexibility." That, in a nutshell, is why we are losing investment in British Columbia and losing jobs to other provinces.

The Leader of the Opposition talked yesterday about the number of jobs, the number of companies that have left British Columbia. Again, to go to some absolute numbers. . . . Do you know where these numbers come from? B.C. Stats. B.C. Stats is an agency of the provincial government. You know, these aren't numbers that are being made up by some radical group that doesn't like the NDP. This is their own ministry. One hundred and forty-five corporations transferred out of B.C. to other provinces in 1996; that's up 16 percent from 1995. Of these transfers, 54 percent went to Alberta.

These are the stats of the companies that we know of. As I understand it, these are generated by companies actually moving their head offices -- 145 companies in one year. That was 1996; the numbers are worse in 1997. And the numbers are going to be much worse in 1998, because this government doesn't get the message that it's screwing up the economy of this province and driving people out of jobs.

[ Page 8926 ]

Interjection.

C. Hansen: Well, they haven't. They've maintained a small staff, maybe a small marketing office in British Columbia. They have moved their workforce to Alberta.

The Speaker: Hon. member, I draw your attention to the time.

C. Hansen: I'm the designated speaker.

The Speaker: Thank you very much. Proceed.

C. Hansen: The other thing that I find astounding is that this government has done nothing to find out why these companies are leaving. I had an economic development officer, who is a trained professional in this field, explain to me some of the fundamental principles of economic development. He said there are three things. One is business retention: retaining the companies to stay here in British Columbia, making sure that they're willing to maintain their businesses. The second fundamental is business expansion. Let's see what government can do to encourage companies to grow in British Columbia -- to get bigger, to create more jobs, to put more young British Columbians to work. The third element is business attraction. What can we do as a government to ensure that companies located in other parts of the world want to come to British Columbia to open up operations and create jobs?

Well, when it comes to business retention, this government is doing a lousy job. We see companies leaving this province. When it comes to business expansion, it's worse because companies clearly are not expanding their workforces. When you start looking at things like the application of the Employment Standards Act and things like Bill 14, with the new provisions for red tape and costs in the workplace that are supposed to somehow help workplace safety, there is absolutely no evidence it will have that effect.

Those are the things that are preventing companies from expanding in this province. Since the Bill 14 debate, I have had numerous companies tell me -- a couple are currently at the level of nine employees -- that Bill 14 alone will give them reason to not hire the tenth employee. The minister is sitting over there shaking his head. If he doesn't recognize that that is happening, then he is wilfully ignorant of what is happening in the workforce and in the economy today. I've had companies at the 18- to 19-employee level tell me that they will not hire the additional employees because of the additional costs being imposed on them by this government's policies.

They have absolutely no idea as to what that economic impact is, because they are wilfully blind to it. They deliberately did not go out to do economic impact studies on Bill 14, and they have deliberately not gone out to do economic impact studies on Bill 26. The reason for it is because they're afraid of what they're going to find out. They probably know what those economic impact studies will say -- that it will hurt the economy -- and they don't want that kind of news.

I also want to pull some other numbers from B.C. Stats, which talk about the new self-employed in British Columbia. What I find interesting is that there are a significant number of British Columbians who really want to be their own boss. If you did surveys of people that were in a salaried position or a waged job, I think there would be a significant percentage of people who really have that dream of being an entrepreneur, of creating a new company. I've been there; I've created my own job, my own company. I helped to build it and hired people. I'll tell you, hon. Speaker, it was a scary process, because you've got the second mortgage on your house in order to get the capital financing. You've got the future of your children at stake because of the amount of money you're investing in trying to build a small company. Yet there's an enormous number of British Columbians who hold that dream. I've often described starting and building a company as being constantly on the razor's edge of disaster -- personal financial disaster -- but, at the same time, loving every minute of it. It's the challenge of building something -- building a company. It's the challenge of creating jobs and hiring people.

In British Columbia today we have two types of this growing number of self-employed. One is the British Columbian who is really taking the challenge to achieve that dream they've held; on the other side are the British Columbians who are forced into self-employment. They're forced into self-employment because of the labour laws that we have in this province today. Because companies are being hammered by labour legislation brought in by this government, they are no longer prepared to hire employees. Instead they are seeking the self-employed contractor to do that. That is an issue that is fundamental to the Bill 26 debate.

Let me read what B.C. Stats says about the new self-employed in British Columbia:

"British Columbians have been discovering record numbers of self-employment possibilities in service, construction and other industries. The majority are self-employed without paid help. The addition of so many new entrepreneurs without a matching increase in the number of employees has changed the small business profile in British Columbia."

"If present trends continue, the number of small business owners may exceed the number of small business employees sometime this year."

[11:15]

Interjection.

C. Hansen: The Minister of Small Business said he doesn't believe that, doesn't buy that. He said he doesn't agree with me. He should do a bit more research. He should do a bit more consultation with the small business community as to the effect of Bill 26 and the other labour legislation that the minister has brought in. He should talk to the small business community about what effect that will have on their ability to hire more employees, on their ability to continue to be the job generators -- to create 70 percent of the new jobs in British Columbia. Here we have a statistic from B.C. Stats saying that for the first time in history, the number of small business

[ Page 8927 ]

The Speaker: The member for Okanagan-Penticton rises on what matter?

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

Leave granted.

R. Thorpe: On behalf of my colleague from Okanagan West, who is tied up in some meetings, I would like to make an introduction of 80 grade 6 students travelling with their teacher, Mr. Leonard, and a variety of parents from Springvalley Elementary School in Kelowna. Would the House please make them very welcome.

C. Hansen: I'm glad to hear that we have visitors in the gallery from the Okanagan. The Okanagan is an area which has one of the highest percentages of small businesses in British Columbia. I'm not sure of the exact numbers, but I'm sure the minister is aware of that. These guests in the gallery, who are used to their corner store. . . . They are used to being able to go to downtown Kelowna and see companies that are thriving. Here we have legislation that's going to make it much more difficult for those small businesses in Kelowna to thrive and grow and create jobs in the future for young British Columbians like those who are in the gallery with us now.

It's all about optimism; it's about the future of the economy in this province. The Canadian Federation of Independent Business, in their regular annual survey of members' expectations, has come out with some disappointing numbers for British Columbia. The business optimism is highest in Ontario and the prairie provinces. Unfortunately, the optimism is the lowest -- there is the most pessimism about the economic outlook -- in British Columbia and in New Brunswick. Of the firms that were surveyed, 40 percent said that they would be spending less on capital investment this year. That's a sad number, because it's about the future of British Columbia.

Let's look back and compare British Columbia to what it was like in 1991, when the NDP were first elected to government. In 1991 we were number one in economic growth in Canada. I believe Alberta was close at the time. In 1991, when this party took power, we were number one in terms of job creation. Just think of it: the British Columbia economy was creating more jobs than any other province in Canada. In 1991 British Columbia had the highest credit rating of any province in Canada. In 1991 British Columbia had the lowest per-capita debt of any province in Canada.

Let's look at where we're at now, in 1998. Economic growth -- we're in last place of any province. If you look at what that means. . . . It's bad enough when you start taking the growth, which is the increase in our real gross domestic product, but what does that mean? That means what the whole economy is doing in total. It's an aggregate number that economists use to gauge whether or not an economy is growing or shrinking. During those years there was still some real growth in domestic product in British Columbia.

What is even more alarming is when you start looking at per-capita economic growth in this province. Per-capita economic growth is the measure of how well each of us is doing as individual citizens. It has everything to do with how much a family in this province has to spend on the things they need. That's per-capita economic growth. The one thing we know is that over the last decade, many new Canadians came to this province to make it their home. If you factor that in and start looking at per-capita economic growth, there is only one year in the last eight -- since this party came to power -- when there has been positive per-capita growth. What that means is that British Columbians are getting poorer every year -- the average family, the average British Columbian. If we had the ability to kick this party out of office today, that would be their legacy: a decline in per-capita income, a decline in personal standard of living. That's the legacy this party has to date.

The other thing that is alarming is when you start to look at how much money is left in people's pockets after taxation. Do you know, hon. Speaker, that in 1996 the aftertax personal income of British Columbians declined by 1.9 percent? Do you know what the number was in 1997? It was a decline of 2.3 percent. The amount of money the average British Columbian has to feed their family and pay their rent or mortgage declined by 2.3 percent last year, as a direct result of the policies of this NDP government.

I talked about 1991, when British Columbia was number one in job creation. Do you know what we're at today? We're in last place. If you start looking from January of 1997 to January of this year, in that 12-month period there was an absolute decline of 19,000 in the number of jobs in British Columbia. We were the only province in Canada that actually lost jobs. Every other province -- every one of the nine provinces -- had an increase in the number of jobs. Even Newfoundland, which was seeing Hibernia coming to completion with less construction jobs there, created more jobs in that 12-month period. Even Prince Edward Island, which had already completed the construction of the Confederation Bridge, had a positive growth in the number of jobs. In that 12-month period Alberta increased the number of jobs in that province by 22,000 -- 22,000 additional Albertans had work in January of this year compared to January of 1997. At the same time, right over the border in British Columbia, we saw a net decline of 19,000 jobs. There is nothing more graphic to show the effect this government is having on the B.C. economy: in the same 12-month period we have 19,000 fewer jobs in British Columbia, and there are 22,000 new jobs of Alberta.

What is the difference between the province of Alberta and the province of British Columbia? We have a much more diversified natural resource base in this province. We have a much more diversified economy in this province. We have a very good infrastructure in this province when it comes to transportation systems, when it comes to the ability to take manufactured goods or natural resources. . . . We have a very good infrastructure system to get those products to market, whether it's by train or truck to the United States or by ships to Asia or by plane out of the great new international airport we have in Vancouver. We have that in British Columbia, and Alberta doesn't. In British Columbia we have probably the best labour force in Canada. I would say that we have a much more diversified labour force in this province, compared to Alberta.

So what's the big difference? Why is it that Alberta is doing so well? Why is it that Alberta can create 22,000 jobs and we lose 19,000? The reason is that we have a bad government in this province. I talked about the credit rating we had in this province in 1991. We had the best credit rating in 1991. Now what do we find? We are the only province in Canada in recent history to have its credit rating downgraded. We have a

[ Page 8928 ]

I also mentioned that in 1991 we in British Columbia had the lowest per-capita debt of any province. We can no longer claim that. I'll tell you why. It's because of another stat that comes up, which is that we have the fastest-growing provincial government debt of any province in Canada. That is part of the problem.

There are a lot of things about the economy that we should probably talk about, but I'll focus specifically on labour costs, because I think that is directly relevant to this bill. Since 1989, the unit labour costs in British Columbia have increased by a staggering 27 percent. That stat is two years old. We in British Columbia are pricing ourselves out of the market when it comes to being competitive. If we want to compare that to some of the other provinces, the national average is 12.5 percent. We're driving up our costs at almost twice the rate of other provinces. We have the lowest productivity growth of any province in Canada. In fact, we have declining productivity in this province.

Let me talk about government expenditures for a minute, because I think that is fundamental to the problem we're having with the economy today. We saw government expenditures in this province increase at an annual average rate of 7.7 percent in the five-year period from 1990 to 1996. If you correct that for inflation, it's an annual growth of 4.6 percent in real terms. That is double the rate of increase of our gross domestic product over that period of time. As I mentioned earlier, compared to the GDP per capita, it's truly a crying shame. It's part of the problem with our economy in this province.

[11:30]

I talked earlier about the myth of business owners, about what it takes to start a company in this province today. I talked a bit about my own experience. It is interesting: I know that a lot of people on the NDP benches feel that somehow workers are being taken advantage of and that business owners are going all the way to the bank with great profits and that type of thing. The reality is quite different. Let me refer to some numbers about business owners and entrepreneurs. It talks about the myth that business owners are richer. These are some numbers that go back to 1993, so they are not that current, but I believe they probably hold true today. Entrepreneurs are earning a median income that is $15,000 less per household than the median for employees. In other words, the average entrepreneur in Canada earns $15,000 less per year than the average employee. In addition to that, they are working an average of 13 hours a week longer.

When people asked me what position I had with my company, I said I was the president. You know, that sounds impressive: the president of a company. What does it really mean? I always described being the president of your own small business as meaning that you got to take out the garbage on Sundays. That's what owning your own company is all about. It's not nine to five, it's not five days a week. Running your own company and trying to create jobs in this province means working seven days a week; it means long hours. A lot of those hours, unfortunately, are spent filling in paperwork that the government is asking for -- needless paperwork, needless extra red tape.

This government comes in now and says it is going to cut red tape. So what do they do? They set up a committee to study red tape. I heard a story last week about somebody who was asked to nominate a candidate for that task force on red tape, and this person was trying to think of people from his particular industry who may be able to make a contribution. So he asked how he was to go about nominating somebody for the committee. Do you know what they did? They sent him a form to fill in. Can you believe that? They're setting up a committee to look at red tape in government, and they send out forms for people to fill in if they want to nominate candidates to serve on this committee. These guys don't get it; they don't understand the problem. What is clear is that when this government cuts red tape, they are going to start at one end of it and cut it lengthways. I guarantee you: there's going to be twice as much by the time they're finished as when they started.

Yesterday at his press conference, the minister was bemoaning the fact that business leaders were daring to raise the spectre of what effects these Labour Code changes will have on our economy. He was complaining that people would have the audacity to say that these Labour Code changes are going to further erode investor confidence in British Columbia and further drive jobs out of this province, as if somehow the fault of our deteriorating economy was not the policies and legislation of this government, but rather the fault of those who dared to talk about it. The minister made it quite clear that anybody who dared go out and say that Bill 26 was going to hurt our economy was the problem and that Bill 26 would do no such thing.

I know that the NDP members would love to portray the Labour Code we have today as being in favour of business and that somehow the union movement needs more from this government in order to make the Labour Code more balanced. I've heard that. Let me quote from the words of a very prominent trade unionist in this province. This is a gentlemen by the name of Roger Crowther. I'm sure the minister knows him. He is the B.C. representative on the national executive of the Canadian Auto Workers Union. When the CAW had their national convention in British Columbia last fall, he was quoted. . . . At that convention, the CAW decided that they were going to go on a big organizing drive in order to sign up more members. So where did they start? They started that organizing drive in British Columbia. Do you know why? These are his words; he was quoted as saying: "B.C. is perhaps the most fertile ground in Canada for trade unions to increase their numbers since it has an organizing-friendly Labour Code." That's exactly what so many people have been saying to this government over these years -- that in 1992 they fundamentally tipped the balance of the Labour Code in favour of the big trade unions in this province. These are the very words of the regional vice-president of the Canadian Automobile Workers Union.

Interjections.

C. Hansen: Hon. Speaker , the minister obviously wishes he had more speaking time, because he's talking about the

[ Page 8929 ]

What this bill is about is a fundamental question as to whether or not. . . .

Interjection.

C. Hansen: Hon. Speaker, the minister is saying it has taken me an hour and 15 minutes to get to talking about the bill. That's the problem: I've been talking about the bill for an hour and 15 minutes, and he doesn't get it.

Interjections.

C. Hansen: What this bill is all about. . . . Hon. Speaker, these members are wondering why it has taken me an hour and a quarter to get this far. I hate to tell them this, but I have barely started.

What this bill is fundamentally about is a question of whether or not this province needs an even more union-friendly Labour Code and whether this province needs jobs. It's a question of whether or not they want to bring in some favourite things for their friends in the big union movement, or whether or not we're going to restore economic health in British Columbia. That is what this is all about. This government has an opportunity to actually put this economy back on the rails again.

Let me tell you about what probably happened last fall. They probably went out and did a survey. I understand this government loves to do surveys and spend a lot of money on public opinion research, and then they keep it quiet. It's stuff they've spent the taxpayers' money on, and then they basically think that it's their little piece of private information. Last fall, I have no doubt that they did a public opinion survey, and it came back and said that the economy was going into the tank and that the public understood that the economy was the problem. I can picture this meeting that took place in the Premier's Office. There was probably some assistant who came in and said: "Mr. Premier, we've got the new numbers from this latest opinion poll." And the Premier would say: "What do they say? Do the people out there like me?" And the assistant says: "Well, I think their biggest concern, Mr. Premier, is that they recognize that there are some fundamental problems with our economy." And the Premier goes: "What do they think the reason is for that? We know it's Asia." The assistant says: "Well, no, hon. Premier. They know the reason this economy is going in the tank, and it's because of you, hon. Premier." That's probably what their survey showed.

I'm sure the Premier said: "We've got to do something about this." But did they address the tax issue? Did they address the issue of overregulation? Did they stand up and say no to Labour Code changes? All of those things would have restored economic health. But I have no doubt that what they did instead was say: "Let's have a communications plan. Let's take out some advertising and tell the public that the economy is good. Then they'll believe it." That's this government's response to anything when it comes to the demise of our economy: buy more advertising. The only jobs that this government has created in the last two years have been in public relations firms and advertising agencies, spending millions of dollars of taxpayers' money trying to convince the public that they're doing something to create jobs. We now know that it's not working. They know that they cannot pull the wool over the eyes of British Columbians, because they know that British Columbians are looking for real jobs that will put themselves and their loved ones back to work and give some reason for optimism to young British Columbians today. They are not prepared to buy into the advertising that this government is wasting so much money on today.

The minister in his opening remarks was talking about the July-August rate period. Certainly we will be talking a lot about the July-August rate period when we get into committee, because the minister talked about the fact that July and August was the time of year when there was the most in number of workers in the construction industry. The biggest problem with Bill 26 is that as a result of it and the other policies of this government, there will be fewer people working in British Columbia in July of this year. The minister talks about July and August as being the time when the most people are working, but what he fails to look at is the fact that we need more people working in July and August in British Columbia in the construction industry. It's the economic policies of this government that are driving jobs out of B.C. and driving down the number of people employed in this province in July and August.

This government has done a couple of studies on this issue of the construction industry. They've done studies in terms of the sectoral certification and sectoral bargaining. They've done studies in terms of the overall Labour Code. As those studies have come out over the last seven years, they never get the answer that they want. First of all, we had a study that was done in 1992 by Vince Ready, Tom Roper and Baigent. . . . I can't remember his first name. That committee of three appointed. . . .

An Hon. Member: John.

C. Hansen: John Baigent -- thank you. That committee of three did a fairly substantial review of the Labour Code, generally. They were asked to look at the construction industry, and they were specifically asked to look at sectoral bargaining in that industry. Out of that report, the government did not get the answer they wanted. What that committee recommended is that it required more review than they were able to give it at the time.

So what did they do? In March of 1995 they struck a panel called the construction industry review panel. The construction industry review panel that was set up in 1995 had two members on it. One was Vince Ready, and the other was Stephen Kelleher. The minister has been very glowing in his tributes to the work that these particular experts do on labour relations.

The committee was asked to produce an interim report; I think it's much like the interim report we had on the royal commission. There was obviously another agenda, which was out of the control of the royal commission, and they were told not to complete a final comprehensive report but to bring in an interim report on specific things that fit their political agenda. This construction industry review panel received briefs from around the province. An enormous amount of work went into the particular interim report that they were asked to generate. That interim report came out in February of 1996.

The Speaker: I recognize the member for Kamloops-North Thompson.

[ Page 8930 ]

The Speaker: Thank you, member.

[11:45]

The Speaker: Hon. members, observing that there is now a quorum, I recognize the member for Vancouver-Quilchena to continue.

C. Hansen: Before we realized we didn't have a quorum, I was talking about the first construction industry review panel. That review panel brought in an interim report in February of 1996, and I'd like to read some of the things that they recommended. They're talking about the single bargaining unit for the construction industry. This is an interesting quote, which I think is something we should all take note of: "It would entirely eliminate collective bargaining in the construction industry, apart from bargaining conducted by [the Construction Labour Relations Association]."

These are two of British Columbia's most reputable labour experts, and they are saying that bringing in the single bargaining unit would entirely eliminate collective bargaining. This is a government, this is a party, that thinks it's the champion of the trade union movement in British Columbia. They often talk about the importance of collective bargaining. Yet we have two of British Columbia's most renowned labour experts saying that this would entirely eliminate collective bargaining in the construction industry, apart from the bargaining conducted by CLRA.

What they were talking about in this legislation was the prospect of bringing all bargaining in the entire construction industry under this one umbrella. Perhaps Bill 26 does not encompass all of the construction industry under CLRA bargaining, but what they're doing is taking a huge chunk of it. In effect, what they're saying is that they are going to deny collective bargaining rights to that entire sector. The unionized employees in that entire sector are going to be denied collective bargaining rights, except for the bargaining done by one organization in this province.

On the very next page they go on to talk about some of the feedback they've had on this proposal for a master collective agreement, and they state:

"We have carefully considered this proposal and have decided not to include it in our recommendations. In our view, the complexities of the construction industry militate against a single negotiated agreement. One size does not fit all. In fact, the industry is moving in the opposite direction. Increasingly, contractors and unions are making contractual arrangements on a project-by-project basis." It goes on to say: "Employers and unions currently have the means to work out mutually acceptable accommodations to their needs. . . . We do not believe that it is either necessary or desirable to so dramatically alter the environment in which these accommodations have been made."

Hon. Speaker, noting the hour, I move adjournment of the debate, and I will resume my comments after lunch.

Motion approved.

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

Hon. D. Lovick moved adjournment of the House.

Motion approved.

The House adjourned at 11:51 a.m.

Proceedings in the Douglas Fir Room

The committee met at 10:14 a.m.

D. Jarvis: I'd like to ask the minister some questions with regard to the new trust agreement itself. I read the Blues this morning. The explanations were quite confusing. I will preface this: both sides were rather confusing as to what they were talking about. I think if the normal man on the street were to read the Blues, he probably wouldn't understand what was going on with regards to the old community chest.

[10:15]

Hon. M. Farnworth: I agree that trying to understand and get everything out in a way that all of us will feel comfortable with is complicated.

In terms of the overall system, in terms of how charities access gaming revenue, the only change that took place is that you don't need volunteers at the casinos anymore. So if you're

[ Page 8931 ]

This year there is a guarantee of $125 million. In fact, it could even be more than that, but there is a minimum of $125 million that is available to be accessed by charitable organizations in the province. They make applications to the Gaming Commission, and the Gaming Commission goes through those applications and makes their decisions according to the criteria that they have. Those criteria are the same criteria that have been in place in the province for the last ten years.

D. Jarvis: So anyone can make an application, and it would be up to the bureaucrats to see who qualifies. Is that right?

Hon. M. Farnworth: Yes, in the same way that it's always been. The Gaming Commission itself does the ultimate approval. Your charity organization would send in an application stating the purpose of your charity, what it is you're trying to accomplish this year -- whether it's services for a year or a specific project -- and how much money you require to make these services or this project happen. It would be evaluated by the Gaming Commission, which determines whether in fact those meet the criteria. Assuming that they do, they will then make the recommendation, and you will get your money.

D. Jarvis: Why would the moneys flow through to general revenue and then into the trust account and then into the charities? Why wouldn't the moneys from the Gaming Commission just go straight to the trust fund?

Hon. M. Farnworth: I want to differentiate between before the changes were made and since the changes were made. Under the new arrangement, the moneys from casinos, under section 207(1)(a), flow to the trust through government, because they have to. The gaming that's conducted under section 207(1)(a), which is casinos, is done under the government, through the B.C. Lottery Corporation. In order to get to the trust, it flows through the government, then into the trust. Bingo money, which is gaming that's done under section 207(1)(b), does not flow through the government. That's how it operates now.

The money that was there last year was placed in a trust as a result of Judge Owen-Flood's decision. That was the money that was there last year. The money ruled from when the changes were brought in in November and you had the expanded limits. . . . The court said that incremental increase, that money, had to be placed in a trust, which it was.

D. Jarvis: I know it's just expressions and verbiage and all the rest of it, but when I originally opened, I mentioned that the moneys, the guarantee, was based on $125 million, and there would be more moneys coming down there. The minister answered back, saying that there could be. Is that just a slip of the tongue?

Hon. M. Farnworth: The reason why I said it can in fact be more is because bingo gets to keep the money that comes through bingo. So if they get more than expected, casino isn't topping up bingo. So if they do better than expected through electronic bingo and that, that money stays with them; it doesn't come to government. And that does not affect the guarantee. The guarantee is a minimum of $125 million. Let's say that bingo had a good year, and they took in more money than was expected. They keep that, and there would still be the $125 million there. That's what I mean by saying that in this particular year it could, in fact, be even more than $125 million. But the absolute minimum is $125 million.

D. Jarvis: I'm still a little bit confused, because when you say minimum. . . . Can you explain if there is a maximum on that $125 million? You keep saying minimum. One would tend to believe that it will grow. That $125 million -- is it going to grow? And if so, is there a cap to that?

Hon. M. Farnworth: Ultimately there will be a mature market. It's a growing market right now, and ultimately that market will mature and stabilize. Let's say that you have gaming revenue that stays consistent over a number of years. They will be getting. . . . It won't grow any more. But while it's growing, it grows proportionately each year. They will ultimately get. . . . Let's say the pie goes to -- I don't know -- $400 million or $500 million. They would be getting a third of that.

D. Jarvis: We're always looking at the pie. We're going to get a minimum of one-third of it -- right?

Hon. M. Farnworth: Yeah. Right now you've got $125 million as the base guarantee. Let's say there's an increase in gaming revenue over last year. That will be reflected next year as an increase in the size of the guarantee. And that will happen each year. So as the pie gets bigger, the guarantee gets bigger.

D. Jarvis: Could the minister explain how that $125 million minimum is going to be guaranteed in the proposed legislation?

Hon. M. Farnworth: The legislation hasn't been written. We're still in the groundwork stages, but it would be my expectation that a section in the legislation would say: "This is what you will get." There would be any number of ways you could do it. For the sake of argument, let's say you would be guaranteed $125 million as the base or however you wanted to. . . .

A Voice: Up to one-third?

Hon. M. Farnworth: Up to one-third, or however you want to try and define it. You would embed in legislation the share that the charities get.

D. Jarvis: That's all very well. There have been promises in the past. As you can appreciate, a new regime could come in. It's an open-ended promise put down in writing under one bill, which can be changed at any time, I guess.

[10:30]

[ Page 8932 ]

D. Jarvis: Of course, we would never have got ourselves into this position. We wouldn't have taken it away from them in the first place, nor would we have got into the expansion of gambling throughout this province. But that's a long story, and I don't think we have time today to go into the pros and cons of why the NDP is grasping for the dollars and has expanded gambling.

We just saw in the news last night that in Ontario. . . . Madam Chair, did you happen to see the news from Ontario last night about the gambling situation they have there: how the different mayors and people are all upset over what is happening there with the cost of rehabilitating the gamblers and what it's doing to families in Ontario after their expansion of gambling? So it's obviously not a good thing. We will rue the day coming down the line. It will cost us more money in the long run, I think, in the heartache and the pocketbook, but it's short-term relief in revenue for this government, I guess.

One question that I want to ask is: will this trust fund pay for any part of the B.C. Gaming Commission?

Hon. M. Farnworth: The answer to the question around the trust fund is no, they don't pay for any part of the Gaming Commission.

Again, in terms of the money, the amount of money that charities are guaranteed this year is $125 million. Last year they got $118 million; the year before that they got $110 million. So you can see the pattern, that the amount of revenue is going up.

But to answer your question around the Gaming Commission, no, the trust does not contribute any money to the Gaming Commission.

D. Jarvis: I want to ask another question of the minister as to why this trust fund was not basically set up exclusively for charities. My understanding is that the fund. . . . I was going to ask: why doesn't the fund return to general revenues upon its termination?

Hon. M. Farnworth: There's no intention to terminate the fund. It's intended to go on and on and on. There's no sort of intention to do away with revenue to the charities.

D. Jarvis: Does the charitable society. . . ? I was wondering why the proposed charitable society doesn't follow the Society Act.

Hon. M. Farnworth: I don't quite understand the question. If you could repeat for me what you're trying to. . . .

D. Jarvis: The example is the appointment of the treasurer and the secretary by the government and not by the society's members.

Hon. M. Farnworth: Which society? There's the Gaming Commission, and then there's the trust which oversees the $125 million, which is where the money comes from. Is that what the member is talking about? Is it that trust?

D. Jarvis: The reason I was asking the minister this question is that the way the trust agreement is set up at the present time. . . . The B.C. Society for the Distribution of Gaming Revenue to Charities is incorporated differently from how a normal trust fund would be set up, where the membership makes the decisions and the appointments.

Hon. M. Farnworth: The new trust that's been created has been set up in a legal manner that's consistent with what's required to have gaming on a legal footing. The trust is set up so that its sole purpose is to allocate the money that the Gaming Commission recommends. It oversees the issuance of the cheques, the money. That way it can ensure that the money that was recommended by the Gaming Commission to be paid to a particular charity goes to that charity. That's why the membership of the trust is made up of seven individuals, two of whom are chosen by bingo charities and two of whom are chosen by casino charities. Two are members of the Gaming Commission, and one, the chair, is appointed by the government.

D. Jarvis: This is only set up for one year, then.

Hon. M. Farnworth: Right now we have an interim model. The trust will be put into legislation. It's not intended that at the end of the year this will wind down, disappear and that's it. It will be in legislation, and it will continue its work as long as there is charitable gaming and money going to charities in British Columbia.

D. Jarvis: At the end of that period of time, the one year, when the model runs down, what happens to those moneys that are held in trust at that time? I'm referring to moneys that haven't been disbursed.

Hon. M. Farnworth: The trust will continue; it won't end. Its sole purpose is to see the money going out and to issue the cheques. It's not going to end. We're in an interim change period right now, and the ultimate goal is legislation. The role of the trust is enshrined in legislation, and then it continues to do the work that it's doing right now. The money comes in; the money goes out. The trust doesn't make investments. It doesn't make any decisions around who gets the money. That's the job of the Gaming Commission. Their job is to issue you, the charity, your cheque. It was set up in such a way that charities are on it and are the dominant group on the board that oversees it. It's not going to disappear.

D. Jarvis: What will happen with that society at the end of the interim period?

Hon. M. Farnworth: Nothing. Nothing will happen. It will continue to do what it has done -- other than that its role will now be enshrined in legislation. It doesn't disappear. It won't be disbanded. It continues to do the work that it does today.

The Chair: Shall the vote pass? Member.

D. Jarvis: I allowed that once before in my life, and I'm still hearing about it, Madam Chair.

I'd like to read a statement to the minister, and I'd like an explanation of it, if he wouldn't mind. In

[ Page 8933 ]

Hon. M. Farnworth: That provision would come into place if a trust failed for some reason. That can't happen in this case, because the trust isn't going to be wound down. The trust continues. It's there now. It functions. A year from now, you introduce legislation that says that this is what it is and this is its role. So you move from a system where its role, when it was created and defined and made public. . . . At the same time, there is an intention to say that we want to move to a model where we have legislation, and at the time that legislation comes in, its role. . . . The only difference is that its role is now enshrined in legislation. There's been no structural change to it; there's been no functional change to it; there has been no change in its status; it has not wound down; it hasn't changed form in any way or shape that one could possible imagine. It still continues its work. It will continue its work in perpetuity, basically.

T. Nebbeling: Without taking over from my colleague. . . .

Interjection.

T. Nebbeling: No, you're doing fine.

One of the concerns that the member for North Vancouver-Seymour has is the fact that it is conceivable that in the future, government could decide that they want to get control over the funds, one way or another, that would be in that trust. But dissolving the society could be done by its membership or by the government, whoever is responsible. It would be a tool to then seeing that money transferred, as is stipulated in section 5, to general revenue. With the goodwill of the minister today, that wouldn't happen. Legally, it could happen, because just as easily as you can create a society, you can dissolve a society. I'm not saying this is going to happen, but in the unexpected event that it does -- if government or a minister feels that that is the way they want to go and they dissolve it so the money goes to general revenue -- why would the clause not reflect that if the society gets dissolved, funds held by the society will be transferred into a fund representing further action in the disbursement of these funds towards the charities?

[10:45]

Hon. M. Farnworth: I understand what the member is saying, and I'll say that that's not going to happen. It's not going to end; it will continue. It'll be there in perpetuity; I don't see any government changing that. However, having said that, there's no reason why something like what the member is talking about could not be put into legislation. When you bring in a gaming act, you could put a clause in there that says just that, and maybe that's what will be written in the legislation. The fact of the matter is that the trust isn't going to be wound down. Government isn't going to take the revenue out of it. It will continue in perpetuity, and the only change will come next year when it goes from its current status as part of an interim model into permanent status by legislation.

T. Nebbeling: I'm not a lawyer, so I do not know if a clause in the legislation would overrule the Society Act. This is within the conditions under which the society that is responsible for the disbursement of the funds. . . . They have that clause in their terms today.

However, when the minister says that there will be gaming in perpetuity and no government will ever dare to change that -- as long as the benefit is for the charities, of course -- I don't know if that is totally true. The reason I say that is because of what's happening right now, and it's the reason that we are going quite intensively into what has been happening with the whole gaming issue in British Columbia. I've lived in this province for only 23 years now, and when I arrived here there were some very, very basic church-basement type of activities going on, and any other form of gaming was just not acceptable. It was not acceptable, because people at that time realized the problems that were associated with gaming. Then, over time, they loosened up a little bit -- primarily for the right reasons. These reasons were, indeed, to give organizations that did good community services an opportunity to make some money in times when government began to walk away more and more from supporting these organizations, because funds were getting quite tight.

I don't think that this government or governments in the past ever saw gaming as a tool to create revenue for government. That was a great position for government to take, and it was a position that government could afford to take, because we had our natural resources to bring income to the government that was needed to work towards prosperity for all British Columbians. So the natural resources were always the source of income to a large extent. What happened was that the charity beneficiaries had that right to the revenue. They had that legal right, as it was enshrined in the gaming regulations.

What we see happening now is a shift. We now bestow that right to charities under totally different conditions. With the new legislation that will be coming forward and the interim guidelines that are used by the Gaming Commission, the charity organizations can no longer exclusively count on what they collect during a gaming activity -- be it bingo, be it small-bet casino activities. A portion of whatever was collected that evening was theirs, and that's just the way it was. As of now, charities will have to depend on goodwill. They will have to depend on the goodwill of people who do the analysis of the requests for funding for charities. They will depend on the goodwill of government who, because of reasons that are unknown today but which will become clear in the future, may from time to time change the formula for topping up the funds with dollars in order to channel the funds back to the charities. The charities will be dependent on the goodwill of the decision-makers, where the focus is going to be stronger in areas that the government decides funding should go, with a lesser focus in areas where the government sees lesser needs for funding.

Today we have 11 categories, I think. We will talk about that maybe today or tomorrow or next week, when we start getting into that kind of depth about how money will be disbursed and the reasons for it going to a particular category.

So all these rights that were enshrined up until the changes were introduced for the charity organizations --

[ Page 8934 ]

I think we have made a fundamental change. There is no longer a right to get the funds that you as a charity have worked for and use them for your charity organization. Today we are in a situation where government and workers within the government will make decisions on who gets what, how much and for what reason. I know there are rules and regulations. There were rules before and regulations before, but it seems to have worked. The rules and regulations today can be interpreted in a totally different way. So there is change; it is no longer a given right to work in a bingo hall for an evening and get 30 or 40 percent, or whatever it was, of the take. Now it is going to be up to a bureaucrat looking at the application and saying: "Yeah, I find it is valid," or "It is not valid," or "My priority is to channel in that direction rather than in that direction." There are many opportunities to look at an application and reject it or reduce it to an amount that is less than is being asked for.

Maybe the minister can explain how he is going to guarantee that the right that was there in the past will be entrenched in the future through legislation.

Hon. M. Farnworth: There's clearly disagreement, and we're not going to agree on the changes that have been made to gaming over the last while. I'll make a number of points. One is that nothing's changed as regards bingo; bingo carries on exactly the same way as it has. The only change in and around casino gaming is that volunteers are no longer there. The question that I think can be asked is: what do the charities exist for? Do they exist to supply volunteers to casinos, or do they exist to do good works in their community and good works around the province? There has never been a guarantee to charities in the province. There is now. Charities in this province get the most money of any province in the country.

I have said that we need to have legislation in place, and it's my intention that we will have that next spring. It will deal with all the issues that one can imagine, and of course the guarantee will be a key component of that. I can't be any clearer than that. I guess if the hon. member doesn't like the system or thinks that the system needs to be changed, then my only suggestion would be that if, at some time, they form government on this side of the House, they would be in a position to throw out the system that we have put in place and put in a new system. If they chose to give all the revenue that comes out of gaming in this province to charities, they would be free to do that. They could change the guarantee, and they could change the rules and regulations.

What I have said is that we have a guarantee for the first time in this province. It's more money than it's ever been before. I want to see that guarantee enshrined in legislation. We are embarked on a process, a task, of ensuring that we can have legislation for the spring of the session. That's the goal. I don't know what else I can say.

T. Nebbeling: Maybe to make it a little bit easier, can the minister give me the number of charity organizations that raise funds annually for their organizations through charity casino activities?

Hon. M. Farnworth: There are approximately 7,000 licensees in any one year. Some of those licensees would have casino, bingo and raffle; some would have casino and bingo; some would have bingo; some would have casino. So there are approximately 7,000.

T. Nebbeling: With the changes that have been made, certain charity organizations still have the opportunity to work in a gaming activity and get a percentage of the take on the given day -- like in bingo halls. That is one category. There is now another group of charity organizations that no longer can do that kind of activity. Those are the bingo organizations that traditionally were working in the charity casinos. So I'm not interested in the total numbers. I'm interested in the number of charity organizations that worked in charity casinos, not in bingo halls. Is it 3,000 or 2,000 or 6,000?

Hon. M. Farnworth: I'll get that number for the hon. member.

T. Nebbeling: As I said yesterday, I'm really surprised that staff doesn't have that kind of information available immediately during an estimates debate. Often, depending on a response that is given to us, we can evaluate the need for further questioning if we get a satisfactory answer. Let's say that there were 1,000 -- and I think maybe there are more -- charities that worked traditionally in charity casinos. These organizations no longer have the need to do that. They just fill out a form once a year, they apply for X amount of money, and that form goes to the Gaming Commission. That's different.

[11:00]

One of the problems they're going to face is that because there are going to be so many applications, the reason for not getting the money may not be based on the fact that the need is not really there for the amount, but that the funds will not be available because of the multitude of applications coming in. If we don't have to do anything for it, well, it's easy: apply. And maybe over-apply a little bit, so that even if they reduce it, we still get our money. But it can conceivably be coming to a situation where, because of the number of applications, there will be less money available per charity. That is a fundamental change, I believe, because there was a good time when you got what you worked for.

Hon. M. Farnworth: I'll answer part of the question the same way that I did yesterday. That is, I have not had complaints from volunteers at charities. In fact, most volunteers with whom I have spoken are quite happy. They're glad that they don't have to go and work in a casino. They'd much rather be out doing the work in the community, the service

[ Page 8935 ]

Yes, there may be other charities that are able to apply. My question that I would ask the member is: is it a bad thing that smaller charities, which aren't able to get volunteers, are able to access the system? Or should it be limited to only those charities that are large enough to supply volunteers? Is it a bad thing for charities that deal with the needs of single mothers, for example, who may have a hard time trying to arrange day care for their children so that they could go and work in a casino? Now their charity would be able to apply.

The fact is that there are literally thousands of licensees in the province who have accessed the system in the past, and they will access the system in the future. Their applications will be judged in the same way as before. The decisions will be based on the activity and the need and the fact that it meets the guidelines. That evaluation hasn't changed, and the system will work.

D. Jarvis: Madam Chair, it was insinuated, more or less -- or a suggestion. . . . I can go along with part of what the minister said. But there was part of it when he was insinuating that they were happy just to stay home and were lazy and all the rest of it. But I think you'll find. . . .

Hon. M. Farnworth: I never said any such thing.

D. Jarvis: Well, it's more or less confirmed that they'd be glad now to stay at home. You've taken the onus off them to go out and work in the casinos and all the rest of it. But most of the people that belong to service clubs now are a very active type of people, and they enjoy it thoroughly. Part of it was getting out there, but now that's been taken away. They just, as you say, can be happy to stay at home now. They don't have to go to the casinos and dig up the. . . .

Interjection.

D. Jarvis: Well, if you read the Blues, Mr. Minister, that's certainly the way it came across.

Anyway, I was going to ask the question: why, then, has the government decided now to allow bingo and casino operators to take fixed cuts of funds, as opposed to allowing the charity association to work out their cost arrangements?

Hon. M. Farnworth: A couple of points. One, I never said that the volunteers could be sitting at home and are lazy. I said they would be able to do the things that they got involved in charity to do, which is good works in the community, in service clubs and organizations. That's what I said. I didn't say anything at all about being lazy or sitting at home, hon. member. Quite frankly, that kind of twisting of words is really offensive and not what I would expect from the member.

The issue around the fees that are paid to the operators in casinos and bingos. . . . In the case of bingos, the charity association continues to set the compensation for the operator, and that's the same way it's always been. In the case of casinos, it's set by the Lottery Corporation as a fee for service; it's a percentage of the take, similar to the system that used to be in place before they moved to section 207(1)(a).

D. Jarvis: I was wondering if the minister could explain to me what he means by similar.

Hon. M. Farnworth: The way it was previously, the operator would get 40 percent of table games and 25 percent of slots, less any expenses incurred by the Lottery Corporation for, for example, equipment or things of that nature. Now, because the Lottery Corporation owns and supplies those things, that's factored in, and it's gone to just a straight percentage. The amount of money is similar; how you arrive at it has changed.

D. Jarvis: What's the purpose for the change, then, if it's ostensibly the same?

Hon. M. Farnworth: Because the Lottery Corporation now owns and supplies all the equipment.

D. Jarvis: Could the minister tell us how this compares with cost arrangements in other jurisdictions?

Hon. M. Farnworth:We've done comparisons on the margins with other provinces across the country, and we are on the low end of the scale. In fact, some of the operators have commented on how thin the operating margins are in comparison to Ontario.

D. Jarvis: The minister explained that. . . . How does the corporation arrive at the 11 percent cost for administering electronic bingo, when I understand that the current cost is about half that level?

Hon. M. Farnworth: That figure is an average of the installation of electronic bingo in different locations. It would be consistently applied across the province. It is based on installing and operating the equipment, and on the maintenance, the personnel and upgrades to the equipment. So whether you are in a large area or a small community, where it would be more expensive, the fee is the same across the board.

D. Jarvis: I know that it sounds like a silly question, but the minister mentioned previously that their costs are very. . . . They asked him why they are very thin. Why did they establish that method?

Hon. M. Farnworth: Good negotiating, I guess.

D. Jarvis: It's probably good negotiating, but I'm surprised that the government is being that generous at this stage.

In any event, are the electronically linked funds going into general revenue?

Hon. M. Farnworth: Because it is conducted under section 207(1)(a) of the Criminal Code, it has to go through the consolidated revenue fund and then into the trust.

D. Jarvis: What consultations occurred with charities prior to the establishment of this trust agreement? Can you tell me that?

[11:15]

D. Jarvis: From all I've heard out there, most of them felt that this wasn't the greatest situation. It appears that you're

[ Page 8936 ]

Hon. M. Farnworth: That's right. They're not getting the same amount of money as they did before; they are in fact getting more.

D. Jarvis: Would the minister please explain to me, therefore, how they're getting more? I am of the understanding that they're getting less.

Hon. M. Farnworth: Last year, there was $118 million; this year, there's $125 million.

D. Jarvis: It's not what they pay in; it's what they pay out. I think what the charities are receiving, net, is less than what they were receiving in the previous year.

Interjections.

The Chair: Order, members.

Hon. M. Farnworth: If $125 million is less than $118 million, then I guess it's less.

T. Nebbeling: My colleagues and I have been receiving a large number of letters, e-mails and phone calls from charity organizations that were counting on funding, as they have been doing for a number of years, and that have been notified by the Gaming Commission that the funding that they can expect is considerably less than they have been receiving. Without going into the role of the Gaming Commission in the evaluation -- as I said, I want to spend more time on that later on -- has there been a tightening up of how funds can be applied for or what they can be applied to as objectives? Are more applications being cut down, in part, because new evaluation rules disallow certain things that in the past were available?

I'll give one example. A street band -- a music band, I should say -- wanted to go to a parade in which they have been participating for years. They have always been able to do it, based on the funding they were getting through their charity donation. This particular street band has been told that they will get an amount that's about 50 percent less than they traditionally were getting because the use of the money did not fall within the guidelines set out by the B.C. Gaming Commission.

There may be more money going into the fund as a whole, but a certain category of recipients of the funds have been notified that certain functions that they had funded in the past no longer qualify and that therefore the funds that they'll receive will be less. It is not just one case. We have many of these cases, and I'm sure that the B.C. Gaming Commission is aware of this.

Hon. M. Farnworth: There has been no change in the criteria by which charities are judged since the changes that were made a number of weeks ago. As I said then, I say now: these are still the same criteria by which a charity is evaluated. Charities apply on an annual basis. There's no guarantee. You have to apply on an annual basis on the work that you intend to do over the coming year. Depending on the work or the activities you're doing, you can in fact get more, and you can get less. But the decision that's made in terms of when you're notified about how much money you get isn't cut and dried. If you as a charity are dissatisfied, you can appeal that amount to the Gaming Commission and, I guess, make your case on why your activities are worthy of more. The fact of the matter is that there has been no change to the criteria by which charities are judged.

T. Nebbeling: As a statement from the minister, it's easy to say. Maybe the minister is also able to explain this to me. A charity organization for a number of years has applied for funding for a particular function and has always been funded. When they applied this year for the same type of function in the same location for the same amount of money, not more -- and this application was, I think, three weeks after the changeover -- this organization received a rejection of its application. It was based on certain elements in the application that did not fit the criteria the Gaming Commission used to establish the validity of the request.

I can come to only two conclusions: either the minister is wrong, or the officials of the ministry have been sloppy in the past and didn't look at the application. That would then lead to a third conclusion: the Gaming Commission has decided to look much more carefully at applications, and that has led to the elimination of certain charity organizations' objectives that have been approved in the past and that no longer qualify. There is clearly something happening within the B.C. Gaming Commission. Its evaluation of charity funding applications is different from what it was before the changeover happened. Maybe the minister can address that.

Hon. M. Farnworth: I'll make a couple of points. First, the changes that have come into place have been in place now for only 18 days. They took place as of June 1. Prior to June 1, the old process was in place, like licences -- the whole works. That's when the changeover took place -- June 1. So if someone was notified by letter that they're getting less money, it would have occurred under the old system before any change moving anything from 207(1)(b) to 207(1)(a) of the Criminal Code. June 1 was when the change took place for 207(1)(a) of the Criminal Code -- not before.

Second, it varies from year to year on the basis, in part. . . . The amount you get is on the basis of financial statements. If there are surpluses left over at the end of the year or if the financial health of the charity has improved, that will affect how much money they can get next year. It varies. That's why it's done on an annual basis. It's not: "You got $50,000 this year, you will get $50,000 next year, and you'll get $50,000 the following year." It's based on the activities that you're doing and the finances of the organization. That's how it's done. The criteria are there. The applications go in, they're judged by the Gaming Commission, and the Gaming Commission makes a decision. If people are unhappy with that, they can appeal the Gaming Commission's decision. That's the answer that I would give the hon. member.

T. Nebbeling: First of all, I think that the minister, every time he doesn't get a real answer, uses the sections of the Criminal Code: section 207(1)(a), which is the gaming that the government is allowed to do as long as it's done exclusively by the government, and then there is section 207(1)(b), which allows the beneficiaries of the activity to be non-government entities, as well, such as charity organizations. The government, in order to decriminalize some of the activities that it

[ Page 8937 ]

[11:30]

"This organization was informed at the beginning of May by the B.C. gaming regulatory body that B.C. gaming regulations will change and that the new regulations will make operating in certain areas of the sports activity that this football team is involved with impossible. The new regulations stipulate that adult amateur sports teams can no longer use the funds towards travel and equipment expenses, whereas in the past, travel and equipment expenses have always been approved."

If the minister is right when he says that none of the changes happened before June 1. . . . Is the minister saying that the B.C. Gaming Commission made changes to the areas where funds could be applied for prior to June 1 -- that by making sure the changes would not be considered as part of the transfer that is happening now. . . ?

The bottom line is that this particular team is going to get about $25,000 less than they traditionally were getting. There are many teams like that which fall into the same category. Remember, this little exchange we're having now is caused by one thing, and that is that the minister stated that charity organizations that were getting funds in the past are getting more under the new regulation, not less. I've argued that, and I've now given you an example. One of the reasons why they're getting less is indeed. . . .

Staff have big smiles on their faces. That's fine with me. Nevertheless, the fact remains that this is just one example where less money will come towards them because of changes made by the B.C. Gaming Commission.

Hon. M. Farnworth: You know, the hon. member has just read from a newspaper report. Once again he's demonstrated the dangers of reading from a newspaper report.

I will clarify for the member once more exactly what happened. On June 1 the change took place. On June 1 charities were no longer required at casinos. Prior to June 1, volunteers were required at charity casinos. May, the month the member is referring to, was before the changes came in. Under the old system, what the member says is the way that it should have happened. The guarantee is not a guarantee to individual charities; it's a guarantee on a global amount of money that is available for charities. You can't guarantee to a charity that they will get exactly the same money they got last year, for the simple reasons that the Criminal Code does not allow that and that it's dependent on the financial health of the organization. It's dependent on the activities of the organization -- whether in fact they are charitable activities that the organization is applying for money for. I think that's one of the key things we have to remember here.

In terms of the change in applications. . . . The change to the system where you don't need volunteers was June 1 and after. Prior to June 1 you had to have volunteers at the facilities.

T. Nebbeling: It is certainly enlightening that the minister once again tries to explain the difference before June 1 and after June 1 and the role of volunteer organizations working in the charity casinos that no longer are charity casinos.

The case I talk about is an organization that has never worked in a charity casino but has always worked in bingo halls. As the minister made very clear, there is no difference for organizations that worked in bingo halls. This organization got its money through working in a bingo hall, not in a casino. Therefore what the minister just gave as an explanation is invalid. There is nothing different for the organization that worked in a bingo hall. They worked then; they work now. Sections 207(1)(a) and 207(1)(b) have nothing to do with that.

The only thing that has happened is that the funds this organization collected through working in a bingo hall in the past were justifiably used for putting equipment in place and having their travel expenses covered. That has happened in the past. This time they have been informed that they can no longer do that, thereby having a shortfall of about $25,000. So try to explain that. The whole defence was that 207(1)(a) and 207(1)(b) were really the culprits in what I believe is an unfortunate situation that is duplicated in many other areas throughout the province.

Hon. M. Farnworth: A couple of points. First off, the member asked a question, but at the beginning he didn't specify whether it was a casino or a bingo. The fact of the matter is that that is relevant. We're in a discussion of charities in general here. That is the issue. An important issue is whether it's done under 207(1)(a) of the Criminal Code or whether it's done under 207(1)(b). And the date of June 1 is important. The member's been making all kinds of statements about this funding and charities getting less money. In part, he's saying that that's because of the changes that took place. The fact of the matter is that if you were accessing charity funds before June 1, then the old rules on the way you accessed that money was still in place. If you got less money, then it was under the system that was in place, which the member seems to think is wonderful.

The member has raised the issue around sports teams, bingo and travel. Travel has always been a very sensitive area around the issue of charity funds.

J. Dalton: Haven't you paid the money back yet?

Hon. M. Farnworth: Why don't you go dig up an old graveyard somewhere? Hon. Chair, why doesn't he go dig up some old bones?

Interjections.

The Chair: Order, members. Order!

Hon. M. Farnworth: Thank you, hon. Chair.

Interjection.

Hon. M. Farnworth: That's right. He should leave. He shouldn't show his face around here.

The Chair: Members, order.

Hon. M. Farnworth: The issue around the funds as they apply in regards to travel vary from year to year for a number of reasons. There are strict rules and regulations, in particular on how adult teams access charitable gaming funds for travel.

[ Page 8938 ]

T. Nebbeling: I will continue to be civil when addressing the minister or anybody on the other side. But nevertheless, I must also say that the minister is trying to use all kinds of avenues to defend what is indefensible.

The argument that the minister made as to why these charity organizations -- and one in particular that I'm discussing -- are getting less funding is because there are maybe more organizations applying for the same funds. This is a change in the rules. The one thing you can't appeal is the rules, I'm sure. If the Gaming Commission, in its deliberations, has concluded that travel and equipment are no longer covered, then that is a change in the rules. If the organizations get notified that these rules are to be applied in that manner and for that reason, and if this particular organization gets $25,000 less than they have in previous years, then there is a change. It's not an interpretation. The organization has been notified that no longer can they apply for funding to cover travel and equipment. They have done it in the past. This applies to the whole league, by the way; this is not just one organization. There is no appeal mechanism -- unless the Gaming Commission will overrule their own rules -- that this organization can come back to. The bottom line is that yes, there may be more money in the pot to be disbursed over 11 different categories, but the particular category that I've highlighted this morning seems to be paying the price for funding that may well go to other areas within the 11 categories.

I hope that the minister can understand the damage that he's doing not only to these teams but also to the whole spirit of B.C. charities' relationship with the gaming industry. We spoke about that earlier on. I've tried to emphasize to the minister that there was a time when, by participating in a bingo activity or a charity casino activity, they could indeed count on a percentage of the money that was raised in the particular period that they were involving in running the facilities. That was a right. That was a form of protection that was there for these organizations that counted on the money. From now on, and this particular application illustrates it, it will depend on the goodwill and rules and regulations that are being set -- interpretations -- by the people that will evaluate the applications. Unfortunately. . . .

No, I'm not going to say that. I was going to talk about potential political interference as well. If, for example, one of the categories is equipment for hospitals, that would, under certain circumstances, form a particular category. There may well be a day that government, through channels like the B.C. Gaming Commission, would like to see more emphasis on funds going towards that particular sector as one of the 11. I'm not saying that it's going to happen, but the potential is there in the way the system has been set up now. That was just not possible in the past. That's the major change that I fear.

The changes have caused many organizations in the province who were. . . . When the announcement was made that there was going to be $125 million in the pot, they kind of took the carrot. They said: "Hey, this is not bad. You know, we are actually getting more than in the past, so we're okay." But once the excitement was over and that period of reflection started to happen. . . . I'm not a lawyer, but I can figure it out. There are some pretty serious traps in this new interim program, which will most likely become permanent once the regulation or the legislation comes into play. That's the reason that we are getting more people saying: "Hey, wait a second. What the heck is happening here? We could get hurt here; we could get hurt in that section. We never had to fear that. We have the assurance of one year's funding, regardless of what we do. That's all we've got now, whereas in the past we could say that as long as we participate in an event and fulfil the requirements set out by the B.C. Gaming Commission, we would be able to count on a certain amount of money." That is taken away.

If the minister doesn't recognize that, then I think it's very sad, because that is a potential. Sure, I can't second-guess the legislation that will be introduced next year. But if it is based on some of the principles that are now incorporated in this interim period, then I fear that charity organizations are going to be dependent on a handout rather than what they have been doing up to now, which is being partners in how the funds were raised. That is definitely a switch and a change that in the long run I don't think will be beneficial to charity organizations.

Can the minister, to complete this session. . . ? I will ask the question later.

[11:45]

Hon. M. Farnworth: Actually, I was looking forward to an opportunity to respond. However, that will be later. I move the committee rise, report progress and ask leave to sit again.

Motion approved.

The committee rose at 11:46 a.m.

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