[ Page 9073 ]

Prayers.

Orders of the Day

LABOUR RELATIONS CODE AMENDMENT ACT, 1998
(second reading continued)

What wasn't mentioned by the minister are four important things in Bill 26 that all British Columbians need to recognize. The first is that the changes to the Labour Code set an enormous precedent for labour and economic policies in the future. They're setting the stage piece by piece, increment by increment, for what the government would have liked to have brought in last year with Bill 44. If you can't kill something by one blow, you do it by a thousand cuts. I think this is the characterization of what Bill 26 is setting the stage for in British Columbia. Bill 26 will set up the opportunity to expand sectoral bargaining to other areas of the economy and in many parts of industry. We could end up with each member of the private sector having their own mandatory union agreement.

I think that what's most important, as always with government, is the politicization of the role that we as MLAs and ministers follow -- that is, support for our friends and insiders. Surely it is payback time for the B.C. Federation of Labour, who funded the NDP re-election to a certain extent. This opportunity was necessary in order for the government to pay back their friends in big labour. It is certainly not a bill that is here for the benefit of small business. It is certainly not a bill for the benefit of the average British Columbian. It's very necessary to start looking at the average British Columbian and what's good for them -- not what's good for us politically, but what they need in order to have a level playing field, to stabilize the economy, get jobs, maintain jobs and make a living in this province other than on the payroll of the welfare agencies.

There are alternatives. The government could have brought in the secret ballot, which is supported by 77 percent of British Columbians. The government could have brought in anything, even though they know at this time that changing the Labour Code is disastrous for business, especially small business -- anything but the undemocratic, ancient, outmoded kinds of policies that will create economic problems within British Columbia, in an economy that is spiralling downwards at this point anyway. The minister knows this, and the minister and his Premier have chosen to ignore the fact that we truly need stability in order to seek economic development and investment in this province.

I think it's really important for this entire government to stop their agenda that is based on class warfare. We have heard a number of issues discussed, from the northern doctors dispute all the way through to this being an anti-union movement if you're in opposition to this particular labour bill. These are completely untrue and unfounded. I think they really go back to the basic roots of this particular government, which supports big labour. There is class warfare involved in the creation of Bill 26, and it is a precursor to future class warfare on behalf of big labour movements. I think that is absolutely, completely wrong. It's the wrong time. It's narrow-minded thinking; it's a neosocialist agenda. And it's just dumb.

If this is the government we have in B.C., then why don't they get on and govern? Why don't they look at the problems we have with huge unemployment, low economic development and with small business? Why don't they just look at those problems and say: "We've been charged in this province with doing something creative and forward-thinking to help get people back to work, to help them raise their families with a paycheque that they can count on"? Why don't they do some of those things that would start to make the nucleus that we could build a community in B.C. around, with people who are actually working? Imagine that -- people actually working in British Columbia, being remunerated for work that they actually perform at a workplace with some kind of fairness and equity.

Job creation strategies, young people employed -- now, there's a novel thought for B.C. How about that 18-plus percent who are unemployed in the youth sector, the highest in a decade? How about bringing in some changes in legislation that would put them to work? Bill 26 is going to be the last thing to do that. It's going to put people out of work, and the government knows it.

Instead of looking at spiralling unemployment, instead of looking at things like the biggest single employer in Vernon being the welfare system, instead of looking at small businesses that are going out of business, instead of looking at those problems and really governing -- that's what you've been elected to do -- get on and do it. Get on and make those changes that help the people in my community to actually have a job and to have the dignity and self-assurance that they can work for a living, earn their own paycheque, raise their family and know that in ten years their kids would be able to take over from them in whatever family business they've created, so that they too would have an opportunity in the future.

This government has taken away the hope for the future in my community -- the hope that people will be employed, and that they will be maintaining their own dignity and their ability to raise their families. And that's wrong. This labour bill is one more nail in the coffin of the loss of that dream for people in the communities of Vernon, Lumby and Cherryville.

Let me give you an example of the unemployment that exists in Vernon. Recently I had to replace a person who works in my office, a constituency assistant. This is a very tough job; this is a front-line job. All of those people who are angry and frustrated, with nowhere else to go, come to the MLA's office in each of our communities, and they come there seeking help. The first person that they see face-on is the constituency assistant who works in our office. Everyone on both sides of the House knows how difficult that job is. They also know that the job pays somewhere around $2,400 a month, which in this day and age is not a salary that you're going to be doing well on, with one income. When I asked for applications for that job, I got 100 applications in my community. And you know who was among those, hon. Speaker? I had a PhD, a CGA, a chartered accountant and a person with an MBA. Why do I

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[10:15]

This government doesn't get it; this government doesn't understand what it's done. They have no idea of what they've done to the economy. They close their eyes, shut their ears and pretend that everything is wonderful, that we're still living in Lotusland. And their own people, who run for their party, go out of the country to get a job. Does that make sense?

Now we bring in legislation that will mean increased construction costs and fewer construction jobs. And to my friend, the faithful NDP supporter, I would say not to make too many synaptic crossovers and think too hard, because you might actually figure out that the policies that you're running for are creating a poisonous situation in the Okanagan, where jobs don't exist. Give me a break. This is a circumstance that really is unconscionable.

Let's look at another employer in my area, Gray Monk Cellars winery. Their letter addressed to the Premier says:

"We have just received a copy of the. . .Bill 26 legislation. We wish to state that we feel strongly that this legislation is just another attempt by NDP government. . .to put a stranglehold on small business. Surely you must be aware of the fact that small businesses are a large part of the economy of this province.

"Small businesses, and most big businesses in this province, are teetering on the brink of destruction [and] we do not need any further Labour Code changes. The people of British Columbia cannot afford any more of your government's attitude -- you are killing investment, killing jobs and killing small business.

"Take a good look around you, listen to the business community. This province is being driven further and further into the ground. Where do our young people go for jobs? We know that a lot of our young people are seeking employment in Alberta. Take a look at what Ralph Klein has done for [economic development in] Alberta.

"We do not need your NDP government tampering with any more labour changes. Stop Bill 26. We view this bill as your stepping stone to begin tampering with the labour law of the rest of the workforce -- leave us alone."

The minister will claim that this is good legislation. He'll say that he's used the litmus test -- that he's been empowered by five criteria that he looked at critically to make sure that the Labour Code was a good thing for all of us. He defined in those five criteria his gold standard, his troy ounce, in order to ascertain that this Labour Code is the best thing for all of us in B.C. -- not just for special interest groups that support the NDP, but for all of us as British Columbians. So let's use his own criteria to see whether or not he passes the test of looking at his own criteria and coming up with the intellectual conclusion that what he said is in fact the truth.

The minister said: "We must ensure that British Columbia's [economic climate] is efficient and capable of competing in the national and international markets." What business and labour in many cases will tell you -- what small businesses will tell you, for sure -- is that B.C.'s Labour Code is unbalanced and undemocratic. For those reasons, when investors come to invest here, they choose to go to Washington State or Alberta instead, because it's easier for them to set up their business. These changes will further be seen by journals, such as the Wall Street Journal and other important economic and investment magazines, as making B.C. less competitive.

Let's look at the minister's second topic, his second area. "We must ensure that the right of workers. . . ." This is the government that took away the rights of workers when they took away the secret ballot, something that's supported by 77 percent of British Columbians. They took it away.

Interjection.

A. Sanders: You've done more harm to labour than anyone else in the province in the last seven years. Let's look at how the new changes to the Labour Code will interfere with the workers' ability to negotiate a contract. You've taken away the ability of workers to negotiate a contract. How can you say that this is going to ensure their rights? You've taken away their rights. Let's create a stable climate. We have anything but a stable climate; we have a climate of incredible instability created by this minister and this government.

Interjections.

The Speaker: Excuse me, member. I wonder if you'd take your seat for just a moment. I'd like to remind the members that one person has been recognized as having the floor, and that's the person who should be speaking. So I request all members to attend to those who are speaking and have the acknowledged right to do so.

Member, continue.

A. Sanders: Thank you, hon. Speaker.

Let's look at the minister's fourth gold standard for seeing whether he made a cognitive connection between what he said and what he did. He said: "We must consult carefully with key stakeholders. . . ." Well, if you consult, you have to listen; if you don't listen, then you haven't consulted. Over 50 percent of people polled in one poll thought the committee for the LRB was biased and not properly consulted on several cases.

[ Page 9075 ]

Let's look at what the minister can do to justify the amendments in his gold standard, if he cannot for one single time make the connection between what he has said and what he has done. You know, there are some answers for the minister. He could consult and listen; that would have been a good start. But that isn't the usual way this government deals with British Columbians. He could leave the Labour Code alone; that would have been the first thing to do. That's what any group of intelligent people would have done at a time when there is economic instability.

He could be democratic. He could support the group of workers to demonstrate and be able to exercise their democratic rights to join a union. He could give them the right to negotiate with communities an agreement that creates jobs. He could allow for freely negotiated contracts. None of this stuff is going to happen as a result of Bill 26. He could let the building trades unions resolve their internal problems without legislation, something recommended by Stan Lanyon. He could let the construction industry modernize -- imagine that -- rather than enforcing a 20-year-old style of craft unionism, along with the loss of competitiveness that it will create.

He could regain a vision of what the union movement is for. Over the past century, the union movement has been successful when it has reflected the collective views of the majority of workers in their workplace. We have come a long way in this country. A lot of times when the members on the opposite side talk about the state of the workplace, they're talking about it as if it's out of a movie in the 1940s or a Charles Dickens epic. It is none of those things. The NDP could have shifted their logic that all workers should be unionized and that whatever gets workers unionized is good for jobs.

Every group of workers has the right to decide for themselves if a collective agreement is desirable. It is not government's prerogative to impose that on workers. It is not healthy, it is not right and it is undemocratic. This bill is the worst thing that could happen at this point to workers in B.C., in terms of job stability.

I would urge the Minister of Labour to stop thinking about his big-union friends and the paybacks that are necessary and to stop thinking about the politicization of labour and labour laws, and to start thinking about unemployed British Columbians who live in Vernon and everywhere else in the province -- to think about their families and about the support systems they have. The support system they'd like to have is a job. I'd like him to stop sacrificing their ability to procure jobs in my area for paybacks he needs to make. I'd like this minister to do the right thing: go back to the drawing board.

The Speaker: I recognize now the member for Richmond Centre.

Hon. D. Lovick: The voice of sweet reason. . . .

D. Symons: I'm sure, hon. minister.

Hon. Speaker, I appreciate the opportunity to get up and express some concerns I have about Bill 26, Labour Relations Code Amendment Act, 1998. I have some real concerns. The first one is that we have to ask ourselves: why this bill now? The province's finances are in disarray. When this government took office, we had $800 million worth of new taxes in the first year and roughly another $800 million of new taxes in their second year in office. That's $1.5 billion in new taxes in the first two years of this government's fiscal mismanagement of this province.

In spite of adding $1.5 billion to the revenue of the government, they still ran a deficit. They have run a deficit every year that they have been in office. This is in spite of the fact that the deficit figures from this year and the past few years show that they've been cooking the books. So besides the fact that they have an extra $1.5 billion in their coffers to work with, they spend more and are running a huge deficit. The figure they give is a gross misrepresentation of the facts, because they've found lots of ways to move it from the consolidated revenue fund to Crown corporations and elsewhere, so that it doesn't show as part of the figures that count as part of the deficit. But I would remind the listeners and viewers out there that all they have to do is look at the increase in the provincial debt, year by year by year, to get a real idea of where the finances in this province have been going under this government's mismanagement.

Besides the fact that the government's debt is up -- and that's one of the big problems facing the province -- jobs are down. We have various ways. . . . This government has been announcing that it's going to create jobs in the province. Why, it was only a year ago that we heard about the jobs and timber accord and the 22,000 new jobs that would be created over the next five years. What's the result after the first year of this five-year program? We're down 10,000 jobs. They've got quite a deficit to get back up to zero, let alone getting those 22,000 new jobs. . . . With almost every announcement this government makes, whether it be aluminum smelters that are going to be built in the province or Nike shoes coming to B.C., we find that attached to them are claims of jobs being created in B.C.

We have yet to see an aluminum smelter built. As a matter of fact, if we read today's Vancouver Sun, we'll find that it's not even likely that Alcan -- let alone the other firms that have been announced as coming to B.C. -- is actually coming. When the Premier speaks of these job announcements, he talks as if it has happened and as if all they're doing is negotiating with people. When people look at the situation in British Columbia, they look at the economy, the tax regime, the Labour Code and so forth. All of these things tend to appear to them as a negative, and they don't locate here. That's unfortunate for the people of British Columbia. We desperately need those jobs.

So does this bill address either of these two important issues that are facing the people of British Columbia today? I would say that it does not. In fact, when we look at the situation, the minister admitted soon after the bill was introduced that there was no study done on the possible economic effects that the provisions in this bill might have. That, to me. . . .

Interjection.

D. Symons: Well, it was in quotations marks. The minister is sort of denying he said it. I'd be delighted to hear him say he denied that he said this. Apparently he denied it. But if it's true, we would love to see a copy of the economic study that was done, because we have not seen it as yet.

If it is true that there has not been an economic study, it shows the inadequacy of this government -- by bringing in

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[10:30]

They've done studies that enable them to claim that they had two balanced budgets. You can remember the balanced budgets of a few years ago, just prior to the election, which this government kept announcing it had. It wasn't until a short time after the election that we discovered that no, they weren't quite balanced. As a matter of fact, there were some pretty hefty deficits in those two years. But they did a study showing that they were indeed going to have balanced budgets. They predicted 20,000 jobs, which I mentioned a few moments ago, from the jobs and timber accord. They've done a study on that. But did they do a study on the effects of this bill? Every other bill has been hailed as a jobs, jobs, jobs creator. This particular one could possibly be worthy of a study to find out: are we going to affect the job situation in British Columbia? There has been no study done.

I ask again: why this bill now? We've had a number of NDP speakers -- almost all of the members on the opposite side -- get up and, somewhere along in their dissertations, comment about how the Liberals are anti-union or something to that effect. Could it be that the bill is just a setup to point out the Liberals as being anti-union and the NDP as the saviours of the union movement in this province? I'm beginning to think that it has less to do with what's contained in the bill and more with being a setup.

This government seems to work on the concept of confrontation -- divide people. I would honestly suggest that this is the wrong time to be trying to divide people in this province; it's the wrong time to be setting up confrontation. We should be considering the state of B.C.'s economy, and we need cooperation. I hark back to last Saturday, when the Premier, at the fast ferry christening ceremony, talked about naysayers in the province. Again, he was dividing people by saying that there are people in this province who were against building these fast ferries; they were against the superferries.

An Hon. Member: Yeah, the Liberals.

D. Symons: It was rather interesting. I hear the member for Vancouver-Burrard say: "Yeah, the Liberals." Well, you know, the Liberals weren't really on the political map when the superferries were being projected; it was the NDP, as a matter of fact. Although the Premier said there were these naysayers against the superferries, do you know which party it was that was against the superferries, in their opposition? It was the NDP, and the Premier talked of them as being naysayers. He didn't bother thinking about what he was saying. All he wanted to do was set a division among the people in the province. This is the wrong, wrong approach to dealing with the situation of labour relations in a province with the economy the way it is.

Interjection.

The Speaker: The minister will come to order. The speaker has the recognition to make a presentation. The member will proceed.

D. Symons: Thank you hon. Speaker. It's interesting to hear the comments from the members on the opposite side, because we have these bombastic statements by our Premier and others in the NDP that are often not truthful. They tend to twist the truth to suit their purposes -- as he did at that fast-ferry launching.

We don't need confrontation in the province today. We need cooperation, and we need to get the economy rolling. Do we need legislation, then, to accomplish what the minister says is the aim of this legislation? I think that's an important question: do we need legislation to do it? I don't see why we would necessarily, if in the commercial, industrial and institutional sectors the idea is to have. . . . Could the unions not simply work together in a cooperative joint council format, as the CLRA could also do, without legislation? Is it not possible that they could do this without legislation -- cooperatively work together and work as a group? I gather it's done with B.C. Rail and the joint council of unions there. There are about seven unions involved with B.C. Rail, I believe. If this could be done, I would have to ask: do we need legislation? Maybe later, when the minister has his turn to respond, he will be able to make comments about that.

I would think that people could, if they wanted to. . . . Rather than have it legislated that you must, that would be a better approach. Give the various craft unions and employers the choice, just like in a democracy. I don't know how much this government believes in democracy and the right to free choice. It should, I assume. The only thing that seems to be democratic about the New Democratic Party is the "d" in the party's name -- but that's another story for another day.

Interjection.

D. Symons: Give them secret ballots -- that would be one thing, hon. member.

The minister says that unions want it; he claims employers want it. I met recently with the executive members of the CLRA. You know, they never mentioned once, during the couple of hours we were meeting with them, the concept of sectoral bargaining and how they were really after sectoral bargaining. They didn't mention anything about a master collective agreement. What they did talk about was the concept of wanting something they referred to as a level playing field. They said what they really wanted was to be able to double-breast. If the minister is going to be looking and listening to the labour side involved in construction, I think maybe he should also listen to the management side as well and say: "Well, on the one hand, if we're going to give them the sectoral bargaining. . . ." The government doesn't claim it's that -- they use the words "master collective agreement" -- but it's the same thing. It's interesting the number of times we hear the minister comment: "This is not sectoral bargaining." I'm not quite sure what a master collective agreement is, if it

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Nevertheless, the business side asked for double-breasting. It would seem that if they're going to give in on master collective agreements on the one side, they would maybe also like to balance that by allowing double-breasting on the part of the business sector. The business sector has some problems when a union member is able to go out and work in a non-union job. When he wants to, he can put his union card in his back pocket and work at a non-union job and then come back when there's jobs in the union sector and work again for a union employer. The union employer, unfortunately, cannot operate another company that's non-union. That's what's meant by double-breasting, and they would like the opportunity to do that.

It's interesting that the government acquiesces to the desires of the union sector but not of the business sector. You might remember, hon. Speaker, that when Bill 44 came in last year, the minister responsible, when asked if they had spoken to the business sector, said: "Well, no. We didn't; we knew what they felt. We didn't bother talking to them. We simply spoke to the unions, because that's what they wanted." That is not a good groundwork for creating, in the business and investment sectors -- particularly outside of this province -- an indication that B.C. is a good place to invest in.

The NDP members have said that it's decent-paying jobs and the right to belong to a union that are being addressed in this particular bill. If workers feel aggrieved by an employer, they can sign a union card; if enough are interested, they can be certified. You don't need a government favouring one side or another in a labour negotiation. Unions in the province are mature enough, I would hope -- and I know they are -- to stand on their own. But for some reason, this government doesn't believe that. This government feels that we have to tilt the playing field in order to arrange it that unions can have things set up automatically for them, rather than go out and fight and win members over to their particular cause.

What does this legislation do? Well, it sets up an employers council and a union council of industrial, commercial and institutional employers and unionized workers to bargain a master collective agreement. Again, that sounds somewhat like what I refer to as sectoral bargaining.

What will this result in, when we set this up? Well, we're going to have some problems. One of the problems will be that companies that do both residential and commercial work are going to be in the position of choosing one or the other. Or if they do both, it's most likely that if it's a non-union company, it will be unionized very shortly, because to work in the industrial sector they'll have to be union. So that's going to cause some problems. Or they will likely end up becoming union, because the second fact is that if this bill is introduced, it will be a carrot to. . . .

An Hon. Member: It's been introduced.

D. Symons: Passed -- I beg your pardon, hon. member.

It will be a carrot to non-union people to organize, because the union organizers are going to be able to hold a complete union agreement in front of them, wages and all, and the workers won't have to go through any bother of negotiating with their employer, basically, if enough of them sign up. I think this is a wrong thing, because you really have to have the workers and the employer -- the employer of those workers, not some council -- get together and hammer out a first agreement.

Further changes to the Labour Code, of course, are going to scare off investments in this province, and I think that's important. The perception is going to be bad. Some non-union firms are concerned that the NDP will start demanding that developers use unionized labour for large industrial, commercial and institutional projects -- as they have done with roadbuilding in this province -- and, in effect, leave smaller jobs to the non-union sector. Unfortunately, no matter what sort of assurances are given by the minister and by this government, we cannot believe them. Time and time again, this government has given us assurances of one thing and done another.

A few years back, they gave the municipalities. . . . The member is shaking his head. He can't believe that I'm saying such a thing. They gave the municipalities at UBCM an assurance that they would consult, and a month later, they simply downloaded an awful lot of the costs to municipalities and cut back on the transfer payments. A few years before that, they brought in a new municipal cost-sharing program which was going to establish certainty and continuity of funding to municipalities. Two years later, that agreement, that bill, was changed at this government's whim. So, basically, people have no faith that anything they're told today will be true tomorrow. I think that is a real concern. It's a concern, of course, that is going to live with this government for a long time. Even if they were telling the truth today, who could believe them?

The industrial, commercial and institutional sector of the B.C. construction industry in our province has done well for years, with relative labour peace and without special legislation. So again, I ask: why this legislation now? If it's not broken, what is the government trying to fix? Why this legislation now?

The minister has said: "There'll be no expansion of sectoral bargaining. It's just this bill and that's all there is to it." The interesting thing is that the Premier didn't say that. The Premier said just about the opposite. He talked about it being the first step. He was interviewed by the papers: ". . .the Premier indicated that he hadn't given up on the [points] that were dropped. . ." -- that is, the points that were in Bill 44 last year, which the government didn't carry forward because there was so much concern about it. The Premier went on to say: ". . .especially those that would have helped the unions get control of the contract-for-services sector, like security, food services and janitorial." On Bill 44 he's quoted as saying: " '. . .the questions around that -- I very much would like to [see them] come in,' [the Premier] told reporters. 'It's still a huge gaping problem of contracted services and the rights of workers in the contracted sector, which we are going to try to address as best we can in all kinds of different ways.' '' This is simply step one.

[10:45]

Interjection.

D. Symons: The minister responsible -- who is kibitzing me right now -- when he was talking to the press at the same time, was saying: "Believe me, as Labour minister there is no intention of going beyond this." The Premier, in one way, is

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I have no problem with the aim as expressed by this government, as long as the workers have the free right to choose. Unions should have to win workers over and not have the government pave the path for them. If the government really believes that workers deserve a decent wage, then they should include all workers, not just those in a particular area they happen to favour, the construction industry. I would suggest to the minister -- maybe partly with tongue in cheek, because I think he realizes the impracticality of it -- that maybe they should pass a law guaranteeing everybody, all workers in the province, $30 an hour and $15-an-hour's worth of benefits.

Interjection.

D. Symons: There we are, hon. minister. I've given you a suggestion. If you want to bring in something, do that.

They know -- they don't do it; they just pick little sectors to favour friends -- that that wouldn't work. Productivity would have to quadruple in order to support it. Unfortunately, we don't live in a hermetically sealed economy. If we could close the borders of British Columbia and work hermetically within here, maybe we could do something like that if we could support ourselves, but we are dependent upon export in this province, and we import a great amount as well. We deal with other countries and other economies; we simply cannot do it on our own. But this minister really neglects that.

The minister was quoted again in the paper as saying -- and it was in this House, as a matter of fact. . . . "The reality of the modern economy," explained the minister, "is that it functions to a huge degree on perception as much as anything else."

Hon. D. Lovick: True.

D. Symons: The minister is agreeing with the statement he made in this House, by saying that it is true, and I agree with him. On one point, so far, during my dissertation here we agree on something -- that it is perception. What we have to do, then, is consider the perception that this bill is putting out to the investors around the world, the people we need to bring investment to this province to get the economy rolling again. If we read a few of the columnists in the papers, we'll find what the perception is out there. The heading from the Times Colonist is: "Labour War Is Last Thing Province Needs Right Now."

Interjection.

D. Symons: Well, that's a reporter, not a Liberal.

The reporter, at the beginning of his column, starts off: "It's as much a part of life on the coast as tide changes. Every few years, the government of the day decides to start a labour war." He goes on to name a couple of past histories of that happening. At the end he closes with:

"Maybe [the Premier,] the former ironworkers' organizer, feels the need to define himself this summer. Maybe he's desperate for something to take the heat off his government for its inept economic performance. Whatever the reason, brace yourselves as a B.C. citizen, for exactly the last thing your struggling debt-ridden province needs right now: a labour war pitting the investors with money in their pocket against a government with a debt to repay."

Interjection.

D. Symons: The minister asks who created that perception. I'll tell you. The answer is as plain as the nose on his face. The perception has been created by the actions of this government over its last six years in office.

The Vancouver Sun. . . . This person, I must admit to the minister, is not entirely unbiased: Maureen Enser, the executive director of the Urban Development Institute. She says:

"There is little doubt that the Labour Code changes presented in the Legislature this week are bad for business, jobs and the economy in British Columbia. Any labour-law amendments that favour unions and entrench archaic labour practices are a red flag to investors.

"It seems that once again the provincial government has decided to put the interests of its union allies above the need to formulate credible public policy that builds confidence in our economy. The government is out of touch with economic reality if it believes these changes will not drive businesses out of the province and further undermine investor confidence.

"Although the amendments will introduce sectoral bargaining in only the industrial, commercial and institutional construction sector, mixed-use projects which have a blend of commercial and residential use may also be affected."

"A study of the economic impact of sectoral bargaining in the B.C. construction industry was undertaken in March and April by Roslyn Kunin. . . .'' She concluded in her analysis: " 'The combination of a poor business climate and the threat of new legislation -- in most cases, in that order -- is causing a continued flow of construction industry capital, effort and jobs out of the province.' She added that 'many potential projects will be considered unfeasible and unfinanceable if changes to the Labour Code are tabled and passed.' ''

" 'In preparation for this, a majority of respondents referenced shifting some resources -- efforts, people, capital -- out of the province. Interprovincial and international competition is such that investment will likely not stay in a jurisdiction with strong, newly introduced sectoral bargaining, at least not in North America.' Surely, even at this late stage, comments such as these should be a wake-up call to the government."

We find, even in today's paper, what that honourable reporter Vaughn Palmer says about one of these investments that the Premier has spoken of. Remember the Alcan deal that the government made a few years back? He says: "Alcan is rethinking a plan to expand its aluminum production in Kitimat after a feasibility study determined that B.C.'s higher labour costs and higher taxes would boost construction costs by 50 percent." That's the perception that's out there in the world. Regardless of what the minister might say, that is the problem that we in British Columbia will be facing when those perceptions inhibit investment in the province, inhibit people from improving and making jobs in the province. This is the situation we're facing. The article goes on to say: ". . .Alcan's hesitation over high construction costs couldn't come at a worse time for a government that is busy defending changes in the Labour Code that would make it even easier

[ Page 9079 ]

Hon. Speaker, what I've been trying to say all of this time is that this is not a good time to make any changes. No matter how innocuous the minister might say they are -- and possibly even if he was right -- it's not the right time to make those changes in this province, because the perception out there is that this province is already investment-unfriendly. This will be just one more nail in the coffin of the economy of this province.

E. Walsh: I rise in support of Bill 26. Right off the top I would like to express my surprise at how vehemently discouraged the opposition seems to be over this bill -- in fact, so vociferously so that I have to question exactly what the opposition perceives it sees in this bill. I have yet to hear what in this bill they think is so wrong.

I've been a member of this House for the past two years, and I have to say that not only was I surprised, but I was somewhat puzzled at the opposition's reaction to Bill 26 -- and specifically in not even voting in favour of putting this piece of legislation on the floor for debate. Hon. Speaker, debate is a part of democracy, and I feel that this, in fact, was a violation against democracy. Not only is it a violation against democracy to vote against debate, but it is an insult to every British Columbian and every Canadian who fought so long and so hard for democracy. After voting against the motion to debate, the member for Vancouver-Quilchena had the audacity to say that they recognize the parliamentary tradition of first reading votes and that they also recognize what that means. He then went on to say that they didn't want to debate this bill, because they wanted to "ensure that we start the process of healing the deep, deep wounds that this government has caused to the economy of British Columbia."

Well, what the member opposite doesn't want the people of British Columbia to know or even remember is that we didn't cause the Asian crisis, and we didn't cause the recession in Japan -- surprise, surprise. The opposition want people to believe that none of this has anything to do with our economy. It can't have any effect whatsoever on our economy in British Columbia. They want people to believe that what is happening is all our fault. How ludicrous! Never mind what the economists and world financial officials might say otherwise -- and these are financial analysts from all over the world.

[11:00]

Day after day, week after week, month after month the opposition compares us to Alberta -- but only when it suits them. Did the opposition tell us that Alberta already has provisions that are much like Bill 26 that we have put forward. They have compulsory accreditation, the model of employer representation within the construction industry under which a newly certified employer will be required to accept the registration. . . . In Alberta, they call it registration. Did the opposition tell us that legislation in Alberta also allows for the designation of special project agreements by the government -- for major projects of special economic importance? Of course not.

We have heard so much about Alberta that it quite frankly makes me want to disgorge. The opposition talks incessantly about jobs in Alberta. Let's talk about that for just a moment. Has the opposition ever mentioned the number of contractors who actually bid on jobs and developments and job sites in British Columbia? I don't think so. Have they even mentioned the pay that these contractors pay the non-skilled workers they bring in from Alberta to B.C. jobs? I don't recall that. Has the opposition even mentioned the number of people who live in Alberta but work in British Columbia, displacing British Columbians who live here? I don't recall any of those numbers -- of course not, because they don't fit the picture that they want to paint of British Columbia and Alberta. The member for Peace River North, when he was a Reform MLA, spoke about jobs lost to Alberta in his constituency. Do we hear about that anymore? Of course we don't.

What about open borders -- NAFTA? They believe in open borders and NAFTA, which allow people to come into British Columbia and take jobs. What I would like to know. . . . I have yet to hear the answer to this question, and I have asked this question over and over again: if there are so many jobs in Alberta, then why are they all coming to work here? One only has to come into my region and take a look around to see how many people from Alberta are working in British Columbia. Could it be that the land of Alberta is not all milk and honey, as the opposition thinks it is? Could it be that the people are working in British Columbia because they like making more than $5 an hour.

[W. Hartley in the chair.]

There is a light on the horizon. That is, after six years the Alberta government is -- guess what -- raising their minimum wage.

An Hon. Member: Say it ain't so.

E. Walsh: It is so. They are going from. . . .

An Hon. Member: How much?

[ Page 9080 ]

Some people may be asking why the Alberta government, after six years, would raise their minimum wage to $5.90 an hour. One of the reasons is because -- and this is a quote. . . .

Interjections.

E. Walsh: You may want to hear this quote, because it comes from the business community and from the newspaper: "Some employers were finding that some of their employees were moving on to higher-paying jobs." Guess what: they're in B.C. That quote is from the Globe and Mail of June 20 -- just this last weekend.

The Liberal opposition clearly has to stop romanticizing Alberta. If I have time a little later on, I'll share some of the reasons why.

But right now I want to talk a little bit more about Bill 26. The reason that I want to do this is because I have found that a lack of knowledge and a lack of understanding cultivates fear. I see a lot of fear out there. What is Bill 26? This is a bill that is an amendment to the Labour Relations Code to ensure that one small group of construction workers and their employers in industrial, commercial and institutional construction have the same access to fair collective bargaining as any others would have. Usually projects in these areas don't last very long. They don't last long enough to allow any form of bargaining to conclude with a collective agreement.

If craft employees elect -- and I want to stress the word "elect" -- to join a craft union, then they will have access to a standard collective agreement. That is, if they so choose or elect to do so. This is in line with existing legislation that is already in place in Alberta, Ontario and the rest of Canada. It reflects the uniqueness of the construction industry and construction labour relations in the province and in Canada.

Bill 26 supports continued competition too -- no fear there. It supports continued competition between the union and non-union building contractors. That might come as a surprise to many people, but it is so. It applies to building sawmills, schools, hospitals, shopping malls, office buildings. It requires that craft unions and their employers include a plan in their contracts to resolve jurisdictional disputes. That area is one of the most common reasons for instability in the workplace and delays in construction. Again, it surprises me why anyone would speak out against not delaying the construction industry -- the sites, the work. This will bring all craft unions into one council and all craft union employers into one association to bargain in non-residential, industrial, commercial and institutional construction. It protects the rights of workers to choose among non-union, craft union and industrial union models. This is about no sweetheart deals.

Let's talk about what Bill 26 isn't about. It's not about bargaining in residential construction. It's not about organizing a union in construction or anywhere else. It's not about employers or unions outside construction. It's not about non-union versus union sites. These changes, contrary to what the Liberal opposition states, will not hurt the economy. The main group that will be affected by the Labour Code amendments, the Construction Labour Relations Association, supports Bill 26. These changes have been crafted with both the economy and the needs of the construction industry -- employers and employees -- in mind.

Stable labour relations will protect the ability of the employers to remain competitive. We've heard the fears; we've heard the concerns mentioned by the opposition about competitiveness. That competitiveness will be maintained. In fact, 60 percent of the companies in industrial, commercial and institutional construction are non-union. If they become unionized, it will be because they choose to do so. Regardless of whether companies are unionized or not, the amendments support and enable fair competition within the industry.

The opposition claims that costs will be driven up. As far as I'm concerned, that's a bunch of malarkey. Construction is intensely competitive, and like so many other areas and so many occupations -- whether it be in the sale of homes or the building of homes or whatever it happens to be -- it's all market-driven.

Interjection.

E. Walsh: Just the way they are now: market-driven.

The dollars that are earned by the workers that live in our province are spent in our province. They're spent in their communities and in small and large businesses. Whether they are large or small, they all depend on the workers and their families to spend their hard-earned money here in the province. Can you imagine how long a business would survive if rather than shopping locally within their own communities, workers spent their money at what they see as the lowest bidder -- the Costcos of the province -- or by going out of province to the States or to Alberta to shop? Can you imagine how long a business would be able to stay running and functional? Probably not very long.

Let us remember some quotes of the past and the present just to renew and refresh people's memories. Here's a quote from the member for Richmond Centre: "It" -- the Island Highway project --"means we're all going to be paying union rates for jobs that could be going to the non-union sector." That's from the Times Colonist, March 11, 1994. Well, let's talk about another one. The Leader of the Opposition said: "The B.C. Liberal Party will restore the secret ballot to the Labour Code, so people can decide for themselves and won't be forced into accepting what big unions want."

Let's now talk about Liberal-style democracy in the workplace. Again, this is the Leader of the Opposition: "In Alberta they have workplace democracy. They have a secret ballot. They have double-breasting. We have seen this bill, and it strips away workers' rights in the province of British Columbia." That was just said during question period this year, and it's in Hansard, June 17, 1998. And how about the member for Oak Bay-Gordon Head? "We cannot allow a union collective agreement to intervene and override workplace safety when it disagrees with management's disciplinary actions towards employees." That's on Bill 14 in Hansard, May 6, 1998. The member for Delta South said: "The minister's avowed reason for Bill 44 is to bring labour peace. That's rubbish. We have enjoyed several years of labour peace, so what is really behind it? A promised payoff to the building trades unions for the money and the workers they provided in the last election." Well, look what happened when Bill 19 was introduced by the Socreds.

Let's go on a little bit more. The member for West Vancouver-Garibaldi said: "This fair-wage policy is not creating fair wages for workers. It is paying excessive wages when. . .compared to the private sector -- and even often to the union sector." Well, I don't want to leave anybody out here. So let's go to the member for Okanagan-Vernon: "My question to the Minister of Education is: when will his government stop allowing the children of this province to be held

[ Page 9081 ]

Like I said, I'd like to try to get in as many as I can. The member for Saanich North and the Islands said: "We would have protected education and health care by cutting programs like the fixed-wage policy, the health accord, the Island Highway's special deal for unions." That's from the Vancouver Sun, June 29, 1996. And how about the member for Langley? She said: "The NDP has declared war on small business. One size does not fit all. Small business cannot survive under a Labour Code designed to benefit big unions." That's in a letter to small businesses, July 10, 1997.

Well, let's just go over quickly a little bit of what the government has in fact done in supporting small business. Over three years the B.C. government is providing $150 million in direct tax relief to British Columbia businesses. How are we going to do this?

[11:15]

E. Walsh: You might want to hear this; you might want to listen to this. Ten thousand small businesses will save $46 million annually in taxes when the corporate capital tax exemption is raised to $5 million from $1.5 million over the next three years. There's a two-year tax holiday on corporation capital tax for new investment. Call centres and other users of 1-800 telephone numbers are now exempt from the provincial sales tax. To maintain Vancouver's position as gateway to the Pacific, the jet fuel tax on international flights has been cut in half over two years. Are those not signs of investment? The top marginal tax rate is being reduced to 49.9 percent from 54.2 percent over three years to help the high-tech sector attract and employ more qualified professionals.

Interjections.

E. Walsh: Hon. Speaker, it amazes me how the opposition doesn't like to hear good news.

Deputy Speaker: Order, members, please. I'm having difficulty hearing the speaker.

E. Walsh: Thank you. They don't like to hear good news, hon. Speaker. They don't like to be reminded, because they don't want the people of British Columbia to hear the good news. It's like a thorn in their side to think that British Columbians might hear the good news that 40,000 small businesses will pay less income tax as the small business corporate income tax is cut 11 percent over two years.

There's a lot more than that in here. Let's go to the forest sector, which is employing 78,200 people who are being assisted. The stumpage formula has been changed to better reflect market conditions and keep B.C. forestry more competitive. Value-added manufacturers will have access to 70 percent more timber under the Small Business 2000 program. The costs for forestry companies have been reduced $14 a cubic metre, by streamlining approvals and cutting stumpage charges by 28 to 30 percent last fall.

They don't like good news. Well, what about the oil and gas sector? Royalties have been cut between 20 and 40 percent to double up production over ten years. What about the mining industry? There's $9 million for exploration in the mining industry, with new mines receiving larger tax credits to help offset startup costs.

There are two more quotes I want to share with the opposition, just as a reminder. The Leader of the Opposition said: "B.C. Liberals believe it is essential to return to a balanced Labour Code. Small businesses in particular must have the option of hiring replacement workers during a strike to protect their viability -- and to protect the jobs they generate. We have introduced legislation to return to secret ballots on union certifications, repeal strike replacement provisions and end secondary boycotts." But the one that really says it all comes from the member for Kamloops-North Thompson: "The way good managers deal with conduct problems is called progressive discipline. You whack them once. If they do it again, you whack them again. Eventually you turf them right out."

Hon. Speaker, why would anyone not want fair wages and the best working conditions possible? Why would anyone not want to fight for British Columbians to keep them employed, to keep them working? Why would they not fight for their own constituents? It's in this light that the petitions that have been presented in this House came from constituents in their ridings. How many of the members here in the House have described what those petitions have been all about? How many of the members that have been elected by their constituents have actually said: "This is what this petition is all about"? We hear about it from all the other petitions. That's not a problem. It goes on until they're shut down by the Speaker. How often is it that they don't have problems discussing what those petitions are about for anyone else? But this one tells me. . . . Are they ashamed of these petitions? If they're ashamed of the petitions, are they ashamed of their constituents? Well, I would say: shame on them! The opposition's silence in presenting these petitions is definitely deafening.

It is unfortunate that the Liberal opposition is so anti-union, so anti-worker. Why attack them? Why attack labour -- the very people that communities, that the province, that this country relies on? Why attack them? This bill will bring fairness, it will bring stability, and it will bring modern labour relations to British Columbia. And skills, of course, my hon. colleague next to me reminded me -- those skills that other provinces and other countries are looking at now. It will bring British Columbia into the Canadian mainstream with respect to construction labour.

Hon. Speaker, this bill is long overdue. What I find particularly galling at this time is that this is a blatant fundraising scheme. It's a blatant fundraising venture at the expense of every worker and their families in British Columbia. To be so anti-worker, so anti-union is an expense that this province cannot afford. For example, the quote from Oak Bay-Gordon Head on Bill 14 -- did anyone hear any reference whatsoever to safety in that statement? I didn't read it and I didn't see it.

Interjection.

E. Walsh: Pardon me, hon. Speaker. It was Vancouver-Quilchena. My apologies to the member for Oak Bay-Gordon Head.

During debate on Bill 14, the amendments to the Workers Compensation Act, on June 18, 1998, the member for Vancouver-Quilchena stated: "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

[ Page 9082 ]

The opposition wants economic impact studies done. Well, what about injury rates? What about putting legislation in place to deal with the injuries that workers suffer? What about putting legislation and regulations in place to deal with those families that have to suffer also, for injuries that have been sustained by workers in the workplace? What about the ultimate -- that is, death of the worker in an unsafe workplace?

Exactly what does the opposition support in the way of the Labour Code, in the way of Bill 14, in the way of Bill 26? What part does the opposition support, and what part do they not support? Why do they not support that bill? Is it the fairness? Is it the stability? Is it the fact that we are finally in line with the rest of Canada? What part, hon. Speaker?

Much to my chagrin, I believe I've come to my close. The rest I can save for another day. I would encourage the opposition to join us in support of Bill 26 -- in support of fairness, in support of stability, in support of democracy, in support of recognition of this unique-to-labour construction industry and in support of British Columbia.

J. Smallwood: I have to first make a confession. Listening to the debate in the House today makes me really quite angry. The heckling from the opposition in this debate -- while predictable -- really underlines for many of us the real division in this House, the division as to who each of the two significant parties represent. With pride I support this bill and support the men and women who not only work in the construction industry but who are the workers in this province. The thing that makes me so angry about this debate and the heckling that I have heard is the lack of confidence and the lack of respect for the people that built this province.

I entered this House earlier on today to listen to one of the Liberal speakers talk about the number of people representing capital and the investor class in this province. He finished giving his quotes about the doom and gloom and desperation in this province by saying that the government should listen to the people that built the province. Hogwash -- absolute hogwash! The people that built this province are the men and women who are the working people, the waged people, the people that have actually toiled to build this fabulous province. I challenge all of the members of the opposition to show the kind of pride and dignity that is due those people that have put their efforts into the building and the history of this province. It is a proud history, and it is a history that you should learn a little bit more about. It is not simply the people that have drawn the enormous profits by simply putting their capital into investments and receiving the return; their motivation has been their bank accounts. It has not been loyalty to the province, because that is not what we have seen in the last number of years, with the threats of capital boycott, the threats of leaving this province. I say to them that if they are loyal to this province, if they are proud of this province and of the kind of legacy that we have been part of in this House, then stand and make certain that the people of this province are. . . .

Interjections.

Deputy Speaker: Order, members. The member has the floor.

J. Smallwood: The Liberal hysteria, when the bill was first introduced, was way over the edge. Most of us watching it were tempted to find it humorous. I recall, in some of the heckling, that someone from our side said, "The sky is falling, the sky is falling," making a joke. Certainly nobody on this side could believe the hysteria and the rhetoric that was flowing from their mouths. You know what their House Leader said? He said: "Yes. The sky is falling." I thought: my goodness, are they so wrapped up in their narrow view, their perspective of who they represent, that they don't understand the strength of the majority of the people of this province, the people that truly built this province? Have they lost confidence so totally in the people that built this province, are they so wrapped up in representing corporate interests, that they truly believe the sky is falling? Well, that is sad, hon. Speaker.

Interjections.

Deputy Speaker: Order, members. All members will have an opportunity to take part in the debate. Please give the member the courtesy of listening.

[11:30]

What has happened since that time? We have seen labour peace. We have seen an opportunity in the tools for both labour and management to sit down and work out their differences. The kind of fairness that has been brought about by those changes has certainly helped to ensure that there have not been days lost in this province. We've seen historic levels of labour peace. I predict that when the hysteria breaks and the clouds clear, we are going to see in this province the kind of stability and prosperity in the construction industry that we haven't seen for a long, long time: an opportunity for people who have dedicated their lives, for the workers who have built this province, to bring their skills, their talents and their commitment to high quality to the construction industry -- and the kind of prosperity and hope that we all have confidence in.

Again, I want to challenge the Liberal opposition to have confidence in the working people of this province and in the opportunities that lie ahead. This very small amendment simply brings that balance. That amendment is an opportunity for people in trade unions to have a contract within the time of the project they're working on. Surely any fair-minded person in this province. . . . I want to challenge them, because I'm certain that there are fair-minded people somewhere over there on those benches, to understand and recognize that that is the sole significant factor in the amendments that are being brought forward.

[ Page 9083 ]

While I say the amendment is a small one, I think it is, however, a significant one. It is based on a principle of fairness, and it is a recognition by this government of the people that work in this province and the pride and confidence that we have, not only in the work done by the people, but in the economy, the future and the opportunities that are available for all of us.

I'll leave my comments at that and simply say that I am glad to have had the opportunity to enter into the debate.

J. Weisgerber: It's a pleasure to enter the debate and to follow the member for Surrey-Whalley. I think she very clearly demonstrates and speaks very clearly to the ideology that drives the New Democrats. I think she encapsulated their position and is very genuine in doing that. I commend her for doing that because I think she spelled out precisely the motivation that drives not only this bill, but drives this government. If you want to know, as a British Columbian, why the government is making the kinds of decisions that it is, the kinds of decisions that affect our economy, then go back and get a copy of Hansard, and read the comments of the member for Surrey-Whalley. She very clearly gives absolutely no credit to the risk-takers, to the investors. The word "capital" almost comes as poison off the end of her tongue. There seems to be no understanding at all that those investment dollars are union funds, my RRSPs, your RRSPs. They're investments in the future; they're pension plans, and they're retirement plans of small, individual British Columbians who build this province. That is absolutely dismissed. There is absolutely no recognition or understanding of the importance of that risk-taking by investors. I commend the member because she doesn't colour it; she spells it out. She tells it the way it is, and it should be instructive for all of us as we try to understand the decisions that our government makes and the motivations behind them.

I was quite happy to see this bill come forward because I think it's important for us to debate it. Let me say that I think the biggest single criticism that I have is its timing -- the fact that legislation is brought in at a time when our economy is struggling. If anybody on either side of this House would dispute the fact that the economy is struggling, let them jump up and say it now. Let them contradict me in the midst of my speech. Don't wait until the end. If there are those who genuinely believe that our economy is not in trouble, let us hear from them immediately. Then we can try and put that into context.

I think it's also important to think about this legislation in the context of the labour climate and the labour legislation that has been brought in over the last seven years. It's important to think about this legislation in the context of the lack of secret ballots. It's important to think about this legislation from an employer's perspective in view of things like fair-wage policies and other issues which have been brought in with much the same arguments. The government brought in this notion of fair wages on public projects, with the notion that it would provide some workplace equality but would have no spillover effect into other sectors of the economy -- apparently blind to the notion that an employer might send a construction worker out one day to a government project and the next day to a residential construction project. Somehow the employer would have to rationalize for that person the $25 an hour for the labour on the government project and the $18 an hour the next day on the residential project. Is it any wonder, then, that the member for Esquimalt-Metchosin, when he had the good fortune to build a new home, chose not a union contractor but a non-union contractor? I hope that we'll hear from that member about the rationale, about how he's able to put his own ideology in the context of his own personal actions. That is the climate in which I see this legislation being brought in.

Again, it's always interesting to listen to members. The member for Kootenay entirely dismissed the economic problem as being -- these are not her words, but I think they summarize it -- the Asian flu. If anybody doesn't understand that it's the Asian flu. . .that that's not the only problem with our economy, then those persons aren't very insightful. The member then went on to slag the Alberta economy, Albertans generally and anybody who would invest there. I'm trying to think, in my own mind: is this a person who lives in the Kootenays? Is this a person whose own constituents probably spend more time in Calgary than they do in Cranbrook? Is this person in touch with what's going on in her own constituency, never mind her own province?

I think I understand that, because I represent Peace River South. The city of Dawson Creek is less than ten road miles away from the Alberta border. When I was up last week talking about the Electoral Boundaries Commission, I ran into an old friend of mine. He said: "Our shop is completed, and we'll be opening it up next week. I hope you can make it." I asked: "Where is it?" He said: "It's in Bay Tree, Alberta -- three miles inside the Alberta border." This is a shop -- a major overhaul facility -- for an oilfield trucking company. This company is a third-generation family business. It has operated in the B.C. Peace, in the gas and oil industry, for as long as that industry has been active. He's moving operations to Bay Tree, Alberta. It could just as easily have been in Dawson Creek or Arras or Groundbirch or any one of a hundred small British Columbia communities, but he chose not to. His words were: "Jack, it's taxes and labour legislation."

It was with some interest, as I was looking through the clippings today, that I noted that Alcan used almost exactly the same words as this small Alberta-based contractor -- who, for three generations, has farmed, ranched and done business in British Columbia and who will continue to do business in British Columbia. It is in that context that I believe this decision to bring in legislation at this time -- modest though the minister says it may be. . . . It is the timing, it is the labour climate, it is the economic environment that it is introduced in.

[ Page 9084 ]

This certainly is not enough, in isolation, to drive anyone from the province. It may well be that the last straw. . . . I hate to use the expression about the straw that broke the camel's back; it's old, it's tired -- very much like the camel, I guess. The fact of the matter is that it is this continuing change, this continuing erosion, that's affecting people.

[11:45]

What happens to that certification at the end of the project, when the employer decides to go back into residential construction? The Minister of Labour is here, and I hope that when he concludes this or before we get into third reading, we can understand the effect both on employers and on workers who decide to certify in the midst of this undertaking. I think that the answer is pretty clear. I think that one can assume that you'd now have a certified company with all of the challenges of decertification that have been brought in over the last seven years by this government.

In saying this, I want to recognize that there are legitimate issues for unions in the construction industry. I think that the difficulty in reaching collective agreements before the project is done and the company has dispersed is a very real one. I also think that there are some serious problems for unorganized workers in the construction industry. I have to ask myself why the non-union sector is so vigorously opposed to this legislation. In a couple of instances -- and I think we often learn our greatest wisdom from talking to people like my friend who is moving his trucking company to Alberta -- I was talking separately to two young men who I know well enough to believe absolutely that what they tell me is true.

The first one I talked to laughed about his experience of going onto a construction site for the first time and not having money for safety shoes and showing up in running shoes. He was told: "Look, when we give you the sign, you've got to get downstairs. If it's a WCB person or a safety inspection, here's the drill -- here's how you get off the site, so you don't get caught in your running shoes." Well, he thought that that was an accommodation and that he'd get paid at the end of two weeks, get his safety boots and be able to carry on working. And that's what he did, fortunately. Fortunately, he wasn't involved in an accident while he was skirting around the law.

I don't think one should minimize that, but more seriously, another young man, who I have absolute reason to believe, quit the construction industry after six years and went to work in another non-union job. He told me that for the first time in six years he'd been paid overtime. He'd worked in the construction industry for six years, and he had never in that period, through a number of employers, been paid overtime. I said to him: "Good heavens, don't you know that there is a labour relations entity in this province? Don't you know that you can go to the employment standards branch and make a complaint?" And he said: "Only if I never wish to work again." So let's understand that this issue -- and I hear the black-and-white arguments here -- is not all one-sided. There are no all-rights; nor are there all-wrongs.

To those non-union employers in the construction industry who are critical of this legislation -- and who I expect to hear from as a result of my comments -- let me say this: let me challenge them to show that they're not one of those people who blackball employees who go to the employment standards branch. I've got to tell you that I was shocked, and I still find myself angry when I think about it. I've hired people in this province over the last 30 years. To think that people are still ripping off employees with respect to overtime infuriates me. It makes me angry. These people are normally younger people, labourers and people with minimal skills, and to be taken advantage of, in the way this individual was, is enough to make me truly angry. This young fellow worked mostly in the residential construction area. So sadly, not much will change as a result of this legislation.

But let me say in conclusion -- and I know that the time is fast approaching -- that I'm going to vote against this bill. I'm going to vote against it for the reasons that I outlined in the early part of my comments. I believe that the timing is incredibly bad. I believe that if we were to send out a message to investors -- to risk-takers who I have a good deal of time for and who, I believe, are critical to the health of our province, generally. . . . If we were to send out a message to investors, both within British Columbia -- and they are the most important group. . . . The domestic investor is far more important to our economy than the investor from eastern Canada or the Asian investor or the American investor. The really critical investor is the local, domestic person, whether it be their retirement fund or the small business person deciding on whether to expand their business, move their business to Alberta, shrink the size of the business or go out of business. That is the person who has the greatest impact on what happens in this province.

This sends a bad message. It says: "Look, regardless of the fact that our economy is in crisis, despite the fact that we have a serious downturn, we're going to forge ahead with changes to the Labour Code." I think that that is most unfortunate. One has to ask: despite the problems that I've spelled out, are things so difficult in the organized construction sector of the market, in the unionized sector, that this effect on our economy is warranted? I don't think so. I have to think that the motivation behind this -- besides the ideology that the member for Surrey-Whalley expressed -- has to do with obligations to organized labour that the government appears to have.

We hear that the Liberals are kowtowing to the business community. But surely to goodness the criticism could bounce back -- be mirrored back to the government side -- by saying: "You're paying off your union friends with what you're doing." Is that what this is all about? Is this the result of an obligation that. . . "Damn the consequences, we're going to move forward with it anyway"? Tragically, I think that perhaps that's what it is. For that reason, I will be voting against Bill 26 when I have an opportunity to do so, in a forum that is appropriate for me to express my opposition to this legislation.

[ Page 9085 ]

[The Speaker in the chair.]

B. McKinnon: Since I'm next up to speak, I move adjournment of the debate.

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 11:55 a.m.

PROCEEDINGS IN THE DOUGLAS FIR ROOM

The committee met at 10:09 a.m.

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

T. Nebbeling: First of all, I'd like to thank the staff for being here. Hopefully, we can expediently go through some of the questions we'd like to see answered and make it a constructive exercise. So thanks for being here.

I would like to start off by talking about the Columbia downstream benefits. The first question I'd like to ask, which I will most likely focus on for a while, is on the amount of energy that B.C. will actually derive from the downstream benefits.

Hon. M. Farnworth: It's 1,400 megawatts, hon. member.

T. Nebbeling: Before I start working on that figure of 1,400 megawatts and its accuracy, can the minister explain to me how he sees the difference between capacity and energy?

Hon. M. Farnworth: Capacity is the most you can deliver at one particular point in time. Energy is the amount that you can actually produce. Let's say that your dam is capable of producing 1,000 megawatts. Then you have to have the capacity to actually deliver that at your peak time.

T. Nebbeling: I'm sure the minister understands why I asked that question. There is a debate within the industry and among people who are knowledgable in the energy field that the difference between capacity and energy is the confusing factor as far as establishing the amount that is truly available, energy-wise, in megawatts. I think it is the energy need that has to be addressed, not the capacity. It is no surprise to the minister when I say that the industry in general and people knowledgable about power have established that the energy actually available is 500 megawatts, not 1,400.

Can the minister give me some further explanation as to why he questions that figure of 500 megawatts of energy -- we are selling energy; we are not selling capacity -- and counters with a figure of 1,400 megawatts? That would create a totally different picture when we talk about the needs the province faces today and will face in the future.

Hon. M. Farnworth: I don't know if we're going to be moving back and forth between various terms. I think some of the terms can be a little confusing in that when we are dealing with capacity, we're dealing with megawatts, and when we're dealing with energy, we're dealing with gigawatts. And 1,400 megawatts, in terms of energy, is about 4,600 gigawatts.

The member is correct in that there are not 1,400 megawatts all the time, but at the peak time, when we require it, there are 1,400 megawatts available. We can call on that power and bring it on when we need it most, which is when it is at its most valuable.

T. Nebbeling: When the government made the deal with Alcan. . . . Can the minister tell me what the deal was as far as the supply of power to Alcan? Was it based on the energy requirement or the capacity requirement? As the minister is well aware, 175 megawatts have been committed to Alcan, and if that is the number. . . . When the consideration is based on 175 megawatts, how would that reflect as a percentage of the total energy base that comes out of the Columbia basin deal?

I should simplify this. In the deal the government made with Alcan to replace the Kemano project, what percentage of the total energy base that comes with the Columbia basin treaty is now allocated to Alcan?

[10:15]

T. Nebbeling: What that would represent.

The Chair: Through the Chair.

Hon. M. Farnworth: We don't have that number, but we can get it for you in the next few minutes.

T. Nebbeling: Considering that the Columbia basin treaty brings back 111 megawatts in 1998, which then increases over the years. . . . Right now it is 111 megawatts. What does the minister see these increases leading to on an annual basis? Does he see it having, by the year 2003 or 2005, the amount that the KPMG report had indeed indicated to be coming up to 1,400 megawatts in total? I'm looking for the incremental increases over the next couple of years -- not on capacity but on actual energy -- that would justify KPMG's conclusion that the province indeed has 1,400 megawatts.

Hon. M. Farnworth: Over the next four years, it ramps up from 1,110 megawatts this year to. . . . We can get the exact schedule for the hon. member, but it goes from roughly 500 to 950, and then to 1,400 in 2001. That's in megawatts. In terms of energy, it's a ratio of the 1,400 to 4,600, so in 2001, when it's

[ Page 9086 ]

T. Nebbeling: This is a very high-tech type of debate we're having, and I am obviously not an expert. At the same time, the difference between the capacity, which may be 1,400 megawatts, and the actual energy that can be counted on as an average availability, which is 500. . . . We have to come to a conclusive point, where we have to agree or continue to disagree on what is actually available.

What I'm trying to say is that according to experts, there aren't 1,400 megawatts to divide. That's capacity. It is a little bit like having an elevator with a capacity of 15 people but a weight capacity that reflects only five or six people, depending on the size of the people. There is something fundamentally wrong in trying to sell the province on the belief that we have a capacity of 1,400 -- the way the KPMG report has done -- and then trying to sell the idea that we can divide the 1,400. We can't. The energy itself is considerably less. It's only 500 megawatts, and that, I believe, is what you can sell.

Having said that, I'd like to ask the minister about the 500. If that number is 500, then 175 megawatts have gone to Alcan. I believe that is firm under the existing deal.

Hon. M. Farnworth: In terms of the 1,400 megawatts, that's not in dispute; that figure is firm. It's not available every minute of every hour of the day. It's available at peak periods when we need it most. That gives us maximum flexibility, which is when you get the highest price for it. You can offset that at low-peak times -- in the middle of the night, for example -- with power from other sources -- co-gen or gas-fired, for example, which are operating on a 24-hour cycle. The 1,400 is there, and it's available when we need it -- at its most lucrative point, if you like. It's a capacity-rich energy, in that it's all there exactly at the time we need to be able to market it as we see fit.

T. Nebbeling: That is where I think the problem lies: the reasoning that the minister just gave. What the minister is saying is that that capacity is to be divided among certain parties, which seems to be an objective of this government -- in particular, smelters. . . . These smelters will take that capacity. . . . I believe the minister is aware that each smelter will take 400 to 500 megawatts on an ongoing basis. The users will always be at top capacity. That's these types of operations. You can't say: "If we put everything together, peaks are up to 1,400." These peaks are indeed peaks. You also have to calculate when you have the lower use requirements of the energy under normal circumstances.

Unfortunately, that argument doesn't work, because the government is in the process of committing Power for Jobs. . . . Like 175 to Alcan. . . . Alcan has the right to those 175 megawatts. Come hell or high water, that's their right. The government has also committed 200 megawatts to Power for Jobs. That is committed -- not dependent on if we work in the peak periods. No, no, this is on average. Maybe the word "average" has to come in between capacity and energy requirements, and then we will see that 500 megawatts is the number that on average is going to be available, without having the low periods and the high periods. But 500 is available on an ongoing basis to be divided amongst these so-called assured groups, be they smelters or other forms of job suppliers -- mines, pulp mills.

I'd like the minister to agree or disagree with me, but to state whether he can base what he promised to users of that power on what -- at peak, peak, peak times -- can be produced as capacity. Nothing can always work at peak. It is like a city. . . . No, I'm not going to make comparisons, because I will just confuse it. But can the minister understand that when it comes to calculating how much can be allocated to certain parties, he cannot base that allocation on the peak performance? You have to base it on an average.

Now, under normal circumstances, if power was to be sold to other parties, then you have a different reason. When there is low use by the traditional users and you have a surplus, then you can sell that off for a period of time. That's what the minister said earlier on. Then capacity comes into the game. But when you commit your power allocation on a permanent basis to certain parties, then that flexibility in peaks and valleys is no longer there. That commitment has been made. With smelters in particular, that commitment is needed to keep the smelters going. So the availability of 1,400 kilowatts, to me, is a number that does not apply in the strategy that the Premier announced on how to entice investors to come to this province. Can the minister comment on my fear that we are promising more than we have?

[10:30]

In non-peak time, when you don't have that, you have not only the energy that's flowing through the system, the capacity within the system but also the ability to supplement that with power that you can purchase at low-cost hours -- at 2 o'clock in the morning, for example -- to supplement the existing power structure you have.

D. Jarvis: I'd like to ask the minister, first of all, where he expects to get this extra power that's coming through. Is he going to import it from some other jurisdiction? I'm wondering just how it's coming about. If the Premier's program is correct and he gets three smelters -- in the paper he's telling everyone that he's bringing three smelters into this province -- a smelter requires a 24-hour turn. You know, they don't shut down during the nighttime. So that would be three smelters, and it takes approximately 450 megawatts per hour of capacity to run a smelter. So we're way above the amount of power that's required. He's saying that we can off-load it from other jurisdictions or other areas, because the existing cogeneration plants out there now -- most of them -- are for mills in this province that are running 24 hours a day.

Hon. M. Farnworth: There's a number of sources. One is existing generation. Two is market purchase, which we currently do in off-peak hours, for example, in the middle of the night -- either from the U.S. or from Alberta. Three are new projects coming on stream between now and 2003 -- for example, Stave Falls or the cogeneration plants at Campbell River and Port Alberni.

D. Jarvis: In the Campbell River project, is that not a 24-hour system that they required for their power?

[ Page 9087 ]

D. Jarvis: I'd like to ask the minister: the power that you. . . . In the contract that you made in regards to them not being allowed to continue with KCP, I understand that B.C. Hydro sold to them, or gave to them through the government, approximately 175 to 200 megawatts of power. Is that true? That resulted from avoiding a court case. They agreed to make a settlement with them for not allowing them to continue with KCP.

Hon. M. Farnworth: If this is the figure the member is looking for, it's that the province is going to provide Alcan with 175 megawatts of electricity for the smelter. That's the number: 175.

D. Jarvis: Is that a firm contract? Could the minister please advise us -- even if he can't give it in exact, specific dollars -- approximately what that's worth in dollars and cents?

Hon. M. Farnworth: The price they've agreed to pay is variable; it's tied to the price of aluminum. It's a percentage of the price of aluminum.

D. Jarvis: It is a firm contract with them, is it?

Hon. M. Farnworth: It's an MOU right now.

D. Jarvis: Could the minister please explain what he means by MOU? I know what an MOU is, but. . . . It was a settlement for a pending court case, and it was a contract. I'd like the minister to explain that further, if he wouldn't mind.

Hon. M. Farnworth: There's an agreement, and if you want to call it a contract, you can call it a contract. But nothing's been built yet, so until something's built, you don't get the power. If nothing's built, then you don't get the power. Understand?

D. Jarvis: Was this contract a guarantee that they would not. . . ? Pending a court case, there was an out-of-court settlement. As a result of that, I understand, they agreed to give Alcan, in place of the dismissal of the KCP project, 175 megawatts of power. In that agreement, was it that Alcan had to build an additional smelter or an extension to their smelters? Was it just that in view of the fact that we've cancelled the KCP project, they're going to get. . . ? And to avoid going to court and to offset the costs -- a billion dollars, approximately, or $500 million, whatever you want to call it. . . .

Hon. M. Farnworth: In the agreement, the province will provide Alcan with the replacement energy, which is what the member is talking about. However, the replacement energy can only be used for smelter expansion. If they don't expand the smelter, they don't get the power.

D. Jarvis: Was the minister aware. . . ? At least, it's been said to me -- and I wonder if he could confirm it -- that Alcan has sold that power to someone like Enron, to be delivered to the California border?

[J. Cashore in the chair.]

Hon. M. Farnworth: When the member said "technical," he was right.

Outside the agreement that we've just been talking about, there was a separate existing agreement between Alcan and B.C. Hydro, where Alcan could sell to B.C. Hydro 285 megawatts. As part of the overall settlement, the concession was given to Alcan that Alcan could assign that potential sale to Hydro to a third party. They went out to tender, and the successful bidder was Enron. So Alcan sold to Enron; then Enron can turn around and sell to B.C. Hydro.

[10:45]

Hon. M. Farnworth: There was a press release, I know, between Enron and CPC. We can get that information for the hon. member. I don't have a problem with that.

D. Jarvis: Is the minister aware of the costs or the prices -- for example, how much Alcan sold it to Enron for? In turn, what did B.C. Hydro buy it back at?

Hon. M. Farnworth: B.C. Hydro still pays the same price it paid before. Enron paid Alcan for the opportunity to sell the power to B.C. Hydro.

D. Jarvis: I want to again ask the minister about. . . . The information that came to our attention was the fact that Alcan took this power and sold it to Enron for about $22 million. Then Enron turned around and sold about 55 percent of it to Columbia Power Corporation. I wonder if you agree with me on that or if you would explain that to me.

Hon. M. Farnworth: Alcan sold the privilege of selling to Hydro to Enron. I think the figure you have of about 55 percent is correct. In the meantime, Enron has done a deal with CPC to sell power to CPC from their ability to purchase from Alcan to sell to B.C. Hydro.

D. Jarvis: First of all, I'd like to ask the minister if he can tell me how long the deal between Alcan and B.C. Hydro was in effect, when it first started and when it ended.

Hon. M. Farnworth: It was in 1990, for a 20-year deal.

D. Jarvis: So in 1990 they made the agreement for this excess power in Alcan, to sell it to B.C. Hydro for 20 years -- to 2010. In 1997 or '98, we assume, a switch took place. When I say a switch, I mean an agreement was made with Enron. Alcan and Enron made a deal. I've been informed that it was for $22 million. They sold those 175 or 176 megawatts to Enron. Now we've been informed that Enron turned around and sold 55 percent back to CPC for $20 million. They still have 45 percent of that 176 megawatts down there, which they're using to make money somewhere else. I wonder if the minister can tell me: when they sold it back to CPC, what did CPC pay for it, and who do they deliver it to?

Hon. M. Farnworth: Hopefully, this will answer the member's question. What is being sold is not necessarily the power, but the opportunity to sell at a fixed price to B.C. Hydro. Let's say, for the sake of argument, that Alcan had the ability to sell power to B.C. Hydro at 10 cents. Alcan sold the

[ Page 9088 ]

D. Jarvis: It seems to me that this is a situation of robbing Peter to pay Paul and that there is no value. . . . Why would Alcan sell to Enron when they could sell directly to Hydro for, say, 10 cents? Why would anyone pick up that contract for 10 cents and sell it to CPC for 10 cents? We're talking about a lot of lawyers and accountants and everything involved with this power being delivered to the States. It seems to me, from the information that I have received, that Enron only sold 55 percent of it. That's where the kicker is, I think. They've got 45 percent of that 176 megawatts to sell somewhere else. Could the minister illuminate that aspect of it a little more for me?

Hon. M. Farnworth: In the beginning, Hydro has the ability to buy power from Alcan at a fixed price through this contract.

D. Jarvis: When you say in the beginning, is this the first or second customer?

The Chair: Through the Chair, please, hon. member.

Hon. M. Farnworth: In the beginning, Alcan has the ability to sell to Hydro at a fixed price. At the end, Hydro buys the power -- whichever way it has come through the loops -- at the same fixed price. So Hydro starts out at X dollars and it finishes at X dollars. Alcan puts out to tender the ability to sell to Hydro, and they would get cash. You'd have to ask Alcan why they would sell some of the power, but I think a logical reason would be cash. Enron is a successful bidder. Enron has power of its own. It may, in fact, have surplus power of its own that it can sell in a different area if it can have access to some of Alcan's power, which it can sell to Hydro at a fixed price. And it obviously thinks there's a good deal. So that's where Enron comes in. Enron may decide to sell all of its option to purchase from Alcan. Or it could sell part of its option to Hydro. It is separate and away from B.C. Hydro. So it sold some to CPC, who in turn will sell it back to Hydro at the same price that it started out at.

[11:00]

Hon. M. Farnworth: When Columbia, the CPC, bought the contract, in a sense they bought -- at a fixed price -- a customer. That customer is B.C. Hydro.

T. Nebbeling: Before I go to where I was earlier, I've just a quick point on the energy that comes to CPC via Alcan. Then CPC sends it back to Hydro. What loop are they using? Is it the same loop they're using to fulfil their commitment that they have under the Columbia downstream benefits package? Or is there a different loop?

Hon. M. Farnworth: In terms of the loop, that's money and contracts, and that goes around in a circle. In terms of the energy and where it comes from, eventually it's at Keenleyside. Until that time, it's at the California-Oregon border or at any point that we so choose. That comes from Enron.

T. Nebbeling: My concern is that here is a potential for seeing the grid that delivers the power from the border to Hydro as the same grid that will be used to fulfil the requirement of the 175 megawatts that have been taken from Alcan and, via the States, come back to Hydro. If the capacity is coming in via the same grid as the power that comes in under the agreement, then obviously you cannot count on the grid's full occupancy or full use for the deal, because part of the grid's capacity on a daily basis will be used to get the 175 megawatts to the Hydro grid.

Hon. M. Farnworth: Just to clarify my understanding of what your concern is, it is that you've got the downstream benefits coming over wires here, and then this extra power is coming in on the same wires, and there's not enough capacity to carry the two. Is that your concern?

T. Nebbeling: Yes, that's right.

Hon. M. Farnworth: Okay. That's not a problem; they use two different routes. And the route coming over from the Oregon-Washington border up to B.C. has a 2,000 megawatt capacity.

T. Nebbeling: As it is highly technical -- 500 megawatts, 2,000 megawatts -- I don't know what the limitations would be. It is just that I want to make sure that that is not potentially undermining the capacity of power coming into B.C. It all has to do with what we discussed earlier on.

I don't think we have totally come to an agreement on what exactly is available on an average basis to supply hydro for future uses. The 1,400 megawatts is just not a number we can use; 500 to 550 megawatts on average is much more realistic. Considering that, the minister said that in case we run short, we will have the opportunity to buy extra power during the low hours. This power will be bought at a price. Considering that, the Premier has clearly stated that he has made some commitments to potential aluminum producers coming into this province, enticing them by providing them with power at an abnormally low price -- a price that nobody else can provide power for. Does that mean that somewhere, if the surplus is going to be required to fulfil the commitments, there will be a subsidized power source for these aluminum smelters? Who will be responsible for that subsidy?

Hon. M. Farnworth: A couple of points. For a technical issue, we're having a fairly wide-ranging debate. I understand where the member is coming from and what he is saying around the issue of 500 megawatts. The fact is that that's not a more realistic number than 1,400. It's a different measurement; that's all it is. We can agree or disagree on that, but at the end of the day I think it's an important point that needs to be made. It's no more valid than anything else. It's just a different measurement.

In terms of Hydro and the point the member made around what we're selling, or the issue of power for aluminum, there are two points. Downstream benefits, which are what fund Power for Jobs, are owned by the Crown, not by Hydro. So they're separate. Any arrangements that the government makes in terms of downstream benefits and the rate that that power is sold for affects the province directly, as opposed to Hydro. Hydro is kept whole, in that the residential

[ Page 9089 ]

T. Nebbeling: Does that mean that the Crown is setting up a new energy Crown corporation to deal with a new client base that will rely heavily on subsidies by the Crown? Is that what the minister is saying? I believe that the traditional commercial clients that are there today and use hydro, be they mining clients or pulp mill clients, do come via the Crown corporation called B.C. Hydro. Am I wrong in assuming that?

Hon. M. Farnworth: There's no new Crown agency being created. The issue is in terms. . . . The contracts are negotiated between the Crown, the province and the end user, as opposed to being done through Hydro. With Alcan, for example, the contract is negotiated between the province and Alcan, not through Alcan and Hydro. The customer base in Hydro is separate from the power that's available for Power for Jobs, which is negotiated between the Crown and the end user.

T. Nebbeling: The bottom line is that B.C. Hydro is a Crown corporation, and the Crown is the Crown. We're talking about the same animal. Who is going to absorb the dollar value of the subsidies that is associated with enticing these aluminum producers to come into British Columbia, especially when there is going to be a need to buy surplus from wherever it can be found at a price that will most likely be higher than what the Crown is selling it for? I think that's the first question. Who is going to be responsible for the additional dollars that will be short, based on the fact that surplus power will have to be bought to supply and fulfil the commitment made to aluminum smelters under the scenario we are discussing now?

Hon. M. Farnworth: I guess it's not just that the Crown is a Crown is a Crown, because they are separate. That's why they exist. That's why you have B.C. Hydro as a Crown corporation, as opposed to the Crown provincial -- it just being like the ministry part of the ministry I have, as opposed to B.C. Hydro. It is a separate entity.

[11:15]

How we choose to market that and distribute that is, in a sense, up to the government. I mean, we could turn around and say: "Okay, at the border sell it for whatever the market will get at that particular point." Or you can use it for, let's say. . . . You could sell it for what you could get, without any thought for, let's say, the potential to create economic development. Or you can take that power and say, "We want economic development in this particular field," and you can market it at a price that will attract that development. It doesn't impact on the rates that you in the regulated sector are already paying, because this power is outside that.

So that's the difference between the two. It's a question of how the government, the Crown provincial, decides that it wants to market and use that power.

T. Nebbeling: I would almost use a quote used by the minister last week in the House, when the minister answered the question from the opposition. It had something to do with the feces of a bull. But I will not do that. I think it is a nonsensical answer that I'm getting. It does not answer my question. My question is not on what you will do with the 500 megawatts that you are entitled to or will be receiving under the agreement.

I'm talking, and have made it clear, about the surplus power that the government, the Crown, will need to fulfil the legal obligations that they are making in order to entice aluminum producers to come into British Columbia. The minister is very much aware that an aluminum producer uses between 400 and 500 megawatts. We are talking about three smelters, minimum. That is between 1,200 and 1,500 megawatts. We have all the other commitments that the ministry has been making. If the minister is not willing to accept that surplus will be needed, that surplus power has to be found somewhere else in order to fulfil these commitments, then we are having this little exchange in vain.

My point is this: who is going to be responsible for it when surplus is needed to fulfil the Crown's commitment to these companies coming from abroad into B.C. to set up aluminum smelters? Who is going to be responsible for the difference between the price that the government, the Crown, will receive from these aluminum smelters and the actual cost that the government will have to pay to purchase that surplus? It has nothing to do with the downstream accord. It is all to do with capacity or energy needed, which is not available as a derivative of the Columbia River Treaty as it is today.

Hon. M. Farnworth: The member's question is different from the first question and the last answer.

T. Nebbeling: Same question.

Hon. M. Farnworth: Worded differently on the second time around.

The Chair: Through the Chair, please, hon. members.

Hon. M. Farnworth: On the issue of the 1,400 megawatts from the downstream benefits, that comes through the Crown. Other sources of power that we talked about earlier on in the discussions come from B.C. Hydro surplus, new projects that are coming on stream and then market purchases. The responsibility for those, if they're required, is with the provincial Crown, not B.C. Hydro.

T. Nebbeling: Again, I am not getting an answer from the minister. The minister knows that the moment this power comes in from whatever source, it is subject to the Utilities Commission's rules and regulations. It cannot just be handed over to consumers at the whim of the government. The point is truly that the minister is trying desperately to hang onto his 1,400 megawatts, and all experts categorically say that that's a pipe dream. The minister is not willing to face the reality of what is happening as far as power supply is concerned and as far as need is concerned, or the fact that the Premier is enticing these industries to establish themselves here with unrealistic prices for the power that is needed.

We're not going to find common ground where we can come to some commonsense answers as to how the Crown

[ Page 9090 ]

Hon. M. Farnworth: The member made a couple of points in his last comments about power being subject to the Utilities Commission. Downstream benefits are not subject to the Utilities Commission.

T. Nebbeling: I know. I'm talking about the surplus. . . .

The Chair: Through the Chair, please, hon. members.

Hon. M. Farnworth: For Hydro, last year, about 10,000 gigawatt-hours of electricity were surplus, and that was exported.

T. Nebbeling: Mr. Chair, I apologize for speaking directly to the minister.

Within Hydro there must be a plan somewhere that describes all these surplus areas and the providers of power to Hydro, so that ultimately the Hydro corporation can show their electricity plan as saying: "This is the surplus, and we sold it through Powerex to the States," -- or wherever else. Is there a plan, or does this just go day by day?

Hon. M. Farnworth: There is an electricity resource plan that I think deals with the issue that the member is raising. The last one was done in 1995, and it's redone every three to five years. There should be another one done this year.

T. Nebbeling: In discussions with a number of people from Hydro. . . . Apparently there was an integrated resource electricity plan done last year. Is the minister saying that all the steps, all the actions, all the calculations that are used by the ministry today are based on a plan from 1994-95? Or is there an updated version that better reflects what has happened in the last three years, be it co-gen plants or other initiatives that create power for Hydro?

Hon. M. Farnworth: Updating does take place, but it is not as comprehensive or as thorough as with a full-blown, integrated plan. That's what was done in 1995, and there will be one completed this year.

T. Nebbeling: Can I then ask the minister to provide me with the full-blown, integrated plan from '95, plus the updates of '96, '97 and '98? That must be available, as things do change quite rapidly, especially in the power supply. I hope the minister can comply with that request.

Hon. M. Farnworth: I'll make a couple of comments. One is that we can give the member a full briefing on all the issues, because in some cases there are some issues around competitive confidentiality that still need to be addressed. So you can get a full technical briefing on all aspects that deal with the issues in '96 and '97. Then, when the 1998 plan is fully completed -- it still has to go the board -- the hon. member can get that as well.

T. Nebbeling: I appreciate the offer for a briefing on '96 and '97. I hope I can get that in paper form, with a briefing. If there are certain elements that have to be excluded from it for confidentiality, that's fine, but at least it will give me an opportunity to look at how the strategy has been developed, the strategy which is right now giving the minister a level of comfort about the way in which the future management of Hydro and power will avoid its becoming a burden on commercial and residential users -- which is one of my fears. We will spend a fair amount of time, now and later on today, on why I believe there's justification for fear. That will materialize during the estimates we're doing right now.

I want to come back to the surplus. I hope the minister does understand that we are talking about the long-term needs; we're not talking about what happens today. Today there are only 111 megawatts coming our way under the downstream benefits program. Over the years it will escalate to what I believe is 500 megawatts in energy. The minister has a different opinion. That's fine. We're not going to agree there. But I'm looking really at the long-term need and cost, and I base that today on the commitments that the Premier has assembled throughout North America as far as bringing these new industries to British Columbia.

[11:30]

Hon. M. Farnworth: We all need a catharsis.

T. Nebbeling: I wasn't going to say it, but I was thinking it.

My focus is clearly on what happens in 2000-plus. There was a study done recently on behalf of B.C. Hydro or of the Crown -- I'm not sure which yet. It was done to establish the actual need and the actual capacity of power in British Columbia. This study concluded after, I suppose, some exhaustive analysis that by the year 2008, B.C. will need an additional 1,500 megawatts -- on average, not at peak. So when we keep talking about all these surpluses that are everywhere. . . . The study showed that we are short already, when we go with its calculations. How does the minister respond to that? If the surpluses are not there, then the whole theory of enticing the aluminum industries to come to British Columbia, based on these phenomenal surpluses we can give to the aluminum producers for next to nothing. . . . It's a figment of the imagination because it doesn't exist. Can the minister comment on these results from this study?

Hon. M. Farnworth: I'm not sure of a specific study on 2008. I do know that KPMG have looked at 2003 in terms of the five-year horizon and what's firm and what's coming on. Past that, it tends to become more speculative, in part because of what's coming on stream. That's why, when you're looking over a ten-year horizon, clearly there is more growth, and what's important is what projects are coming on during the time frame to start to meet. . . . The further out you go, the more. . . . You can never predict bang on. It's easier to predict next year than it is to predict ten or 20 years down the road. That's why we're looking at more power coming on stream from the generating upgrades with General Electric which are

[ Page 9091 ]

T. Nebbeling: Let's once again state just for the record that we're having this discussion because the Premier and the minister at times have made statements to the public at large that the whole premise of enticing these aluminum producers -- and I focus on the aluminum producers because they will be the high users, capacity-wise and energy-wise -- is based on the enormous surplus that this province has -- in the long run, obviously -- and that this is the best way of using that surplus: to entice the job opportunities that come with the new industry coming into the province. That is the basis of why we have this discussion. I think I've made it clear that I have my doubts about that surplus.

Another reason that that was re-emphasized -- that there is serious doubt about that surplus -- is that when the Keenleyside Dam was announced in December, the justification for the new Hydro investment of, I believe, $250 million in that project was that within five years we'll be running out of power and more power will be needed. Again, if that was the justification for the major investment that Hydro is going to make in the Keenleyside Dam, how can the minister and the Premier continue to sell power to aluminum producers abroad at very reduced rates, based on the fact that we have this surplus, as we as British Columbians are asked to believe?

Hon. M. Farnworth: A couple of points. First, the decision around Keenleyside was not Hydro's; that's CPC. That decision wasn't B.C. Hydro's. The issue around power has been made in terms of the KPMG study, and that's what the Premier has made his remarks on -- the power that's available in the year 2003. No one has said that we will have a surplus in 2040 or 2050, and clearly new projects need to come on. That's why a lot of those projects are in development and are starting to come on. I mentioned them a few moments ago: Seven Mile and Stave Falls, for example. That's taking place. Those projects and a lot of that work will be identified in the 1998 integrated electricity plan, which we talked about a few moments earlier.

T. Nebbeling: I hear what the minister is saying. As I said before, I think that much of the debate is driven by what we believe to be available in real energy and what capacity in ultimate or peak time reflects. . . . It is then a matter of what number we are choosing. It is regrettable, of course, that the Crown has decided to take a number that is just not realistic because of a number of factors. When an elevator goes all day and can take 15 people, it's not a matter of how many people it really transports; it's a matter of how often it can go up and down. That will eventually determine how much the capacity is. It's the same thing with power. It will not always work at peak time, and the minister knows that you have to take an average. The numbers that we are working with are very confusing because of the determination by the minister to continue in that top-capacity production.

I want to talk later on about Keenleyside, because I've got some specific questions on the role of the partners in that project. Maybe we should recess now and continue after lunch. I make a motion to rise, report progress and ask leave to sit again.

Motion approved.

The committee rose at 11:43 a.m.

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