[ Page 9093 ]

The House met at 2:06 p.m.

G. Bowbrick: On behalf of the Premier, I'd like to introduce today a group of 60 students in grades 5 and 6 at John Norquay Elementary School in Vancouver, with their teacher, Ms. Kainer, and several adults. I'd like to ask all members of this House to join me in making them welcome.

Hon. H. Lali: Today I have two guests up in the members' gallery. Michael Towers and Chuck Brewer are on the executive of the Merritt Chamber of Commerce. Would the House please make both of these gentlemen welcome.

J. Smallwood: In the gallery today there are three talented young British Columbians. They have been our legislative interns and are in the final week of their assignments with the government caucus. They have been a tremendous asset to our team, and I want to thank them all for their hard work and wish them well in their future endeavours. Will the House please welcome Aaron Delaney, Malcolm Fairbrother and Adrienne Nash.

G. Campbell: Hon. Speaker, I am sure that the members of the assembly and yourself have noted in recent days that the media has been bombarding us with reports of sporting events: U.S. Open golf, World Cup soccer in Europe, and recently, the tennis championships in Wimbledon. The media, as you know, when it suits their purposes, do not hesitate to inflict their choice of sporting events on the helpless public. But what happens when the media themselves are directly involved in a world-class event in which athletes of all descriptions, sizes, ages and abilities are fighting it out for the world-famous Speaker's Trophy? [Laughter.] We hear nothing; nothing at all comes forth.

Therefore I consider it my duty today to announce to the world that last weekend the Legislative Assembly tennis team humiliated the press gallery in a score which I'm sure will never be recorded in the annals of any of our journals except for Hansard : 156 to 83. I should also say to the Legislative Assembly that we appreciated the support of the Speaker at the event on the weekend, and we are looking forward to an even more decisive victory next year.

J. van Dongen: I'm pleased to introduce to the Legislature today two constituents: David and Shona Lamson. David is a retired teacher, and now he's working as hard as ever on fish habitat issues in the Chilliwack River valley. I ask the House to please make them welcome.

Hon. J. Kwan: I'm pleased to introduce a special delegation in the gallery today visiting us from the People's Republic of China. They are: Professor Wang, director of the department of education, Ministry of Internal Trade; Professor Hu, president of the Hangzhou Institute of Commerce; Professor He, president of the Tianjin Institute of Commerce; Professor Ye, president of the Heilongjiang Institute of Commerce; Professor Xu, president of the Nanjing Institute of Economics; Professor Zhou, vice-president of the Lanzhou Institute of Commerce; Thelma Plecas, president of Horizon College; and Xiu Sang Wang, also from Horizon College. Would all members of the House please make them welcome.

P. Calendino: I'd like to introduce some of my friends from the union movement up there today, but I'll leave that pleasure to the member for Burnaby-Edmonds. Instead, to the chagrin of the member for North Vancouver-Seymour, I would simply like to salute the victory of the Italian national team at the World Cup championship. They qualified for the next round. I'd like the House to salute the Italian team.

Hon. D. Zirnhelt: Visiting us today in the gallery is former MLA Jim Beattie, and in particular, his son Cedric Beattie from Penticton. Please welcome them.

F. Randall: In the gallery this afternoon is Greg Mooney, a business representative with Sheet Metal Workers Local 280. There's also Borys Lessy, who is an organizer with Plumbing and Pipefitters Local 170 in Burnaby. Would the House please make them welcome.

B. Penner: I'm going to have to be on my best behaviour today, because seated in the gallery are my parents, Wilf and Frieda Penner from Chilliwack. With them are their friends Margaret Brisson and Betty Voth, as well as my friend Malti Devi. Would the House please make them welcome.

E. Conroy: I'd like to take the opportunity today to introduce a lifelong friend, a person I grew up with, Wayne Peppard. Would the House please make him welcome.

Hon. S. Hammell: Hon. Speaker, in the gallery is an old friend of mine, Len Friesen. He has been active in our community and in politics in this province. Would the House please make him welcome.

The Speaker: Hon. members, I'd like to read a very brief statement. I have received today a letter from the member for Parksville-Qualicum resigning his seat effective noon today. In accordance with section 35 of the Constitution Act, a Speaker's warrant has been prepared and forwarded to the office of the chief electoral officer, advising him of the vacancy.

Oral Questions

COST OF SECHELT FIRST NATION DEMANDS

[2:15]

[ Page 9094 ]

The Speaker: First supplementary, the member for Matsqui.

M. de Jong: The one thing this minister is very good at is assigning blame elsewhere, either to first nations or to the Treaty Commission itself -- and we'll hear more about that report that was tabled today a little bit later.

Before the NDP got its hands on this treaty process, the claim from the Sechelt was essentially for cash -- a reasonable cash-only deal. Now we've got confrontation, we've got court cases, and we've got a massive escalation of demands. The question to the minister is: can he quantify for British Columbians, who are going to have to pay the bill, how much his government's dithering and inability to secure a reasonable deal is ultimately going to cost the people who are going to end up footing the bill?

Hon. D. Lovick: First, let me say that I reject categorically and most peremptorily the notion that the government is somehow to blame for the fact that the negotiations broke down. That's number one. Number two, I think it is irresponsible in the extreme for a member opposite to take a statement from the press, which is, quite frankly, a pretty exaggerated claim on the part of that particular first nation, and suggest that somehow that will automatically be the amount that the province will ultimately be liable for. I do not believe that trying to use a 15-minute question period for 40 seconds of questions and answers is a good way to deal with these complex, difficult issues. Frankly, I think we owe the Sechelt people better than what the member is introducing.

FIRST NATIONS TREATY PROCESS AND PRIVATE PROPERTY RIGHTS

Hon. D. Lovick: I want to thank the opposition for the first real question in the last week.

The answer is very simple. As we have said from the beginning, private property is not on the table. The reason that we registered concern with the B.C. Treaty Commission report -- more specifically, the so-called "Lay Person's Guide to Delgamuukw" -- is that what the B.C. Treaty Commission did was take two legal opinions and present them as if they were in fact somehow the final word on Delgamuukw. Instead, they are merely opinions on the subject. Frankly, I do not think the report and the "Lay Person's Guide to Delgamuukw" -- more specifically with regard to question 11, which is the one the member refers to -- serve the people of the province well.

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

G. Campbell: We've just watched and seen how the Sechelts' demands have expanded dramatically as a result of this government's negotiating habits. The fact of the matter is that we look today, and the public has no confidence at all. . .

Interjections.

The Speaker: Members, order, please.

G. Campbell: . . .that this government won't change its position with regard to the protection of private property rights. So let me ask the minister this: what guarantees does anyone in the province of British Columbia have that their private property rights won't be sacrificed at the treaty negotiating table?

Hon. D. Lovick: For the last six years the province has never wavered in its stated commitment that private property rights are not on the table. We have never wavered, nor shall we.

But it's a little difficult to listen to the Leader of the Opposition talk about changing one's mind. These are the folks who came from their convention one day, saying they would not retreat from cede, release and surrender, and two weeks later had this miraculous transformation: "We were wrong, and now we're going to be reasonable." So please let the opposition members be a little delicate about accusing anybody of changing their mind.

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

G. Campbell: Hon. Speaker, I suggest it is the government that has caused the confusion with regard to the treaty negotiation process. We now know from the Treaty Commission that as far as they are concerned -- the commission that this government sits on -- private property rights are on the negotiating table. There is no question about that. The keeper of the treaty process has said that private property rights are effectively on the bargaining table. And the question that everyone's asking is: why should anyone now believe a government that hasn't been straightforward with them? So let me ask the minister if he will set the public's concerns to rest. Will the minister commit today to going to a public referendum on the province's negotiating mandate for treaties, to ensure that private property rights will never be on the table and will never be included and sacrificed during the treaty process?

Hon. D. Lovick: I don't know how I can make it more clear than I already have. I have said that private property rights are not on the table. Government has been saying that for some six years.

I have also said that the B.C. Treaty Commission chose to get two legal opinions -- one from a prof at Osgoode Hall Law School, as I recall -- and put opinions on the table vis-à-vis Delgamuukw. But those are simply opinions on Delgamuukw; they are not by any stretch of the imagination the final word on that difficult and complex subject.

I'm sorry, member, but that's as clear as I can make it, and if that isn't good enough or if I need to enunciate more carefully, I'll be happy to do so. You may as well repeat the question; you usually do anyway.

[ Page 9095 ]

BCTF AND EDUCATION AGREEMENT-IN-COMMITTEE

Interjections.

The Speaker: Hon. members, order, please.

Hon. P. Ramsey: Yes, the BCTF conducted its ratification vote in accordance with its constitution and by-laws, and yes, they have ratified this agreement overwhelmingly, by nearly 74 percent. They've said, by nearly three to one, that they think putting wages on the back burner for two years and accepting a wage freeze in exchange for improving services in the classroom, reducing kindergarten-to-grade-3 classes and hiring 1,200 more teachers is a good deal for kids in our education system.

The Speaker: First supplementary, the member for Powell River-Sunshine Coast.

G. Wilson: The facts are that slightly less than 43 percent of teachers have actually cast a ballot. . . . We now hear from the president of the B.C. Teachers Federation that if they don't hear from the government this week that the government is going to impose legislation to make this deal law, they're going to go on strike in September. Will the minister confirm that the BCTF has not conducted a strike vote, that they only have a mandate to do so by the end of June and that the real reason the minister is rushing this through is so that the BCTF may be in a position to conduct a strike vote before the teachers disappear over the summer months?

Interjections.

The Speaker: Order, hon. members.

Hon. P. Ramsey: Last night I met with representatives of both BCPSEA and the BCTF. I regret to inform the House that those parties are still miles apart, with a huge gulf between them, about how we move forward from here. Indeed, the trustees wish to return to the table and present the same position that led to fruitless negotiations back in February and March. For their part, the teachers have said: "We've been there. We've already put our wage demands on hold in terms of additional resources into classrooms. We have no desire to return to the table, and our executive has a mandate to take a strike vote."

The Speaker: Second supplementary, the member for Powell River-Sunshine Coast.

G. Wilson: Well, to the Minister of Education: quite simply, can the minister tell us, now that we know what the government has with respect to financial resources, why he will not exercise the law and allow binding arbitration between the two parties to take place? Why does he insist on government-imposed legislation? Would the minister tell us: if the shoe were on the other foot and government was making a deal with the employers, would he be that anxious to make sure that the government had an imposition?

Hon. P. Ramsey: What I am anxious about is that in the last week of school, before kids go home for the summer, we have some assurance about what's going to happen when those kids return to school in the fall; that we are able to tell parents, with some assurance, that their education will not be disrupted next fall; and further, that we can tell those parents that this government's commitment to improving education, to lowering class sizes and to more counsellors, teachers and ESL specialists will be there when their kids go back to school this fall.

FIRST NATIONS TREATY PROCESS AND PRIVATE PROPERTY RIGHTS

Hon. D. Lovick: There are a number of hypotheses built into that question, along with the hyperbole that seems to identify. . . . Madam Speaker, I have always endeavoured to answer questions fully and completely in this chamber. Indeed, members opposite, I suspect, sometimes object to the fact that my answers are as full as they are. But I will continue to do so, and I assure the member opposite that I will get him a detailed answer to that question as quickly as I possibly can.

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

G. Plant: I know the minister has his head buried pretty deep in the sand, but the question is: how deep? We've been asking. . . .

Interjections.

The Speaker: Members. . . .

G. Plant: We've been asking the minister about a serious and important question concerning the province's position in respect of the Treaty Commission process. So far the minister is hiding behind all kinds of interesting veils. Let's try to give the minister another opportunity to see if he actually knows what's at stake in the treaty process in British Columbia. Have he or his staff calculated the compensation that taxpayers will be on the hook for to the Stó:lo first nation, for all the lands in the Fraser Valley that have been wrongly alienated to private citizens over the last 130 years?

Hon. D. Lovick: I remember when the member for Richmond-Steveston was a civil, urbane and sophisticated fellow -- before he went to the opposition school of finger-

[ Page 9096 ]

Interjections.

The Speaker: Hon. members will come to order. Members, there is a member of the House who has the floor and who I wish to recognize. I need order in this chamber.

I recognize the Opposition House Leader.

Interjections.

The Speaker: Members, members.

G. Farrell-Collins: Hon. Speaker, as entertaining as the Minister of Aboriginal Affairs thinks he is, I would ask him to withdraw his last comment.

The Speaker: I would ask the minister to do so. Thank you, member.

Hon. D. Lovick: Madam Speaker, I respect this chamber too much not to. I withdraw. The member certainly does not have the manners of a ferret.

The Speaker: Minister, that's not appropriate -- humorous as it may be. Minister, an unqualified withdrawal would be the appropriate thing to do.

Hon. D. Lovick: Madam Speaker, absolutely I withdraw, without reservation or qualification.

The Speaker: Thank you.

Interjections.

The Speaker: Come to order, members.

Tabling Documents

Petitions

J. Weisbeck: Madam Speaker, I'd like to present a petition on behalf of 124 constituents. This petition was initiated by the BCAA, and it is the same petition that our leader just presented.

[2:30]

J. van Dongen: Hon. Speaker, I rise to present a petition signed by 1,270 people asking the government to take action on the Slesse Park claybank problem in the Chilliwack River valley, to protect against further damage to fish habitat and wildlife stocks.

P. Nettleton: Hon. Speaker, I rise to present a petition re Bill 26, with roughly 290 signatures.

A. Sanders: Hon. Speaker, I rise to present a petition from 78 constituents of Okanagan-Vernon.

Orders of the Day

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

The NDP got a bit of a shock last year when they introduced Bill 44. There was an enormous outcry from all over this province. That anger was not anticipated by the NDP, and they withdrew Bill 44. People are paying attention to the antics of this government, and it's time they paid attention to the people. Will this government allow a public debate on this bill? Will this government allow the public a chance to get an understanding of what is actually in this bill? The answer to both questions is no.

If Bill 26 carries only a modest change, why is the Minister of Labour trying to rush it through the Legislature before the public gets a chance to have a good look at it? It is a cowardly way to do the business of this province, and the members opposite should be hanging their heads in shame. Their popularity is sinking to an all-time low, and when you take a look at our economy since they came into office, you can understand why. Bill 26 is described as a bill with modest changes -- just minor housekeeping in terms of labour legislation in British Columbia. The public isn't buying the spin, and neither are we.

This government has lost all credibility. In a press release, the Minister of Finance quoted from a letter she wrote to her federal counterpart. This is what she had to say: "Given the challenges facing the provincial economy, this is not the time to take a chance on introducing measures which could damage the investment climate." We agree with her. So why is the NDP continually doing things to erode investor confidence in this province?

The NDP know, and we know, that the fact is that Bill 26 will do enormous damage to the investment climate in British Columbia. This Bill 26 is a gift from this government to labour for their support and finances in the last election, and that is the reason we see it here today in this Legislature. It begs the

[ Page 9097 ]

Their socialistic ideology is driving businesses out of this province to places where investment is encouraged. When investment is encouraged, jobs are created -- something this government can't seem to create. This NDP government doesn't care what happens to this province. They don't take the time to look at the impact their legislation is going to have on the province. They are like bulls in the china shop, destroying everything that gets in their way. The construction unions were amongst the largest donors to the Premier's leadership campaign and were also among the heaviest contributors to the NDP's election campaign. It really shows the people of this province that NDP friends are put before the welfare of the province, and the Labour bill is a prime example of that.

Bill 26 is an investment-killing, job-killing, small business-killing law designed to give a boost to unions that are desperate for new members. This is a bill that every member of this NDP government should be ashamed of ever giving any consideration to at all. The NDP haven't even tried to be fair and bring forth balanced legislation that will be equally beneficial to both the employer and the employee. It wasn't that long ago that the Premier stood shoulder to shoulder with the leaders of some of the biggest businesses in British Columbia and declared that the NDP was changing its tune. There were pictures of the Premier standing beside these business leaders all over the front pages of the Vancouver Sun.

The business leaders gave the Premier two messages. The first message was: if you want the economy back on the rails, you must lower taxes. The second message given to the Premier was that any changes to the Labour Code would further erode our economy. "Do not touch the Labour Code" -- that's what they said. "The class war against business is over," declared the Premier. "The NDP are not socialists anymore." To prove it, the Premier went around the province holding economic summits. Everywhere he went, he got the same message: stop wrecking the economy with your high taxes, red tape and anti-business labour laws. The Premier said that he heard what the people were saying. He said that he got the message and would change his ways.

So what happened after all the hype and all the promises of dramatic action to revive the confidence of the business community and the consumers of this province? The NDP came up with Bill 26. This is a disgraceful piece of legislation that has pulled the plug on investment coming into this province. The NDP need to open their eyes and clean out their ears and realize the damage they are doing to British Columbia. It begs the question: why do we have a Minister of Small Business when he isn't doing his job? Do we hear him coming out to defend the business community in this province? The business community hasn't heard a word from him defending their side of this bill. So why are the taxpayers in this province having to pay the wages of the Minister of Small Business when he can't even do his job and stand up for the business community? The only consultation this government has had is with big labour. This government promised to consult with both sides. What they did was to completely ignore the business community.

The government has no idea what the economic impact is because they are wilfully blind to it. The NDP did not do any impact studies on Bill 14, the Workers Compensation Amendment Act. That bill adds more red tape, more costs and more regulation to small businesses. The reason they haven't done an impact study is because they are either afraid of what they are going to find out or they don't care what those economic studies will say. Once again, we have another broken promise made by this government, another broken promise that can be added to the large list of broken promises this government is well known for. Keith Sashaw, executive vice-president of the Canadian Home Builders Association of B.C., says that this is the worst possible thing that could happen to the housing industry at this time. Housing starts are down 40 percent in the lower mainland, 55 percent in Kelowna and 91 percent in Campbell River, hon. Speaker. To introduce a bill like this when the construction industry is in free fall will do untold harm to this industry.

This legislation clearly doesn't demonstrate the faintest idea of how the construction industry works. This legislation isn't about stabilizing the industry; it's about helping Ken Georgetti and the building trades unions to rebuild their deteriorating share of the construction market. That's what this Bill 26 is all about. Building trades unions would like everyone to believe that construction workers want to join their unions. If they were not so afraid of secret ballots, they would soon find out what the real truth is.

Let's talk about secret balloting for a moment. Secret balloting is a democratic right that we have in this country. Big labour doesn't want secret balloting, because they know they wouldn't survive. Big labour couldn't survive because they couldn't control the workforce. When votes are taken without a secret ballot, everybody knows how you voted. Not having a secret ballot is all about fear, intimidation and control. Democracy needs a secret ballot vote based on good, balanced information.

[2:45]

This piece of legislation is purely political and is not motivated by good policy but by insider politics between the Premier and big labour. Sometimes I wonder if anyone on the other side understands that it is small businesses that provide people in this province with jobs. The small business community creates more jobs than any other sector. Why won't the Minister of Small Business talk to the Minister of Labour? It is small businesses that pay the wages that support families. The Minister of Small Business and Tourism said so himself. Yet he won't even stand up and defend small businesses against this one-sided piece of legislation. There isn't one person on that side of the House who has the courage to speak out about the role of the business community in this province. Is it any wonder our province has gone from number one in economic growth to last place? Since this NDP government came into office in 1991, this government has been in a downward spiral that has brought British Columbia to its knees.

[ Page 9098 ]

We have to give credit where credit is due. They did actually create one job. That job was the jobs and timber accord advocate, with a salary of $168,000 annually. That is the only job that has been created. This government promised 22,400 direct forest jobs, and 12,680 jobs were lost. That's disgraceful.

The NDP's response, when asked if they had a plan to restore British Columbia's economic health, was to advertise. They advertise that the economy of British Columbia is good and think that the people will actually believe their spin. When this government doesn't like what they hear, they buy more advertising -- spend more of the taxpayers' hard-earned money trying to make themselves look good.

Neil Roos of the Christian Labour Association of Canada calls these changes to the Labour Code diabolical. He thinks it's a blatant attack on independent unions in the construction industry. He says there is a centralist plan going on here which clearly favours the government's friends in the big unions, and so-called freedom of choice and democracy is being given the short shrift. Big labour wants to eliminate independent unions. The mainstream unions harshly criticize them for negotiating deals with lower wages and benefits than those in the trade contracts.

The interim report of the construction industry review panel was very clear in saying that this legislation was not the desirable route to solve the problems that exist in the construction industry. They were very clear that what was necessary was for the unions and employers to sit down and negotiate solutions to their internal problems -- that legislation was not the answer. Every business -- whether you run a restaurant, a hotel or a retail store -- has to question what this government is doing. Today it is the construction industry; tomorrow it might be them. The Coalition of B.C. Businesses, which represents approximately 50,000 small and medium-sized companies, called Bill 44 undemocratic and job-killing last year. Bill 26 is the beginning of undemocratic legislation and the start of killing more jobs in British Columbia.

What the member for Victoria-Hillside and his counterparts fail to recognize when they talk about the working man is that this bill is not fair to the working man. We on this side of the House are fighting for balance, fairness and equality for the working man and the employer -- something this government needs to learn. The members opposite are trying to spin that it's B.C. Liberals' doom and gloom that is discouraging investment from coming to this province. This government continues to wear blinders when it suits their purpose.

The future is about hope, about optimism for this province. If we didn't have hope that this NDP government would soon be out of office, our future would be full of doom and gloom. On this side of the House we are filled with hope and optimism. We know that the people of this province will have long memories and will not forget the way the NDP has treated them. When you look across Canada, business optimism is highest in Ontario and the prairie provinces. Optimism is the lowest in British Columbia.

When the working men and women in this province look at the amount of money that's left in their pockets after taxation, it is quite alarming. We can see why optimism is so low. Personal income of British Columbians declined by 1.9 percent in 1996. In 1997 personal income declined by 2.3 percent. The amount of money the average British Columbian has to feed their family and pay their rent or mortgage declined by 2.3 percent last year -- a direct result of the policies of this NDP government.

When we look at capital spending, the national average is 12.2 percent. In British Columbia we are less than half of the national average, at 5 percent. Alberta has a growth in capital spending of 24 percent. They are thriving, because they are open to investment and small business. The people are leaving this province in hordes, and this government is pretending nothing is happening.

Whether industry supports this bill or not, they all rely on investment. Investors have to have a willingness to invest in British Columbia. This province is beginning to get a reputation as a bad place to invest, and that is the fault of this government. It is this government and its socialistic ways that have brought British Columbia to its knees. These are job-killing NDP policies and just another nail in the coffin for anybody considering investing in this province.

Let's take a look at what the changes to Bill 26 do to the Labour Code. Once this legislation is enacted, there will be only one contract for every project in the industrial, commercial and institutional construction sector in this province that is built by a union contractor. This bill will impose a one-size-fits-all contract on an industry that desperately needs the opposite. It means that if a contractor is unionized, the workers don't have to negotiate a first contract. It is just handed to them. This gives union organizers a leg up in recruiting new members. Never mind that it leaves no flexibility.

What's most frightening about all this is that the NDP is acting against the recommendations of some of the top experts in labour relations. Let's take a look back to 1996. The labour mediators Stephen Kelleher and Vince Ready wrote a report on the construction industry. These men are not B.C. Liberals, nor are they seen as pro-business in any way. In 1996 they said that one size does not fit all. In fact, the industry is moving in the opposite direction. Increasingly contractors and unions are making contractual arrangements on a project-by-project basis.

Earlier this year another non-partisan committee reviewed the NDP's proposed changes to the Labour Code and said that there should be no sectoral bargaining. This committee said a sectoral bargaining model, as envisaged in Bill 44 -- and you remember that that was last year's controversial bill -- does not provide solutions to the problems facing the industry. Nobody wants sectoral bargaining imposed on business -- nobody, that is, but Ken Georgetti. He is so desperate to get more members that he will sacrifice the jobs and investment of the entire province. The NDP is bringing in sectoral bargaining against all the advice of labour experts and all the pleas of their new friends in business.

Interjections.

B. McKinnon: That's you guys getting desperate.

Not so long ago we had the Premier telling us that he was the new champion of business. Do you remember, hon. Speaker? The Premier was saying that the NDP had changed their tune. Now they're dancing to the tune of Ken Georgetti,

[ Page 9099 ]

Ontario is changing their labour law to give more flexibility to the construction industry. The Mike Harris government has just introduced a new labour relations act that gives employers and unions the freedom to negotiate specific project agreements which contain terms and conditions that may differ from those set out in the provincewide agreements. The changes in Ontario will also end automatic certification and guarantee workers the right to vote for or against a union. British Columbia, on the other hand, will have to apply directly to the minister, who has the sole authority to decide whether or not any special arrangements may be made. The changes that the Ontario government is making will create more opportunities for investment and improve workplace democracy.

We need a government that gives employers and workers the freedom to negotiate their own contract. We need to restore the secret ballot for workers, and we need to open our doors to investors. We won't get these things from this NDP government, because when push comes to shove, we know where the Premier's loyalty lies. It's with Ken Georgetti, not the working people, not the consumers, not investors and certainly not small business operators.

British Columbia's economy is headed for a full-blown recession, if we're not already in one. Our economy is not just in the doldrums, like the NDP would have you believe. When we talk about Alberta's economy, we know it upsets the NDP. We keep doing it in the hope that someone over there on that side is listening -- listening and taking an honest look at the number of businesses either shutting their doors because they can't take any more harassment from this government or moving out of this province altogether. Did you know that 107 companies left B.C. for Alberta last year alone? Did you know that the building permits in Alberta jumped 20 percent last year while those in B.C. actually dropped by almost 10 percent?

With Bill 26, this NDP government is going to make it more expensive to build in British Columbia. This NDP government is going to take away the rights of employers to freely negotiate with workers and of workers to freely negotiate with employers. Think what messages this NDP government is sending out to the world. They don't seem to have any knowledge of the world economy or of how it works. This government doesn't give any thought to what the ramifications will be to anyone affected by this bill. The Minister of Labour himself admitted that they didn't do an economic impact study of this bill -- at a time when our economy is in a free fall.

I'm beginning to think that the NDP have lost sight of why we have a union movement in the first place. The union movement has been very successful when it reflects the collective views of the majority of workers at a workplace. Workers have won when they maximized their benefits while still allowing the company to ensure that their jobs will be secure for the long term. What I mean by that is that businesses are allowed to make profits. Profits are why people have businesses and why companies invest. The NDP and big-labour leadership appear to have decided that all B.C. workers are better off if they belong to a union. The next step in that logic is to say that whatever gets workers into unions is justified. Whatever happened to free choice? Are the NDP afraid that the worker cannot make the right choices for himself or herself?

B.C. Liberals believe that each group of workers has the right to decide for themselves if a collective agreement is desirable. It is not government's prerogative to impose it on them. That's really the shame of it, hon. Speaker -- the government's knowledge of how to run a province. They are pulling the plug on jobs and investment in this province.

[3:00]

This government hasn't shown us that they are capable of fixing the damage they have done to our economy. The Premier has proven once and for all that he doesn't have a clue how to create a prosperous economic climate. What this province needs is a government with a plan, a vision, on how to turn the economy around, not a government determined to do everything in its power to destroy what was once the strongest economy in the country. We need a government that will enact fair and balanced labour laws. We need a government that says it will balance the budget, cut taxes, cut red tape -- and then actually do it.

Just read Vaughn Palmer in today's Vancouver Sun. I will quote from his column: "Alcan is rethinking a plan to expand its aluminum production in Kitimat after a feasibility study determined. . . ."

Interjection.

B. McKinnon: Don't you like to hear the news? Let me start all over again, just in case you haven't read the paper. Listen carefully, because this is what you are doing to this province: "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 -- to $1.8 billion from $1.2 billion." And you tell me that you're not doing harm to this province with your labour bill? You are.

Interjections.

The Speaker: To members and the member speaking, I would draw your attention to the fact that comments are to be addressed through the Chair.

B. McKinnon: Hon. Speaker, I apologize for that.

Interjection.

[ Page 9100 ]

We have a Labour minister who continually spins that these are modest changes. Do you call 50 percent more expensive to do business in British Columbia modest? Oh, no. It's time you faced the truth. Now we know why no one in this province can believe anything that this government says. No longer are the people living in this province going to allow this government to pull the wool over their eyes, when they make such a mockery of the jobs here. We have a vision; we have a plan. The B.C. Liberals will deliver on that plan and put British Columbia back to number one in Canada again.

Hon. Speaker, remember that when your neighbour loses his job, it's a recession; when you lose your job, it's a depression; when the Premier loses his job, it will be a recovery. In a nutshell, Bill 26 needs to be taken back to the drawing board, to make it balanced and fair to all British Columbians. The government needs to do an impact study to find out what effect this bill will have on the economy of British Columbia.

With these words, I hope that this government realizes we have to stop the downward spiral this province is in and begin an upward climb toward the future.

R. Masi: It is my privilege to rise today and make a few comments on Bill 26. I would like to talk a little bit about the economy to begin with. I believe that there is a definite relationship between the economy, the resources of the province and the effect that any sort of labour bill has on these.

First of all, I'd like to turn the clock back. Not so long ago, an idea struck the Premier, believe it or not. He came across a gentleman by the name of Tony Blair, the Prime Minister of England. Tony Blair was doing pretty well in England. He had just won an election; he was very popular. He was a good-looking fellow, and he became quite a celebrity in England and in the world. Our Premier then decided that he'd become Tony Blair, because it spins well. His spin doctors told him that would be a good spin -- "I'll be Tony Blair."

The Premier decided to hold a number of summit meetings, and of course these would be historic summit meetings. They're all historic meetings when the Premier calls them. The Premier went out and gathered the business leaders, including Jimmy Pattison. "Everybody knows Jimmy and everybody respects Jimmy, so we'll spin him into the mix too." Anyway, after hearing the message, the Premier declared, in all his glory: "The class war against business is over. The NDP are not socialists any more. We have seen the light." Another historic announcement. "In the future," the Premier said, "we will stop wrecking the economy with anti-business rhetoric and anti-business labour laws." After all the hype and all the promises of dramatic action to revive the confidence of business and consumers, what has the Premier and the NDP come up with? Well, they came up with Bill 26.

I respect the Minister of Labour. He's absolutely right when he states that the reality of the modern economy is that it functions, to a huge degree, on perception as much as anything else. I have no quarrel with that. In fact, that's what this debate is all about; it's all about perception. What is the people's perception of this NDP government? What do international investors perceive about this province and this government? What do major corporations with huge investment dollars perceive about this province and this government? What do small and medium-sized businesses -- the job creators of our province -- perceive when they struggle for survival? Big business lines us up with China and all the dictators of the world when they say: "That's a tough place to do business. British Columbia is not a place we want to do business in."

How do the 16,209 British Columbians who left perceive the economy of this province? They're voting with their feet; they're leaving because they know that jobs are tough to get in this province. What confidence does anyone anywhere have now about the economic policies of this government? Let's look at Bill 26, the Labour Relations Code Amendment Act, 1998. It meets the fondest dreams of old-line trade unions. It meets all the dreams of the trade unions in British Columbia, of all the friends and insiders of the old-line unions. But it could and probably will lead to a long and lingering nightmare for business and investment in this province.

When we speak about perception and the economy, as the Minister of Labour did, let's review the history of the NDP's anti-business labour policies. Let's just take a look back at where they've gone. We like to talk about balance and the pendulum swinging, but I think that maybe the pendulum has swung too far. Look back to 1993, to the fair-wage policy imposed upon contractors working on government-funded construction projects. The policy forces contractors to pay workers a super-minimum wage equivalent to union rates. The policy is later shown to have increased the cost of public construction and to have reduced the number of jobs created. This sort of policy virtually decimates the highways budget and other capital budgets. Roads, schools and hospitals could be built with a little more balance in this whole business of wages and how the policies are implemented.

In 1993 the NDP rewrote the Labour Code to make it easier to organize a union. The NDP eliminated the secret ballot in certification votes. You know, no one is against organizing, no one is against organizing unions and no one is against unions. Unions have played a vital historical role in our province, and I probably know more about the historical role of unions that most people on the other side of this House. But the problem here is: what about the secret ballot? The secret ballot is a fundamental precept of democracy. It's something that we fought for over and over again. We can compare it to the universal ballot.

We are talking about a fundamental precept of democracy. If we had the secret ballot in the labour movement today, the support would be there for the development of unions, but it has been taken away. What we have now is that certification is automatic when 55 percent of the workers in a company sign a union card. Talk about an opportunity for intimidation! Have you ever been there? Have you ever been to a union meeting when you're forced, when you're embarrassed, when you're put into a corner to sign a union card? That's how it goes, and that's reality. That's not democracy. Democracy is when we have a secret ballot and when you can make your decision in secret in a purely democratic manner. There's a fundamental weakness there. The members on the opposite side know that there's a fundamental weakness there, and they should change that and get back to democratic principles. Then the recruitment and union organization would be justified.

In 1994 the union-only highway project. . . . All workers on the project had to sign on with one of eight unions which signed a master collective agreement. Do we call this freedom of choice? Is this a level playing field? In his speech a day or so ago, the Minister of Northern Development was talking about level playing fields and modest changes. Let's make some modest changes. Let's look back. . . . Let's level the playing field when we're talking about union recruitment.

[ Page 9101 ]

[3:15]

Well, some small business cannot compete without variances, and that's the reality. And do you know what the government answer is? The government answer is: "Who cares? That's the law. You follow the law; the law is the law." We had laws enacted in Germany in the 1930s too. Because it's the law, that doesn't make it a good law. So let's examine these laws and look ahead.

[W. Hartley in the chair.]

Again today, with Bill 26, the business sector, the investment community and the business leaders of this province have been led down the garden path by this Premier and this government. It's no surprise that British Columbia is perceived as a shaky place to do business; it's no surprise that we've fallen from first to last in Canada. Imagine that -- from first to last, dead last. This rich province, with all its resources and all its population, has gone to last place in economic development. Who has been in government for seven years? That's what I ask. I mean, how did this happen? We know about the Asian crisis. Everyone understands that, and we know it's serious. But we also know that in the time this government has been in place, that's where we've gone: from first to last, dead last in Canada.

What we have to ask, in economic development. . . . Is Bill 26 just more of the same big-labour-knows-best legislation? Or is it maybe payback time? Maybe it is. You have to ask the question: where did the NDP get its funding? Where did the NDP get its workers? Where did the NDP get its strategists in the 1996 election? Well, we know where. Obviously it came from unions -- from big unions, from craft unions. The help that was provided throughout the '96 election was very nicely excused from campaign costs by the NDP's Election Act -- very convenient. I have to ask another question: where did the Premier get his support for the leadership of the NDP? Can we say from big labour? Was big labour ever involved in the leadership campaign of the NDP? I think so.

Interjections.

R. Masi: I would like now to turn, if I may -- despite the rantings of the other side -- to the Kelleher-Lanyon report.

Interjections.

R. Masi: I think we should talk about it. It's called "Looking to the Future," which is interesting. But you know, you have to read the whole report -- and maybe someone hasn't read the whole report. I wonder how many people on the other side have even turned to open it to the first page. Let's look at the panel's conclusions. I've looked at four or five of them here, and the first one I looked at. . . . I'll read it to you: "The principles of competition must be maintained if the industry is to thrive in the increasingly competitive economy of the next century."

Well, I wonder about that. I wonder if anyone on the other side even realizes what competition is all about. I know it's a dirty word on the other side. I mean, we don't like competition. We don't even like competition in our schools anymore, according to the other side. Let us not compete.

We never talk about the rights of employers. Have you ever talked about the rights of employers to bargain in their own interests? We often hear from the other side about the rights of workers to unionize. What about the people who take the risks and who put the money up? Do they have any rights? Can they not bargain in their own interests?

An Hon. Member: Not with this government.

R. Masi: Not with this government, they can't. I don't know where investment dollars are supposed to come from.

Let's look at another one here: "A sectoral bargaining model, as envisaged in Bill 44, does not provide solutions to the problems facing the industry." Well, well, well. So!

Interjection.

R. Masi: "Bill 44 is gone," says the minister, but I don't know. I tend to read the papers now and then and to look at various columnists, and I look at a columnist by the name of Vaughn Palmer.

Interjections.

R. Masi: And, of course, that creates derision and laughter. I think maybe you should. . . . Keep it up.

Interjection.

R. Masi: That's right. I suggest that Vaughn is a reputable and very accurate reporter. He was talking to the Premier about -- surprise, surprise -- Bill 44. We all know that this Bill 26 is the first step toward a similar bill coming up in the future, if the government's still around by the time the next session rolls around. Anyway, the Premier was asked about Bill 44, and he answered. It says: "Moreover, though the current bill implements only some of the measures contained in last year's bill, the Premier indicated that he hasn't given up on the portions that were dropped. . . ." Well, well, well.

On another question to the Premier around Bill 44: " '. . .I very much would like to see that come in,' Mr. Clark told the reporters. 'It's still a huge gaping problem of contracted services and the rights of workers in the contracted sector. . . .' " The Premier says we're going to get Bill 44, come hell or high water. Of course, the Labour minister says: "Believe me, as Labour minister -- there is no intention to go beyond this." So who do we believe?

Interjections.

[ Page 9102 ]

So I look at another clause in the conclusions there: "Non-union, craft union and industrial union models currently exist in the industry and the legislative framework must reflect that diversity." Well, I'm glad to see that in there. I hope that there'll be some recognition of this, because the evolution of the construction industry and individual skills capacity must be recognized. I think this is something that perhaps the old-line unions don't want to recognize: that young people are now more competent, better educated, more capable and can develop more skills than they could in the past.

Hon. D. Lovick: I thought you said the school system was failing them five minutes ago. Let's be a little consistent.

R. Masi: Hon. Speaker, I feel I've been misquoted here. I said that the other side does not appreciate competition even in schools, and they don't.

Let's look at the fourth conclusion. "There is broad agreement on the need for stronger training programs, but no consensus on the best ways to go about it." Well, Bill 26 provides nothing in this area. It's probably the most important segment of this Kelleher-Lanyon report. We have to look forward, look at a new way of developing training programs. I'm surprised that putting forward a labour bill does not include some of the methodologies of developing new skills training techniques. At the least, supporting it in the bill would be appreciated.

Also included in the report are some trends and statistics that indicate the real and present makeup of the construction industry. I'd like to quote from the Kelleher-Lanyon report: "A slowdown in demand for construction services combined with an influx of new resources into the industry. . .has led to a situation. . .where construction resources are generally in oversupply. This has led to a buyers' market and significant competition within the industry." Well, here we see this word "competition" again. So we have to realize that employers, in order to survive and have a willingness to invest, must be able to bargain in their own interests. I don't think the government understands that -- that employers have to have the capacity to bargain, to deal, to bid in their own interest, or there will not be investment in this province.

Let's look at some more facts from the report. In 1997, StatsCan reported that 129,000 persons were employed in construction in British Columbia. Employment has edged upward in the construction industry. The overall rate of unemployment has reached a ten-year low of 10.5 percent during 1997. It is below the 14.4 percent average rate over the last five years and far below the 17.1 percent unemployment rate in 1993. I know these are dry statistics, but you have to look at it. Self-employment in the industry is very high; somewhere close to one-third of all employees are in the construction industry.

So let's be logical here. If employment is rising in the construction industry, I must ask: what are we really trying to fix here? Well, let's not tamper with and destroy the construction industry. I mean, the government tampered with and destroyed the forest industry, tampered with and virtually wiped out the mining industry. So what are we trying to fix?

I don't think we're trying to really fix a problem. What we're trying to do is do some paybacks to friends and insiders. We must remember that the construction industry is also critical for many other sectors. Suppliers, developers, design firms, truckers and, yes, even the towboat industry and other integral sectors are dependent upon the construction industry. So in the modern economy, you cannot hive off a section of the industry and give that industry special privilege, no matter how close you are to the insiders and the special people in the union movement.

Let us make no mistake. Traditional union construction has come under tremendous competitive pressure over the last few years. There is a lot of pressure on them: pressure from non-union competition and pressure from industrial or wall-to-wall unions.

Let's look at some of these so-called rat unions. IWA-Canada is now involved in sawmill construction. The Christian Labour Association of Canada -- CLAC -- the General Workers Union, the Canadian Iron, Steel and Industrial Workers, commonly known as the CISIWU. . . . The Carpenters Union is also doing some wall-to-wall organizing. So when we take a look at this, why do we call these rat unions? Why do we get into this controversy about wall-to-wall unions and non-unions? What we have going on here are just turf wars.

We can cite again from the Kelleher-Lanyon report. The Boilermakers Union and the Sheet Metal Workers Union. . . . We know that a significant amount of their work and bargaining activity takes place outside the bargaining council. We also understand that special enabling provisions have been negotiated, even with the building trades, to allow contractors flexibility on bidding and estimating of project costs and that they have permitted these contractors to successfully compete. I know I'm not supposed to use the dirty word "competition." I realize that.

I ask, hon. Speaker: why at this time, when the province is close to recession, when the construction industry is moving along nicely. . . ?

[3:30]

R. Masi: I believe that perhaps the other side doesn't believe we're close to a recession. They should check the report of the B.C. credit unions and the major banks. They should check the bond-rating agencies. But no, we don't want to hear all that, because that doesn't come from the trade union movement; that only comes from people with a lot of expertise in the economic and financial world. We don't want to hear any advice from those people.

So again I ask the members on the other side: why, after the Finance minister states that we will relax regulation and open the province to business, do this at this time? Isn't timing everything in politics? Isn't timing everything? You know, I would have bet big dollars if someone had told me that this bill would be introduced. I said no, they will never introduce it, because they have changed their approach to investment and business in this province. They will not tamper with the labour situation. But oh no, they went ahead and introduced it because big, big labour spoke. I guess it's just payback time again. But we always have to remember that governments come and governments go. So we will see just how long this one stays.

I would like to look at the interim report brought forward on February 7, 1996, by the original construction industry

[ Page 9103 ]

"In our view, the complexities of the construction industry militate against a single negotiated agreement. One size does not fit all. In fact, the industry is moving in the opposite direction. Increasingly, contractors and unions are making contractual arrangements on a project- by-project basis. The process of enabling which has developed over the last several years, whereby the provisions of collective agreements are modified on an ad hoc basis. . .is merely an example of this.

"Employers and unions currently have the means to work out mutually acceptable accommodations to their needs. We heard from some who have successfully done so. We do not believe that it is either necessary or desirable to so dramatically alter the environment in which these accommodations have been made. In our view, nothing has changed that should alter this assessment of the state of construction industry labour relations in British Columbia."

An Hon. Member: Payback.

R. Masi: Payback is right.

The Clark government still fails to grasp a fundamental point: in business, perception is reality. Of course, I know that the Minister of Labour has already commented on the definition of perception. It's interesting, too, that he commented on. . . . I'm not sure if he quoted or not, but he commented on and used Ross Perot as his example of political expertise.

Deputy Speaker: Excuse me, member. Perhaps you could wrap up your comments.

R. Masi: Well, I would just like to say that I hope the minister realizes that Ross Perot certainly was a paragon of social justice in the United States of America, and as the days and weeks go by, we'll have lots more to say on this bill.

Hon. H. Lali: Thank you very much for this wonderful opportunity to respond to Bill 26. Listening to the member opposite, he was asking why we needed to bring this in. I think he should be made well aware of the fact that the construction industry needs separate rules for collective bargaining, and until now every province but British Columbia has recognized this fact. Alberta has it, Ontario has it, and I know that the members opposite use those two particular provinces as the role models that they want to follow -- when it suits them the best. By implementing legislation that recognizes the unique characteristics of construction, B.C. is joining the Canadian mainstream. I want to tell that to the members opposite, because I know they're very, very confused. They haven't read the bill, but they'd like to go out there and make comments to the media, which further aggravates the situation. It would help if they knew what was in here and what was not.

I'm glad the member for Matsqui is here, because he's one of the people on the opposition benches who has the biggest misunderstanding, if you want to call it that, and who is most confused. I know he will listen intently to every word I'm about to say.

Bill 26 will apply mainly to the part of the construction industry called industrial, commercial and institutional -- ICI for short. ICI construction workers build sawmills, they build schools and hospitals, and they build shopping malls and office buildings, but they do not build -- and I repeat this for the members opposite -- condos or houses or roads. I want them to be clear about this -- what they do and don't do.

Bill 26 also requires that craft unions and their employers include a plan in their contracts to resolve jurisdictional disputes. That's one of the most common reasons for instability and delays in the construction industry. Bill 26 will also 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. Bill 26 also supports continued competition between union and non-union building contractors. It also protects the right of workers to choose between non-union, craft union and industrial union models.

I want to point out to the members opposite what Bill 26 does not do. That is, Bill 26 is not about bargaining in residential construction.

Hon. L. Boone: That's right. Listen up.

Hon. H. Lali: Listen up. It is also not about organizing a union in construction or anywhere else. It is also not about employers or unions outside of construction. I also want to point out to the members opposite that this is also not about non-union versus union worksites. So quit confusing the issue. It's fairly clear. It's in here. Read the bill, and you'll find the details. If they had read the bill, they wouldn't be out there making misleading statements, in the House or outside of it.

I also want to talk about the Liberals. One has to wonder where their opposition is coming from. Why are they so opposed to all of this? Well, one thing that has been made perfectly clear from day one, from 1991 when they were first elected. . . .

Interjection.

Hon. H. Lali: I see the member opposite doing his usual Nixon imitation.

Hon. D. Lovick: He fits it so well.

Hon. H. Lali: He fits it so well; he's a funny guy.

One thing is perfectly clear about the members of the opposition: they have no philosophy; they have no objectives or goals in mind -- except for one. They are unanimous in the one goal that they have, and that is their blatant anti-unionism -- the blatant anti-labour stance that they always take. In the final analysis, it's the blatant anti-worker attitude that these people have. They don't understand the working people of this province. They have never spoken up on behalf of workers' issues. As a matter of fact, time after time. . . . I have been here since 1991, and every time we have introduced legislation or anything that the government has put forward that is in favour of the working people of this province, that anemic Liberal opposition has always voted against it. They have spoken against every one of those positive initiatives -- every single time.

They're against decent wages. The members opposite are against workers making decent wages. They don't want workers making decent wages so they can go out there and

[ Page 9104 ]

These members opposite have always been against communities. They have always spoken against communities, especially rural communities. If a few more of them had been elected in the rural areas, they might be able to understand the issues of rural communities, such as Quesnel and Merritt and Williams Lake and Pouce Coupe. But they don't. Not once have they spoken up on behalf of small rural communities. Not a single one of these people ever has. They continually speak against decent working wages and against communities, every single one of them. They're against the middle-class lifestyle, which comes with people making decent wages. They make their wages; they go out and spend it on consumer goods. They might want to buy a washer or dryer for the house, a car for their kids or pay for their children's education. They'll go and buy a house. No, these people are against decent wages. They're against communities and they're against community stability. Those people are especially against decent, well-paying, family-supporting jobs. That's what these people are against -- every single one of them.

I ask them: what have you got against working people? What have you got against communities? What do you have against families? What do you have against people making decent wages to be able to send their children to universities and colleges?

Hon. D. Lovick: Maybe buy goods from small business.

Hon. H. Lali: They might buy goods from small businesses, which some of these people own -- the local grocer, the local person who sells clothing and sporting goods or the restaurateur. It's the people who are in these decent, well-paying jobs who go out and spend their money. It's not the minimum-wage kinds of jobs.

These folks are also against the minimum wage. They have spoken time and time again. The last time we raised the minimum wage -- what was that huge amount? -- 15 cents an hour, to a person those people sitting across the way, those Liberals, spoke against it. They said there was going to be doom and gloom. They said there were going to be businesses closing because of 15 cents an hour. Some young kid may get an extra 15 cents an hour, so he could have a little bit of money saved up.

An Hon. Member: Some young mom.

Hon. H. Lali: And some young mom saving up a little bit of money. Maybe they could go to a restaurant and have the odd meal out or save a little bit of pocket money and put a little bit of gas in the car. That's what these people are against; they are against minimum employment standards. If the Liberals had their way, there will be no employment standards -- none whatsoever. That's how they would have it.

What else are they against? Well, I'll tell you what else they're against. They're against minimum health and safety standards in the workplace. They don't want any of that. Who cares if somebody gets their arm lopped off at their place of work? They don't care. They don't want minimum standards in the workplace -- not a single one of them. Did one of them stand up in the House and actually support health and safety standards? Did anybody speak in favour of it? To a person, none of those members opposite did.

But time and time again, you hear them talking their anti-worker language. They get up in the House and outside of the House, and they rail against workers. They rail against "big labour." It's supposed to be this monolith out there that's controlling everything. That's how these people would like to paint the picture. You can hear them every time when they get up to speak. Just listen to them all. All you have to do is listen to them all.

Let's talk about big labour for a minute here. If you put all the money and resources that big labour has in British Columbia in one pot, I'll tell you that those resources and the money in that pot would be less than one big corporation called Mac-Blo or Interfor or Canfor. You can pick any large multinational corporation in British Columbia, and they will have more resources and more money at their disposal than all of supposedly big labour combined. That's what these people here are supposed to be fighting against.

Now, we know what side of the fence these guys are on. Certainly it's not on the side of the working class -- absolutely not. They're not in favour of workers. They never have supported and they never will support the working class of this province. When they talk about big labour, what does labour stand for? Labour stands up on behalf of 2.5 million working people in British Columbia; that's what labour stands for. They stand up and work on behalf of the working people of this province, whether it's talking about employment standards or the Workers Compensation. . . .

Interjections.

Deputy Speaker: Excuse me, minister. Could I ask members to allow themselves a few moments -- until they have the floor -- before they speak and to allow the minister to finish his speech.

[3:45]

I'd like to see these guys across the way over here. . . . We know what they stand for. They're anti-worker, but they also stand for Howe Street -- every one of them. That's what they stand for. Let's talk about what else they stand for. Here's what they have to say on some of these things. The Leader of the Opposition said that it's okay to hire scab workers; that's what he says. He said that on May 27, 1996, in the Vancouver Province.

An Hon. Member: He had a different term for them, didn't he?

Hon. H. Lali: He called them replacement workers, to try to soften it up a little bit. He said that we should have "the option of hiring replacement workers during a strike to protect [our] viability." What else? On occupational health and safety, let's hear what the member for Oak Bay-Gordon Head had to say. It's from Hansard of May 6, 1998 -- page 7544, to be exact, if anyone wants to read it. She said: "We cannot allow a union collective agreement to intervene and override workplace safety when it disagrees with management's disciplinary actions towards employees." She doesn't believe in health and occupational standards -- none. She says if it's in the agreement that there's supposed to be certain health and occupational standards, and the employer chooses to override it, he should be able to do so. That's what the member for Oak Bay-Gordon Head said.

[ Page 9105 ]

The member for Vancouver-Quilchena said: "We would eliminate the fair-wage act." He said we should eliminate it. That's what the member opposite said. Then the member for West Vancouver-Capilano says that government should not be the one spending money, so those on the payroll can spend it in the community. He says: "Government should not be paying wages, so people should be spending that money in the community." That's what that member said.

Hon. D. Lovick: Oh, I see. Are they supposed to bank it or something?

Hon. H. Lali: I don't know where they were going to take the money. Again, the Leader of the Opposition said: "We will scrap the fair-wage act that the NDP brought in." He said it again. This is on May 20, 1996, in a B.C. Liberal news release.

The member for Vancouver-Little Mountain, when he's speaking about Highway Constructors Ltd., said we shouldn't have it. What he's really saying is: "We shouldn't have aboriginal people working on the Vancouver Island Highway. We shouldn't have women working on the Vancouver Island Highway. We shouldn't have people in the local communities and local hire working on those." He's also saying that members of the visible minority groups should not be working on the Island Highway project. "They should be all non-union, making minimum wage." That's what the House Leader from the opposition is saying.

He also says, when he's talking about the Vancouver Island Highway, that the fair-wage policy -- or more appropriately, he calls it the fixed-wage policy -- "was an attempt to pay off the construction unions, and it hasn't benefited anyone but the unionized workers who are now making $30 an hour on public construction sites." He thinks paying somebody $30 an hour -- trained personnel who are out there making a decent wage -- is something inappropriate. What does he want those people to be paid -- $7 an hour? Is that what he wants?

Hon. Speaker, the list is endless, and it goes on. Oh yes, here's the doozie of the day. This is the one that takes the cake. This one is from page 248 of Hansard of July 2, 1996, on the budget debate. I know that the member for Kamloops is looking this way. I know that she has a keen interest in what I'm going to say here, because the person who is making this statement is her colleague from the other party, from Kamloops-North Thompson. This is what he said when he was talking about job security or the health care of the workers within. . . . This is what he says about enlightened labour legislation: "The way good managers deal with conduct problems is called progressive discipline." He also goes on to say: "You whack them once. If they do it again, you whack them again. Eventually you turf them right out."

That's the management style that the Liberals prefer. Obviously the Leader of the Opposition, when he first became a Leader of the Opposition -- what was his first job? He fired four workers, but he didn't have enough guts to do it -- four Liberal caucus workers. He hired somebody for $4,000 to go out there and do it.

The list goes on and on about all of these Liberals. We know what side of the fence they're on. They're certainly not on the side of the working class of this province. In 1992 the Labour Code. . . . We heard lots from these people, the members opposite, about how much it was going to bring doom and gloom into the province, and everything was going to be in chaos. Since the Labour Code was introduced and brought in, in 1992, we have had the lowest number of strikes and lockouts in this province since the end of the Second World War. That is something that I think all members of the House should be proud of.

Interjection.

Hon. H. Lali: As a matter of fact, I see the member for Matsqui sitting over there making some comments. Here's what his colleague in his MLA's report in the Delta Optimist on July 12, 1997, said about the new 1992 Labour Code: "We have enjoyed several years of labour peace." He said it. They should even listen to his own backbencher, an esteemed, respected member of this assembly on the opposition party. They don't even want to listen to their own member. Who do they listen to?

I was talking briefly about the Liberals here. I want to talk about the member for Okanagan-Penticton over there. I'm glad he's in here. I hope he has guts enough to stand up and speak a little later. This Liberal doom-and-gloom scenario they like to build -- where's it coming from? I guess one doesn't have to look too far to find out where it's coming from -- the kind of class warfare that they're talking about. They're the ones who are waging it. They're the ones who are out here speaking this doom-and-gloom scenario. They're the ones who are standing up on behalf of their friends. They don't care about workers or their families. That's already been demonstrated, because they've always voted against any kind of legislation in the House that would help workers and families in this province. They've voted against it. So where are they coming from? Why are they like this?

Well, it's fairly straightforward and simple, because these Liberals. . . . The Liberal Party is bought and paid for, and we know who they're speaking on behalf of. They're speaking on behalf of their friends and insiders. You know, the Phil Hochsteins of this world. Phil Hochstein's group, the ICBA, gave them $100,000 for their party coffers. That's why they're all here and talking on behalf of their friends. They've been paid to ask all these questions -- and well paid: $100,000. This is such hypocrisy on the part of the members of the Liberal opposition.

Here we are, speaking on behalf of at least 2.5 million working people in this province. . . .

Deputy Speaker: Excuse me, minister, the member for Matsqui rises.

M. de Jong: Hon. Speaker, as enjoyable and revealing as the minister's comments are, I thought I heard him say that members of the opposition are being paid to ask questions and perform their duties as members of this House. If that is the case, I take that very seriously.

Deputy Speaker: I'm sure if the minister has impugned any member of the House he'd be happy to withdraw it.

Hon. H. Lali: Thank you, hon. Speaker. I will withdraw that particular line from my statement. And I apologize to the member if he was offended.

Deputy Speaker: Thank you, minister.

[ Page 9106 ]

And their reaction is just far too overblown. They don't pay any attention to the consultation that took place in the last year or so with communities, with people on the labour front and also on the business front, and the recommendations that have come forward from that group. They don't want to talk about that. They don't want to talk about that at all. Instead, these people, when the bill was being introduced. . . . And it's convention here that when a bill is introduced, everybody votes in favour of it so we can have an open debate right here, in front of the cameras, and for Hansard, and anybody who cares to listen and watch and read -- that it's there.

They hadn't even read the bill, and to a person they said: "No, we don't even want to see it." And their reaction justifies their behaviour. To a person, their reaction has been overblown -- totally overblown. They're talking about all sorts of things that aren't even in the amendment to the labour bill; they haven't bothered to read Bill 26. If they had, they would know that they don't need this. Their reaction is sort of like getting ready to get married and standing at the altar -- and the bride doesn't show up. That's how foolish they look. Nobody's paying attention out there. Nobody's paying attention to them.

Interjection.

Hon. H. Lali: I think the member for Matsqui's objecting to that, and I don't know if it has happened to him or not.

But most certainly that's the kind of reaction they're having: they're still standing there at the altar, waiting for the bride to show up. And the bride ain't coming, hon. Speaker. She's long gone. And I wish they would understand that -- from the reaction they've shown over there. I wish they would understand that.

For the hundreds of thousands of dollars that the members of the opposition are getting paid to perform their duties, we want some performance out of them. And I would say to the members opposite, each and every one of them: go out there and read the bill first. Read the details. You know, residential is not in there; condos are not in there. It's institutional, commercial and industrial. They've got to look at that -- ICI construction. Residential ain't in there.

I would ask the members opposite to please go out there and read the bill. Please go out there and talk to the people in your communities; please come out to the rural areas to talk to the people in the rural communities. For once in your lives, speak up on behalf of the working people of this province. That's what I would ask the members opposite to do: speak up on behalf of the working people of this province. Speak up on behalf of families. Try speaking up on behalf of students who are making minimum wage at some of these service jobs. Speak up on behalf of the workers who support local businesses. The people who are making decent wages are the ones who are going out and spending their money at the local grocers, at the shop that is selling clothes or sporting goods, and the odd time they might go out for a meal at the local restaurant. It's the good, decent, union-pay jobs that support local towns. If you had gone out there and done your research in the rural communities, you might know the kind of support that is out there for a bill such as this.

This is a great bill, and I want the members opposite to quit fearmongering. And I know that Phil Hochstein has dumped $100,000 into the Liberal coffers. I think that they should go out there and actually listen to the people of this province. Listen to the working people. Go out there and listen to the 2.5 million workers of this province, and then we will know the truth.

[4:00]

Meanwhile, the Premier and his cohorts have been gallivanting around the countryside at summits, town halls, coffee shops and who knows where, wearing suits and ties, coveralls or hardhats -- depending on what their wives packed, I suppose. They've been nodding slowly, screwing up their foreheads and looking thoughtful. They have appealed to the common man, the salt of the earth, the putting-meat-on-the-table man. They've empathized with the single mom with tots in tow. They have addressed the concerns of professional working women and have congratulated the hardy entrepreneur just getting started. They have stood nose to nose with the corporate boardroom crowd.

They have heard the voice of the people, they say. Understanding dawns: "There will be a renaissance in British Columbia. We shall stand proud again." Of course, this sort of spin-doctoring is not cheap. The Premier said he got the message about high taxes, red tape and anti-business labour laws. The Labour minister has said that we must ensure that the economy is efficient and competitive. He has said we must create a climate that will encourage investment and create jobs.

Well then, good. Message received -- except we then come back to Bill 26. It just doesn't make sense to go through this whole exercise in public relations work and then throw it all away. No one wants this bill. If anyone had really been lulled by the NDP's projected new approach to business, they just woke up to a hard slap in the face. Actions speak louder than words. Nobody in the business community is going to vote for these people, and nobody who can see the connection between the health of their employer's business and their own prospects for continued employment will ever vote for these people again.

Then it struck me: this has nothing to do with the good government of the province, nor does it bear the more usual relationship to improving re-election odds. This is retirement planning. Only the B.C. Federation of Labour and the building

[ Page 9107 ]

Haven't you taken some comfort from the news that the former Premier, Mr. Bill Vander Zalm, may return to the scene as the leader of Reform? Are you not energized by the possibility of a split in the right-wing vote? I guess not. If the NDP had any aspirations for re-election, one would expect that they would listen to the electorate. They must know how high this stinks to just about everyone in this province.

A recent McIntyre and Mustel Research Associates poll found that a majority of British Columbians believe that the NDP's labour policies are having a detrimental impact on the economy and that this belief is shared equally among union and non-union households. People want the economy back on track, folks. They understand that the engine of the economy is business. They want policies in place that encourage business and investment. Everyone sees the hemorrhage of business, of capital, of jobs, of talent, of opportunity -- and of optimism, of course -- to Alberta, Ontario and the U.S. This has to be stopped. Everyone knows this.

I mean, if this isn't retirement planning, what else could be going on here? Is there a bet, maybe? You know: "I'll bet you I can completely destroy the economy of a province." "Think so?" "Uh-huh." "How long would you need?" "Oh, just under two terms should do it." "That wouldn't work; we'd never get a chance at the second term." Is it a bet or isn't it?

Okay, those are two possibilities. We looked at (1) retirement planning and (2) capricious whim. Is it possible that the government is looking out for the best interests of its citizens? I know it sounds pretty far-fetched, members, but government, after all, is elected as trustee of the will and interests of the people. Maybe we should give them the benefit of the doubt. Let's treat it as a rebuttable presumption that in fact the government is acting in good faith. The rationale for this sort of legislation, as pitched by the building trades, is that it is difficult for unions to get a collective agreement because of the project nature of the industry, combined with a host of other ill-defined, sneaky tactics loosely termed as corporate manoeuvring.

The ostensible purpose of this legislation is to protect or advance the rights of workers to unionization, and we've heard that ad nauseam. Do the rights of workers to unionization require more protection? That's a question that needs to be asked. Well, no. The workers' rights to unionization are covered by the existing legislation and more than adequately protected by any measure. Since 1993 there has actually been a significant trend towards greater unionization in small and medium-sized businesses. It is other factors, such as the downsizing of the larger unionized businesses and increasing self-employment, that are inhibiting overall union growth. In any event, British Columbia already has a higher rate of unionization than the national average. If the building trades unions have difficulty signing up new members, it is because they insist that employers sign an expensive and inflexible standard agreement. Enshrining this standard collective agreement in legislation will impose this expensive lack of flexibility, without regard to the unique nature of each employer in his business, as a mandatory term.

What about the workers' rights not to unionize? Would someone explain to me how the denial of secret ballots on union certification -- a measure implemented by this government -- has anything to do with rights or democracy? This government is implicitly sanctioning and condoning the use of intimidation to achieve unionization. Seventy-seven percent of British Columbians believe that the workers should have a right to a secret ballot. This, however, has not concerned the current government.

Now, this wink at strong-arm tactics is yet to be subsidized. It has become apparent that the union shops cannot compete with the open shops. Bound by the terms of standard collective agreements, union companies are more inefficient, less productive and thereby more costly. They can't compete. As a result, 73 percent of the construction work in the province is done on a wall-to-wall basis. Some of the trades contractors have acknowledged their competitive disadvantage and have disassociated themselves from the CLRA and its multi-trade bargaining. They have thereby made progress in negotiating collective agreements that make sense and that will put them in a position to compete with open shops. This is a rational response.

On the other hand, the mandatory imposition of a generalized standard collective agreement on everyone is simply not rational. It rejects the progress made by trades contractors in negotiating specific and appropriate contracts, and it will result in an increase in the number of high-cost, low-production union shops. Now, hon. Speaker, this is not a slur on the abilities of union workers. It is a criticism of a bargaining process that cannot help but produce an agreement that will drive costs up in specific applications and with specific employers. Ultimately, it will also drive some employers out of business or at least out of our province.

The changes to the Labour Code redress the disparity between open and union shops by political subsidization. If every project in the industrial, commercial and institutional construction sectors built by a union contractor is to be covered by the same contract, and if organizers have this contract to offer potential recruits as a tangible benefit of signing up, there is no question that this will increase unionization. But it is cold comfort to those unionized workers whose newly accredited employer has closed shop. We do not yet have labour legislation making the employer liable for workers' disappointed expectations of continued employment.

It may be possible that in response to this legislation, this unionization thing could snowball. As more companies are unionized in response to this carrot of a juicy standard agreement, and the collective agreement bears down on more and more of the construction work, the carrot itself becomes bigger, as unionization provides access to an ever-increasing piece of the construction pie. Perhaps this is the scenario envisioned by Mr. Georgetti and Mr. Sigurdson. Perhaps the open shops can be displaced altogether. We can clap our hands together happily in a workers' paradise without the nasty construction from those low-cost contractors. Everyone should be able to get a generous piece of the pie.

I suppose that there will always have to be some construction in British Columbia and that somebody will just have to pay the increased cost. That's all there is to it. But there is also a lot of discretionary construction and a lot of construction relating to investment in business infrastructure that simply will go elsewhere. Companies that have lost confidence in British Columbia will want to build their offices elsewhere. More than likely they will still be able to hire the same contractor they might have used in our province, who

[ Page 9108 ]

The increased costs of construction aside, by far the greatest impact of this legislation lies in its symbolic significance. Business will lose confidence. When Bill 44 was introduced, it was withdrawn in the face of the business community's reaction. Since that time, however, the NDP has been consulting with business representatives and others, and the business community has been led to believe that there was some commitment to cooperation and some understanding of their bottom line.

This legislation ends all that. Business is universally opposed to this sort of legislation and has made its position abundantly clear throughout the consultation. Not only is government not reversing itself on the labour policies that have proven so hostile to business and investment, but it is continuing along the same course. As it stands, capital spending in this province is projected to be only 1.3 percent, compared to 6.2 percent nationwide. Investment is going elsewhere. If anyone with the option of relocating or diverting their business elsewhere was taking a wait-and-see approach before abandoning the ship, they don't have to wait anymore. They've seen enough. It is impossible to gauge the impact on the economy of this loss of confidence. Now we will have to wait and see. The only problem, however, is that once those of us who stay behind have seen, there won't be much we can do about it by that time.

[4:15]

This bill has nothing whatsoever to do with the rights or choice of the workers. We're not talking about rights, or at least not about the liberty and security-of-the-person types of human rights. Maybe it's the right of organized labour to increase its power and influence and the right of a democratically elected government to act with impunity; but these would be new definitions for rights not yet in common usage.

More could be said. However, I think we have rebutted the presumption we afforded the government -- namely, that the government is acting in good faith here. That throws the burden back on this government to show how Bill 26 falls within the mandate granted by the electorate or how it is in the best interests of British Columbians, or why it should be passed as being in the best interests of the province as a whole. I have yet to hear or see any justification for this legislation that makes any sense at all. Hon. Speaker, my capricious-whim theory is better than anything I have heard from the other side of the House, and it is certainly more consistent with the power-sotted arrogance with which this government has always acted.

J. Weisbeck: I rise to speak to Bill 26. It was a sad day when this bill was introduced in this House last week. It was a very sad day indeed for all British Columbians, and it's only one of many as the situation in the province gets steadily worse and worse. Our economy moves closer and closer to a recession, and the NDP continues to mismanage this province's resources. It has been a sad eight years. British Columbians have had to deal with a government that fudged their budget figures to get elected, who forgot about the children of this province. . . . And the list goes on and on.

But today is a sad day, as I rise to speak to Bill 26, the most recent amendment to the Labour Code, and as this NDP government attempts to ram this bill through against the wishes of the people of this province. As I stand here today, I'm still hearing the voices of my constituents ringing in my ears. Since the inception of the amendments to the Labour Code, beginning with Bill 44 last session and now with Bill 26, my constituents have voiced their concerns loudly and clearly. Over the last two years, many have contacted my office to express their displeasure over this government, which does not seem to hear their concerns.

I was elected in 1996 to represent the people of Okanagan East in the Legislature. Prior to the last election, I took a poll in my riding to attempt to get an understanding of what the key issues were. It became apparent very quickly that their utmost concern was jobs in this province. They were concerned about their ability to feed their families and pay their bills. They were concerned that the young people in Okanagan East would not have a future without investment and that the economy in the Okanagan would suffer due to high unemployment. This piece of legislation does the very thing that my constituents feared. NDP policy has made B.C. a province that businesses do not want to invest in, and the result has been a further loss of jobs and further uncertainty for British Columbians. This piece of legislation only makes things worse.

It begs the question: why would they introduce this bill at this time? Why, at the height of all the concerns expressed by British Columbians, would this government go ahead with Bill 26? Did they not receive enough letters, enough phone calls and enough concerns to make them understand how much British Columbians do not want this piece of legislation? You know what I believe? They did hear the voices of British Columbians; they did understand their concerns. They just didn't care; they don't care.

When I entered politics, I entered with a novel idea. I honestly believed that I was here to represent constituents -- to hear their concerns and to help them wherever possible. I even imagined that most politicians entered with the same concept. So please understand it if I am saddened by the actions of the members on the opposite side as they ignore the wishes of their constituents and use their positions to bring forward their personal agendas.

I think the answer became very apparent in the comment that the Premier made at the Order of British Columbia awards ceremony last week. Ken Georgetti was selected as one of the recipients of the order, and in his remarks the Premier referred to Ken Georgetti as the nineteenth cabinet minister.

Interjection.

J. Weisbeck: Well, I do not remember Ken Georgetti ever being elected to represent British Columbians as a member of this Legislature. Ken Georgetti has a personal agenda, and he has no qualms about that fact. What a frightening thought: a labour union organizer, an individual who obviously has a lopsided view of the business world and will use any tactics to upset that balance of power, is pulling the strings of the Premier's Office.

It is a frightening thought that at a time when business, government and labour should be pulling together to get the economy back on track, the scales are leaning towards labour

[ Page 9109 ]

The government has made a feeble attempt and, I'm sure, a costly attempt this past week to soften up their victims, the general public and the taxpayers of British Columbia, into believing that this bill is good for them. This government has attempted to soften them into accepting that what they are proposing today in Bill 26 isn't as bad as the proposed amendments in Bill 44. It isn't as bad; it's a modest amendment. Hasn't this government heard the public cry out that any amendments to the Labour Code are sending the wrong message to the investment community? Are Mr. Georgetti and his friends so quick to sell out their union members and take away their choices? Is this just a power trip for Georgetti and friends to justify their own existence, so they can stand back and say: "Look what we have done for you. You don't have a job, but we enforced the Labour Code that penalized the people who are creating jobs"? When are we going to give employers -- the creators of jobs, the employers of union members -- their businesses back?

We've all seen how this government works, how they have forced their ideology onto the public and how they've used their positions to undermine people's choices. We also know how the Premier has forced the forest industry to its knees, how he has threatened the industry to stand behind him and his grandiose ideas -- ideas that don't have a chance of success. The classic example occurred at the Premier's summit in Kamloops. The Premier threatened the executives of the forest companies into standing behind him literally on stage for a photo op or expect a lot of difficulty with their permits.

Hon. Speaker, I have received a number of letters from my constituents; I'm sure I'll receive many more regarding this bill. I'd like to read some of these letters into the record, because I think it's an opportunity to say to my constituents that we on this side of the House take their concerns seriously and give them proper respect, unlike what we normally see from the government side of the House, where people's concerns end up in the shredder. I received a copy of a letter addressed to the Minister of Labour from a constituent of mine, Brian Tostenson and Construction Ltd. I'd like to read this letter because I think it emphasizes a lot of the concern expressed by the business community. It's addressed to the Minister of Labour.

Deputy Speaker: Member, the Chair would just advise that you can highlight parts of letters, but you can't read full letters into the record.

J. Weisbeck: Thank you.

Hon. Speaker, this gentleman operates a small business in Kelowna. It employs six employees. He's writing to express his concerns regarding the Labour Code. These are some of his concerns:

"My business is not restricted to residential construction only. Approximately 50 percent of my business is in the commercial sector as well. I am concerned that the proposed sectoral bargaining provisions of the new Labour Code will draw my company into a process where I will no longer be able to freely negotiate the wages and benefits of my workers, [even with] the unique circumstances of my company."

He states: "My company believes in my community and my workers. The proposed changes to the Labour Code will have a significant impact on my company and my ability to. . .employ valued and skilled workers." So he's urging this government not to proceed with the proposed changes and to send a strong message to the people of British Columbia that B.C. is actually open for business. He has an interesting little PS as well, and it talks about. . . . He's still waiting to find someone who voted for you -- referring to the NDP, of course. And obviously, when you consider that this government represents only 39 percent of the province, he probably has a very good point.

Hon. Speaker, last week in the House the Minister of Small Business, Tourism and Culture commented that Kelowna was booming. I would suggest that the minister has no idea what is happening in the rest of the province and particularly in Kelowna. I think that previous letter states just that. There are currently no booms in this province, except maybe in U-Haul trailers. This letter emphasizes that even Kelowna is noticing a downturn in its economy. In the past, Kelowna has always been extremely resilient in the face of any downturns in the economy, so this certainly reinforces the seriousness of the current economic situation in this province.

[4:30]

This letter also talks about the spillover effect of this bill and the impact it will have on the cost of residential housing by decreasing affordability. Obviously the most vulnerable people in the housing market -- the first-time buyers -- will be the most affected. But first-time buyers are not the only ones affected by this bill, because all levels of homebuyers will see the increase in the prices of homes.

The increase in construction costs has meant a lot to Alcan. The proposal for a $36 billion investment in this province and the creation of 6,000 permanent new jobs is about to be withdrawn. In today's Vancouver Sun, Vaughn Palmer states that Alcan is reconsidering expanding in B.C. because of the 50 percent increase in labour costs and taxes -- an increase which amounts to $1.8 billion, as opposed to the $1.2 billion previously budgeted. Alcan is having second thoughts. But Alcan hasn't given up yet. They're still waiting to see if this Premier will change his mind and make this

[ Page 9110 ]

The lack of affordability was certainly expressed to me by the executives of MacDonald Dettwiler. I had an interesting meeting with them a couple of weeks ago. They're one of the largest employers of high-tech people in the province, and they're based in Richmond. We spoke about the problems in their industry. Certainly they spoke of some of the problems in British Columbia -- the high taxes, the Labour Code -- but one of their major problems in attracting employees to their company was housing affordability. They're attempting to hire individuals from all across North America and invite them into one of the most expensive housing markets in the country. So this obviously has a huge impact on the growth of this emerging industry, as companies have a more difficult time attracting the personnel needed to grow their business. All of this relates to the fact that we must compete in a global market -- not only for the sale of our products, but for the attraction of investment to British Columbia.

We've all heard the excuses from this government as to why British Columbia is not globally competitive. And that is exactly what they are: excuses that are designed to cover up their inadequacies. We as British Columbians certainly don't buy the rhetoric anymore, because we know that we have all the components needed for a healthy industry: the people, the know-how, the passion and resources. In the past the excuse for forestry revenue shortfalls was the weather. Currently the Asian flu seems to be the excuse of choice. Certainly the downturn of the Asian economy seems to be making everyone sick, and no one would disagree that it has exacerbated the situation. However, the truth of the matter is that there have been large deficits in British Columbia long before Asia got a stomach ache. We've been experiencing tough times under this government even when the rest of the world's economy has been doing well. The fact is that our current economic crisis is homemade in British Columbia as a result of this Premier's economic policies and poor management. There can be no other explanation as we fall further and further behind the rest of the country in economic growth.

At the end of the day, one glaring fact remains: we need a new vision, a new direction. We must change our economic modus operandi, our way of dealing with and thinking about people, business and our futures so we can be current with global product demand. What better way to join our global partners towards the millennium than to promote high-tech? But promotion is very difficult with this government's economic policies. As new technology companies develop their products, the most important step is product promotion. Not only must the product have intrinsic utility for it to successfully compete at the next level, there is generally a requirement for highly skilled and experienced upper-management individuals. This often means going out of province to find the people resources required. There are a number of factors that these individuals look for before they can be lured here. While British Columbia has no problem with its climate, amenities and attractions -- in fact, we have been voted the most desirable place to live in Canada -- the deterrents to relocating here are high taxes, overburdening government policies and economic uncertainty.

These concerns have been expressed by the Technology Industries Association. I'd like to read a quote from that report card:

"The TIA's view of the role of government, at any level, is that it should create a climate and framework within which our industry can flourish with due regard to wider social issues. This means displaying interest and leadership, communicating with the public, encouraging inward investment and ensuring that publicly funded institutions, particularly in the field of education and training, are responding to industry needs. It means working with other governments to encourage the free flow of trade and ideas. Of equal importance, it should avoid doing things that inhibit the industry, classic examples in B.C. being the inappropriate aspects of the labour standards act and maintaining a high-tax regime."

The minister has continually asked us to trust him and trust that the changes to the Labour Code contained in Bill 26 are modest. Trust can take a long time to develop, and when it has previously been lost it can take an even longer time to be regained. Business does not trust this minister or this government. How can you blame them, when so many promises have been broken?

The changes in Bill 26 are not modest proposals. Bill 26 is a beachhead for Bill 44-style amendments. The NDP are continuously planning that this legislation be exactly like the labour legislation in Alberta and Ontario. Again, this minister is attempting to deceive the people in this province. There is one major difference that the other provinces have that this legislation does not, and that is the right to vote by secret ballot. That may be only two words, and perhaps they mean nothing to this government, but it means a great deal to the people of this province and those who are members of unions. To vote by secret ballot is a democratic right and allows a person to make their choice free of fear of reprimand.

This government wonders why the business community is so against this bill. Business has pleaded with the government: "Don't tinker with the Labour Code. It will affect the investment climate in B.C." Sherwin Goerlitz, another one of my constituents, has written a letter to the minister as well. He expresses a number of his concerns. He has a very large building company established in Kelowna and Westbank, with 22 full-time, salaried employees. He deals with 150 subcontractors. He builds 80 to 100 homes per year. Each month he signs cheques in excess of $800,000 to pay for both labour and materials. In his letter he states: "I believe that the proposed changes will adversely affect my business, causing me to close down and move away to a place where. . .[I] will not be penalized for being an entrepreneur."

He states that several others have already gone, and we know about those. He says that his options are looking better every day. He states:

"The B.C. economy is already the worst in all of Canada, and when you add this burden. . . ." The ship is sinking, and this will wreck it. "If you would put your efforts toward encouraging free enterprise by minimizing restrictions and creating an environment that would attract investment and more business, you would have my full support. . . . To revamp Bill 44 is only rearranging the deck chairs on the Titanic. . . . When the Labour Code becomes too onerous, it forces good business people to either quit or leave to an environment where Big Brother is not

[ Page 9111 ]

against the people who pay their salary. You cannot send a message to the people of British Columbia that we are open for business when you are pointing a 'Labour Gun' at the heads of the businessmen."

My only hope is that this gentleman does not take his company out of British Columbia, as we can certainly use the number of jobs he's creating and the taxes he's creating for this province.

[The Speaker in the chair.]

"Canadians are having second thoughts about this Lotusland of the north. After years of vigorous expansion, the province's economy has fallen off the rails. Unemployment is rising, bankruptcy filings increased 12 percent last year, housing sales have been falling since last summer and many people are leaving.

"Jock Finlayson, an economist with the Business Council of British Columbia, notes that the province's economy began underperforming Canada's well before Asia's problems surfaced last year. He charges that the government has created barriers to business by increasing labour costs and the cost of complying with a thickening forest of regulations."

I had the privilege to attend a conference in Austin, Texas. The conference was called "Managing for Results -- Decision-making in the Age of Accountability." The conference theme was performance-based budgeting, the idea that one should have a strategic plan with a set of indicators where one could measure the outcomes. I mention this conference because I think the whole concept of accountability is important in relationship to this bill. In Bill 26, the whole process was sidestepped when this government introduced a narrow-minded piece of legislation without any idea of the outcome. They have gone ahead and introduced a piece of legislation without an impact study. They continue to claim that this is a modest adjustment. But without an impact study, this is just an empty statement.

[4:45]

I found an article by the Fraser Institute very interesting. You know, we often compare ourselves to Alberta. In this article, Mr. Mihlar does a comparison with Ontario. He comments that the Premier is presiding over a provincial economy in decline, with continuing budget deficits, high income and corporate taxes, a growing number of regulations and, consequently, declining investment and job creation. There are a number of lessons learned from the Ontario reforms. I think lesson 4 is probably the most appropriate in this case. It suggests that the province introduce more labour market flexibility. Research evidence suggests that countries with flexible labour markets create more jobs than jurisdictions with rigid labour markets.

Mr. Mihlar, in another article in the journal Commerce and Industry, quotes a survey of senior investment managers. The investment managers held negative views of both Quebec and B.C. -- 49 percent held negative views of B.C. compared to Ontario, which gained an 81 percent positive response. B.C. ranked ninth of the provinces -- the ninth-worst province in Canada to invest in. Only Newfoundland ranked lower than British Columbia.

In conclusion, hon. Speaker, my constituents are shaking their heads in disbelief over the introduction of Bill 26. They cannot believe that this government is too shortsighted to see that any changes to the labour laws in this province will further erode the certainty and confidence for investment in British Columbia. The one positive move to enhance jobs and investment in this province is to hoist this bill and show British Columbians that they are concerned with their future and with the future of British Columbia.

Hon. J. Pullinger: I'm very pleased to stand in support of this bill and to enter into the debate and respond to some of the points made by the members opposite. The first thing I want to say about this bill is that I agree absolutely and entirely with the opposition when they say this is about politics -- absolutely and entirely. But I differ on one critical point. On this side of the House it's about policy; it's about labour laws; it's about the end of a long process that started a decade ago; it's about simply clarifying the rules, as has been identified for years. The politics are on that side of the House, when we get an opposition that stands up in this House and devotes an entire question period to ranting and raving and engaging in hyperbole about the disaster -- the sky is falling! -- before they've even seen the legislation or had a chance to read it.

Not only that, they're working with their political buddies, and they got -- what is it? -- a couple of million dollars, an ad campaign. They'd got the whole strategy mapped out before they saw the legislation. They hadn't read it, but they went right over the edge like lemmings into the sea on this one. It was the most remarkable performance I have ever seen in this Legislature.

It is clear to me that this is not about the legislation; it's clear to me that this is about Liberal ideology. It's clear to me that this is the best way they can find to get a fundraiser going on that side of the House. If they'd actually read the legislation, they would find it was nothing like what they're talking about. Interestingly, on that point, they're not talking about the legislation, as you notice; they're talking about the economy; they're talking about jobs and youth; they're talking about Alberta and Ontario. They're talking about everything in sight -- and making up quite a bit, I might add. They're talking about everything in sight, but they're not debating the legislation. Gee, I wonder why that is.

Could it be that if they actually read the legislation and debate what's in it. . . . It really is very balanced; it came out of

[ Page 9112 ]

This piece of legislation simply rectifies a longstanding, long-identified problem with the existing labour laws. It simply brings British Columbia into line with the other provinces -- those radical, left-wing provinces like Alberta and Ontario. It just simply brings us into the same process -- very, very similar or virtually identical rules to what those provinces have. This is good legislation; it fixes a longstanding process. What we have here is a set of rules that apply to the construction industry. Every province except -- until now -- British Columbia has recognized the need for this kind of legislation. I mean, we've recognized the need. The members opposite don't; they refuse to.

By implementing this legislation, we recognize the unique characteristics of the construction industry, and I don't think the people opposite even understand the difference, much less recognize it. But all we're doing with this minor amendment is joining the mainstream.

Since 1987, governments have attempted to change the Labour Code to address this issue -- Lyall Hanson, the Socreds, their pals, the people that were working for them. What we did in 1997. . . . Despite all of the rhetoric on the other side that says, "The sky is falling; you didn't consult us; it's a payoff; it's all sorts of things," it's not. Anybody who wants to look at the legislation and actually see what's happening here would recognize that very, very quickly. In 1997 we struck an independent panel -- not Ken Georgetti. They love to malign people who are involved in labour. It wasn't Ken Georgetti; it also wasn't Suromitra Sanatani -- and they never mention that bias. We struck an independent panel to look at what the industry required and fill the gap identified by business and labour and the Bill 84 process.

That panel consulted with businesses and employers. I know that the members opposite think this is a travesty, but it also consulted with employees and unions. Of course, to be balanced it needs to do that. This legislation, Bill 26, is based on the work of this most recent panel. It is narrowly focused on one part of the construction industry, but it's critical legislation to that part of the industry for the employers and the employees alike.

The focus of Bill 26 is industrial, commercial and institutional construction. Now, ICI: industrial, commercial, institutional. Does anybody hear housing? I don't hear housing in that. It says: industrial, commercial and institutional. But the members opposite continue to say that this is going to drive housing prices out of control. What twaddle! That is about politics; it's about rhetoric; it's about Liberal fundraisers. It has nothing to do with reality.

What we're doing is providing, quite frankly, long overdue fairness to people who work in the construction trades who want to join a union, who want to exercise their constitutional right to join an association. It's interesting that the people opposite never talk about allowing workers, for instance, to interfere in whether people join the chamber of commerce or the Coalition of B.C. Businesses or a gazillion other organizations that employers have. They have every right to do that.

I fully support business owners and employers joining all of those organizations, and there are numerous organizations. I fully support their right to do that. But unlike the other side of the House, I also fully support the rights of workers to do exactly the same thing. The people opposite would deny that to workers. We on this side of the House think that both sides should have the same right and that there shouldn't be a special set of privileges for some that are denied to others, especially when there is an unequal power relationship.

What we're doing here is simply fixing a long overdue imbalance identified by the Social Credit government, by the business and labour committee on Bill 84 and by this balanced panel that just simply went out and consulted. We're simply fixing a very small problem. Bill 26, as I say, affects the industrial, commercial and institutional. . . . And if any of the members opposite continue to say it's housing, the public should know that is simply not true. It affects craft unions. It doesn't affect industrial unions -- just craft unions and their employers. The unionized employers, interestingly, think this is good.

What I find absolutely amazing is that the members opposite continue to scream and cry that they know for sure -- absolutely -- that by addressing this long outstanding issue, the sky is going to fall, people are going to flee and businesses are going to close. It's going to be an absolute disaster in British Columbia according to the members opposite, and they profess to know that. They say: "What studies did you do over here to say that this wouldn't hurt the economy?" I would like to ask the same question. They've read opinion after opinion from their political friends. They have not one shred of evidence to back up their claims, and that's simply because there isn't any. It's not so. It's simply political rhetoric for their own political purposes on that side of the House. This is about bringing craft unions into one council and all craft union employers into one association -- balanced. Guess what: employers and employees both get to go into associations. What it does is provide for umbrella agreements.

You know, hon. Speaker, we did something like this in the film industry. The film industry was fragmented. There were different agreements. The negotiations were ongoing. It was very disruptive. In fact, it was so disruptive -- listen up, on the other side -- because the labour laws were unbalanced. Because we had a situation like we've had in the construction industry, we couldn't get the film industry to come here in the numbers it should. So guess what: we went and fixed that problem, when it was in the film industry, in just about exactly the way we're fixing this problem in the construction industry. We made long-term umbrella agreements amongst the trades in the film industry. And you know what happened? Well, according to the members opposite, all of the film industry should have fled British Columbia. Jobs were lost, people were out of work and youth were damaged. It was a disaster -- right? Wrong. What happened was that in the year following, the stability created by the changes we made, made our climate so attractive here in British Columbia that we became number one in Canada in the film industry and the third in North America. That's youth jobs; these are good, union jobs. In the year and a half that I was the minister responsible for film, I had big film companies like Warner Brothers say again

[ Page 9113 ]

[5:00]

So we've got this incredible rhetoric starting long before they ever saw the legislation, right over the edge to the point of being silly about what this minor amendment will do. At the same time, we have evidence in British Columbia that these kinds of changes actually bring stability to the labour market and actually encourage economic growth.

We also have labour law specialists who are saying that these are good amendments. Ken Thornicroft from UVic says: "I don't see these amendments as hugely controversial, although there probably will be controversy." Of course, that's because the Liberals have decided to declare war over this. They think this is their best opportunity to garner support to get a movement going with their friends to raise funds and who knows what else.

I think that the reaction on the other side of the House is, quite frankly, over the edge, silly. Most of the debate has no substance; it's simply rhetoric. Quite frankly, I'm appalled that the opposition would engage in that kind of rhetoric without a shred of substance before they even looked at the bill. It's really quite appalling in the democratic process.

It's very clear, I think, to anybody who has read the bill and listened to the members opposite that this is not about Bill 26. It's about Liberal politics; it's about their ideology. As they said, in their words, "It's of symbolic significance," but I would add: "to the Liberal Party." This is about the members opposite -- the retread Socreds, the ones that brought in Bill 19 -- and their utter contempt for working people. I haven't seen anything like it since we saw the Socreds leave. This particular caucus of the Liberals has utter contempt for working people.

We have, for instance, seen the member for Kamloops-North Thompson. Here's his idea of fairness and democracy in the workplace. The member for Kamloops-North Thompson said this: "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." That is a quote from Hansard, July 2, 1996. That's the Liberals' view of working people -- utter contempt.

Similarly, we have the Leader of the Opposition with similar kinds of quotes that demonstrate their contempt for working people. We have the Leader of the Opposition who says: "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." That's in the ICBA newsletter, June 1994, volume 6, No. 2. That's a quote from the Leader of the Opposition. What he's saying is that they want a secret ballot so employers can intervene in the collective bargaining process. Are they willing to provide that same right to employees when employers decide whether they want to exercise their freedom of association, their constitutional right? No, not at all. One-sided -- that's what they call balance. Whack them if they don't behave the way you want. That's Liberal balance: just hit them; whack them; throw them out.

They also want to have a vote, and it's very clear that the Leader of the Opposition says they want a vote specifically so employers can intervene, so they "won't be forced into accepting what big unions want." That's what they want. That's a disgrace.

The Leader of the Opposition also says that he wants to slash the size of government. He's going to cut government to make it even smaller. Should he win the next election, he isn't afraid to re-examine signed contracts. Now, this is where we're talking about working people, and the reporter said: "Are you hoping to reopen these negotiations?" And the Leader of the Opposition said: "If it's necessary to make sure that we can deliver the services and protect education and protect health care in British Columbia to do that, then we would be willing to do that absolutely."

The Leader of the Opposition is on record the same way as Bill Vander Zalm and the Socreds were, saying that they will rip open legally negotiated contracts and roll them back. He's on record more than once saying that. That is contempt for working people, hon. Speaker.

I find the attitude of the opposition, quite frankly, on the verge of frightening. They have utter contempt for working people. They will take the side of doctors when they want $1,000 a day more, rather than defend people's right to put that money into health care -- unilaterally, with no discussion. They don't want any discussion -- just give it to them. I support the doctors' right to bargain and negotiate, but if working people had essentially a wildcat strike like that, they would have been up in arms. They would have said: "Take away their right to bargain and to strike. Make it an essential service." That's what they would say. Ferry workers should be an essential service, but doctors should not? Where's the balance in that? Where's the fairness? That again demonstrates simple contempt for workers by the members opposite.

We see in Ontario Wal-Mart versus the kids who work there. They finally got a trade union to represent them. One Wal-Mart in all of Ontario got it, and they got it because the Labour Relations Board found that the company was being so unfair, engaging in such unfair labour practices, that they said they were going to grant this certification. And guess what: the people in Ontario, which the members opposite admire and want to emulate and be like in every way. . . . The Ontario government -- today, I believe -- is taking away the ability of the Labour Relations Board to do that. In other words, they're restoring the ability of the employer to interfere in the collective bargaining process without interruption, without interference. That's the kind of balance that we're looking at on the other side of the House. That's what the Liberals are looking for.

These people on the other side of the House again and again and again pretend that they care about youth, but in the case of young people -- in a case like Wal-Mart -- they wouldn't emulate that. They would go back on labour legislation. So it's David and Goliath; it's Wal-Mart International, a huge chain, against young people that are trying to earn a decent living. They want to drive down labour laws and drive up the cost of education. What kind of balance is that?

[ Page 9114 ]

An Hon. Member: They don't care about workers, those Liberals.

Hon. J. Pullinger: They don't care about workers. The Liberals' argument that this labour legislation will drive jobs out of B.C., as I have demonstrated and argued, is nonsense. We have a very parallel process that has happened in the film industry, and it did just the opposite.

They say the Labour Code in B.C. is unbalanced, and we should return to Bill 19. Well, guess what. Bill 19, which the Socreds had -- these retread Socreds want to go back to it. That law was created behind closed doors by the Premier and a lawyer -- even behind the backs of his own cabinet and caucus and Labour minister. It was so unbalanced that it was condemned by the ILO -- the International Labour Organization, a division of the United Nations. It said that B.C.'s labour laws were unfair and oppressive. That's what they want to go back to; that's their idea of balance.

An Hon. Member: Back to the future.

Hon. J. Pullinger: Exactly. So that's another argument. Clearly that's just silly. What they want to do is go the other way.

The member for Saanich North and the Islands is arguing on this legislation that this is chapter 1 of Bill 44. Well, says who? They made that up; they just made it up. I guess that's like Warren Betanko: you make it up, you give it a name, and it must be real. That's the Warren Betanko method over there. It clearly goes further than it went for the Parksville MLA. They're saying: "This hurts young people." How so? By providing decent jobs at decent wages? By allowing for a balance between labour and employers? By clarifying the laws so that we can stabilize industry so that it can get on with business? Pray tell, how does that hurt young people?

They say we're inciting class warfare. Well, that, of course, is laughable. We've brought in a modest amendment based on consultation, based on what the business and labour committee that did Bill 84 said, based on what the previous Social Credit government identified and based on the laws across this entire country. They've gone ballistic over nothing and said: "The sky is falling." They're accusing us of creating class warfare? Hello. What am I missing? There's something wrong with that argument. It's completely fallacious. It's silly, but they continue to make it.

They also say that we should be doing something to stimulate the economy, that we're doing nothing. Well, I guess four years of personal and small business tax cuts is nothing. I guess sorting out the film industry and having a tax package for domestic industry and another tax package of incentives for offshore industry to come here and make us number one in Canada -- I guess that's doing nothing. I guess bringing in a separate agency to market British Columbia and cooperating with industry to do that, maintaining funding in very difficult times -- better than Alberta did, I might say -- giving the tourism industry a legislated right in land use planning and creating parks -- I guess that doesn't do anything for that industry. I mean, silly us.

This year we brought in a package of $450 million in tax cuts, and they say that's not enough. How much is enough? We're going sector by sector. We've got one-stop business registration. We've got the best centralized information and support for small business in British Columbia of anywhere in Canada -- in cooperation with the federal Liberals, I might add. We've got interactive business planners. We've got the youth business and entrepreneurship training. We've got oil and gas, mining, forestry. We're working sector by sector, and we're cutting red tape. We're reducing costs, and we're working with industry. So the only ones offside are the people opposite, who just want to pick a fight. They don't want to work with industry, they don't want to stabilize the economy, and they don't want to create jobs. They just want to pick a fight for their own political purposes.

I agree with them on a couple of things. One, this is about politics -- Liberal politics. I also agree that the business climate is about perception. If there's an event that happens affecting the money markets or the stock market, the head of the Bank of Canada and the head of the U.S. Federal Reserve will stand up and make a public statement. Everybody knows that top-level public statements make a huge difference. Given that and given what our government has done in the last few years, I would simply pose the question to the Liberals: if perception is so important -- and I agree it is -- why do they engage in a three-month phony and, quite frankly, misleading campaign about 24 percent of businesses leaving B.C.? Every single one of them wrote columns and letters, and the sky is falling: "You know, we've got this poll that says 24 percent of businesses are leaving B.C." Do you know what that was about, hon. Speaker? That was a self-imposed survey of 2,000 board of trade members. And I know those are, of course, representative of employers, the general public, youth and women and men all around B.C. -- I mean, how silly. It was a self-survey of 2,000 board of trade members -- and good for them. That's great. But it's opinion, not fact.

[5:15]

It was a phony, false, misleading, outrageous campaign, but it was effective. They have scored some political points, but they did it at the expense of the business community and the people of British Columbia, and I think that's despicable. That's Liberal politics. Yes, perception is important. Why don't they stand up for once and say that we're doing brilliantly in high-tech or in tourism? Under the NDP, we've gone from $4 billion per year to $8.3 billion per year and created thousands of jobs. Why don't they stand up and admit that?

Why don't they stand up and admit that we've got 20 percent per-year growth in high-tech, and we've got IBM coming in here with a centre of excellence and all sorts of really positive things? Why don't they tell the world that B.C.

[ Page 9115 ]

Why don't they stand up and tell the truth? The truth is that in the new economy and in the Okanagan, Vancouver and the lower Island, our economy is actually doing quite well. We are still creating jobs. Yes, we do have problems; of course we have problems. The markets for pulp are in the tank. The markets for wood are in the tank. They are rarely in the tank together; it's just our bad luck in B.C. that they are. The mining markets are also in the tank. I mean, that is a big problem, and we're working to resolve it. The federal Liberals are systematically and deliberately destroying the fishing communities along the coast of British Columbia.

We've got some real problems. More than any other province, B. C. is linked to the Pacific Rim -- 30 percent of our economy -- and that's a problem. There's no question. But despite all of that, our economy continues to grow. It's not a lot, but when we look at what happened in 1982 under those people, when we had a massive recession and huge problems. . . . The gap between the haves and have-nots widened faster than in any other decade in our history. We're not doing badly, and it would be real nice if they stood up and said: "Yeah, we've got the same oil and gas boom in the North Peace as Alberta and Saskatchewan has." Maybe they could admit that the oil and gas boom is helping B.C. in the same way that it's helping Alberta -- we just don't have as much of it. Maybe they could admit that for once.

What we have here is an absolutely outrageous debate from the other side based on nothing, which was started before they even saw the legislation and funded by their friends to the tune of $2 million. They wrote the ad before the legislation was dropped; it's based on nothing. The evidence demonstrates that what we are doing with Bill 26 brings us into line with other provinces, including Alberta and Ontario. It is modest. Our experience shows that it will be effective to stimulate the economy -- not the reverse. I challenge the members opposite to stand up, tell the truth and enter into the debate in a more real way.

L. Stephens: It's a pleasure for me to join in the debate on Bill 26 this evening and to talk a little bit about what some of the policies of this government have meant to the prosperity of British Columbia.

Just to make a few remarks for the Minister of Human Resources. She talks about how wonderful the economy of British Columbia is. These are the B.C. stats that were just released. What it says in here is that for the first time since the mid-1980s, British Columbia had a net outflow of people to the rest of Canada. It also says that exports of B.C. products plunged in April, dropping to 19.5 percent below the April '97 level. It also goes on to say that B.C.'s exports have been falling since last summer and that this year to date we're down 15.3 percent from the first four months of 1997. This includes exports in forest products, which are down 21.5 percent to date. Industrial goods -- not just natural resources, but industrial products -- are down 21.8 percent. Energy is down 3.5 percent, and fish is down 2.7 percent.

What's happening on the national scene? Well, exports were up 5.5 percent this year to date, with Prince Edward Island -- tiny little Prince Edward Island, which is smaller than Surrey -- having exports up 62.7 percent. Manitoba is up 14 percent; Quebec is up 12 percent.

Alberta -- which the government likes to talk about, particularly in relation to Bill 26 -- has been maligned by this government. They talk about how badly Alberta is doing -- and about some things they want to take from Alberta, and we're going to talk about those a little later on. They talk about how wonderful Alberta is doing, why they're doing so well and why they're employing all these people. The Minister of Labour said that it was because of oil and gas. Well, oil and gas prices are down 16.4 percent, and Saskatchewan's are down 7.5 percent. And yet Alberta, Saskatchewan and Manitoba have the lowest unemployment rates in the country. So the minister and members opposite really have to make sure that they know what they're talking about.

But on Bill 26, let's be clear: this is a political bill. There is no question. This is a political bill, pure and simple. It's a payback bill, and it's a payback to the building trades movement and the B.C. Federation of Labour. It's a rewrite of Bill 44. It is not by any stretch of the imagination as draconian as Bill 44, but it is certainly a bill that sets out the real agenda of NDP labour legislation.

This kind of bill, Bill 26, based on socialist ideology, really shows the true colours of this government and the NDP. Because I don't share that ideology -- nor do other members on this side of the House -- I won't attempt to convince the members opposite of the errors of their ways -- certainly not in regard to Bill 26. But for the NDP, investors, all members opposite. . . . I was listening earlier in the day to the member for Surrey-Whalley, and she talked about this socialist ideology. She talked about investors, bosses, profits, corporations and business all being dirty words to this government. At some point in time, members opposite have to understand and realize why this province was at one time viable. What they don't understand is that the cumulative effects of government policies, practices, procedures and legislation are destroying the spirit of entrepreneurship in British Columbia.

Now, no one asked for these changes in the construction industry, and there's no need for them. In fact, the construction industry has been one of the most stable labour environments in recent years. Bill 26 gives trade unions carte blanche to recruit non-union workers and boost their declining numbers, and it gives unions the same chance to offer a single standard contract instead of requiring newly organized union members to negotiate a first contract from scratch. Bill 26 is the thin edge of the wedge. The Premier and this government know that they cannot impose Ken Georgetti's entire agenda all at once, like they tried to do in Bill 44, so they're imposing it one little piece at a time. Bill 26 allows unions to organize the highrise residential sectors through the back door. If any residential construction project has a commercial component -- and many do -- it will fall under the one-size-fits-all agreement of the commercial sector. This means that there is less flexibility for employers and workers and higher costs for consumers.

The Minister of Labour said: "We are bringing forward the measure with regard to Labour Code amendments because, first, it is fair; it is the right thing to do. It's a minor amendment; it's a matter of repairing something that's wrong with the Labour Code that people in the province have recognized for at least a decade." Well, what is it that people have recognized for at least a decade? What's wrong? What's wrong from the government's point of view is that it is not easy enough to certify. It's not easy enough to unionize the

[ Page 9116 ]

He goes on to say: "The legislation will be absolutely neutral, as far as we can make out, with regard to investment and economic activity." "As far as we can make out. . . ." Now, if neutral. . . . And even if the status quo was maintained, B.C. is clearly still losing economic development. He also said that this legislation was comparable to Ontario, Alberta and Manitoba. But what he didn't say was that in those provinces they have a secret ballot vote and they also have double-breasting. So when the government wants to talk about balanced labour legislation, they should go back to the drawing board because this is anything but balanced. This clearly tips the balance in favour of the unions.

The minister also admitted that there had been no economic studies done on this labour bill, no cost-benefit analysis and no attempt by the government to determine whether or not heavily tilted labour legislation in favour of the unions would damage the investment economy of British Columbia. He said that in an interview. I know Mr. Palmer has been quoted today, and I'm going to quote him again because we really want to make sure that we have this on the record. We really want to make sure that the government understands this and what they've said: ". . .the Premier indicated that he hasn't given up on the portions that were dropped [from Bill 44] -- especially those that would have helped the unions get control of the contract-for-services sector, like security, food services and janitorial." The Premier is quoted as saying: "Bill 44 -- the questions around that -- I very much would like to see that come in. . . . 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."

The Premier was indicating that we haven't seen the last of these giveaways to the union. So when the Premier was out talking about bringing in, in all kinds of ways, the provisions that were in Bill 44, the Minister of Labour was saying: "No, no, we're not going to do anything; we're not going to do anything further. This is the end."

But the experiences of the official opposition and the people of British Columbia have clearly shown that you can't trust this government. You simply cannot trust what they say. They don't do what they say. There is example after example after example. The people of British Columbia know it.

[5:30]

An Hon. Member: There isn't any.

L. Stephens: There is sectoral bargaining. The effect of Bill 26 brings in sectoral bargaining for the ICI sector. Everyone understands that; everyone absolutely understands that. You know, the committee's exact words were: "One size does not fit all. In fact, the industry is moving in the opposite direction. Increasingly, contractors and unions are making contractual arrangements on a project-by-project basis." It's sectoral certification, sectoral bargaining in the ICI sector.

Earlier this year, another non-partisan committee reviewed the NDP's proposed changes to the Labour Code and said that there should be no sectoral bargaining. Here again is a direct quote: "A sectoral bargaining model as envisioned in Bill 44" -- that was last year's NDP bill -- "does not provide solutions to the problems facing the industry." That's an unequivocal statement. In other words, nobody wants sectoral bargaining imposed on business -- nobody except the NDP and the trade union organizers, who are so desperate to get more members that they will sacrifice the jobs and the investment of an entire province.

According to a Mr. Joe Barrett, who writes in Trade Talk. . . . He put forward an article and some statistics, and he talks about a few facts about the construction industry. He says: "Ten years ago the union share of industrial, commercial and institutional construction was 80 percent. Today that figure is about 52 percent. Unionized residential construction is about 10 percent." So I wonder why we're seeing this kind of legislation from this government. I think it's clear, and I think it doesn't take a rocket scientist to figure it out.

An Hon. Member: It brings up fairness.

L. Stephens: It's not about fairness, hon. member. It's about increasing union membership; that's what it's about. Other provinces are going in the opposite direction. Ontario is changing its labour law to give more flexibility to the construction industry. The Mike Harris government just introduced a new Labour Relations Act that outright gives employers and unions the freedom to negotiate specific project agreements, which contain terms and conditions that may differ from those set out in provincewide agreements -- as part of this bill does.

In British Columbia employers will have to apply directly to the minister, who has sole authority to decide whether or not any special arrangements will be made. Is this -- I don't know -- a mini-dictator or something? Ontario's changes also end automatic certification and guarantee workers the right to vote for or against a union. I know the Minister of Labour would probably relish that role. The changes in Ontario will create more opportunities for investment and improve workplace democracy. We need a government that gives employers and workers the freedom to negotiate their own contracts. We need to restore the secret ballot for workers, and we need to open our doors to investors.

The timing of this bill is especially bad considering that B.C.'s economy is not just in the doldrums; it's headed for a full-blown recession. These are the latest figures that we're aware of: 107 companies left B.C. for Alberta last year alone. I know that in my constituency, in Langley, a number of businesses have moved south of the border. Many of them have left our chamber to do that. There's active recruitment south of the border to recruit British Columbia businesses, and much of it has been successful. What do they tell us? They tell us: "The reason we're going is because of the high taxation, unfair labour practices and the fact that this particular government doesn't care about business." They simply don't care about business, and it's evident in their policies and in the legislation they bring forward.

What are they doing? They're making it more expensive to build in British Columbia. They're going to take away the

[ Page 9117 ]

It shouldn't be hard for the government to take a look at their laws before they're announced to see what the ramifications are. They should ask themselves how this law is going to bring back jobs to British Columbia, how it is going to bring in jobs, how it is going to bring investment back to B.C. In the case of Bill 26, it's going to kill jobs. It will kill investment, and it will kill small business.

The fact that the Premier has shown that he is incapable of fixing the damage that he and the NDP have done to our economy. . . . The Premier has proven once again that he and this government don't have a clue about how to create a prosperous economic climate. It's obvious that they have no economic plan -- absolutely none -- unless it is to destroy the economic viability of this province. And if that is in fact the case -- and it appears that it is the case -- they're doing a very good job. But we need a government that can turn the economy around, not a government that's doing everything in its power to destroy what was once the strongest economy in the country. We need a government with the vision to enact fair and balanced labour laws, not these tilted efforts that we've seen on behalf of this government. We need a government that says it will balance the budget, cut taxes, cut red tape and then actually do it.

In the last budget that this government brought in, the tax cuts were crumbs -- absolute crumbs, just crumbs, nothing of any significance -- and do not come into effect until the year 2001. It isn't going to help; it is not going to help. We don't need a government that you can't trust and that rewards friends and insiders as it is doing with this bill. That's all they've done.

But what are some of the other people. . . ? It isn't just the opposition that's talking and that understands what is going on. Let's talk about some of the other organizations around the province that have had an opportunity to look at this.

An Hon. Member: The B.C. Business Council.

L. Stephens: No, it's not the B.C. Business Council, but you're close. It's the B.C. Chamber of Commerce. It's that organization in this province that this government likes to say they understand, that they understand small business, that they know what small business needs and that they have a thorough understanding and support for small business people. Well, again, there's a lot of talk and a lot of information that this government puts forward that is in fact not true. Time after time the government says one thing and means another. You can't trust them, and certainly nothing they say has any credibility for the small business sector in this province.

The chamber -- an organization that I belong to and have belonged to for a number of years -- does represent the small business sector in this province. It cares about its members. It advocates on behalf of the best interests of the small business community. It has tried on a number of occasions to get through to this government and impress on this government what is needed to build a viable economic province where small business provides. . . . I know the government knows this; I know the Minister of Labour knows this. At least I certainly hope the minister knows this. The small business sector is responsible for the majority of jobs created in this province. But what does the chamber say? They say: this bill is as bad as Bill 44.

"Make no mistake. . . . B.C.'s labour laws are already tilted against employers. The recommendations, particularly in the area of construction, will just unbalance the code further. Collective bargaining for small business works best when it tailors an agreement suited to the needs of that business. . . . The recommendations for construction will either prevent small business from participating in the ICI sector or force them to conform to an unsuitable employment agreement."

What does the Canadian Home Builders Association say? They say that the implications of proposed changes to the Labour Code will accelerate job losses. They say that B.C. housing starts have fallen from 43,000 in 1993 to a projected 29,000 in 1998, resulting in the loss of 42,000 person-years of employment. Proposed Labour Code changes will accelerate this trend.

Sectoral bargaining is another area where the Canadian Home Builders Association comments. They say that under the proposed Labour Code changes, residential construction contractors will lose the right to move freely between homebuilding and commercial contracts. Without a say, they could be forced into sectoral bargaining schemes, contrary to what the independent review panel recommended. They also say that there's a lack of confidence and that B.C. has experienced a drain of both resources and talent, perhaps nowhere more apparent than in the homebuilding industry. These Labour Code changes will further undermine confidence in the residential sector and in the entire British Columbia economy. The government wasn't listening. They were not listening when they went out and talked to people affected by changes to the Labour Code. They were certainly not listening.

One of their own labour associations, the British Columbia Sheet Metal Association, sent me a letter. They don't support these changes to the Labour Code -- for some very valid reasons, I thought. I thought their reasons made a lot of sense. They just say: "Please do not make any changes to the existing Labour Code. . . . The present code works," they say. "We see the proposal as more legislative red tape that applies only to our already overregulated sector of the construction industry -- the building trades craft union sector." Did the government talk to them when they were drafting this bill?

Interjection.

L. Stephens: The Minister of Labour says yes, they did. But they obviously ignored them.

They go on to say: "We believe that strong, consistent enforcement of existing legislation would be of greater value to both contractors and tradespeople." That would be a better way for this government to increase the cooperation between labour and business.

[5:45]

[ Page 9118 ]

The membership of this British Columbia Sheet Metal Association consists of 100 percent unionized sheet metal contractors and closely related industry suppliers -- a pretty impressive organization. They made a presentation to the construction industry committee, to Mr. Kelleher and Mr. Lanyon. They laid out pretty clearly why they were not part of this and not supporting this bill. They said that their members were members of the CLRA until the system clearly did not serve the sheet metal contractors' needs. They said they still contribute to, and are active in, many joint industry programs, such as the jurisdictional assignment plans and the rehabilitation centre, and they said this was because they believe in the programs. They believe in the programs, and not because government says they must. Bargaining units must be based on the premise that if it is truly a good idea and if it adds to the contractors' and tradespeople's well-being, they will join on their own. They will join on their own.

One of the problems with the construction industry review committee is that it has recommended that an out-of-date construction model be enshrined in the Labour Relations Code. Only 27 percent of construction work is done on a craft basis through the building trades union. The vast majority of construction work -- 73 percent -- is done on an open-shop or wall-to-wall basis. This is a dramatic change from 20 years ago. At that time, virtually all industrial, commercial and institutional work was performed by the building trades. Why did it change? Very simply, it's because craft-based construction is inefficient. Consequently the construction industry quickly moved to wall-to-wall construction to meet the needs of developers and our economy generally. When you look at the statistics, it's clear that the vast majority of work done in the province today is done by the industrial wall-to-wall unions.

Given these facts, why would this government enshrine a collective bargaining model that is based on an out-of-date method for performing construction work? The only reason that I can think of is very simple: to assist the unionization of the province. I see that my time has expired.

Interjection.

L. Stephens: I have two minutes.

So why would the government bring in this legislation? Why would the government bring in Bill 26 -- sectoral bargaining in the ICI sector? It is clearly accepted and clearly understood by everyone in the province that this is sectoral bargaining in the ICI sector. Why would they do it when everybody understands that this particular model is outdated and outmoded? That's what everyone says. That's what the unions say. That's what other organizations say. But that's not what the government is saying.

By forcing all of these building trades to belong to the CLRA, the committee has effectively stymied the efforts of trade contractors to bargain their own separate trade agreements. This is another area that is becoming more prominent: the ability to bargain your own contract, the ability to provide the kinds of working conditions and working environment that companies and workers need to succeed. All of this has been put into jeopardy because of the compulsory membership in CLRA and multi-trade bargaining.

Hon. Speaker, noting the time, I move adjournment of the debate.

Motion approved.

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

Hon. J. MacPhail: I would like to inform the House that we will be sitting tomorrow, and I move that the House at its rising stand recessed until 6:35 p.m.

Motion approved.

The House recessed from 5:50 p.m. to 6:35 p.m.

[W. Hartley in the chair.]

Hon. D. Streifel: I call Committee of Supply A. For the information of the members, we will be examining the estimates of the Ministry of Employment and Investment. In the main chamber, I call second reading debate of Bill 26.

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

This bill is said by the minister to just be a minimum change in the Labour Code. But at the very least, what it means is that if you take a set of scales and those scales are balanced. . . . If in the balance, as the minister has been trying to tell us, we've had a good labour climate over the last number of years, we should leave it alone. If we were to assume that were true and that the scales are balanced -- on one side we have the employers' weight and concerns, and on the other side we have labour's weight and concerns -- then, at the very least, this bill is like the small grain of sand which, though being described as very small, still puts the scales out of balance and begins the tipping onto the labour side.

But in truth the scales are not balanced even at this point. So the small grain of sand or the large rock of this bill puts the balance even more out of place. Just to give an indication, the highlight in the very first section of the bill. . . . There's an amendment which strikes out "a group of employees" -- which implies a group of employees that may make a union that may apply for certification -- and substitutes in its place "one or more employees." What it does is say that a union, as was suggested in the previous bill a year ago, is made up of one person. Theoretically, you can have ten employees in your location, and each one of them could belong to separate unions and would be trying to get certification for his or her specialty. When we talk about craft unions, there are many specialties. So right in the very beginning, we have that kind of red flag that comes up and says: "Whoa. This is far more than what we have been told in the press releases that have come forth from the ministry."

There's a simple explanation at the beginning, and I think it's important that people who are listening to the debate tonight hear that explanation. It says, in the words of the bill itself, what is supposed to happen according to this bill. It introduces into the code a new part 4.l dealing with construction industry labour relations. Division 1 contains general

[ Page 9119 ]

". . .'construction industry' means the employers and employees engaged in the construction, alteration, decoration, repair or demolition of buildings, structures, roads, sewers, water or gas mains, pipelines, dams, tunnels, bridges, railways, canals or other works but does not include those employers and employees engaged in (a) delivering supplies and materials to a construction project, or (b) routine maintenance work."

But we know that once this bill is in place, it won't be long until another small, modest amendment, in their words, is brought forward, and it will be called Bill whatever-the-number-is-at-that-point, "Labour Code Amendment Act, 1999." If we give at all at this particular time, what we will discover is that not only have we given away the ship this year, but we've given up the dock and everything else that's a part of it. It's just that continuous flood of legislation coming forward, coined bit by bit.

It goes back to the very beginning of this government. In this regard, I must say that they were at least quite honest. When they dealt with their first labour bill, it was back in the first session that I was involved with, after 1991 when we were first elected, and when this government came into power. At that point they changed the Labour Code. One of the very significant changes they made was to change the wording in the introduction to the code from "supporting labour unions," as the old code read, as I remember it, to "promoting unions." That's what they've been doing ever since -- promoting unions. Many of the speeches presented by the members of the government today have been honest and straightforward -- that's exactly what they're doing.

[6:45]

In essence, that's what this act does. If this act is to be passed, what it says is that the small unions will be caught up in the flood. Their ability to make decisions for themselves will be taken away from them. It will be only the large union masters that will control their destiny. I'd like to remind the listeners, again, of the comprehensiveness of this bill. It's not talking just about a small segment of the construction industry; it's talking about those who are engaged in construction, alteration, decoration, repair or demolition of buildings, structures, roads, sewers, water or gas mains, pipelines, dams, tunnels, bridges, railways, canals or other works. Like so many of their bills, there's that small phrase at the end: "or other works."

This is just the initial introduction. It's all those other works that we also have to be concerned about. After the bill is passed, there's always the opportunity in the bill -- it's written in -- for the Lieutenant-Governor-in-Council to make regulations and to define any words that weren't properly defined in the bill. So "other works" will be defined after the fact. All of those people who thought they weren't covered in the beginning will soon discover that they are part of the other works. That's a major concern.

That's just the first division of this particular bill. The second division provides for the establishment of multi-trade and multi-employer bargaining for the industrial, commercial and institutional components of the construction industry. That's where a whole other gamut of rules and regulations will come into place. If this is to pass, what it means is that both employers and employees will be forced into union agreements, whether they like them or not, if they go into particular sections of the construction industry.

That's why we have been concerned about it. Some of the speakers from the government side were concerned as to why we should be objecting to this bill even before it was presented to the House. That's because we knew what was coming forward. It was just a matter of to what degree it was going to come forward. We knew what Bill 44 was, and we knew this was the follow-up from Bill 44. We knew that though they might water it down a little bit, as they have done with the two exclusions here, they would not water it down a great deal. Of course we were concerned about it -- as are men and women across the province.

The Minister of Labour will have heard me use the phrase before: a text without a context is a pretext. That's what we have here: a pretext of a good labour bill. Why are people frightened about it? It's because of the context. This is the text; it's the context that is fundamentally important. The context is that in our province, people do not have trust and confidence in the leadership that the government is providing at this time. Because they do not have trust and confidence, then any bill that is brought forward would be greeted with suspicion and uncertainty -- any bill, even if it was 100 percent. . . . Time and time again, bills have been brought forward in this Legislature that promised hope and constructive developments in our province, and these promises turned out to be false.

I personally spend a great deal of time arguing for the Ministry for Children and Families, because it was to integrate the services to children from the ministries of Health, Education, Social Services and Attorney General. All of these services were to be brought together in an integrated passage for the well-being of children. I was ministry critic at that time, and I supported that direction. Basically, apart from some segments of the bill that we disagreed with but could not get changed, it had hope and promise. But the result has been that the children of this province are worse off now than before that bill was passed. They are worse off in two ways: the services are worse and the hope of their families is worse, because they had hoped for better and found that it failed.

[ Page 9120 ]

The youth of this province are without hope. Seventeen to 20 percent of our young people -- who are ready, willing and able to go to work -- are walking the streets because they cannot find employment. When this bill comes in, it does not promise them employment. It does not promise them the opportunity to get the skills that they need or to arrive at those programs. The context in which this bill comes is one that means it can't be accepted as credible, even if the wording of it was reliable and one that we could accept. But of course, as I've explained, it's not one that we can accept.

We need to examine what is happening to our people in every part of British Columbia. Companies are leaving British Columbia. One after the other, they're going east and they're going south; they're not staying in this province. Companies that had planned to invest in this province -- to create the jobs that we need -- are presently going anywhere in the world but here. Housing starts in British Columbia in May were down 42 percent.

This bill is not supposed to involve the housing construction industry, but the housing construction industry, along with all the commercial, institutional and industrial construction, is interwoven among the labour force and the employers and the projects that are undertaken within a community. You have multi-purpose buildings in many of our communities. The ground floor will be commercial, and upstairs will be residential. You can't explain to me or to anyone else how this regulation will not affect the housing component of those developments when they are so closely integrated in the very same building and with the very same employees -- housing and commercial wrung together. It's just not going to work.

When we take the press release that was presented by the Minister of Labour -- it came out on June 17 -- he talked about modest legislative amendments. Well, if he had put "modest" in capital, black, blazoned letters, it would have explained much more clearly what this minister means by modest. It does not mean minimal. It means that they have brought forth the maximum amount of amendment that they thought they could get away with. They brought forth the maximum amount of amendment that they thought they could get passed without concern and uproar from the community, like they had from Bill 44.

Even within this amendment, where they talk about freedom of choice and how they're going to streamline the collective bargaining process so that new craft unions will be covered automatically -- not through negotiation, but through automatic. . . . This is what's in their own press release. They're putting it out and expecting us to understand it differently than the way they're saying it. Put that along with one person being a union. Can you imagine one person being a union? They talk about this in Bill 26.

If they happen to mean this next comment I'm going to read, I might just, in desperation, support the bill. They make a promise. If I thought they would keep it, it might be worth living with until a new government is formed and we have a chance to do it properly. This is in the press release. "Lovick" -- the minister -- "said Bill 26 completes the reform process that began with the government's 1992 Labour Code review." If the minister is saying that this completes their labour program of review, what is he saying? That they have completed phase one of ten phases? Or is he saying -- as he would like us to believe, I think -- that there will never be any more Labour Relations Code amendments brought forth by this government? I don't think any person with a rational mind will be able to accept that interpretation. So he's saying it's the end of this phase, which simply implies that tomorrow, or whenever this bill is passed, they begin the next phase.

[7:00]

Hon. Speaker, as you go through and look at it, there's just so many things we want to ask about -- and will, in more detail. They appoint an umpire. The umpire means the person appointed for resolving jurisdictional disputes. The umpire has power like the Speaker of this Legislature: what they say goes, and nobody can argue with them when they've said it. That's the kind of people that are going to be put in place. They talk about the umpire, and they talk about the plan that will be developed. Then they say: "On or after. . .this section comes into force, the provisions of the plan are deemed to be part of every collective agreement negotiated by the employer and a trade union. . . ." What we have in place is a process that, once it has started to take control, goes on and on and on, and you have to go back to the very beginning to stop it.

It's so blatant and obvious as you look through the process, the wording and even the headings. The heading here is: "Subsequent employer is bound." It simply states that if an employer comes into a process that somebody else has already had unionized, that employer is bound. There is no attempt to renegotiate or have the opportunity to deal with it. It's a frightening and a discouraging bill that is put before us.

The member for Surrey-Whalley said that we, in challenging this bill, were not giving credit to the people who built this province. She said that some of the persons who were investing money were investing money only to get a financial return. I think she has to be honest and say that every employee of whatever kind or direction in this province -- or anywhere else, for that matter -- who is working for a salary is investing their time in order to get a return. That's the way we live with each other. We all invest our time, and the time and labour that we put forward is an investment, even as

[ Page 9121 ]

Now, if the member had said that the volunteers in our community, the people who work on volunteer time to contribute to their community. . . . If she had been referring to those, I could have agreed with her, because every person who works with their time or their money and invests that in the building of the community. . . . Of those people, 99 percent also provide volunteer time in their community, for the well-being of their community. Our communities have been built by volunteer time. In our communities across the Prairies and here on the coast, when our neighbours had a problem, the volunteers, the neighbours, came, and they built their barns, they cut their harvest and put it in the bins, and they cared for them -- the kind of support it takes out here. That brings me back to the context of this bill. In the last year particularly, this government through its legislation has challenged the viability of the volunteer communities and organizations across this province. It has put many of them out of business. It has taken the property and possessions which they earned through volunteer effort, and it has taken away their well-earned income and their buildings. That's the context, and this is a pretext within that context.

G. Hogg: It's indeed a pleasure to join and follow my colleague for Vancouver-Langara to add my thoughts, my emotions, and I'm sure my excitement and perhaps even some repetition to this evening's debate -- perhaps not repetition. Sorry to even mention repetition; of course not.

An Hon. Member: We've heard the same speech at least 20 times.

G. Hogg: This will be totally original, totally new, for each one of you.

Interjection.

G. Hogg: I haven't even met Phil; I don't know who Phil might be.

This second reading of the labour relations amendment act, the time to review and debate the principles upon which the bill is based -- the principles being the fundamental truths and the basis for the reasoning, at least the reasoning as is reflected in the words before us in this bill. . . . The questions I had, as I looked at and reviewed the bill, were: what indeed are the principles behind this bill? What are the principles upon which it is based? What is the vision of this legislation? As public policy, where is it leading? Where does it take us? I question the timing. Is this indeed the right time, the right context for such legislation to be introduced? And indeed, how do we measure the impact, how do we look at the impact that this legislation will have?

I, unlike other members of this House, have not had the benefit of being here for Bill 44, and perhaps that, some would say, was not a benefit. I have therefore not generated the emotions associated with Bill 44 and its fleeting existence in this House last year -- and now I'm confronted with Bill 26, the son of Bill 44.

In an effort to learn more about the bill and its intent, direction, focus and meaning, I've been searching for the principles -- for the vision, for the impact -- and for the answers to those questions. I've been interested in listening to the minister's explanation. The minister called the legislation -- the bill -- moderate, reasonable and balanced. He called it modest and timeless -- timeless in that it, or a similar machination of it, had been in effect in Ontario since 1978. He called it a compromise position, and he expressed dismay that some members were taking what he called a Chicken Little, "The sky is falling" approach to it. And he reminded us of the old adage that saying it is so just doesn't make it so. He wanted to remind us that words alone were not effective in making change -- that there had to be substance, emotion and feeling behind an intent for change.

And as the member for Vancouver-Langara just made reference to the umpire, I heard many speakers on this bill make reference to baseball, and certainly that tweaked and piqued my sporting interest. The member for Powell River-Sunshine Coast, in particular, talked about the baseball player, the home-run hitter standing on deck, waiting for his opportunity to see the pitch lobbed to him and to hit the home run, to knock it out of the park. And as he stood anxiously waiting on deck for that one pitch to come, he thought it was going to be his time for stardom. And as he stepped up to the plate, he was sadly dismayed that the pitcher had intentionally thrown him four balls and walked him. How sad it was, the member described, as the home-run hitter had a tantrum. He suggested that that was analogous to this side of the House. He suggested that we were anxiously waiting to hit a home run with Bill 26. He said that we must be distressed, because he felt there was a million-dollar windup by the government and just a ten-cent pitch. He didn't think the substance was much.

The member for Alberni used baseball as well. He said that this side of the House wanted to whack labour with a baseball bat -- I assume he meant the workers. He talked about progressive discipline in some thwarted method or manner that I did not understand nor ever experienced in my many years of working with and in unions. With the member for Burnaby-Edmonds -- I was hanging on his every word -- baseball came back too. He quoted my Little League coach. Baseball seems to be a theme running through many of the speeches.

Vin Coyne was indeed my first Little League coach, and later was a fellow member of White Rock city council. I sat on city council with him for 20 years. I will quote the member for Burnaby-Edmonds: "The story that Finning was being virtually forced out of B.C. wasn't true, Coyne said. Coyne is another top official there. In fact, the company is building a $19 million parts and service centre in Surrey. When asked if Finning had contacted BCTV to correct the impression that it was being virtually forced out of B.C., Coyne said: 'No. Why should we go whining to the media?' "

Naturally, being a good friend of Vin Coyne's -- and with him being my Little League coach and therefore knowing him for virtually all my life -- I had to contact him and tell him that he was being quoted in the House and ask him what in fact was meant. He said that it was his experience that people seem to hear what they want to hear, to interpret things as they want to interpret them. He said that the real reason why Finning was moving to Alberta was that the oil was booming there and that forestry in B.C. was not. He said that the cost of doing business in B.C. was too high. The trigger that especially caused Finning to move occurred in 1992, when they had made a decision to set up a remanufacturing plant in British Columbia that was going to employ over 60 people. In order to meet the standards -- to work their way through what he described as the red tape in British Columbia -- it was going to take them approximately two years. So the president, Mr. Shepard, spoke to people in Alberta and asked them how long it would take, and he found that they could do

[ Page 9122 ]

That has tragic human consequences. I know a number of the people who work in Finning. One was a member of our city council in White Rock, and he is now scheduled to go to Edmonton. He has been off work for four months. It has been very difficult and hard on his family. That all stems from economic decisions.

[7:15]

The second is business expansion: encouraging business growth to create more jobs, to put people to work. Simply put, it's expanding what we have and ensuring that what we have is encouraged, is treated with dignity and respect and is allowed to grow to provide more jobs and more opportunities for the people of this province.

The third is business attraction: encouraging new businesses to come to British Columbia to create jobs, wealth and growth. Those are three simple, fundamental principles which allow us to experience growth and allow us to provide families with opportunities to continue in their lifestyles.

Our experience with Finning seems symbolic of many of the experiences of many of the companies throughout this province. My Little League coach has assured me that Finning was not encouraged to stay in British Columbia. Their expansion -- their remanufacturing plant -- was, in fact, discouraged. Their experience with and reception by the governments of British Columbia and Alberta were dramatically different. They felt welcomed, supported, and that their issues and the roadblocks put in their way were eased in Alberta. In British Columbia, it was going to take two years to accomplish what happened in two weeks in Alberta. As a result, the jobs have gone and many people have suffered. The principles of business retention and business expansion were indeed not met in our experience with Finning and with many other businesses in this province.

The third principle, business attraction, is well described in the recent experience of expansion and attraction which has been reported with respect to Alcan's review of their feasibility. Their feasibility study determined that British Columbia's labour costs and taxes would boost their construction costs by 50 percent. At this time the government is suggesting Labour Code changes which will make it even easier for workers to organize in the construction industry. Our record in business attraction leaves much to be desired.

The spectre of change often evokes fears -- fears of uncertainty, of instability and of insecurity. Without the vision necessary to look further than we can see, our personal assumptions often overtake our chances to look more objectively at and review our realities. The changes in Bill 26 have evoked fear in some, and phrases such as "moderate and reasonable" in others. Perhaps as Emerson said, we see the world not as it is, but as we are. Even if I agreed with every section of this bill, I would still have questions with respect to its context, with respect to its timing -- to be placed within this environment at this point in time.

That context has been described by many who have stood up to speak to this bill. British Columbia has been described as having gone from number one to number ten in Canada in economic growth -- the tenth province in economic growth. Descriptions of British Columbia include having the highest marginal income tax rate in North America, and of going from number one in job creation in Canada to number ten. Last year there was a decline of some 19,000 jobs in British Columbia, the only province in Canada to actually lose jobs, while at the same time many provinces were gaining jobs. While we lost 19,000 jobs, Alberta garnered 22,000 new jobs. From 1990 to 1997, government per-capita spending rose in British Columbia faster than it did in any other province in Canada. It grew by 28 percent, while government spending in some provinces declined by as much as 17 percent.

Disposable income is declining in British Columbia. The amount of money which the average British Columbian has to buy food and shelter and to pay rent and mortgages has declined by 2.3 percent during the past year. The economy, the context, the timing are not correct for this bill. What we may be fixing or hoping to fix with this legislation can be fixed, can be managed by less invasive processes. It can be managed or dealt with at a point in time when our economy can better withstand change. Be that real or imagined, that change or that challenge still has the impact. The perception, for many people, is the reality.

Vince Ready and Stephen Kelleher said in their February 1996 interim report that the problems which exist in the construction industry and in the building trades sector should be resolved through the collective bargaining process, not through legislation. It seems to me that the problems that are in existence there could and should be adjusted and directed and managed, just as Ready and Kelleher have suggested, through the collective bargaining process -- and not, at this point and this time, through the legislation which is being proposed, the legislation which stands before us.

Having questioned the context and the process, we must also question it against the minister's own criteria, which he said he would utilize in evaluating any proposed changes to the Labour Relations Code. The minister stated in a letter which he wrote to a business organization: "Let me close by stating the criteria that I will use when evaluating the recommendations from the two panels as well as submissions from interested groups such as yours." The minister had listed five criteria for evaluating any piece of legislation. Those criteria were:

"1. We must ensure that British Columbia's economy is efficient and capable of competing in the national and international marketplaces;

"2. We must ensure that the right of workers to join the union of their choice is respected;

"3. We must create a climate of stability which will encourage investment and create jobs;

"4. We must consult carefully with key stakeholders before making changes to laws, policies and regulations; and

"5. We must work [together] to bring. . .labour and government together to address issues of public and common concern."

[ Page 9123 ]

The second criterion: "We must ensure that the right of workers to join the union of their choice is respected." While many references were made by the minister to things occurring in Ontario and to some things occurring in Alberta, it seems to me that this would also mean secret ballots and certification, neither of which is present in this bill.

The third criterion: "We must work [together] to bring. . .labour and government together to address issues of common and public concern." Even the Premier's self-proclaimed nineteenth member of cabinet, Mr. Georgetti, is quoted as saying that he is not happy with this bill.

The fourth criterion: "We must create a climate of stability which will encourage investment and create jobs." B.C. is down 19,000 jobs; 107 companies have left B.C. for Alberta. Building permits in British Columbia are down by 10 percent. While our neighbour Alberta's -- the context that the minister referred to, national and international marketplaces -- are up 20 percent, B.C.'s are down 10 percent.

Interjection.

G. Hogg: I'm sorry, what was it you need to know?

H. Giesbrecht: Tell us about your. . . .

Deputy Speaker: Through the Chair, please, members.

G. Hogg: Hon. Speaker, I'm sorry. I was just so excited that somebody was actually pretending to listen that I got carried away. Good effort to pretend. I was dazzled by the intent.

The fifth criterion: "We must consult carefully with key stakeholders before making changes to laws, policies and regulations." Well, there seem to be very few key stakeholders who are excited with, enamoured with or even satisfied with what this bill presents. So using the minister's own criteria, this bill seems to be a failure. It does not make the grade in today's economy.

Hon. Speaker, I would request. . . .

Interjection.

G. Hogg: You're going to interrupt me. Are you going to interrupt me now, or shall I interrupt myself?

Deputy Speaker: Hon. member, I believe you're going to allow the Attorney General to take the floor for a minute, and then we'll be happy to let you come back after that, if you want.

Hon. U. Dosanjh: Tonight I want to recognize a very important occasion for both the deaf community and the justice system, and it gives me a great deal of pleasure to be able to do that. I ask for leave to make a ministerial statement.

Leave granted.

Ministerial Statement

COURT SYSTEM EDUCATIONAL VIDEO IN AMERICAN SIGN LANGUAGE

"See You in Court" is an educational video using deaf actors and ASL to illustrate the process involved in criminal, civil and family courts. It provides information in a medium that's accessible to the deaf. It ensures that they have the most basic and important information on their rights and responsibilities. The video will also help justice system professionals understand better the barriers that are faced by the deaf and help them to remove those barriers.

[7:30]

I want to thank all of the organizations that contributed to making this project possible. In addition to the ministry, funding for this project has come from a number of provincial and federal agencies. I commend everyone who has worked on this project. It is an important contribution to the province's justice reform plan and its goal of ensuring equal justice, equal access -- justice for all British Columbians.

B. Penner: Justice. It's hard to think of a more powerful and positive word in the entire English language. According to the Oxford dictionary, justice is defined as "just conduct, fairness, exercise of authority in maintenance of right," and "to treat fairly, show due appreciation of," or "out of fairness to." Clearly we cannot deny large segments of our population access to our justice system and at the same time say that we are delivering justice.

I'm a lawyer, and I've spent a considerable amount of time in courtrooms. I can personally attest to the fact that for most non-lawyers, and even for many practising lawyers, dealing with the justice system is a very intimidating and often confusing process. And that is the experience of people who speak English and can hear what is going on. Imagine not understanding the language or being unable to hear what judges, court clerks and lawyers are saying about you and your case.

Without having access to important information about their rights and responsibilities, individuals cannot properly exercise their rights and live up to their responsibilities. If individuals are deprived of their rights solely because they cannot hear, then it cannot be said that we as a society are truly delivering justice. That's why I would like to commend those who worked on this project, including the Greater Vancouver Association of the Deaf and the Law Courts Education Society.

[ Page 9124 ]

On behalf of the official opposition and thousands of British Columbians, please accept my congratulations as well as my thanks on a job well done.

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

G. Hogg: It was indeed a delight to be interrupted by good news. Good news is always wonderful, and I join my colleagues in providing our congratulations and thanks to the Attorney General and to the government on this announcement.

I was so passionate and direct and focused and excited before, and now you're going to have to help to keep me from digressing. With your okay, I'll start again from the beginning. There were perhaps a few of you who missed some of the things I was saying, who need the insight and would value the opportunity. The minister himself has come along, because he needs to have this insight, this bit of wisdom and knowledge conveyed to him, and I'm delighted to be the one to impart this wisdom and knowledge.

Mr. Minister, let me just say some of the things that I alluded to earlier, which may, in fact, be somewhat repetitive for those who have already heard it. But for others, I'm sure that it's going to be just the insight they needed to change their mind with respect to this bill.

The Kelleher-Lanyon panel stated: ". . .we consider [these] to be sensible changes for [the long-term sustainability of the] construction industry. . . . They are not based on the state of the economy at any particular point in time." I believe that this statement was a warning. It was a red flag. The panel questioned the impact that this bill might have on the economy. The economic impact was suggested by the panel -- and is referred to in the minister's own criteria, which I referenced earlier. Yet we do not know definitively what the impact will be, as no economic impact studies were done.

A further study that was commended to me -- "Looking to the Future," a report of the construction industry review panel -- stated on page 46: "In the short term, the most serious constraint on availability of skilled workers [in the construction industry] is the expected strong demands for construction workers for planned major projects in Alberta. Conservative estimates place planned construction projects in that province in the order of $40 billion over the next few years, leading to a significant demand for highly trained workers." I'm sure all of us in this House would be delighted if the $40 billion were coming to British Columbia. We would be delighted to see that type of employment, that type of opportunity, for the people of this province and indeed for the people who work in the construction trades. The question we must ask is whether or not the negative side of that possibility is exacerbated by Bill 26.

This bill, like it or not, is part of the government's economic policy. It's part of the foundation which will impact jobs and growth. It is, in fact, economic policy. It's impact, real or imagined, is negative. It is negative because those people who make those decisions, those people who have the dollars to invest to provide the jobs to provide the growth, are perceiving it as negative. They're telling us that they're seeing it as negative, and as a result the impact can only be negative. If the people have the perception that British Columbia is not a safe haven for investment, then they will clearly not invest. This bill is not just an expression of labour relations policy. It is, in a larger context, a statement about the future of British Columbia's economy, a future that stands on a sadly insecure and crumbling base.

The experience of Bill 26, on the tail of Bill 44 last year, reminds me of the story which Michener describes in one of his novels. In that novel he has a mother and a daughter sitting on their rocking chairs on a veranda overlooking a beautiful sunset in Hawaii. After rocking together for some time in silence, the mother turns to the daughter and says: "Dear, you really should listen to your father. He has 50 years' worth of living experience." The daughter rocks on in silence for a few moments further and then turns to her mother and says: "You know, mom, what I think dad really has is one year's worth of experience lived over 50 times." It's my concern that. . . . [Applause.] Another ovation from the government. The government is just delighted. I'm glad that some of the government members follow me around the province to hear every word I say and sometimes are entitled to the little bits of wisdom I have been sharing throughout the province. The experience. . . .

An Hon. Member: Little bits.

G. Hogg: Little bits. I can't give more than you can absorb, so little bits, being what you can absorb, are what must be given.

While we're onto stories, I'm also reminded of Abraham Maslow's wonderful quote that for some reason leaps to mind: "When the only tool you have is a hammer, then every problem starts to look like a nail." With the problems we've seen in terms of the economy in this province, I'm fearful that the government is often only using a hammer, a hammer that seems to be detrimental and negative in terms of what we're doing with our government and our economy in particular.

As I look around this august chamber at the 22 pillars and the five men of wisdom and knowledge who sit at the top of those pillars in repetitive fashion -- like some of us -- I must wonder what they think as they look down on us. I'm sure that when Mr. Rattenbury, the architect of this building, was designing the building and looking for names and faces of people he thought would provide us with the wisdom necessary to make the decisions that we have to, to provide us with that information and that wisdom. . . . So he put Socrates up there, who said: "Know thyself before you make decisions." Let me tell you about two of his students, Plato and Aristotle, who are up there looking down on you as well. Plato studied and followed Socrates and founded the Academy for scientific and philosophical investigation -- an investigation which. . . . I'm sure that academy would have been wonderful in looking at your bill, hon. minister, and would have helped us.

The red light is coming on, so I've got to move on. Perhaps you'll be around when I get to tell you about Aristotle's impact on you.

L. Reid: I too will begin with a quote: "Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has." Those

[ Page 9125 ]

I was delighted when I read the June 3 press release of the Minister of Finance. I thought there was wisdom in these words: "Given the challenges facing the provincial economy, this is not the time to take a chance on introducing measures which could damage the investment climate." Those are the words of the Minister of Finance. I thought that those words could be generalized to the very debate we're in today -- that the fragility of British Columbia's economy would not be tampered with. I intend to put these words on the record many times during the debate because the words are valid: "This is not the time to take a chance on introducing measures which could damage the investment climate." That's a valid statement, and I believe this is going to be a principled discussion.

The principle is: who is best able to safeguard the provincial economy? I don't believe, based on the actions of this government, that it is the New Democrats in the province. The quote speaks for itself. There was one member of the government who had a flicker of wisdom on this question. Not three weeks later, that flicker of wisdom has been abandoned. It's troubling, because it is about principle; it is about who is in the best position to safeguard the economy. I have some serious concerns. I believed that the Minister of Finance's words would carry some weight. Obviously not. The best economists of the day have said that this is not the time to do anything that would impact negatively. . . .

An Hon. Member: Name one.

L. Reid: I intend to name many during the course of my remarks. Each one has said that it is not the time to tamper with the provincial economy. It is time to have some respect and some regard for the fragility of this economy.

This economy has plummeted to number ten at the hands of the New Democrats. When these individuals came to office, we were in first place in the country. The British Columbia economy was the strongest in the country. There is no doubt today that we are in tenth place. This government can take no pride in having driven this economy to the very brink of disaster and recession. That's a concern to me.

I believe that safeguarding the economy should be a priority. I do not see that this government shares that sentiment. I don't believe they understand the necessity of ensuring that safeguarding the economy is a priority, because I don't believe that they understand job creation. It is small and medium-size businesses which act as the economic driver in the province. It is not government; it never has been. It's important to acknowledge that the skills that are required to build a small business -- the entrepreneurial spirit, the risk-taking -- are something that we should have some regard for. That is who employs British Columbians. That is who provides long-term durable jobs to British Columbians. It is not people who are prepared to tamper with the economy to the extent that this minister and this government continue to do so.

[7:45]

We're not valuing the wealth creators; this government is not valuing the job creators. They're not interested in safeguarding the economy. Their actions speak louder than words. This is not a mild change. This is the beginning of a road that will not improve the economic climate in this province. This government will tell you that. . . .

During question period, this minister has said many times that he hasn't done his homework -- that there's no research to support the changes. Any government that would not conduct an economic feasibility study on any piece of legislation is ridiculous at best. I know that I have stood in this chamber seven years in a row and talked about the cost-benefit analysis of a variety of programs, issues, acts and bills. This government has yet to put on the table a cost-benefit analysis. It has yet to come back to the people who fund this province, the taxpayers of this province, and provide some honesty and some decency on those questions.

The minister knows that to be absolutely true. Anyone only has to reference the Hansard Blues of the last number of days to know that the minister was darned proud of not having done his homework, of not having done research on this question, of not having conducted an economic feasibility study on the negative impact of Bill 26. That's a fact. Frankly, the minister agreed. If he's now changing his mind, I would welcome him to join the debate and provide his new-found wisdom on this question. But I don't believe he has made any growth, any steps, in terms of this discussion.

Hon. D. Lovick: How do you make growth?

L. Reid: Well, if you have to ask, minister, it's because you're not engaged in personal growth at the present time. No one on this side of the House had to ask that question. We truly understand how people grow, evolve and develop. You need to pay attention, hon. minister.

I have read the work of Hillary Clinton when she talks about it taking a village to educate a child. Frankly, I'll say it will take a whole lot more than that to educate this minister. We know that a holistic approach is required in this debate, not the simplistic approach taken by this minister. It's troubling that he continues to suggest that indeed he has covered the bases, when in fact we know that's not the case. We truly, truly know that the homework has not been done. The minister knows that. Frankly, the government knows that. It's not appropriate to take a simplistic approach to safeguarding the economy. It takes a lot more skill, a lot more sophistication, than that.

This legislation is bad for investment. It's bad for jobs in the province. It's bad for this economy. It's bad news for British Columbia's economy. We know that to be true. There's no doubt in anyone's mind in that sense. Again, when we talk about Bill 26, we need to keep in mind that it's not this legislation that has anything to do with creating wealth or job opportunities. That is done by small and medium-sized business in the province. Anything that unsettles what is indeed a very fragile business climate today is not good news for this province. That's a fact.

[ Page 9126 ]

We have no better an investment climate since this government came to office; we have no better an investment climate since these individuals began tampering with Labour Code changes over the past seven years. They have not returned a better product; they have not done their homework; they have not done the research on an economic feasibility study for this particular piece of legislation. We know that. Troublesome, flagrant abuse of the taxpayer. . . . Those are the individuals who end up picking up the pieces every single time this government goes off on some misguided policy. Every single time, the taxpayer is left holding the bag. That's a fact. They are the individuals in this province who fund this enterprise.

The ability to legislate is funded by the taxpayer. The ability for this chamber to operate is a taxpayer-funded enterprise. To disregard the input of the taxpayer in this province is fundamentally wrong. It's not about democracy. But I will say again that this government alarms me when they talk about being supportive of democratic rights, and then they eliminate the secret ballot. I mean there are profound contradictions in the words that emanate from this Minister of Labour. I believe that he has taken a very illogical stance around proposing Labour Code changes, because he has not listened to the economists. He has not looked carefully and precisely at the economic climate of this province. That is the role of government: to safeguard the economy of this province. That is what the individuals who make contributions on a regular basis expect. That is what I would expect in terms of delivering a reasonable product.

I think that's a useful discussion that we need to have, but we need to have a broad-ranging discussion about who indeed is preserving democracy in the province. It's not the New Democratic government. They've had ample opportunity to return the secret ballot, ample opportunity to make some headway on eliminating red tape. They've had opportunities, though, for seven years. Have we seen movement in that direction? I haven't. The public has not. The people who fund this exercise have not seen growth around eliminating red tape, about returning to a secret ballot. Those are the things they believe in. Those are the things they ask for repeatedly. Those are the things that fall on deaf ears when we look to this government.

So this debate on Bill 26 is of great concern to British Columbia, and it's of great concern to the taxpayers -- the creators of wealth, the creators of job opportunity -- because they indeed are the ones who craft jobs for people. They create working opportunities. That's what they believe in. That's what they do extremely well.

My colleague across the way has asked to make an introduction, and I will certainly yield the floor.

T. Stevenson: I ask leave to make an introduction.

Leave granted.

T. Stevenson: In the gallery tonight is a friend of mine from Vancouver-Burrard, Gary Penny. Gary Penny is a small business owner and a strong NDP supporter and supporter of mine.

An Hon. Member: He looks great.

T. Stevenson: Yes, he looks great. He is doing very well, I understand. He has also been a gay activist for about 30 years -- a long time in our movement -- and this year has been honoured as the parade marshal in the annual gay parade. This year we're expecting over 100,000 people for this parade in Vancouver, and he is the parade marshal. I ask all members to make him welcome.

L. Reid: Noting the hour, I move adjournment of this debate.

Motion negatived.

L. Reid: I am pleased to continue in debate on Bill 26. Certainly I want to talk about one of the criticisms that emanated from across the floor when they talked about the official opposition having, in fact, not supported this bill on first reading. The bottom line is that we saw the bill on first reading. There were briefings conducted. There were members of this official opposition who had seen the bill and knew full well that it was not worthy of support. The government attempted to suggest that it was a confidential document until the very moment it was raised in this Legislature. I will ask the hon. members. . . . I would address their attention to this document, the B.C. and Yukon Building and Construction Trades Council's June newsletter, which carries great detail about this particular bill, which this government would have you believe was a confidential document until the very moment it was released. Untrue -- yet another untruth emanating from the government benches.

Indeed, the work that has gone into ensuring that little Post-it notes, if you will, be returned to both the Premier and the Minister of Labour regarding whether or not people believe strongly in the work of this government. . . . Tom Sigurdson, executive director, has penned this lovely work, and indeed, this information was known to these individuals and many others prior to this bill coming before this Legislature. That's a fact, and that's a concern -- if indeed the criticism is valid when it emanates from that side of the House. I have not found many instances where that's the case. There needs to be some consistency. Again this government will have demonstrated that no consistency exists on their part when it is about pursuing an agenda that is in the best interests of safeguarding the economy of British Columbia. That is what the Liberal opposition stands for. That is what we're continuing to fight for, and we will continue to launch a reasoned, logical debate about the economy.

I would only ask this minister to provide the research and economic feasibility studies that he has conducted. He

[ Page 9127 ]

If the minister wishes to get to his feet, I would invite him to do so. If he wishes to continue to make faces. . . . Grow up.

On that piece of advice, I would move adjournment of this debate.

[8:00]

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

Hon. D. Lovick moved adjournment of the House.

Motion approved.

The House adjourned at 8:01 p.m.

PROCEEDINGS IN THE DOUGLAS FIR ROOM

The committee met at 2:37 p.m.

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

T. Nebbeling: Before we broke for lunch, we were talking about the concern that we on this side have that in the future, for the government to fulfil the legal commitments that it is in the process of making when enticing aluminum smelters to come to the province, there will be a need for additional power. That power, with what we know today, cannot be produced in British Columbia exclusively, and the Crown -- not B.C. Hydro -- will most likely be forced to find that surplus power in other areas.

Our concern is that while the Premier is going around offering B.C. as a very low-cost power area for these aluminum companies, we know that the cost of the surplus will most likely exceed what the government will receive from these future aluminum smelters. When we discussed this whole matter, we were trying to identify (a) some of these sources of new power from which the government or the Crown could purchase more power and (b) who would be responsible for the costs associated with this surplus power that would be purchased at a lower price than the subsidized price. The difference between what the Crown would pay for surplus power to service the aluminum smelters and what the aluminum smelters would pay to the Crown. . . . Who is going to be responsible for carrying that financial consequence?

So far the minister has not been able to give an answer to what I think is a fair question. I want to reiterate that last question at this point, so that we can continue to pursue options for power creation, the costs and the prices that will be charged for the power when it comes to these so-called preferred industries that the Premier is trying to entice to British Columbia.

Hon. M. Farnworth: I have a couple of points. I answered this before, and I guess I'll answer it the same way again. There's Hydro and there's the Crown. You have an account with the Crown. The money from downstream benefits goes in there, as does money from contracts that are signed with, for example, Alcan. There's already an existing contract there. It could be with another aluminum smelter or, for the sake of argument, it could be with a copper smelter. The question of the price comes down to the price that you negotiate on each contract, because it wouldn't be the same price with every contract. Depending on when you sign a contract, depending on the price of electricity. . . . I mean, the price is going to vary.

The member keeps raising this issue of subsidy. As I said earlier on, the issue isn't one of subsidy versus B.C. Hydro's existing customer base, because they are separate in Hydro through regulated tariffs. If you're looking at it in terms of subsidies, the question is: what do you compare that to? Do you compare that in terms of economic development, in terms of the jobs you're creating and the industry you're attracting with the price that you can get, let's say, on the spot market in California? I think that's what you're trying to compare. The regular user is not subsidizing the end consumer of the DSBs.

T. Nebbeling: Every time I bring up this question, the minister keeps talking about the downstream benefits and the power that will be created under the contract that started this year and is in existence now. I'm not talking about power created in the downstream benefits program; I'm talking about surplus requirements that will be there because of the intensity of the Premier's desire to bring to British Columbia industry that has very high levels of power requirements. That power cannot -- at this stage, at least -- be supplied, and that was proven by factors that the minister introduced earlier.

The key point is that if the cost of producing a kilowatt is 5 cents, for example, and the government makes a deal with an aluminum producer today that the power will not exceed the price of 2 cents as a base price, then there's a subsidy. The minister can say this is hypothetical, because these plans will not be in place for another five or six years, or whatever time it will take for the first smelter to come to British Columbia. It's the principle that I'm trying to address.

[2:45]

Somewhere down the road we're going to see a difference between what we receive from aluminum smelters

[ Page 9128 ]

Hon. M. Farnworth: The issue around DSBs is integral to the answer to the question by the member. On the issue around supplemental power which Hydro already purchases from the United States, in the case of Alberta it's at off-peak times when it's at its cheapest rate available. In its report, Peat Marwick recognized that that would be purchased to help supplement the downstream benefits. Now, the cost of that is actually lower than the contract price. Let's say you're delivering it to a new industry. That's where one set comes in. Down the road you may need to build new capacity; you may need to build a new gas-fired plant, for example. But that cost would have to be factored into what cost you negotiate or what cost you charge in a contract at that particular time.

The key in this whole thing is that the current users, the current Hydro customers, remain whole; there's no impact on them. Again, it comes down to: what is the cost of generation in terms of the DSBs, and what is the cost of generation in having to access new supply, let's say, outside the province in the case of Alberta, where they have a demand system that has to run 24 hours a day? We can deliver power when we need it and where we need it, because of the nature of our system, which is hydro. Alberta is a gas-based system that has to go 24 hours a day. So at 2 o'clock in the morning they've got an awful lot of power to unload. Hydro picks that up at a very, very inexpensive rate and then, in turn, has the ability to offset that -- use it in our system and offset it, move our power at a higher price when it's needed. So within the system itself, there's no change for the user; there can be no impact.

The next question is the one I asked before: what do you do in terms of the DSBs and that power? Do you compare it in terms of what's the spot price at the border -- if you want to sell it there -- or in terms of Power for Jobs here in British Columbia?

T. Nebbeling: I'm going to go on, but I will come back to this subject a little later. I think the minister is beginning to understand (a) why I have a concern and (b) that added to my concern is the fact that the magnitude of the surplus requirements in the future will be such that that flexibility -- tapping into the Alberta market, for example, because of their 24-hour requirement to keep that energy flow even -- may not be such a saving-grace factor as it is today. Down the road the requirements and the needs for power in British Columbia, because of these new industries, will be of a magnitude that the flexibility to tap into the on-and-off supply that Alberta provides will most likely not be there. The point I raised was that my concern is not so much where you find your surplus and at what time you buy it but at what price you buy it.

If it was not for the Premier going around the world making aluminum and the cost of producing aluminum so attractive to aluminum industries. . . . That gives me reason to be concerned, because if it costs 5 cents and we sell it for 3.5 cents, then maybe somehow the negative will offset the benefits derived for other objectives that we have as a province, and that includes jobs. But if we go below that price, then there may be a problem.

What I would like to touch on quickly is, again, because of what the minister said. Alberta creates its power through gas, and that leads me to wonder if that is going to be a large part of what we also want in British Columbia. I'm asking this because of a letter that was recently sent out by B.C. Hydro to a number of gas suppliers, enticing gas suppliers to look at some long-term supply opportunities in B.C., including our Burrard Thermal generating station, to obviously turn gas into electricity or other forms of power. Can the minister give me a quick overview of (a) when the decision was made to get more into the generation of power through the use of gas and (b) what the long-term plans are for the Burrard Thermal generating plant, considering that in the past there have been a number of concerns expressed about the plant and its polluting impact on the lower Fraser Valley?

Hon. M. Farnworth: The letter is basically an effort on the part of Hydro to identify secure supplies of gas for its existing assets, because in the case of some of the assets, the contracts are coming up. At the same time, there are two independent power stations likely to be coming on stream and the possibility of a smelter. So the letter was meant to try and identify secure sources of gas.

C. Clark: I hope the minister is familiar with the letter. Burrard Thermal is in his neighbourhood. It pollutes the air in his airshed, his community and his riding, where he has to go get votes every couple of years. The letter that was sent out seeking a firm gas supply does list, as the minister said, a number of different projects. It talks about the Vancouver Island co-gen projects -- Port Alberni, Campbell River. But it speaks specifically about seeking a firm gas supply for Burrard, and it says here that the average annual volumes would be about 35 petajoules a year, with a range of up to 48 petajoules a year. Could the minister confirm for us how many units Burrard Thermal would be running to require that level of supply?

[B. Goodacre in the chair]

Hon. M. Farnworth: The numbers that the member mentions in her letter are for all the projects, not for Burrard Thermal alone. Therefore the IPPs are Elk Falls, Campbell River and Port Alberni. The supply of gas that's required for Burrard Thermal is to supply the four upgraded units. There are six units there, and no decisions have been made on units 5 and 6.

[3:00]

I should correct the minister. It's not my letter; it's B.C. Hydro's letter and B.C. Hydro numbers. I just clarify that for him. Perhaps he could answer the question again in light of that clarification.

Hon. M. Farnworth: I do stand corrected in terms of the 20 to 48, and the 35 petajoules per year. That is to do with Burrard Thermal.

As I said, that supply is still for the four SCR units that are in existence right now, and they operate within the permit issued by the GVRD.

[ Page 9129 ]

Hon. M. Farnworth: The range in numbers represents a couple of things. First, the range in usage that Burrard Thermal has in any given year varies depending on the amount of water in the system as a whole. Whereas last year you had a very high water year, the demand for gas with Burrard Thermal would be, say, at the low end of a normal range. If you had a dry year, the gas used at Burrard Thermal would be at the high end of a range to operate the four turbines that are currently in existence, which they would have a permit for from the GVRD. So that's where that number comes from.

Within that, towards 2001 and beyond, then, you're looking at other issues. You may need more gas, because you may need to operate Burrard Thermal at a different rate than it is currently at right now. But there have not been any decisions made around that.

C. Clark: What was the demand last year for gas, then?

Hon. M. Farnworth: We don't have that number, but we'll get that number for the hon. member.

C. Clark: Just so we can compare it, what was the number for the year before, if this year is too soon to tell?

Hon. M. Farnworth: How about if we get you a bunch of numbers for the last four or five years?

C. Clark: All right.

Could the minister tell us, then, if the number of 35, with a range up to 48, is significantly different? Give me a ballpark from last year.

Hon. M. Farnworth: It would definitely be greater than last year, because last year was one of the wettest years on record. So Burrard Thermal was not used as much as it had been in years past. That's why I say that we'll get the member, let's say, the last five years going back. You've got a range of weather conditions in that period.

C. Clark: Now that Burrard has become part of the core production rather than just peak production for B.C. Hydro, I'm curious: in this volume that we're talking about -- the 35 with a range to 48 -- is there an assumption that Burrard Thermal will be running the four SCR units full-bore? Is that what would be required to run those four full-bore?

Hon. M. Farnworth: The amount of gas that's available would be to operate Burrard if it were required, let's say, during an exceptionally dry year. So it's in that range; that's the four generators that you currently have. At the same time, we're making arrangements with B.C. Gas for it to buy back that gas in years such as we had last year, when Burrard did not use much gas. This is a way of dealing with. . . . We've got the gas supply. What do you do with it if you're not using it? That has been one of the issues that has had to be addressed. In fact, the Utilities Commission instructed B.C. Hydro to sit down with B.C. Gas to work out ways of ensuring a steady and smooth supply of gas.

C. Clark: My strong suspicion with this, of course, is that the reason B.C. Hydro is seeking this supply of gas is not because they want to sell it back; it's because they want to crank Burrard Thermal up to produce more power and more pollution. For the minister to ask us to believe that B.C. Hydro has this nice altruistic plan of selling the power back after they buy it is really pushing the bounds of credibility, I think.

My question is, firstly: with a prediction of 35 to 48 petajoules being required, will B.C. Hydro be able to run those four units full-bore with that amount, based on that firm gas supply? What times of the year. . . ? Would that mean that they would be running it all year, full-bore -- all four units? How much gas will that supply?

Hon. M. Farnworth: You know, there's no sort of conspiracy theory here on this particular issue. There's no sort of hidden agenda. I know the interest the member has in Burrard Thermal; that's fine. I too am interested in Burrard Thermal, because it is an issue in our particular area. There's no plan to secure a gas supply to fire up Burrard Thermal 365 days a year for the sake of doing it. It's there to meet a purpose. The supply of gas that's been identified is to be able to deliver in dry years, for example, the power that's needed. In wet years, like we had last year, it will use a lot less gas. It's to ensure that when there is less gas being used, we have the ability to sell back to B.C. Gas that which isn't being used. That's one of the reasons why the Utilities Commission instructed Hydro to sit down with B.C. Gas and resolve this type of issue. There's no sort of, I don't know, secret "X-Files" conspiracy that somehow we're going to be firing up Burrard Thermal to run 365 days a year, 24 hours a day, generating power.

C. Clark: Well, if the minister wants to be sure that Burrard Thermal isn't creating more pollution in his neighbourhood, then he should make sure that B.C. Hydro doesn't increase its firm gas supply so that it can make sure that it always has the capacity to pollute more. The way to make sure that they don't have the capacity to pollute more is to make sure that they don't have the firm gas supply that's required in the long term. Secondly, if he wants to make sure that it's not polluting all the time, then he could shut it down. But I guess that's the hard answer for the minister. I mean, it is in his neighbourhood. I know that the other ministers I've questioned about this are from outside our neighbourhood, but I had hoped that this minister would have had a more personal interest in this issue than he's shown so far.

Can the minister confirm for us why it is that B.C. Hydro is also applying to increase its annual volume to 60 petajoules a year, with a range of up to 74 petajoules? Could he tell us what level of operation that firm supply is based on?

Hon. M. Farnworth: In terms of how many days the number translates into, we'll get that for the hon. member. But again, what this issue is around is being able to meet the demand -- in this case, in the winter when it's required -- and shifting away from the summer when the issue around pollution seems to rear its head. The member seems to think that the ultimate answer -- or her preferred answer -- is to just shut it down.

[3:15]

[ Page 9130 ]

What we're trying to do is ensure that there's power there when it's required in heavy-use times. We've talked about it in terms of low water-flow years, and again, there's less use of it in terms of high water-use years. In terms of the ultimate fate of Burrard in terms of public policy, there are a whole range of options, from shutting it down to making it run as efficiently as it's possible to what the member's conspiracy theory is, which is: what Hydro really wants to do is have it up and running 365 days a year, 24 hours a day. As I said before, that's not going to happen.

C. Clark: I think that historically you can look back and see that Burrard Thermal is operating more and more every year. The minister's right; it goes up and down a little, but if you look at it over a longer period it goes up. And Burrard Thermal is now considered part of the core power production at B.C. Hydro. It's not just a peak operating facility anymore, and that's a significant difference in the way Hydro treats Burrard Thermal, and it means a significant difference in the way that it operates Burrard Thermal. The minister can't ignore that historical trend. I think that when he suggests that by allowing B.C. Hydro to go out and seek a firm gas supply to increase the amount of gas that's available to Burrard Thermal, they don't intend to continue to do what they've done over the years -- which is to increase the amount that they're operating Burrard Thermal -- it's just to ignore all the historical evidence that's there, to ignore the facts. I mean, it's really sticking your head in the sand to ignore reality.

I'm interested to know that the minister is actually studying some options for Burrard Thermal. I know that one of the options on the table for Burrard Thermal is a massive expansion of its capacity to pollute. Can the minister tell us if he or his officials have directed B.C. Hydro to look at the other options, such as scaling it back, shutting it down or reducing the amount of power that it produces over the long-term as part of B.C. Hydro's grid?

Hon. M. Farnworth: You know, hon. Chair, I know what's going on here, and the member knows what's going on here, and that is the game around Burrard Thermal. It suits the member's agenda to paint, as much as she can, a conspiracy theory approach to Burrard Thermal. It suits her agenda to say that somehow the government's and Hydro's long-term aim is to have Burrard Thermal up and running 24 hours a day, 365 days a year.

The issue, hon. member, is that Burrard Thermal is a part of Hydro's system. It's a part of a two-river system that allows us to supply power when it's needed. It supplements the existing system. It's not a base-load system that runs all the time. It supplies power as needed. There are four turbines there that can currently generate power, and there are two others that are not generating power. The issue is in delivering a firm gas supply. It's ensuring that there's a sufficient gas supply when it's needed, because if you don't have that, it's sometimes hard to get a gas supply. That's one of the roles of Burrard Thermal: to supply power when it's needed.

The member likes to think that somehow Burrard exists just to fulfil. . . . I'm sure she's pleased that it exists to fulfil her conspiracy theory approach to this, because the statements that come from the hon. member on Burrard Thermal tend to be apocalyptic. She tends to suggest that somehow it's a worst-case scenario, whether it's around emissions and not wanting to recognize that the emissions of NOx have been reduced by 90 percent, or that the gas supply used by Burrard varies from year to year depending on whether it's a wet or a dry year, or that Burrard Thermal plays a role in supplying power as it's needed.

I can tell you that Montreal would have been extremely thankful this past winter for a facility like Burrard Thermal, because it would have been able to supply power when the rest of the system was down in the metropolitan area. There are policy issues around Burrard Thermal that still have to be decided, but in terms of whether this gas supply is to operate 365 days a year, 24 hours a day -- no. It's to deal with what's there now and, at the same time, to ensure that we can turn around and sell gas from B.C. Hydro to B.C. Gas when it's not being used.

C. Clark: If the best the minister can do is to argue that we need Burrard Thermal in case we get an ice storm the likes of what they had in Montreal, that's a pretty weak argument upon which to hang your support of Burrard Thermal. I don't anticipate a big ice storm like they had in Montreal; somehow I don't think that's going. . . . If we have a cataclysmic event that causes a huge ice storm to happen in Vancouver, one that shuts us down for weeks and weeks like it did in Montreal, we are going to have a lot bigger problems than just the power. We'll be talking about the extinction of the species or something. If that's the best argument the minister can come up with, that we're going to have a cataclysmic weather event, like an ice storm, in Vancouver, the likes of which we've never had in history, and that's why we need Burrard Thermal, he's having a lot of trouble coming up with a good argument in favour of Burrard Thermal.

He is having a lot of trouble, and I can see why he's having a lot of trouble coming up with an argument in favour of it. He has to live in the airshed that it pollutes. He represents people who are affected by the pollution in the airshed. I mean, those are people that he is directly answerable to. So I'm not surprised he has trouble coming up with an argument for that and that the best he can do is an ice storm like they had in Montreal -- that is ludicrous.

We've got Burrard Thermal, which sometimes operates while B.C. Hydro is exporting power to the United States. There's Burrard Thermal, supplying power into the B.C. Hydro grid when they've got more than enough to export. There's B.C. Hydro, producing power in the summertime. The minister says that it's just part of the peak load. Well, that's not what John Allan, the former Deputy Minister of Environment, said. He said that it was part of the base load. I know Hydro has it in their interest to represent it otherwise, but that's what the former Deputy Minister of Environment said -- that it's part of the base load supply.

If we look at the even bigger numbers, and I suspect. . . . The minister has said that the 35 petajoules going up to 48 petajoules is an increase over last year, and he'll confirm that. Then we look at the next increase that Hydro anticipates, which is going up to 60, possibly 74, petajoules a year, which is a really substantial increase when you consider that the total amount consumed in the lower mainland is something like 100 or 104 petajoules. I mean, 74 petajoules compared to the 100 that's currently being produced is a substantial increase in natural gas usage -- and in the pollution that will result from

[ Page 9131 ]

Could the minister tell us what the second number represents in terms of usage? Is that all six going full-bore after an upgrade, or is it all six going full-bore as it stands, or is it some other configuration of usage?

Hon. M. Farnworth: Again, I'll come back to the issue. The request is to look at what the rates are, what the prices are and what the bids are so that B.C. Hydro can plan and look at different options in terms of different scenarios. The member's approach and response to the answer comes back to my comments before in constantly taking this worst-case-scenario approach and trying to take comments out of context. The example I used, in terms of what Burrard Thermal's role is and what it can be used for. . . .

Interjection.

Hon. M. Farnworth: She laughs at the idea of an ice storm in Montreal. Well, they didn't think it was very funny in Montreal, and the hon. member seems to think that somehow that could never happen here. I didn't know she could predict the weather. While you may not get an ice storm, you did get one of the biggest snowstorms of the century the year before last, which placed an incredible strain on the system.

What you can get here are four or five years in a row of extremely low water levels that can cause tremendous stress on the system and that have to be dealt with. Those types of issues are what Burrard Thermal can act as an insurance policy for. The member wants to dismiss that and somehow say: "Oh, this is a once-in-a-lifetime cataclysmic event." She repeats that several times as she throws her arms up. But when it happens, in terms of four or five years of extended drought or of extended low rainfall, such as we had in the eighties, then her constituents will be asking a different question in terms of where the power supply is coming from.

What we're talking about here are some requests for a firm power supply to deal with the four turbines at Burrard Thermal. We're looking at some scenarios in terms of what the cost is going to be and how that can best be used and delivered. It involves running in low-water years and high-water years, and it involves the ability of Hydro to sell gas back to B.C. Gas. It's not for some idea that the member seems to want to think: that we're running it 24 hours a day, 365 days a year, and that it's now a base load facility -- because it's not.

C. Clark: Well, I won't debate this question of the weather with the minister and the weather scenarios he throws out. I won't even ask him to address the fact that he should be standing up for his constituents and saying that Burrard Thermal should not be operating in the location that it is. If B.C. Hydro wants to provide this kind of emergency supply, they should think about shutting down Burrard Thermal and starting up a more efficient plant somewhere outside the most polluted airshed already in British Columbia. I won't even ask him to stand up for his constituents and do that. Even if we set that aside, I would like him to answer the question I already asked him, which is: how much usage would be supplied by up to 74 petajoules a year as specified in the request for firm gas requirements?

[3:30]

C. Clark: The minister still hasn't answered my question. I understand that he's going to get me the information about days. I am interested, however, in the number of units that Burrard Thermal would need to run in order to meet this requirement for gas at 74 petajoules a year. It's an easy question.

Hon. M. Farnworth: Right now we are able to run four units, and they're the ones that are upgraded. The others aren't upgraded, so they couldn't be run even if you had a gas supply to run them. The fact that no decision has been taken on whether to upgrade units 5 or 6, means that the gas could only supply units 1 through 4.

C. Clark: So this estimate of 74 petajoules a year could potentially be used up 100 percent by the existing four units. This is all without the upgrade. Without any more changes being made to the plant, there is currently the capacity in that plant to use 74 petajoules a year. Is that correct?

Hon. M. Farnworth: Again, I don't want to belabour the point, but this is a planning document to seek a firm supply under a range of scenarios. Right now we can deal with four units operating. No decision has been made on upgrading units 5 or 6 so they could use gas, whether you had a supply of gas that was big enough for six units or that could be used for four units.

The answer that the member is going to get from me -- and she can ask until the cows come home -- is that there are four units operating, there has been no decision on upgrading units 5 or 6, and any gas that would be going to Burrard Thermal could only be used, at this time, for units 1 through 4.

C. Clark: This is a really easy technical question for B.C. Hydro. Surely it should be an easy question. Now, as a layperson, I don't know the answer. But it's a yes-or-no question. It's easy. Does B.C. Hydro know whether Burrard Thermal has the capacity to use 74 petajoules a year in power -- in gas -- with the four units operating? It's a simple yes-or-no question. B.C. Hydro must have the answer to it. If they don't, then they have no business going out and asking for a firm gas supply in the first place. It's a very simple question, and all I require from the minister is a yes or a no.

Hon. M. Farnworth: Again, I'll say to the hon. member: look, the approved plan for Burrard is four units. Okay? Any gas that they have now or in a contract will have to go to four units, unless there's a decision made to expand and upgrade units 5 and 6.

C. Clark: Maybe B.C. Hydro can give me this answer. Think of this as a math question from your textbook. If Bur-

[ Page 9132 ]

Hon. M. Farnworth: Look, I think we all know the point that you're trying to get to. I don't have a problem with that. We've said we'll get the number of petajoules, whatever it is. The issue is around whether we're going to go from four units to six units -- if Burrard Thermal is going to be upgraded to run six units full-time, all the time. And the answer. . . .

Interjection.

Hon. M. Farnworth: No, no, that's. . . . Four units is what is up and operating, and the gas supply is for four units. I have said that we will get you the conversion rate of petajoules to days, whatever that is. Having said that, there are four units operating, and there are not going to be more than four units operating.

C. Clark: Well, even the simple math questions seem to elude the minister and B.C. Hydro. That was a pretty straightforward question, I have to say, because it's based on existing usage. The minister could try answering the questions I'm asking him, rather than the questions I'm not asking him. That would be a good place to start.

The fact that he's not answering the question leads me to these conclusions. First, B.C. Hydro is currently using a lot less gas for B.C. Hydro than they're projecting to use, which means that there will be an increased usage at B.C. Hydro -- somewhere from 35 to 48 petajoules a year, which is substantial. Second, he won't answer the next question about their second prediction, which is that they might go up to 70 petajoules a year, which leads me to believe that he doesn't want me to know that answer either. If they're asking for increased supply, then they must be wanting to increase the amount of gas they're going to use. And if they're going to increase the amount of gas they're going to use, then they're probably going to produce more power. That would seem to me to be a pretty simple conclusion to draw, and I can understand why the minister is dancing around it and refusing to answer the question. Clearly what B.C. Hydro is planning to do here is increase its gas supply, so it can increase its usage, so it can increase the amount of power and pollution that it puts into the air in our neighbourhoods every year.

The minister can laugh and joke about it, but the fact is that it's our airshed which we have to live in in the tri-cities. It's an important issue to people out there. I guess I'll leave it at that.

I will ask the minister, though, if he could finish by answering for me whether he has access to or whether B.C. Hydro has done any studies about the environmental impact that increasing to the two predicted amounts -- 48 petajoules and then 74 petajoules -- will have on our neighbourhoods. What will it mean in terms of increased impact on the airshed? If they do use this firm gas supply that they've requested and do get to running it full-bore, whatever the full usage is, what will the total new impact be on the airshed, what will the total new impact be on the Burrard Inlet, and what will be the total impact in terms of the usage of ammonia and the other pollutants that they use at that plant?

Hon. M. Farnworth: There are questions asked that the member wants some general answers to. But the basic premise that the member's going on, which I come back to, is that it doesn't matter what I answer: she already has her mind made up about what she wants the answer to be and what the scenario is going to be. That has been the member's approach to Burrard Thermal since day one. That's fine.

C. Clark: You could try answering the question. Maybe that would change my mind. That's a good place to start.

Hon. M. Farnworth: Actually, the member says that she doesn't want to change her mind. That has been the pattern of this whole debate and discussion.

Around the issue of studies, there have been a number of studies that take place -- a whole range. They cover the ranges of gas use that the member has identified, because they are within the permit as issued by the GVRD. The studies have to take into account the range issued in the permit by the GVRD. There are studies around NOx, and we've told you that through the upgrades NOx are down 90 percent. There are chlorination studies underway; there are water studies underway; there are water temperature studies underway. All those studies are underway, and that's what should be happening. They're underway before any decisions on what, when and how things will be used will be decided on.

D. Symons: I have a couple of questions for the minister. I'm wondering if the minister might give me an idea of how much the line loss is between the power produced at the Bennett Dam and when that power is delivered in the greater Vancouver area. How might that compare to the power lost when you have power generated at the Bennett Dam and you are delivering it to Kitimat?

Hon. M. Farnworth: On the system as a whole, because we don't have it here for you on a line-by-line basis, it's about 8.9 percent.

D. Symons: That's on the system as a whole. Indeed, the longer the distance, the greater that loss would be, so the shorter distance you're delivering it, the less the loss will be. This is line loss that I'm referring to.

Hon. M. Farnworth: Generally that's true, but temperature is a factor and load is a factor. We'll be more than happy to have engineering either do a report or arrange for a technical briefing for you.

D. Symons: I'm not too sure how much my brain will accept the technical briefing at the level at which I'm probably asking. What I will ask, then, relating to the previous series of questions, is if it might not indeed be more advantageous for B.C. Hydro to deliver power from the Bennett Dam to Kitimat -- if the Premier is correct in putting a new arrangement for an Alcan smelter in at Kitimat -- and operate Burrard Thermal to produce electricity here cheaper using gas. Surely those are options that B.C. Hydro must be considering.

Hon. M. Farnworth: There is a whole host of things that you could do around the issue of transmission, in terms of upgrading transmission lines, upgrading stations, when and where the facilities that are using power come on stream, the location of them. . . . In theory, any configuration is possible. Whether the one the member suggests would work or not, I don't know. But the issues around trying to address issues of power transmission will be covered off in the 1998 electricity review, which is a thorough review and which we canvassed earlier on. That will be out later this year.

[ Page 9133 ]

[3:45]

Hon. M. Farnworth: It's about $9 million. It stayed the same since last year. It declined in that we sold the shares to SNC-Lavalin, and it hasn't changed since then.

G. Farrell-Collins: Can the minister tell me what expenses Hydro has incurred in managing this project in the last year?

Hon. M. Farnworth: It would involve, basically, a small amount of staff time, some travel. That would have been charged to BCHIL, not to B.C. Hydro.

G. Farrell-Collins: Can the minister tell me who travelled and how often?

Hon. M. Farnworth: The only individual who would have been travelling would have been the chief financial officer, Dave Harrison. On one of the trips I think there would have been an executive staff member. Apart from that, that would have been it.

G. Farrell-Collins: Was that travel to Pakistan?

Hon. M. Farnworth: Yes, once.

G. Farrell-Collins: Can the minister tell me the purpose of that travel?

Hon. M. Farnworth: It was a fact-finding mission, along with SNC-Lavalin Inc., that met with senior government officials. In attendance, as well, was the acting federal high commissioner.

G. Farrell-Collins: What facts did they find?

Hon. M. Farnworth: That it was probably best to leave, given the situation in Pakistan at that time.

G. Farrell-Collins: Was that the answer?

Hon. M. Farnworth: There were a number of issues that were raised. Clearly, the fact that the government of Pakistan had made some "policy changes" into how they approach independent power producers was of great concern not only within Canada but for the international community in general. So that was a question of communicating directly with the Pakistani government to find out exactly what it was that they were doing.

The second was to deliver a message that B.C. Hydro and SNC-Lavalin Inc. had investments in Pakistan and contracts that they expected to be honoured. The federal government's acting high commissioner was there, in part because they represent British Columbians and Canadians in these countries, and that's part of their role.

G. Farrell-Collins: Now we know why they went. Can the minister tell me what they found out? Also, can he tell me who else attended that meeting besides B.C. Hydro and the Canadian high commissioner? I assume they went to Pakistan for a reason. They must have met with somebody who actually lives there. Could he could tell who they met with, when the meeting happened and what they found out?

Hon. M. Farnworth: The meeting was in the last week of April, and they met with officials from WAPDA as well as the finance ministry in Pakistan, the investment ministry in Pakistan, along with the vice president from SNC-Lavalin Inc., as well as the acting High Commissioner of Canada in Pakistan. I guess the main sense that everyone came away with -- which was the main sense that I think most delegations from around the world who have investments in Pakistan and who are dealing with the situation there -- was that there was a great deal of internal turmoil taking place in Pakistan and that the situation was rather complex and fluid and was related to the political situation in Pakistan between the ruling party and the opposition party.

G. Farrell-Collins: Not quite like here.

Can the minister tell me how many board meetings SEPCOL has had in the last 24 months?

Hon. M. Farnworth: We'll have to get that number for the hon. member.

G. Farrell-Collins: Can the minister tell me if there have been any SEPCOL board meetings in the last 12 months?

Hon. M. Farnworth: There was definitely one at the end of December.

G. Farrell-Collins: Can the minister tell me who attended that board meeting on our behalf?

Hon. M. Farnworth: We had two representatives present at the board meeting. There were two representatives from SNC-Lavalin, and the chief financial officer was present at the meeting by conference phone.

G. Farrell-Collins: I just want to clarify that. The minister said we had two representatives at the meeting: two representatives from SNC, and the CFO was present by conference call. Is that correct?

Hon. M. Farnworth: There were the two SNC representatives. There was the chief financial officer who was present on the phone, and then there were two designates also there.

G. Farrell-Collins: Can the minister tell us who they were?

Hon. M. Farnworth: There were two lawyers in Pakistan who were there as designates, acting on our behalf with instructions from the CFO on the phone.

G. Farrell-Collins: Can the minister tell me the name of the firm that those men represent and when they were retained?

[E. Walsh in the chair.]

Hon. M. Farnworth: We can get that information for the hon. member.

[ Page 9134 ]

[4:00]

G. Farrell-Collins: So the minister is going to find out for me who they are, the name of the firm, when they were retained and the amount that they've been paid. Can the minister, in response to the next question, tell me when and how quickly I can expect that information?

I still have a question for the minister. Well, maybe you can answer that first.

Hon. M. Farnworth: Hopefully, today.

G. Farrell-Collins: I hope it's today too.

Can the minister tell me what other expenses. . . ? Have we hired accountants over there? Are there any other management firms that we have retained to act in our behalf? I would imagine that this project. . . . Are there any local people working on our behalf separate from what's going on as part of the project itself?

Hon. M. Farnworth: There were no accountants hired. Any accountants there are would be with the power company in Pakistan. Engineering and all that would be with the firm in Pakistan. So there's nothing extra from Hydro.

G. Farrell-Collins: Can the minister tell me why we retained the lawyers in Pakistan?

Hon. M. Farnworth: They were hired to represent us at the meeting.

G. Farrell-Collins: Is that the only meeting where they've ever represented us, or have they been doing this for a period of time?

Hon. M. Farnworth: As far as we're aware, this is the only meeting where they represented Hydro. But, of course, we will double-check that for the hon. member.

G. Farrell-Collins: Is this the only work they've done for us? Is that all they have done -- attended a board meeting and represented us -- or have they been doing other work for us?

Hon. M. Farnworth: Their role was not to do legal work; their role was to represent Hydro as alternates at the board meeting, as we required them. This was the only time, as far as we're aware -- we said we'd double-check -- that they actually did that.

G. Farrell-Collins: Let's just start with basics. Who are our representatives on SEPCOL currently? I believe it's Mr. Harrison and another individual. Can you tell me who the other person is?

Hon. M. Farnworth: There are two individuals: one is Don Swoboda, senior vice-president for power supply, and also president of BCHIL; and then Dave Harrison, the chief financial officer.

G. Farrell-Collins: When IPC was sold to SNC-Lavalin, I believe it was Mr. Ridley who left to go work for Lavalin. Is he still there? Is he one of their representatives at the same board meeting?

Hon. M. Farnworth: No, he is not on the board. He is still working for SNC-Lavalin, though.

G. Farrell-Collins: Can the minister tell me whether our representatives on the board have been able to ascertain the share ownership of SEPCOL in its entirety?

Hon. M. Farnworth: We're aware of some of them, but we certainly don't know who all of them are.

G. Farrell-Collins: In his report, Mr. Smith made comment that B.C. Hydro should have gone out of its way to determine the partners in this project. That was one of the failings of B.C. Hydro that he highlighted in his final report. I can't recall exactly what page it's on; it's around page 148 or something in the old report. I wonder, since that time, if Hydro has been able to ascertain the identity of any additional members, partners or shareholders of SEPCOL -- if anything has been done since that report to further us along to that much-needed goal of determining who those people are.

Hon. M. Farnworth: Hydro has attempted to determine if there's a registry of shareholders, and in fact there isn't. A large volume of the shares are publicly traded on the Karachi Stock Exchange in Pakistan, so it is difficult to determine who does and does not own shares. Are we aware of more individuals than were named in the Smith report? The answer is no.

G. Farrell-Collins: So the minister is telling me that the only people, the only partners, that we don't know the identity of are those partners who own shares that are publicly traded on the Karachi Stock Exchange. Is that correct?

Hon. M. Farnworth: The Smith report listed the shareholders that we were aware of, or became aware of. Some of them are clearly holders not of publicly traded shares but of privately held shares. The issue is: have we become aware of the identity of who those individuals may or not be? The answer is no, we have not.

G. Farrell-Collins: Can the minister tell me how many times in the last year members of B.C. Hydro have met personally with Mr. Mahmood?

Hon. M. Farnworth: There was one meeting in early May at which he was present.

G. Farrell-Collins: The minister said that there was one meeting in early May and that "he" was present. What meeting in early May was that? Who is "he," and who was present?

[ Page 9135 ]

G. Farrell-Collins: So SNC was at a meeting with Hydro and the contractors -- these are the contractors building the project -- and Mr. Mahmood was there. At that time, did anybody bother to ask Mr. Mahmood the identity of some of those partners -- Wedmore Investments, for example, and some of the companies in the British Virgin Islands that Mr. Smith was unable to identify?

[4:15]

G. Farrell-Collins: Can the minister tell me if Mr. Mahmood has ever been asked who those other partners are?

Hon. M. Farnworth: The Smith report attempted to get those answers from Mr. Mahmood, and he declined to answer those questions. The Smith report is in, and it has not progressed since it was tabled.

G. Farrell-Collins: Can the minister tell me what effort Hydro has made? The minister tells me that no new information has come forward. Can he tell me what efforts Hydro has made in the last two years to try, over and above what Mr. Smith had completed as of the final report in March '97? I guess that's a little over a year. Can he tell me what efforts Hydro has made since then to determine those outstanding facts?

Hon. M. Farnworth: The efforts of Hydro were around trying to ascertain if there was a share register that would have the names of shareholders on it, and they were unsuccessful in that.

G. Farrell-Collins: I assume that the meeting that took place in May was in Pakistan, given that the contractors were there, and I assume that the same people from Hydro attended as had attended the board meeting. I don't know what time period that was. If the information is other than that, perhaps the minister can tell me.

Hon. M. Farnworth: The meeting took place in New York. There were two from the French contractor, two from the German contractor, two from SNC-Lavalin and one from Hydro. The individual from Hydro was the chief financial officer.

The Chair: Shall the vote. . . ? Member.

G. Farrell-Collins: Thank you, hon. Chair. Sometimes I'm just a little slower getting up than others. I have no intention of passing the vote just yet, so there's no rush.

Can the minister tell me if at any time. . . ? Let me ask this. That meeting took place in New York, which interests me, I suppose. Maybe the minister can tell me, in general terms, what was discussed at a meeting that took place in New York.

Hon. M. Farnworth: The agenda was the progress of the project, the status of the project itself and claims against the contractor.

G. Farrell-Collins: What claims?

Hon. M. Farnworth: There are a range of issues that I guess would be standard in any large construction project, such as things around faulty equipment or delays, which can be apportioned to the contractor -- whom the individuals involved would feel was responsible.

G. Farrell-Collins: Does the minister have a dollar figure for those claims?

Hon. M. Farnworth: The result of the meeting with the contractors was that the contractors agreed to pay about $5.5 million (U.S.) to SEPCOL for claims against them.

G. Farrell-Collins: Can the minister tell me whether in early May the members from B.C. Hydro -- including Mr. Harrison, who was present at the meeting in New York -- raised the issue which was in progress in Pakistan with regard to the concerns that were being raised by the Pakistani government?

Hon. M. Farnworth: It wasn't part of the main meeting. There was sort of a general discussion about things in Pakistan, but it wasn't part of the main agenda.

G. Farrell-Collins: In his report, Mr. Smith wrote that BCHIL should have required an audit of Southern Electric Ltd. development costs. Can the minister tell me whether B.C. Hydro or BCHIL have managed to receive that audit yet?

Hon. M. Farnworth: SNC-Lavalin Inc., Hydro's partner, did do an internal audit on our behalf, and they were quite satisfied with the result.

G. Farrell-Collins: The minister is telling me that SNC-Lavalin Inc., one of the partners, did an internal audit of the project. Can the minister tell me. . . .? Whether they did an internal audit or an external audit doesn't really matter. Did they do an audit of the developmental costs specifically? Were the developmental costs part of the audit?

Hon. M. Farnworth: The issue was raised by Hydro last year at a BCHI Power board meeting with SNC-Lavalin. They looked at the costs charged by Southern Electric to the Raiwind power project, including the developmental costs.

G. Farrell-Collins: Is the minister able to make that audit public -- the developmental costs?

Hon. M. Farnworth: The audit was done by SNC-Lavalin, so it is their audit, but we will certainly ask them.

G. Farrell-Collins: Has the government seen the audit?

Hon. M. Farnworth: The results of the audit were discussed with the chief financial officer, who was told at the time that there was nothing unusual in the audit. That's where it's at.

G. Farrell-Collins: So SNC-Lavalin did an audit, and they haven't given B.C. Hydro or the government a copy of that audit, but they've given us their assurances that they don't have a problem with it. Can the minister tell me whether or not Hydro has done an audit of the developmental costs?

[ Page 9136 ]

G. Farrell-Collins: SNC-Lavalin didn't do an audit on behalf of B.C. Hydro and itself; SNC-Lavalin did an audit on behalf of SNC-Lavalin. That is proven by the fact that Hydro hasn't seen the audit. All they had was a little chat to discuss it -- probably not even to discuss it. Who knows if it happened over coffee or a beer or what happened? But it was discussed, and Hydro was fine.

[4:30]

If somebody were to look at the test -- a very mild test, I might add -- that Mr. Smith put to the previous chair of B.C. Hydro as far as assuring the correctness of this contract, I would suggest that in the two years that he's been there, Mr. Smith has done nothing more. He hasn't added anything to it. He hasn't found any new information. He hasn't got any more assurances. He hasn't pursued this any further. He doesn't know anything more. All of the deficiencies that were highlighted in his report are still there. Nothing else has happened.

Perhaps the minister can tell me. . . . Let me ask him another question. Can the minister tell me whether or not B.C. Hydro has done an audit of its own on the land costs? At the time, Mr. Smith noted in his report that this project paid twice the going rate for the land that this project is on. Can the minister tell me whether B.C. Hydro has done any audit on the cost of the land?

Hon. M. Farnworth: I'll make the following points. One, SNC did the audit on behalf of the BCHI Power board, of which Hydro is a 40 percent partner and SNC-Lavalin is a majority partner. They have a larger financial stake in this than Hydro does, so it's in their interest, too, to have a thorough audit. And that's what they did.

In terms of the question the member raised around the land, there was a thorough review of the land costs as part of the Smith report. In fact, KPMG was brought in from outside to assist in that, and they did a thorough review, which was in fact more thorough than an audit would have been.

At the end of the day, the issue was thoroughly canvassed in the Smith report. He devoted a year of his life to this particular report and this particular issue. The member can criticize, but I think the fact is that he did a very thorough job.

G. Farrell-Collins: My understanding is that SNC-Lavalin's share is 60; Hydro's is 40. So it's not a significantly larger share; it's a share. The problem once again, though, is that the minister and B.C. Hydro still have not done any outside evaluation or audits of the developmental costs. SNC-Lavalin, another partner, came in and did them. There has been no review. Mr. Smith did not do a thorough review of the land costs. I remind the minister that what Mr. Smith did in his report was make a point of the fact that the project paid twice the going rate, twice the market rate, for the land that other people in surrounding areas would have paid. There has been no explanation provided by Hydro, BCHIL, SEPCOL or the minister as to why twice the cost was paid for that land. Can the minister inform me otherwise? If so, perhaps he can point to the specific review that was done with regard to the costs of land, because it certainly hasn't been forthcoming in the last two years.

Hon. M. Farnworth: The issue around the land costs, again to answer the member's question, comes down to land cost. . . . That was done and was completed. The Smith report looked at those land costs and brought in an outside team to determine, as best they could, what constituted the land costs. They did a thorough review as best they could. The answers they were able to achieve are contained in the Smith report. If there are still questions that the member has or answers that the member is still looking for, the fact is that what has been ascertained by the review team -- what was ascertained through the Smith report -- is what information is available. They went and looked, and clearly. . . . Maybe there were some things that they weren't at the end of the day able to answer.

G. Farrell-Collins: Exactly my point. We had no outside audit of this project done. Specifically, Hydro itself has not done an outside audit of the developmental costs. SNC-Lavalin, yet another partner in the project, has done one that they've sort of told the government about.

We still don't know who all our partners are. We don't know where they are. We don't know who owns the rest of this project. We don't have a clue who they are. We don't know if it's Mother Teresa's nuns in Calcutta who own the shares or if it's Mr. Mahmood and some of his colleagues. We don't know who owns all these shares. We don't even know if Mr. Laxton, when he couldn't get control of his project here, turned around and bought up the shares on the Karachi exchange. We don't even know that. We don't know who the players are in Pakistan. We still don't know that. Two years later, we still don't know. We know from Mr. Smith that he describes Mr. Mahmood, with a chuckle, as a man of the world -- a man of the world whose son is under arrest in his native country under charges of arms-dealing.

We had a meeting with Mr. Mahmood. We had a meeting of the board in April. Nobody at the board meeting asked whether or not any corruption had taken place, whether or not any of these partners had paid bribes. Nobody asked that question. It wasn't raised, as far as I know. I asked what the facts were, and I haven't heard anything. I asked about that and wasn't told. Nobody asked Mr. Mahmood at the meeting in May whether or not any kickbacks or payoffs or premiums were paid in order to get this project through. There's been no

[ Page 9137 ]

The minister, B.C. Hydro, Mr. Smith, any of these people. . . . Our representatives on the board have not been able to answer one more question than they were able to answer over a year ago. Not one new tidbit of information has been found. At that time we didn't know where all the money went. At that time we didn't know why we paid twice the going rate for land or where the developmental costs went. We know nothing more today than we did 15 months ago. In fact, we don't know a heck of a lot more than we knew when this project got underway.

Two years ago, when this issue first hit in February 1996, our partners at the World Bank raised a bunch of issues. Let me just quote a bit from what the representative of the World Bank said: "And during meetings with then Hydro chair John Laxton and other Hydro officials, the bank raised specific concerns about individuals, including 'a money launderer,' who were involved with the Raiwind power project. 'We told Laxton. We told. . . Ridley.' -- Stan Ridley at the time -- 'Be clear. Have a clean record. Because in the end these things come out in the open.' " That was the World Bank's task manager for the Pakistani project and all their projects, speaking from London, England -- the World Bank raising those concerns. We know that one of the individuals was a fellow who was a money launderer. The World Bank told them to ditch the guy. On his reason for it, he said: "I have to protect my institution. . . . Basically [I told Hydro], 'You have to clean up your act.' " Then he goes on: "Whether they" -- the shady individuals -- "came back under these [other companies or on the Karachi exchange], I don't know."

If somebody was so determined to get into this project in the first place, and they got kicked out or were forced to sell their shares to others. . . . We have no way of knowing if they are still very significant partners in Pakistan. We know that Mr. Mahmood's son has been charged and is under arrest in Pakistan for some pretty serious allegations. We know that Mr. Mahmood has gone underground. Yet the minister has stood up in the House and told us that absolutely no corruption took place. There were no kickbacks; nothing was there to grease the skids; nothing was done in this project to move it along the skids a little bit. But he doesn't know that. The minister can't know that, because he doesn't know anything more today than he knew over a year and a half ago. He doesn't know anything more.

Can the minister tell me whether or not SEPCOL signed the document that was asked for by the government of Pakistan to confirm that no corruption took place in their project? Have they signed and submitted that?

Hon. M. Farnworth: An officer from SEPCOL did sign it and say that SEPCOL had complied with the request of the Pakistan government and that nothing untoward had taken place.

[4:45]

Hon. M. Farnworth: The chief financial officer of SEPCOL signed the statement. He's been there from day one, so he would be familiar with all the costs and charges that have come through SEPCOL.

G. Farrell-Collins: Does he also know who all the partners are?

Hon. M. Farnworth: It's a publicly traded company on the Pakistan stock exchange. I don't know if it's possible for him to know who all the shareholders are.

G. Farrell-Collins: Does he know who the partners are who hold shares in the British Virgin Islands and the company known as Wedmore? Does he know who owns those?

Hon. M. Farnworth: The Smith report attempted to ascertain those questions and did not receive answers. I understand the member's interest, and one of the things I'd like to remind the member is that there is an ongoing RCMP investigation, which is looking into events in Raiwind -- in particular with Mr. Laxton. Hydro cooperates fully with that investigation. It's the RCMP's job to be as thorough as they can during that investigation. That is taking place, and I think it's important to remember that.

G. Farrell-Collins: That RCMP investigation has been taking place almost since day one. I assume it had. If that's news, I'd be interested to know that. It's certainly been ongoing for a period of time. In addition to that, there is a Law Society investigation going on. If we don't know, and if we can't confirm whether or not the gentleman who signed the document in Pakistan had all that information, it's pretty hard for us to ascertain the validity of it, when he doesn't even have all the information. It's pretty hard to know that and to be able to make that assurance if you don't have all the facts.

The very fact that there is an ongoing RCMP investigation would seem to preclude anyone from SEPCOL -- whether it's B.C. Hydro or otherwise -- from assuring anyone that no corruption, kickbacks, etc., took place in the development of this project.

I don't know how the minister can assure us of that. He's not privy to the RCMP investigation. I'm not privy to the RCMP investigation. No one at Hydro, I think, is privy to the RCMP investigation. We don't know the extent of that RCMP investigation. We don't know if the RCMP have taken it to Interpol. We don't know if the RCMP is working with the police or the government in Pakistan. We don't know what international criminal actions may or may not have taken place. I hope none. We have no idea of the extent of the RCMP investigation -- whether it crosses borders or not.

How can the minister possibly assure us that there was no corruption, no kickbacks, and that nothing untoward took place, when there is still no independent audit of the developmental costs and no explanation for the doubling of the cost of the land -- the 100 percent inflated price that was paid for the land on which the project exists -- and we don't know who the partners are and what role they played in developing this project? I heard the previous minister responsible for this portfolio stand in this House -- in this very room and that very chair -- and assure us that we needed to keep Mr. Mahmood on the project, that he was essential to the project because he knew people and he could "get things done."

With a ringing endorsement like that, how can the minister possibly assure me that along with his little toolkit of how

[ Page 9138 ]

With those eight items, and the ringing endorsement of Mr. Mahmood's abilities weighing in on the other side, how can the minister possibly assure us that everything is aboveboard and perfect on this project? How can he possibly give us that assurance?

Hon. M. Farnworth: I'll make the following points. There has been a thorough investigation of this issue by the Smith review team, which included some of the best, most well-respected lawyers in the province. This has been looked at. There is an investigation in terms of the RCMP, who are looking at it from issues around Mr. Laxton. The member mentions the RCMP investigation and how long it's taken or how long it will take. That's for the RCMP, not us, to know -- nor, in fact, should we know.

The issue of B.C. Hydro's involvement has been thoroughly examined and gone over -- again, through an extremely extensive and thorough review. We've always spoken for B.C. Hydro; SEPCOL has spoken for SEPCOL. If the member suggests that somehow Hydro has not been upfront or is not being upfront, then lay that evidence in front of the RCMP, who are doing the investigation. Right from the day of the Smith investigation, B.C. Hydro has cooperated fully with the RCMP investigation, and the matter was thoroughly reviewed by the Smith team.

G. Farrell-Collins: I'm not alleging that Hydro hasn't been upfront; I'm alleging that the minister has been too upfront. The minister is making an assertion that he simply can't prove. He's telling us that there's no corruption, that there's nothing untoward in this project, and that everything is fine. He can't possibly know that. He doesn't know the answer to all the items that I listed in my last question.

I have never in my comments here today suggested that the RCMP have taken too much or too little time, or anything. I've just said that the minister can't possibly know the details of the RCMP investigation; nor do I. He doesn't know whether their investigation extends beyond the borders of British Columbia. He makes the assertion that it involves only Mr. Laxton. How does he know that? The minister just said this only involves the actions of Mr. Laxton. The minister can't possibly know that unless the RCMP are telling him -- which I highly doubt. In fact, I'd be shocked if they were. So again the minister is making assertions that he simply doesn't have the facts to back up.

What the minister should do is admit to the fact that he is making assurances which he has no credible argument, facts, or documents to support. He has no idea on all of those items. Mr. Smith's report may well have been as thorough as he could make it although I would disagree -- but that doesn't mean that it was complete. In fact, Mr. Smith itemizes a number of issues on which he was unable to get all the information -- so it wasn't thorough. Thorough means you've found all the answers, you've found all the information you need. How you interpret those answers is a matter for the individual doing the report. How he interprets that is up to him. The reality is that there are a whole series of unanswered questions which remain unanswered. Therefore the minister simply can't make the assertions that he's making today. I think any examination of the answers given by the minister today will bear that out. The reality is that he doesn't know. He can't give us those assurances; therefore he shouldn't be making them. He should say: "We don't know. Because of all of these bits of information that we still don't have access to, we cannot give the House or individuals or the people of this province the assurance that nothing untoward happened." He simply doesn't know -- and he can't know, based on the answers that he's given here today. That's clear to anybody examining the record.

I would like to ask the minister a couple of questions on this issue that don't deal specifically with the project, but rather the fallout. Can the minister tell us the status of Mr. Sheehan's case with the province?

Hon. M. Farnworth: It is still before the courts, so I can't comment.

G. Farrell-Collins: Perhaps he can tell me what stage it is at. That shouldn't interfere in the judge's decision or the ruling.

Hon. M. Farnworth: It's in the hands of the judicial system right now, and I don't know exactly what stage it's at.

G. Farrell-Collins: Can he tell me the status of Ms. Mead's case?

Hon. M. Farnworth: There was an out-of-court settlement in that case.

[5:00]

Hon. M. Farnworth: If the out-of-court settlement is not subject to a confidentiality agreement, we will get that information for the member.

G. Farrell-Collins: Can the minister tell me the amount?

Hon. M. Farnworth: Again I'll say, if it's not subject to a confidentiality clause, I will get the amount for the member.

G. Farrell-Collins: Why would the government, on an issue as sensitive, politically charged and difficult as this, even consider coming to a settlement on a wrongful dismissal suit like this and put in a confidentiality agreement? I would argue with the minister about whether Hydro was being as upfront as it could be, as he said before. It's not. If in fact there is a confidentiality agreement in place with this, I think Hydro went out of its way to try and cover this one up, to try and not make this available to the public.

This was an issue that was raised publicly; it was an issue that was raised by Ms. Mead. There was a great deal of controversy over this, and indeed, Ms. Mead is the one, if I remember correctly, who made the allegation that she was present at a function when the Premier, then the minister, was personally and directly informed of the purchase of these

[ Page 9139 ]

How long does the minister think it will take to determine whether or not there is a confidentiality agreement?

Hon. M. Farnworth: Today or tomorrow.

G. Farrell-Collins: We will not be passing the estimates until we get an answer to that question. So if the minister wants to. . . . I know the members have other items that they wish to raise relative to B.C. Hydro, and we can do that. There is a bit of information that the minister's committed to get back to us, and obviously the sooner that information comes back to us, the better.

Can the minister tell me whether or not -- I know Mr. Sheehan's case is before the courts -- Hydro is currently attempting to negotiate an out-of-court settlement on that one?

Hon. M. Farnworth: Mindful of the fact that the issue is before the courts, we're not planning anything at this time.

G. Farrell-Collins: The minister said that they're not planning anything. Have there been negotiations back and forth in an attempt to settle this issue out of court? That does not prejudge anything that's going on in the courts.

Hon. M. Farnworth: I'm not going to comment in terms of legal discussions that may take place between lawyers and Hydro about the case. It would be inappropriate to do that.

G. Farrell-Collins: Given that an out-of-court settlement has been reached with Ms. Mead, where there may or may not be a confidentiality agreement, I would argue it's highly likely that the same type of out-of-court settlement is currently being reached with Mr. Sheehan, or one has been attempted to be reached in the past. I guess the fact that it hasn't happened to date is just that the two parties haven't come to a mutual agreement. I'm going to make that assumption. I don't think the minister telling me that prejudges in any way, one way or the other, what the courts may or may not decide. It's a question about the actions of B.C. Hydro and its role in this. I'm going to make that assumption, I think it's an accurate assumption, and I will await the information that the minister has promised to get back to us.

I understand that the member for North Vancouver-Seymour has a line of questioning that he would like to pursue. I'll see the minister tomorrow.

D. Jarvis: Actually, I have several lines on several subjects. I had to go out of the room, but I wanted to go back to Burrard Thermal and ask the minister a few questions. Could he tell me when the last environmental impact study was made -- or if there was one -- on Burrard Thermal?

Hon. M. Farnworth: Yes, there have been environmental reviews done in the past. As to exactly when and at what time they took place, we wouldn't have that information here with us here today, but we will certainly get that information for the member.

D. Jarvis: I assume from that statement that the minister will give us a copy of this. I thank him for that.

I wanted to know. . . . There was a question about B.C. Hydro seeking a firm gas supply for the Burrard Thermal plant. I don't know if this question was asked previously because, as I said, I was out of the room. I just wanted to know how many existing units would be fired up to use up this amount of gas that they require. I think it was about 48 petajoules. Is that what they wanted?

Hon. M. Farnworth: I already answered that question.

D. Jarvis: I assume the minister, then, was asked how many days of the year Burrard Thermal will be in operation? I got a nod, Madam Chair, from the minister that he already was.

So I'm going to ask the minister: how many tonnes per year of nitrogen oxide will be released into the Fraser Valley area when it's running at full torque?

Hon. M. Farnworth: The amount of NOx that is released into the atmosphere depends entirely on how much gas is burned over a given year. That, of course, varies from year to year on the basis of a number of factors: climate factors, snowpack factors, rainfall factors -- in different geographic areas of the province -- and how much snowpack you have in one area, how much rainfall and water you have in another area and how much water that contributes to the system overall. Because throughout the province there are a number of. . . . There are different dams and facilities around the province that have different levels and different amounts of rainfall. Some are higher and some are lower. All of this comes together in terms of how much water flows through the system, the ability to generate power, and how much Burrard Thermal has to supplement that. Then that is how much power Burrard Thermal uses.

For example, 1997 was a record year for snowpack and rainfall, so Burrard Thermal burned very little gas in comparison to previous years. Now they've been upgraded to the existing four turbines that burn the gas. The result is that there are 90 percent fewer NOx emissions going into the atmosphere than there were before the upgrade. So let's say you burned 100,000 cubic metres of gas that produced, I don't know, let's say 1,000 tonnes of NOx emissions six or seven years ago. Well, these generators were upgraded, and now they produce 90 percent less than they did before.

D. Jarvis: I can appreciate that last year was a record year for snowpack and all the rest of it, and the need for Burrard Thermal was not there. But that was a record year, just as you say -- one year. Surely your impact studies have given you what the average is going to be till we get the next El Niño -- which is, say, the next four or five years.

Hon. M. Farnworth: El Niño is cyclical, but it doesn't come on a regular cycle.

Interjection.

Hon. M. Farnworth: You say "sicle;" I say "cycle."

The Chair: Through the Chair, members.

Hon. M. Farnworth: It can come and it can go. Let me put it this way: in '96 there were 3,500 gigawatts of energy produced by burning gas at Burrard Thermal; in '95 there were 3,800; in '97 there were 428. So as you can see, in the last three years there's been a downward trend.

[ Page 9140 ]

[5:15]

Interjection.

Hon. M. Farnworth: We've got some answers for some questions.

The Chair: Through the Chair.

Hon. M. Farnworth: Thank you, hon. Chair. We need a recess for a couple of minutes for a couple of things.

The Chair: If it's the will of the committee, I'll order a recess of five minutes.

The committee recessed from 5:18 p.m. to 5:22 p.m.

[E. Walsh in the chair.]

D. Jarvis: I'll take a stretch break.

Interjection.

D. Jarvis: We can extend it another minute or so. It's not quite five minutes -- four and three-quarters.

The Chair: We'll declare another recess for about two more minutes, at which time we will reconvene.

The committee recessed from 5:22 p.m. to 5:24 p.m.

[E. Walsh in the chair.]

Hon. M. Farnworth: The question around the settlement for Jill Mead: there is no confidentiality agreement, but there was an understanding to respect Ms. Mead's privacy. . . .

Interjection.

The Chair: Order, members.

Hon. M. Farnworth: Thank you, hon. member, and I'm sure she'll appreciate that, but in terms of the committee's estimates there was a settlement of $70,000, which consisted of banked time and hard dollars. She was offered alternative employment elsewhere within Hydro, not in a secretarial position and she declined those offers. The $70,000 was the final settlement.

T. Nebbeling: Is there any paper that you can give us now so we can have a look at it and maybe have some questions afterwards. Otherwise, to have the level of comfort for myself and so that the House Leader who asked the questions is comfortable with the answers, I may have to postpone it until tomorrow. If we can get some paper on what you can reveal related to this matter before we recess, then we may be able to deal with it tonight.

Hon. M. Farnworth: I'm not quite sure exactly what the member wants in paper, because the question was: what was the settlement? And the settlement was $70,000. There was no confidentiality agreement on that other than basically to request an undertaking to respect her privacy. So in the sense that Hydro has not make it public, it's done so on the basis of that understanding. The member for Vancouver-Little Mountain asked what the settlement was, and I've given him the settlement and the terms that it consisted of -- banked time and hard dollars. I don't think there is any more payment than that, because that is the sum total of the settlement.

T. Nebbeling: There must have been a document signed at the end of the day when the parties agreed on how much banked time and what the other financial settlement was. It's that document that we'd like to see if it was not signed with a confidentiality clause -- the ultimate agreement between Ms. Mead and the ministry on the conditions she accepted. That is a standard document, most probably, but we would nevertheless like to see it.

Hon. M. Farnworth: There is a letter to Ms. Mead and an acceptance by Ms. Mead of the offer, which is what I've outlined. Can I get that this evening? The answer would be no. In fact, if you went for it under FOI, given the fact that there's a third party involved, the privacy commissioner would probably release it and sever out the actual numbers. The member asked a question, I said we would get the information in the agreement and I've got the information in the agreement. I said if there wasn't a confidentiality thing and. . . . At that point, when I made that, I was not aware of whether or not there was, so there's no point to me saying that this is the number if in fact there is a confidentiality section in place which could have serious legal consequences. We went and checked on that and there is not. You asked for the dollar value of the total settlement. We got you the information: the total settlement is $70,000, and it was in the form of cash and banked time.

[5:30]

So if the minister cannot share the letter today, then I will think about it a little bit longer and come back tomorrow and ask him further questions on that. Maybe that way we can then get to what indeed is in that letter that confirms the resignation of Ms. Mead.

Having said that, I believe my colleague has still got some questions related to what he was asking before. We'll deal with this question later on.

A Voice: We're talking about hot water.

Hon. M. Farnworth: I'm very sorry that the member isn't prepared to accept my word when he asks for the details of the letter. I think that's rather unfortunate. We were asked a question, and we said we would get the information and we came back with the information. I think it's unfortunate that somehow that's not acceptable.

D. Jarvis: We'll get back to more mundane topics now like "hot water." I asked a question previously of the minister

[ Page 9141 ]

Hon. M. Farnworth: More than a bathtub and less than a supertanker.

D. Jarvis: Well, for someone that's supposedly the great environmentalist and. . . . It would almost affect the area of your riding as well and all the little fishies that are in the water and the animals that are on the bottom of the ocean in Burrard Inlet. I think I could expect a little more than, you know, a bathtub and a supertanker. What a comparison!

I'll ask it in another way, then. The minister said that they had done an environmental impact study of the area around Burrard Thermal. Is the hot-water aspect in that report?

Hon. M. Farnworth: I didn't mean to be facetious. I guess, if you look at the comparison between how much gas was burned last year -- which was 428 gigawatts, a very small amount, 11 or 12 percent of the amount burned two years ago. . . . So in terms of the generation, that would be considerably less. In a sense, that's the analogy. There's a two-year study underway, involving DFO and Hydro, to look at the effects of hot water on the environment and on fish. That is an ongoing study that's been underway for the last year, and it's got another year to go.

D. Jarvis: Are any parts of that study available for release? If they are finished, would the minister release them to us?

Hon. M. Farnworth: There was a progress report a few months ago that we can give to the member. Progress reports are released on an updated basis.

D. Jarvis: Would you be able to give us the total cost for the upgrade of Burrard Thermal?

Hon. M. Farnworth: Approximately $10 million has been spent on each of the four units, and that's been strictly in terms of reducing-emission standards. It has not generated or created any more energy.

D. Jarvis: Is that the total cost so far? Or what has been expended. . . ?

Hon. M. Farnworth: The total cost so far is about $50 million.

D. Jarvis: What plans does Hydro have to repower Burrard Thermal?

Hon. M. Farnworth: That continues to be an option. But in terms of policy, whether or not that eventually happens has not been decided. The issue is basically around the four generating turbines that have been upgraded and their ability to operate within the existing GVRD permit. I say that because I am aware of the sensitivity around the issue and the concerns in terms of looking at Burrard Thermal operating 365 days a year, 24 hours a day, with all six turbines. So I'm acutely aware of the interest in that.

D. Jarvis: I have another question for the minister on this subject. Is it possible to receive any of the studies on these proposals that you have? And what would be an estimated cost to repower Burrard Thermal?

Hon. M. Farnworth: There are no updated or new studies on the member's question. But I would refer him to the "1995 Integrated Electricity Plan," which has a thorough examination of the issues around Burrard Thermal, in terms of cost and that sort of thing.

D. Jarvis: I assume, then, that there have been no proposals since that '95 report.

I would like to change the subject now and ask the minister what discussions B.C. Hydro has had with the Burrard Indian band with respect to the Indian River valley. I was told by the Burrard Indian band that they have planned some joint projects with B.C. Hydro and that one of them consisted of a removal of all the power lines that run down the Indian River valley. Well, you know where I'm talking about: on top of Burrard Inlet, the Indian River.

Interjection.

D. Jarvis: Indian Arm -- yes. I was told that they had several new methods for new power. I was just wondering if the minister was aware of anything along that line. Or has Hydro had any discussions with the Burrard band with regard to having new forms of power in that area?

Hon. M. Farnworth: We're not aware of any particular issue involving the Burrard band. I mean, we do have an aboriginal relations department that talks to, you know, aboriginal groups on a regular basis. But if there's a particular issue, we will endeavour to find out what that is.

D. Jarvis: The reason I brought up the question was that the head of the Burrard band called a meeting of the district of West Vancouver, the city of North Vancouver, the district of North Vancouver and everyone that's involved in every kind of association there. They had an enormous meeting in North Vancouver. They were saying how there are proposals for the changing of the guard, if it ever comes. They said that they had had detailed talks with B.C. Hydro and that they were going to, because of the top of the inlet -- Indian Arm, the whole Indian River valley, from where all of those power lines come down; I guess it's down through Lillooet, down through that area around Seton Portage. . . . They said that B.C. Hydro had agreed to get rid of them -- remove them -- and that they had a new method of producing new power for our area down here.

I'm glad I'm not on camera because I have a smile on my face, and I can appreciate that the minister probably would too. This is really a new proposal, the first one I've ever heard. . . . And, especially in my riding, it would be quite an event. But I want to know if you can tell me what size those power lines are that come down through the Indian River valley and what power it is that they actually bring down? What does it mean to the lower mainland down here?

Hon. M. Farnworth: The lines themselves are certainly of a significant size and nature. I mean they carry most of the Bridge River system down on them, so they would be 250. . . . They'd be the big ones -- right?

Interjections.

[ Page 9142 ]

Hon. M. Farnworth: Let's put it this way. As the member says, it would be an event for him. It would also be an event for B.C. Hydro. So all I can say is that I don't know the exact details of what the member is talking about or what discussions have taken place between the local governments, the Burrard band and B.C. Hydro. But certainly something of that magnitude would be, you know, a big issue for B.C. Hydro, and I will attempt to find out for the member.

D. Jarvis: Actually, I wanted to ask the minister some questions with regard to. . . . There's a great deal of talk of dismantling B.C. Hydro or rebundling it and all the rest of it. BCUC came out with a statement that they thought that that was advisable. The government and B.C. Hydro said no, they didn't think it was advisable. Are there any ongoing studies now by B.C. Hydro with respect to rebundling?

[5:45]

Hon. M. Farnworth: A couple of points. First, the B.C. Utilities Commission didn't say to break up Hydro. The issue around deregulation and issues associated with potential future directions for Hydro was addressed in the Jaccard report. He made a number of recommendations in that report. The government responded this year with its view in terms of market or access to industrial consumers. We are always monitoring developments in different parts of North America, whether it's in the United States or here in Canada, in terms of what's happening with utilities through systems that are similar to ours, such as Quebec Hydro or Manitoba Hydro and, recently, what's happening with Ontario Hydro. We do look at those issues on an ongoing basis. I guess that's what I can say in answer to the member's question.

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

Motion approved.

The committee rose at 5:48 p.m.

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

The committee met at 6:38 p.m.

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

T. Nebbeling: I talked to my colleagues about the Jill Mead issue, and if the minister can quickly answer a number of questions, then I think we will have settled that issue.

First of all, who signed the agreement? Secondly, when was it signed?

Hon. M. Farnworth: It would have been her and the lawyers for both parties, and it was April 28, 1997.

T. Nebbeling: Do you have, by any chance, the name of the lawyer? Was it a B.C. Hydro lawyer or an out-of-office lawyer?

Hon. M. Farnworth: It was an outside lawyer by the name of Gibson.

T. Nebbeling: Gibson?

Hon. M. Farnworth: Correct.

The Chair: Members, before you start speaking, I'll remind you that you must be recognized by the Chair prior to speaking or you will not be recognized.

Member.

T. Nebbeling: Before the Chair recognizes me, please let me rise. Can the minister provide a breakdown of the $70,000 between the banking and the settlement amount?

Hon. M. Farnworth: We can get the breakdown for the hon. member. The only problem is some of the privacy issues.

T. Nebbeling: I take it that it's holiday and severance and maybe some sick days.

Hon. M. Farnworth: It would be the accumulated time banks.

T. Nebbeling: If I can get that, that's fine. Was there at the time of the severance a payment made due to the fact that Ms. Mead was a shareholder of IPC?

Hon. M. Farnworth: That would not have been part of a severance package.

T. Nebbeling: If there was any financial transaction taking place at the time related to the IPC shares and if there's any information available, I would appreciate it if we would be able to get that as well. But I understand the problem, as it is a different thing.

The last question is: what are the pension ramifications for Ms. Mead? Because of this, is she is now actually being paid a pension?

Hon. M. Farnworth: She is a pensionable employee, but as to her age and where she is in regards to the ability to collect pension, I wouldn't know that. If it's not a problem getting that information, I don't have a problem doing that, but there are privacy concerns around that.

T. Nebbeling: My last question is more of a statement than a question, although it has to do with my last question. I believe that Ms. Mead was with the company for approximately 18 years and was at a senior position. The severance package of the nature that she has been given -- $70,000 -- seems to be rather meagre. The only justification is if she were immediately receiving a pension, and that was part of the consideration. If I could get an answer on that particular part, it would be appreciated.

Hon. M. Farnworth: Yes, as long as we're not violating any privacy rights of the individual around age and things like that. We can all relate to that.

T. Nebbeling: I hope the minister was speaking for himself when he made that point.

I want to go back to where I left off when some other members felt the need to ask some questions, and I hope the

[ Page 9143 ]

[6:45]

The one contract that's out there is Alcan, which is related to the price of aluminum. The others are in terms of memoranda of understanding, so there have been no contracts signed in terms of commitment to power. That would be at the time of a decision by an aluminum company to invest and build a smelter, and it would be in negotiation with the province in terms of what the costs should be.

T. Nebbeling: It is no secret that in the industry it is known that the Premier, when talking to the various aluminum producers. . . . I apologize for saying uranium before, but I didn't have the privilege of going out for dinner like the minister most likely did, so I'm still on my lunch for my energy level. What I'm trying to find out from the minister is. . . . The rumour that is prevalent in the States within the aluminum industry, as reflected by an article in the Wall Street Journal in March, is that the prices that the Premier has been talking about, which B.C. will charge for power, are about a third of what would traditionally be charged. Can the minister confirm that these low-cost approaches are valid?

Hon. M. Farnworth: I know that there are all kinds of speculation and rumours. Both of us know how the press works. But if you did a comparison between Hydro's current tariffs, for example, they are a third of what they are in many parts of the United States at present. I mean, maybe that's one where it could come from.

T. Nebbeling: Without getting into a debate, clearly I think we can talk about what the normal prices would be in B.C. for commercial users. The price that the Premier is offering to entice the aluminum producers to come to B.C. is considerably less. That is not only because of what we read in the paper but also because of certain statements made by some of the teams that have been coming to British Columbia to look at the opportunities.

What I would like to ask the minister now, knowing that in order to come here these foreign producers get offered rates that are considerably lower than what is being paid today by our commercial users, such as mines and pulp mills. . . . Is the minister considering a re-evaluation of pricing for B.C. companies also in the resource industry, which are paying considerably higher fees than what has been talked about for these aluminum companies? Can the minister give me a clarification on that?

Hon. M. Farnworth: Again, I understand that within an industry there's rumour and speculation. The only contract that's out there is the one with Alcan. While there may be all kinds of talk, there is actually nothing on the table at the present time, so I can't give you a definitive answer on whether this would be the price or that would be the price. What I can tell you, in terms of current industries, in terms of pricing around current users of power. . . . We do have the RTP -- real-time pricing -- program which we announced earlier on and which we're trying to take to a new low for existing users -- 25 percent at the actual market pricing. That's being looked at. That's probably what I can tell you right now.

T. Nebbeling: I will actually come back a little later to the charges that are imposed today on our B.C. companies in the resource industries -- mines and pulp mills, as I've said before. Coming back to the aluminum producers that are being enticed to come over to British Columbia, what I would like to know is. . . . There have been talks with the various companies about price structures in the memorandum of understanding with the various companies, which have been signed, I believe, or are in the process of being signed -- no, they have been signed, I think. What kind of clauses have been incorporated in the memorandum of understanding to reflect the strategy of how pricing will be taking place once the aluminum producer is in British Columbia?

Hon. M. Farnworth: There's nothing in the MOUs to a price commitment or to a power price commitment. There is a commitment to look at costs as they relate to infrastructure, port development, transportation and site development -- issues like that -- but not in terms of power to run the facility.

T. Nebbeling: I'm not saying that the minister can give me an actual penny value per kilowatt, but the minister has made statements in the House discussing hydro charges to new potential clients coming from other jurisdictions outside Canada -- that there was going to be a standard established and that the prices would be adjusted according to the commodity's market price on a global basis. This was discussed by the minister in the House a while ago. I think it was the minister; otherwise it was the Premier. But the statement was clearly made that the global fluctuation of the commodity price would have an impact on what the charge would be on the industry.

Hon. M. Farnworth: I think what the member is talking about is the agreement with Alcan -- that would be where that information would come from -- where the price of power to Alcan is related to the price of aluminum. That is the only one out there. Nothing like that is in the MOUs.

T. Nebbeling: I know it was in Alcan. It was my understanding that that same principle could well apply to other aluminum smelters coming to British Columbia. I state this because I don't think that we would see companies allowing a difference in price for the product they produce -- be it higher or lower -- than the competition in British Columbia would be given. So I think that's standard -- that relationship of the global market price in establishing the price that the power will derive for the aluminum smelters as a formula.

My question now is: why can Alcan -- and most likely other aluminum smelters that come into the province -- be given the privilege of having that price based in part on what the global market is for the product that is being created with the power? Why would that same principle not apply to B.C. companies?

[ Page 9144 ]

In terms of existing private sector companies, users of Hydro, as I said a few minutes earlier, what we're doing is looking at being able to supply, through the RTP -- real-time pricing -- up to 25 percent of their new load at actual market pricing. That is something new that we'll watch and monitor to see how it works. This is going to take place over the next few years, and we will have to monitor developments not only in terms of the industry here in B.C. but outside the province. So it's a bit early right now to say that we have a formula for Alcan and that it's going to be the formula for the other smelters.

T. Nebbeling: First of all, I do not believe that what Hydro has put on the table for B.C. users as options for how they in the future will deal with the relationship with Hydro and how pricing will be established, the virtual access program -- whatever label it is going to be given in the future. . . . What the B.C. operations are looking for is treatment not unlike the treatment given to U.S. operators, who, to date, buy Hydro's power through Powerex, and, obviously, the flexibility that Powerex offers U.S. operators with regard to who they buy from. Can the minister tell me if there's an understanding that B.C. commercial power users are at a very big disadvantage today, because they actually pay more for power than what Powerex, the B.C. Hydro subsidiary, sells power for to the States? How is the minister going to allow B.C. commercial companies to have more freedom in the future in terms of who they buy from and at what rate, so that they can also compete on the level that is allowed by this government to U.S. operators?

Hon. M. Farnworth: In terms of the users, existing industrial-commercial users in British Columbia reap the benefits of either long-term power contracts or long-term, dependable supply with everything imbedded in it and on the basis of a low-cost rate.

[7:00]

T. Nebbeling: On the surface the argument that the minister is making about security of supply over buying on the spot market sounds reasonable. But at the same time, when you realize that this government is constantly hammering at the industry and telling them to provide jobs and that when jobs are created for energy there are going to be breaks to be had. . . . This kind of philosophy is actually, in a sense, sold to companies outside B.C. The aluminum producers from the States have been enticed. When they get power here and they get it at a lower price -- which is very conceivable under the circumstances, because the Premier is enticing them to establish themselves here. . . . Again I come back to why the minister doesn't recognize that jobs for energy. . . .

A reduction in some of the power prices for corporations in British Columbia would actually consolidate jobs and, in certain circumstances, allow certain operations to stay open. The minister knows that certain mines today are on the verge of deciding to close down. Why? Because, in part, of the hydro bill being on a level that makes the operation unsustainable. Why not give the same breaks to existing operations in British Columbia, which therefore would be most likely to have an opportunity to stay open or expand, as the government is bestowing and offering to operations or companies in the United States of America -- with the objective of enticing them to come here?

The lure of keeping jobs here should be as strong -- giving companies a break on power -- as it is to create new jobs, which is the lure for the United States. When the minister uses power for jobs as the argument for why certain things are done by B.C. Hydro or by Powerex or through the ministry itself. . . . I think he chooses, when it is convenient, to use the excuse that the job factor has to be incorporated into why we charge for something and how much. That is an argument that the minister has made a number of times today when it comes to why we would give breaks in pricing on power.

I really think that the minister should rethink how giving a break to the B.C. corporations that are commercial buyers will also deal with the programs of jobs and energy in a positive way. It will keep mines open or maybe add jobs to an operation because it becomes a bit more viable. What I was going to ask the minister: is there any consideration at this point for taking that type of approach?

Hon. M. Farnworth: Yes, there is consideration. The RTP program is a new program that was announced, and there are 28 companies now taking advantage of that. The fact is that they have access to even cheaper power to create jobs.

The member raised the issue around the mining industry. We had a good discussion on that issue, you know, during the ministry part of the debate. Again, through the job protection commissioner there is the ability to give relief on hydro rates that can be incorporated into his recommendations. So that is also something that can be done. In fact, the issue is one of how much relief you give. I mean, in some cases you could relieve the entire hydro bill, but the price of metal is still so low that it won't accomplish anything. The fact is that the ability to do that is there. We've said that we've implemented it in terms of the 25 percent, and, quite frankly, I'm not averse to looking at other options as well.

T. Nebbeling: Still on the same subject, I think the B.C. operators who are struggling today because of some prices that are lower than would be preferable, on top of first having lower prices for their commodity. . . . To see them pay prices for B.C. Hydro that, if they were able to access the spot market, would be the choice for them to follow, because it may be that in a particular period they would be able to get cheaper power. That would help the bottom line, and that bottom line will ultimately determine if indeed this operation is going to continue or if it's going to shut down.

I believe that the industry has talked to the ministry, or to the bureaucrats within the ministry, and has requested that they be allowed to buy where the product would be the cheapest for them -- even if is on a spot basis without long-

[ Page 9145 ]

In a sense, the American companies will be allowed to bargain for and get the best price, albeit through our own local system. I'm asking the minister: why is he not allowing B.C. companies, which today have opportunities, to tap into other suppliers at much better prices thereby finding some business viability again? Why not allow that to happen?

Hon. M. Farnworth: I don't disagree with the member's comments. I think we are moving in that direction. As I said, we have introduced the real-time pricing program. We are moving to virtual market access. We've started with 25 percent, and I see no reason why we can't move further down that road. The assumption is, though, that the price is necessarily cheaper south of the border. That's not necessarily the case. In fact, in most cases it isn't the case. The cheap power is here in B.C. That's one of the advantages that we have. I understand the member's comments, and I would say that we are moving in that direction.

T. Nebbeling: For the minister's consideration -- and this is not a suggestion by industry or anybody else. . . . This is why we are talking. When Powerex is given the right to sell X amount of power on the U.S. market, why would it not be that Powerex, on a monthly basis, would announce that there's going to be an expected surplus of so much, and any B.C. company that wants to tap into that would have the opportunity to do so? The spot price will be considerably lower, and they would move from the Hydro grid to the Powerex grid. It's the same grid, anyhow; it's just that they get a fluctuation in price. This is a step that the minister could initiate immediately.

Before we go to the next level, I'm going to ask the minister: how much was exported by Powerex last year? But I would like the minister to give me that number in megawatts, not in geckawatts.

A Voice: Gigawatts.

T. Nebbeling: Exactly. I'm an animal lover, so when I see giga I say gecko.

This afternoon the minister was sometimes talking about megawatts, and then he was talking about gigawatts. I understand it, but whoever is listening may not. So if the minister can just focus on megawatts, it will help the audience out there who, I'm sure, are just hanging on to the words of the speakers.

Hon. M. Farnworth: You are going to hate me when I give you this answer. The conduit to the power to be exported is in megawatts, and it has a capacity of 2,000 megawatts across the border. We exported 13,177 gigawatt-hours.

So that's in the pipeline with everything else.

T. Nebbeling: Considering that the minister has a team of Hydro experts sitting with him, I'm sure they can quickly bring the gigawatts to megawatts with a formula. If that is not possible, then why are we paying these huge salaries to these experts? No, I shouldn't say that. But it must be possible.

Hon. M. Farnworth: We don't sell megawatts. We sell gigawatt-hours, which is different from how many gigawatts there are in a megawatt. It's a lot. We can get the exact amount of gigawatts in megawatts, but in terms of how power is shipped across the border, it's shipped across in gigawatt-hours as opposed to megawatts.

T. Nebbeling: Through the Chair, I must express my disappointment.

[7:15]

T. Nebbeling: If it is so difficult, when I look at B.C. Hydro's 1997 annual report, and I look at "Total Requirements for Electricity and Sources of Supply. . . ." "Sources of Supply, Hydroelectric Generation": Gordon R. Shrum, 2,730 megawatts -- which is 17,099 gigawatt-hours; Revelstoke, 1,843 -- 9,681. I can go on and on and on. But they obviously have a formula for the difference, and I don't understand why there's so much confusion with B.C. Hydro officials when I ask a simple question like that.

I want to move on because we're getting close to final time. It is just that I'm a little bit disappointed that the answer was not forthcoming when it obviously must be fairly simple. It is in the report. Having said that, I would now like to go on. I think that the whole section of. . . . Have we now proven that when the Premier keeps telling everybody in British Columbia that the reason for the smelters coming to British Columbia is all that surplus power, that surplus power truly is a fallacy? If we did have that surplus power, there would be no need for all these new energy-producing projects that the minister is talking about -- be it an upgrade of Burrard Thermal, be it co-generation plants or be it Keenleyside. Unfortunately, we can't spend much time on Keenleyside. I wish we could, because there are many questions there as well. But I may do it in writing, and maybe I can get some answers on Keenleyside through correspondence.

What I would like to ask the minister now is: what is the current rate of return allowed B.C. Hydro on B.C. Hydro's equity?

Hon. M. Farnworth: It's a little over 17 percent. I think it's 17.5 percent.

T. Nebbeling: B.C. Hydro's earnings in '96-97 were above that limit. How can that be?

[ Page 9146 ]

T. Nebbeling: The rate of return is based on equity in the corporation, I believe. Yes? So how can there be a period when the allowable rate -- be it 17 percent -- reflecting X amount of dollars is lower in certain years, when it is a simple calculation? If the equity represents X amount of dollars and you take 17 percent of that, that is your rate of return. Is the minister saying that we actually had years when B.C. Hydro has taken less in profit and that that has happened since 1992?

Hon. M. Farnworth: In fact, for the years '93-94, '94-95 and '95-96 we were under in each of those years: in '93-94 by 5.65 percent; in '94-95 by 4.52 percent; and in '95-96 by 8.53 percent.

T. Nebbeling: First of all, I do not know, because I haven't got the books here to see what kind of transactions were incorporated in that book-year, where the profit was reduced to the level that was below the maximum that equity could have given as a return. You may have paid off big portions of your equity base -- I don't know.

But what I would like to know is: what authority does the ministry have to operate almost on the basis of: "Well, we have had three bad years. Now we have had a good year, so we're going to try to make up for the bad years by taking in a higher percentage based on the equity than is permitted under the guidelines. And that, I believe, led to B.C. Hydro taking $46 million in 1997. That was allowed, based on the 17 percent of equity. Is there a clause in the Utilities Commission's guidelines that says you can actually spread it out evenly over five years? Or is this just an internal decision overruling the Utilities Commission in a certain way?

Hon. M. Farnworth: There are two issues. One is the one the member touched on, which is the dividend. It's not related to the rate of return, in that the rate of return doesn't influence the size of the dividend. Let me put it this way. . . .

Interjections.

The Chair: Through the Chair.

Hon. M. Farnworth: The 17 percent is based on average yearly flow and what we're supposed to earn. If we underperform, we have the option to go and ask for a rate increase, which we haven't done. In some years you are over, when there is huge amount of water -- as there was last year.

T. Nebbeling: I understand that, but I'm asking where the legal right has been to make that judgment call, to take a high percentage on the equity of B.C. Hydro, because somebody within the organization says: "We have made so much more money this year that we will actually take more than 17 percent." That's where I'm going.

Hon. M. Farnworth: The 17 percent is viewed as what a fair rate of return is. Some years you earn under that, on equity, and some years you earn over. There's nothing illegal or wrong about that. In fact, if you were doing it on a regular basis. . . . Let's say you did that for the next five years in a row. You may in fact then apply to have. . .

T. Nebbeling: A rate reduction.

Hon. M. Farnworth: . . .a rate reduction. You could apply for a rate reduction. But in terms of whether there is legal authority that allows you to earn 17 or 18 percent, no, there isn't -- because it's not illegal not to.

T. Nebbeling: Okay, then that is a dispute that we won't have time to debate. I believe the Utilities Commission sets the rate, and it is binding. A good example of the way things were most likely happening in British Columbia is the fact that the minister introduced Bill 6 this year, whereby basically the Utilities Commission's authority to evaluate if indeed government was taking too much money from their users -- be they commercial or residential. . . . If looking at it, they concluded that indeed $170 million was taking too much -- that this money had to be returned to the users. . . . The minister, through action within Bill 6, eliminated the right of the Utilities Commission to make these decisions and transfer that authority, at the whim of the minister, to cabinet. And that happened to Bill 6. So I believe that the Utilities Commission's rate of return on equity was indeed binding, and I think it was fundamentally wrong for the minister, through legislative action, to undermine that binding element. As a consequence, today the Utilities Commission no longer truly has power to control the financial management of a Crown corporation and how much they can take from people without directing government when taking too much to return it. So that really undermines democracy. But like I say, unfortunately we don't have the time to debate it, because I would love to show the minister the error of his ways.

A Voice: Oh God, you sound like. . . .

T. Nebbeling: Through the Chair. . . .

A Voice: You're reaching now.

The Chair: Members. . . .

T. Nebbeling: I just wanted to do it once, Madam Chair, because this was an imitation of the minister during question period. And I think I did a good one, because he recognized his own type of performance.

Having said that, I am finished, although my colleague still has a number of issues that he would like to bring to the minister's attention.

D. Jarvis: First of all, would the minister tell me how much power is exported into the U.S. in gigawatt-hours?

[7:30]

D. Jarvis: Therefore on page 51 of his annual report, when he's talking about electricity trade, he's referring to the United States. That's that 9,826? This is '97, so. . . .

[ Page 9147 ]

D. Jarvis: Could the minister then tell us what was long-term and what was short-term to the United States?

Hon. M. Farnworth: About 93 percent is short-term, and 7 percent is long-term.

D. Jarvis: Could the minister tell me if B.C. Hydro is doing any studies on rate reductions?

Hon. M. Farnworth: There's lots of work and lots of studies being done. There's the issue around real time pricing and virtual market access that is being done. There are studies in terms of the response to the Utilities Commission that was prepared for Hydro. There's a whole series of studies that are underway or that have taken place.

D. Jarvis: I have been informed that Central and South West was doing a rate study in British Columbia for B.C. Hydro. Is that true? Central and South West Power Corp. -- they're out of Texas, Louisiana and Arkansas.

Hon. M. Farnworth: They could be an energy consultant that is working with one of our business units, but we'll take the name and the information and find out for the hon. member.

D. Jarvis: I'd like to ask the minister a question in regards to another contract that seems to be giving a lot to the United States rather than to Canadian boys. That's pertaining to live line work. I understand that they've given a contract for all their live line work to a U.S. helicopter company.

Hon. M. Farnworth: We'll look into that for the hon. member. The only way that could possibly happen is if there was need and there was nobody else around who could do it. That work is traditionally done here in B.C. If the member has details, we'll look into that for him.

D. Jarvis: How come every question that I ask, they're going to "look into it for you"? That's been going on for several days now, through ICBC and everything.

I'll ask this question, and maybe I can get a quicker answer. This is in regard to the National Energy Board's decision on the southern crossing with B.C. Gas. You know, where you went through the National Energy Board and got a decision that said, ostensibly, that you had to share. . . . They'll take power from B.C. Gas and vice versa. What is your position on that?

Hon. M. Farnworth: This was the issue that we canvassed earlier on, and it wasn't the National Energy Board: it was the B.C. Utilities Commission. This was the issue around the firm supply of gas and Burrard Thermal and the ability of B.C. Hydro to sell back to B.C. Gas the gas that's not being used. The Utilities Commission wanted B.C. Hydro to sit down with B.C. Gas and resolve issues where they can work cooperatively in ensuring a steady supply and flow of gas. B.C. Hydro is more than happy to do that.

D. Jarvis: So I assume that B.C. Hydro is now sitting down with B.C. Gas, and they're going to resolve that situation. I understand that B.C. Gas was in favour.

Hon. M. Farnworth: That's correct.

D. Jarvis: Have they done any studies in regard to competitive ratings with independent power producers in British Columbia?

Hon. M. Farnworth: I might ask the member to clarify the question. But in terms of "Are there special studies?" -- no. We are negotiating to build. . . . If the member could clarify his question, we might be able to supply a more detailed answer.

D. Jarvis: I heard a comment from the chairman of B.C. Hydro, who said that B.C. Hydro's relatively low rates put them in a very good position to cope with the deregulation of the electricity market. So I assume they have a study on hand in regard to their competition. We have this big $6 million ad about future competition going out there -- or competition. There must be some study as to. . . . The only competition they're going to get is from independent power producers and/or the Yankees coming across the border with their own power. Have you done studies to that effect?

Hon. M. Farnworth: I hope we've got this right. If not, we can clarify it further. In terms of the IPPs, there are no studies that have been undertaken, but there has been an RFP that has come in, which says that this is what the costs are going to be. So B.C. Hydro knows what the costs are going to be. In terms of overall costs, every three months B.C. Hydro does a survey of what costs are across North America and so can compare with other utilities right across the continent.

D. Jarvis: Just before I turn it over to the member for Matsqui, who has a few questions, could the minister please tell me. . . ? I've lost my train of thought. I shouldn't have mentioned Matsqui. I've hit a brick wall. I'll turn it over to the member for Matsqui.

M. de Jong: A couple of questions arose out of an exchange the minister had earlier today with the member for Vancouver-Little Mountain. This gets back to the discussion he had regarding events in Pakistan. Part of the exchange that I heard related to the fact that B.C. Hydro had retained counsel to attend a directors' meeting. The question is: who are the counsel that were retained?

Hon. M. Farnworth: The name is Surridge and Beechnoe. Their billings in 1997 were $2,400, and while I don't have the figure for 1998, it is nowhere near that.

M. de Jong: I think the minister said less than that for '98 to date?

Hon. M. Farnworth: If anything at all.

M. de Jong: And the firm the minister referred to was retained by B.C. Hydro?

Hon. M. Farnworth: On the advice of our external counsel, so that there would be an external firm representing Hydro at the meeting.

[7:45]

Hon. M. Farnworth: They were recommended to us by Farris Vaughan, and the client was Hydro.

[ Page 9148 ]

Hon. M. Farnworth: They were recommended to us by Farris Vaughan. They were, I guess, paid to represent us at meetings we would have asked them to attend. As far as we're aware, as I said earlier, this is the only meeting they attended. You know, Farris Vaughan may have talked to them about other issues, but certainly for Hydro, this is the only meeting that they were at. For $2,400 you don't get much -- no insult intended, but you don't get much from a law firm for $2,400.

M. de Jong: I'll resist the temptation, hon. Chair.

Did Farris Vaughan recommend that a firm represent B.C. Hydro in Pakistan, or did they recommend this firm specifically?

Hon. M. Farnworth: They recommended this particular firm.

M. de Jong: Was it unusual for B.C. Hydro to retain counsel to attend the meeting? I'm not certain as to the date that meeting took place and whether that date was confirmed earlier in the discussions. Was it unusual for B.C. Hydro not to have corporate representatives at that meeting? Who would have made the decision to retain counsel to represent Hydro's interest at that directors' meeting, as opposed to having direct corporate representation at the meeting?

Hon. M. Farnworth: Yes, it is unusual that we would send lawyers there. The main reason was that the meeting was on short notice and at the end of December, which over here is the Christmas and New Year season. It's not that in Pakistan. That's why we had the CFO on the conference call and the lawyers representing us at the board meeting.

M. de Jong: Was there any other specific reason that Hydro would have received the advice from Farris Vaughan to retain counsel in this instance?

Hon. M. Farnworth: The law firm was chosen not just for this meeting but if we needed representation at meetings where we could not attend, if they're important or if we needed someone to act on our behalf when we couldn't be there. Those were the meetings where we would have asked them to be. In this case, we asked them to attend the meeting on our behalf because we weren't able to get somebody there in person.

M. de Jong: I'm being left, perhaps improperly, with the impression that there was something else in the minds of Hydro in coming to the decision to retain counsel -- apparently an unusual move that extended beyond simply having a warm body on site at a meeting -- and that there were some other considerations at play.

Hon. M. Farnworth: It was for on-the-ground representation as needed. I mean, if we couldn't be there and we wanted to make sure that our interests were represented, for example, it was felt that it would be a good thing if we had a legal firm that could represent us, that could call us for our instructions before a vote was taken. That was the advice from Farris Vaughan, and I think it was good advice.

M. de Jong: There are presumably still some issues and ongoing interests. Is the firm still on retainer in Pakistan now?

Hon. M. Farnworth: They're not on retainer as such, but if we want them to attend, then yes, they would.

D. Jarvis: We're rushing, and in order to get this concluded quickly, I'll ask two questions. Could the minister possibly supply us with a list of any non-British Columbia company that is doing a study in British Columbia -- and their titles? If the answer is yes, that would be appreciated.

The other thing is on the RFPs. Approximately 40 requests came through -- or proposals from the request that came through about two years ago. Three or four were acted on, I understand. Is B.C. Hydro acting on any of those or looking into any of those further RFP proposals that came through? If so, could he send it to us?

Hon. M. Farnworth: Around the issue of the IPPs, the RFP proposal is through; it's over. It's the two that are going ahead. So there's not another study in the works. The first question, if I understood the member correctly, was around the number of non-B.C. firms doing studies in British Columbia. We can get that for the hon. member.

Vote 28 approved.

Vote 29: ministry operations, $135,021,000 -- approved.

Vote 30: British Columbia Utilities Commission, $1,000 -- approved.

Hon. M. Farnworth: I move the committee rise, report resolutions and ask leave to sit again.

Motion approved.

The committee rose at 7:57 p.m.

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