[ Page 10235 ]

The House met at 10:06 a.m.

Prayers.

Orders of the Day

OIL AND GAS COMMISSION ACT

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

Leave granted.

R. Thorpe: I'm pleased today to introduce two visitors from Vancouver, two small business operators who are here to observe the House: Errol Lipschitz and Derek Hamill. Would the House please make them feel welcome.

Section 1 approved.

On section 2.

R. Neufeld: I have a couple of questions about section 2. I understand that we've advertised and that the closing has taken place. Maybe the minister could answer a number of questions around that. What input will CAPP have in the appointment of that commissioner?

Hon. D. Miller: They will have, I think, influence with respect to the kind of questions that we would ask. We will have to constitute a panel for hiring. But the other stakeholders will as well. I think it's important that the commission and the advisory board be something that has the confidence of all the stakeholders. I do believe it is important that we find an individual with the kind of stature and knowledge that all stakeholders have some confidence in.

R. Neufeld: Maybe I was remiss in asking that question. The advisory committee, as I understand from what the minister said, is appointed now, and they will be adjudicating the hiring of the commissioner. Or will they just have input into the decision on the commissioner? I didn't think that the advisory board had been appointed.

Hon. D. Miller: No, Mr. Chairman. I'm sorry if I wasn't clear. The advisory board called for under the act has not been appointed. I talked about a panel for hiring purposes. Normally, when you hire, you constitute a panel to interview applicants. In terms of the kinds of questions the panel will be directing at potential candidates for these jobs, we want to have input that reflects all of the stakeholders -- not just CAPP but Environment, aboriginals and others.

R. Neufeld: Thank you for that clarification. I understand that the panel that will choose this person will be made up of people that are anticipated to be on the advisory committee. Would that be correct? There will be aboriginal people, local government, the Canadian Association of Petroleum Producers, and people from Environment and the Ministry of Energy and Mines. Would it be correct, then, to assume that?

Hon. D. Miller: I would say that the answer to that is yes. There is a reference group that we have now, which is kind of assisting us, and it is comprised of representatives of those stakeholders.

R. Neufeld: I know we'll discuss the criteria a little bit further on in the bill, but what criteria will be given to this panel to determine who should be hired for the positions of commissioner and deputy commissioner?

Hon. D. Miller: Perhaps I could just quote from the job-posting ad that we published in terms of what kinds of qualities we're looking for in the commissioner:

". . .talented, energetic and forward-thinking. . . knowledge and demonstrated ability to: develop and manage a regulatory body efficiently within the context of sound principles of administrative fairness; provide an ongoing and innovative basis for active participation and consensus-building among the various parties involved, noting the important role of first nations; and provide general guidance on the development of the oil and gas industry, ensuring that regulatory provisions promote sound development."

Generally -- and I believe it's true of the opposition as well -- they would support the principle of developing a commission to handle these issues in northeastern British Columbia. It's the first real and, I would say, significant change in the regulatory framework in that we're departing from the traditional approach, which would see applicants having to go around to the various line ministries in order to get approvals to proceed. We're putting all of that together in one commission not only for the approval process but with a broader mandate in terms of consultation and looking at some of the environmental questions. So it's very, very important for all concerned that this work and that we attract and try to retain people of the highest calibre.

R. Neufeld: Will the successful candidate have to commit to five years? I notice in the act that the appointment is up to five years. Will that person have to commit to five years to be eligible to apply for the job?

Hon. D. Miller: Five years is the maximum. One would normally assume that if you find the right individual, you've hired someone to stay for the term. My experience is that if they decide after two or three or four years that, for whatever reason, they want to leave, there is very little you can do about that. I hope that we will find somebody that would want to commit to the full five years.

[10:15]

[ Page 10236 ]

Hon. D. Miller: I think it is always a balance. You're trying to attract people who have the credentials that I've discussed. While I agree that. . . . I mean, sometimes a five-year term can seem like a lifetime, and sometimes it can seem too short. It depends on what the circumstances are. You did refer to other acts with the five years embedded in them. I think that in terms of the importance of this commission, it's reasonable to have the same term. If issues arise -- for example, people are not capable of doing the job -- then obviously, regardless of the term, government would have to act. Presumably, if someone demonstrated their inability, there would be cause for letting that individual go.

I'm not particularly concerned. It's a balance between terms, obviously. If you went for one year. . . . How would you attract people with the kind of credentials we're looking for if you only offered them one year? That's a pretty uncertain future. I'm not particularly troubled by the five years.

R. Neufeld: I'm not advocating that we should be going out for one year, either. We should be going out for someone to do the job. If they can do the job, they don't have to worry about one year or two years or three years or four years, or whatever. Obviously, if they're performing in their job, they're going to be there. The difficulty is that if you write five years in here and give that person a contract, I would presume. . . . Maybe I'm presuming too much. Maybe the minister could tell me: is he intending to give a contract to this person for five years? Maybe that will clarify it a bit. What I'm trying to get away from is the fact that you will get hung out paying some money if someone can't do the job.

I know it's not related to the Oil and Gas Commission, but yesterday we heard about health councils, where someone on a health council has been removed from two different jobs. It's cost the taxpayer upwards of $500,000 to remove this person from two different jobs on a health council. Those are taxpayers' dollars that could be well spent somewhere else. I know that's with health, but I fear that's the kind of thing we get into. That's really what I'm trying to get away from.

Hon. D. Miller: Look, I guess I can't really give absolute assurance in terms of trying to find someone, to hire someone, for the job. We'll go through the selection process, but inevitably these things do come down to negotiations between ourselves and this individual. We might find, for example -- and this is all quite theoretical -- someone who we and the industry and everyone agree is the absolute best person for the job. In theory, that individual might say, "Well, I'm only interested in doing it for three years," in which case we would probably enter into a three-year contract. There has to be a contract of employment.

It's also true to say that while there is sometimes a great deal of attention focused on individuals in senior positions either at government or at Crown levels in terms of severance questions, my understanding is that in the private sector, because the light isn't shone on it, this is the normal course of events. No one wants to end up in a position where you're paying huge severance pay-outs and those kinds of things, but it is a fact of life in corporate Canada, I believe, that's fairly routine in the private sector.

The member has registered his concern with respect to the length of term. We're quite happy, if the member wants to become more involved in terms of offering some advice to us or to the reference group, to take that advice. But I do believe that what we're embarked on is trying to find the very best person to do a job that everyone agrees is very important.

J. Weisgerber: A couple of questions. The first deals with the corporate structure itself. I find it interesting that the corporation is in fact made up of two directors, one of whom is elected the chair. Really, they run the show -- the chair having a second vote, I guess, in case he disagrees with the vice-chair. Can the minister tell us why, having adopted that model and an advisory committee, the choice was made to go that way, rather than having the advisory committee -- in fact, the board of directors -- and then appointing a chair to the thing? That would give far more influence to those people appointed, under this model, to the advisory board. It would take them out of an advisory position and put them into a management role within the corporation itself.

Hon. D. Miller: Well, the design is somewhat different than, say, the Alberta model for good reason, we think. There's always a balance -- I've discovered that, and the member may have some familiarity with that as well -- with the Crown corporation model in terms of its independence. Crowns are creatures of government; they are created to do certain things. The balance for policy-making, for example, between the Crown and the government is often not well defined. We are setting up a structure where it's clearly government's role to make policy and the commission's role to implement policy. Government will still make all the general regulations; the commission has some power with respect to technical regulations. That's the design we chose. We want it to be slim and efficient. This is something new, and we think it is a better model and one that will serve its purpose.

J. Weisgerber: It would seem to me, looking at this thing -- on the surface, at least -- that what you have achieved is that you've created a corporation over which you have as much control as if you had a deputy minister or an assistant deputy minister in the portfolio. You really have two people; you've appointed them both. They're the corporation. At the will of the Lieutenant-Governor, that person can be removed. Basically, perhaps arguably, you would have more control over the two directors of this corporation than you would have over staff, who might have some tenure and some fundamental kinds of protections for their jobs that come over time. Is that a fair assessment?

Hon. D. Miller: Really, you have two models you can choose between. One is the full board that Alberta has. It's much more formal and, I would argue, perhaps more cumbersome. Or you could look at the model that we've chosen, which is the minimum number of directors. The policy is clearly still retained by government, and the board is charged with the very difficult task of making this entity work for the purposes that we want it to work: to improve our ability to issue permits for oil and gas activity in northeastern British Columbia and to take into account the interests of other

[ Page 10237 ]

J. Weisgerber: Perhaps the minister can advise me what the reaction of CAPP is -- the people who are funding this. One assumes that since we haven't heard any criticisms from them, they're in support of this model. Perhaps the minister could confirm that for me.

Hon. D. Miller: Well, they have been. . . . Really, this is a product of broader negotiations on the oil and gas accord. Not only CAPP but the environmental community as well support the direction we're taking here.

J. Weisgerber: The other question I have is around the individuals who will be appointed as directors and, ultimately, as commissioner and deputy commissioner. Will it be a requirement that those people take up, if they haven't already, permanent residence in the Peace? I'll be very candid. What I don't want to see is somebody who keeps their house in Victoria, flies back and forth, collects a per diem for living in Fort St. John during the week and goes back to Victoria on the weekend. Can the minister confirm that there is going to be residence in the community -- the assumption of residence in the area where the work takes place?

Hon. D. Miller: What we're really saying is that the commissioner must establish a residence. I don't know that we can do much more beyond that. If an individual had a house somewhere, whether it's Victoria or anywhere else -- Smithers or you name it -- and wanted to keep it, I don't suppose there's much we could do about it.

I also anticipate that this job is going to be an active one and will probably require the commissioner to be out and about. I suspect that if you're dealing with issues in the oil and gas sector, it's inescapable that you have to spend some time in Calgary. That's just the way things are. I have to spend some time in Calgary. Opposition members have talked about how they like Calgary. Anyway, we do expect them to establish their residence there. But I think the job is going to be very busy and will probably have the individual flying around a lot.

J. Weisgerber: I don't want to flog this. It's just that over the years we've seen many, many examples of people who continue to live in one community and work in the other, and taxpayers foot the bill for them travelling back and forth to their real homes on the weekend. I just don't think that's appropriate in this kind of undertaking. I think that the job is in Fort St. John, and if that requires travel. . . . Or Dawson Creek. At least I hope you're still considering that. The job will obviously require travel to Victoria, Calgary and perhaps Ottawa. I just think it's important that the base be established in the Peace and that it be a real Peace River base for both the deputy and the commissioner.

R. Neufeld: Just to add to that, the member for Peace River South brings forward a good argument. Too often in the north we've seen where people actually do commute back and forth. I know that the minister, as he said in his comments, can't tell someone that they have to sell their house someplace else. But I think that a criterion of the job -- which the panel would ask when they interview the person -- would probably be that residence be in Fort St. John, where the commission has been advertised to be, and that if one wishes to live in Victoria, they can, but they're going to travel back and forth on their own. Is that wording too strong -- to have someone understand that the Peace country is where they should be living?

[10:30]

Section 2 approved.

On section 3.

R. Neufeld: I have a number of questions on section 3. It states: "The purposes of the commission are to. . .regulate oil and gas activities and pipelines in British Columbia in a manner that. . . ." I do not recall where it actually delineated an area. Would this be northeastern British Columbia only, or will this commission actually be responsible for anything that could happen over on the North Coast, in your area? Maybe the minister could just let me know a little bit about his feelings on that -- whether it covers the whole province and if it will be headquartered out of Fort St. John, and that includes offshore.

Hon. D. Miller: It's really a moot point. The only developed region of the province, with respect to oil and gas, is the northeast. That's why we can actually do a commission -- because of the geographic confinement. It's our view, or my view at least, that this is a provincial act and therefore if there were other basins that were to be developed. . . . The two other significant basins are the Nechako -- a couple of major basins -- and then the offshore. There are no current plans that I'm aware of with respect to either of those two. There is certainly a desire on the part of some to proceed to look at the potential offshore. I've said that I'm interested in looking at that question, and I've had some brief discussions with federal ministers and others on the issue. Currently there are no plans to see any movement in those areas, so at this point in time we're talking about the northeast. If at some future point other basins were being developed, then it's my view that the commission would have similar authority in those areas.

R. Neufeld: Then areas such as the Kootenays, where there is a bit of activity, or the Fraser Valley would come under this commission. If there was a basin somewhere else, would the minister see the advisory board expanded in some way to get people from those areas involved on this advisory board, or would that get a bit cumbersome? I'm not sure how that would work. I know that in Alberta -- the way I understand they have it set up -- it's one board that looks after the whole province, regardless of where it's at. But Alberta is just a little bit different when it comes to energy, as compared to British Columbia. We're all aware of that. I just wonder how that would work in other areas of the province.

Hon. D. Miller: Without having given a great deal of thought to the question, it would be my view -- and again I want to acknowledge that these are theoretical questions -- that if, for example, there was a proposal for a major development in the Nechako basin, the people in that region could rightfully say: "We would like an advisory board that reflects

[ Page 10238 ]

R. Neufeld: I can understand the rationale of what the minister just said. I understand that, because I'm sure that they would want to have some input. I guess we'll deal with the advisory committee later on.

Where I thinks it gets a little bit unwieldy -- or it could, I should say -- is if you have too many advisory boards to the two commissioners. Alberta, for instance, has five members on the board -- one is the chairperson -- with no advisory board as I understand it, unless I haven't been informed correctly. That kind of model, it seems to me, is something that could work quite well around the province. I do understand that the province is made up totally differently than in Alberta, so there may be some room for that. That's just a caution that I have: whether it's northeastern B.C. to start with or whether it's the whole province, that we be careful about advisory committees and what could get involved there.

The next question that I have is on section 3(a)(ii): ". . .conserves oil and gas resources in British Columbia." Maybe the minister can just expand on that a little bit, or is that just something that was taken out of the Ministry of Energy and Mines and put over here? It seems like something was just stuck in there, and I'm not quite sure how that works with this commission.

An Hon. Member: Permits.

R. Neufeld: This is for permits.

Hon. D. Miller: It came out of the discussions with the stakeholders: CAPP and others. I guess a broader interpretation is really that it's a mandate, with respect to those resources, that we're not wasteful with them -- in other words, that they are properly managed. "Conserve" can have many different meanings, sometimes ones I disagree with. It really refers to the kinds of practices we want to have in the northeast.

R. Neufeld: Would this commission have any influence over decisions made by the Ministry of Environment, taking into consideration that it conserves oil and gas resources in British Columbia?

Hon. D. Miller: I didn't follow the question, Mr. Chairman.

R. Neufeld: Like I say, I just found it to be a bit of an add-on, understanding that this commission is (a) to look at issuing permits in a more timely manner and (b) to administer a $5 million environmental fund. I'm just wondering if there's any connection between those two to this "conserves oil and gas resources in British Columbia," taking into account the minister's words the other day when he was in Calgary and met with the Alberta Energy minister and the Saskatchewan Energy minister on the Kyoto agreement. Does this have any effect on those decisions, or anything like that? Will they be coming back to recommend something to the minister by using this in the form of the Environment ministry?

Hon. D. Miller: No. Again, I want to reinforce that the use of the term "conserve" with respect to the industry is one that the industry understands to mean having good efficient practices and not being wasteful in terms of how you extract -- to make sure that you do extract, those kinds of issues.

The broader issue is one that to some degree, unfortunately, there is not a comprehensive story on. That is the issue of climate change, greenhouse gases, which is a very serious issue and one not to be dismissed. I note that this morning the press quote President Clinton on that question. In a very real way, because the temperatures in the southern part of the United States -- Texas and places like that -- have been extraordinarily high. . . . In fact, quite a number of people have died as a result of that heatwave.

From a principled point of view, in British Columbia we want to do everything we can to be a positive influence with respect to reducing greenhouse gas emissions. In fact, I think our record here is very good. I know the Ministry of Environment has been in the forefront in Canada in terms of proposing pilot programs, emissions tradings, those kinds of things. The proposal that came out of British Columbia has now been taken up by the federal government and other provinces as well.

The point I was trying to make -- again, I want to stress that the article was incomplete -- is that some factors are beyond our ability to influence. If we continue to have in-migration and population growth in British Columbia, then we reduce our ability to control or reduce emissions. We have been very aggressive, I think, in British Columbia on the question. We are now proposing even further projects that we think will contribute in a positive way to the reduction of greenhouse gas. Certainly we're trying to move people from automobiles into transit -- whether that be conventional buses, the SkyTrain proposal that is now out there or other means -- and we will continue to be very aggressive in pursuing all opportunities to reduce the emissions from British Columbia. But in practical terms, if the population continues to grow, all I was suggesting was that our ability is somewhat limited or influenced by factors that we have no control over.

Secondly -- and I think this is also important for British Columbians to understand -- while the agreement was reached in Kyoto with the Canadian government, the implications are provincial. We do not know at this point -- and I think this was the point that Premier Klein was trying to make as well. . . . We have not received an indication from Canada as to what role they intend to play with the provinces in terms of the broad issue of how Canada reduces its greenhouse gas emissions. That is an important point. Is the federal government contemplating a carbon tax? We don't know. Will the federal government impose on British Columbia and other provinces fiscal obligations with respect to that question? We don't have an answer to that question.

I think Premier Klein -- and I made some comments myself -- and others, particularly from western Canada. . . . The arguments that I put forward for British Columbia apply equally to them, particularly to Alberta and Saskatchewan. We need to know the answers to those questions. We want to be part of finding a solution to these problems; we want to be moving forward. British Columbia has been in the leadership role in terms of these pilot programs, emissions tradings, and other things. But the ball is clearly in the federal government's court in terms of answering these fundamental questions about the fiscal implications and how they intend to relate to the provinces. None of that has anything to do with this wording in the act, particularly the word "conserves."

R. Neufeld: Sub-subsection (iii) -- "ensures safe and efficient practices. . . ." I guess the quick question I have is:

[ Page 10239 ]

Hon. D. Miller: I would anticipate that in the normal course of events, if the commission, in consultation with stakeholders, feels that some changes are required with respect to WCB regulations or others, they will make their opinions known. But it's a general statement, and one which I think we all support: that in pursuing the development of our resources, it be done in a safe and efficient manner.

R. Neufeld: Subsection (b) -- "provide for effective and efficient processes. . . ." There are a number of things I can think of right now: the processing of referrals, or applications for plants or applications for pipelines. Can the minister tell me now how quickly. . . ? What kind of time frame do you think a referral process will take? That seems to be where the biggest holdup is -- right at the front end, trying to get the referral process through so we can get on with doing the work on the ground. Can the minister tell me if he has a time frame in mind? Prior to 1991 we had a walk-around, and people could actually walk around to all the ministries' consultants in about one day, unless it was a real sensitive area in the mountains, and get a referral process through. Maybe the minister could tell me: is there a target we're trying to get to so we can get those referral processes through? That's simply because the window of opportunity to do the work is so narrow in the wintertime and because of the way the oil and gas industry is. I'm sure that, having travelled to Calgary as many times as you have in the last while, you'll know how difficult it is for those people to plan five years ahead. They don't do that in the normal course of events. Many of them, depending on what a well brings in, will go after a second well or something of that nature. So maybe you can give me a bit of an idea of what kind of time frame we're looking at.

[10:45]

I guess with respect to how much time, I understand that there are some applications now that are processed in a very quick turnaround time. When I was in Fort St. John talking with the staff, they talked about some that go through in as little as three days. I would say that what I anticipate is an improvement over time with respect to the time it takes to deal with applications. But we must remember that they are also linked to a lot of other factors. Where are the applications? What are the conditions that have to be considered with respect to giving approval? Some are easy; some are more difficult. I don't think it's possible to give a blanket or simple answer with respect to how much time it ought to take. Our whole thrust is to try to improve time, to reduce the regulatory inefficiency, if you like. This is really very much, I think, in the hands of the commission, backstopped by an advisory board of people in the region representing a variety of stakeholders. So I think this is a work in progress, and I expect to see improvements over time.

R. Neufeld: As I understand it, on average the referral process takes about five days now -- that is, excluding the difficult ones that are in very sensitive areas. You're right; there are some that are down to three days.

A lot of this is predicated on trying to expedite the oil and gas industry in an efficient and safe manner, so that they can get on with doing the work in the wintertime. I thought there would be some measure that the minister would use at the end of the day to say: "Yes, this is better than what we experienced," or "No, it's not, and this has to be changed." I would think that one of the criteria would be the length of time it takes to get a referral through. Maybe the minister is not aware, but I spent an awful lot of time from my office trying to get some of those things expedited -- not so much this last year but prior to that. I had to take a huge amount of time on behalf of the consulting industry, the oil and gas industry and the surveying industry to try and get some of these permits through.

I was hoping that there was some kind of a time frame the ministry was looking at, so we can get this stuff expedited. Hopefully, it's there. The minister seemed to be a bit elusive about it, but maybe he'd like to expand on it a little bit more. Are we going to try to get the average ones through in two days, so we can get on with things and get things done in the northeast oil and gas industry? Are we just looking at another body that's going to take about the same time that it took before to process this information? If that's what it is, one wonders what we're setting up a commission for.

Hon. D. Miller: I don't know that we would have gone to the extent of doing all that we've said -- to create a new commission, to transfer authority for line ministries to the commission, to explain publicly on numerous occasions that its stated purpose is to improve and reduce regulatory inefficiency, to try to deal with these issues in a quicker manner. . . . The member knows that; I'm not trying to be elusive at all. All I suggested was that I couldn't give you a specific time for approval of applications, in terms of what I thought was an ideal. They do depend on a variety of things.

I also know the member has lobbied, I think, against giving an approval for a particular well. You clearly understand that it's not always simply a matter of somebody walking in the door with an application, and then you bang it with a rubber stamp and say: "Go out there and do what you want." You would probably be the first, hon. member, to complain if the commission acted in that kind of manner.

This is historic in British Columbia. It has never happened before that we've put together all of these line ministries and given a commission the authority, under the separate acts, to deal with applications. Clearly our intent is to improve, and I think we can only realistically measure that over time.

J. Weisgerber: With respect to subsection (c), can the minister advise how he sees or perceives the commission and the commission directors going further than the government has been able to do in encouraging the participation of first nations? I think it's fair to say that there has been some indication of a willingness to cooperate from some of the Treaty 8 bands, but it would suggest to me that there is perhaps some strategy here that would see much wider participation by the bands generally in the areas affected.

Hon. D. Miller: You know that we are engaged in discussions with the Treaty 8 bands. Those are proceeding. I don't

[ Page 10240 ]

The whole thrust of this is to have a situation where the aboriginal community feels more included in it. I think that they ought to look at it. . . . I would recommend that they look at the commission as something that could work for them too. It's not just there for CAPP; it's there for all of the stakeholders. It's our intention to try to resolve some of these outstanding issues with the first nations. In that regard, I made a very strong pitch to the federal minister, Mr. Goodale, that federal participation would be of great assistance. I'm waiting for, I hope, a positive response. Everything we're going to do is to try to improve the situation there.

J. Weisgerber: Is it the intent of the minister that the commission and the government work through the Treaty 8 Tribal Association? Or will there be a perhaps more pragmatic approach of dealing with individuals bands, given the dynamics that appear to be inherent in the Treaty 8 Tribal Association?

Hon. D. Miller: We're well aware of the dynamics and are trying to work on both fronts, really, on both an individual and a collective level. I have a very able negotiator on that file. We're making progress. I can't tell the member when we might reach some final conclusion with respect to those negotiations, but I think we are making some progress.

Section 3 approved.

On section 4.

R. Neufeld:, I have a quick question on section 4. I wonder why this appears, other than to respond, I guess, to some of the questions that the member for Peace River South had. I'm not familiar with this being in any other acts that this government has put forward in the House. It has to do with section 35 of the Constitution Act, 1982. I wonder just a little bit about the rationale for doing that.

Hon. D. Miller: It really sends a signal, I think. Again, I talked earlier -- perhaps at too much length -- about the various stakeholders in the northeast, and certainly the aboriginal community is a significant one. I think it sends a very positive signal with respect to the relationship between the commission and the aboriginal community.

Sections 4 and 5 approved.

On section 6.

R. Neufeld: Could the minister quickly explain to me sections 6(1)(a) through 6(1)(e)? I guess we could start with the first one: "(a) acquire, hold and dispose of property." Can the minister explain to me why the commission would acquire, hold or dispose of property? What's the rationale for that?

Hon. D. Miller: It's essentially what they refer to as boilerplate language, with respect to the capacity and powers of the commission. Property can also include money, and they will need a building.

R. Neufeld: The second one is: "(b) invest money, and, subject to the prior approval of the Lieutenant Governor in Council, borrow money." This is fully funded by the oil and gas industry, and I think it's estimated to be about $12 million a year. Can the minister tell me why they would borrow money?

Hon. D. Miller: It can only really happen with the approval of the Lieutenant-Governor-in-Council. It is similar to the powers that are included in areas like the Securities Commission or the TFA. It could be a cash-flow problem as they reach the year-end. Again, it's similar to other provisions that exist with other commissions established by government.

R. Neufeld: Section 6(1)(c) is: ". . .negotiate and enter into agreements with the government, or with an official or agency of it, or with any person, including, subject to the prior approval of the Lieutenant Governor in Council, with the government of Canada, the government of another province, First Nations or local governments, or with an official or agency of any of them." Just give me an idea of why the commission would enter into agreements with the government of Canada or with another province. Just for my clarification, where would it apply?

Hon. D. Miller: It could be, for example, with the government of Canada on information-sharing -- something as simple as that.

Section 6 approved.

On section 7.

Hon. D. Miller: I move the amendment standing in my name on the order paper.

[SECTION 7, in the proposed subsection (1) (d) by deleting "the committee must".]

On section 7 as amended.

R. Neufeld: This section deals with the advisory committee. I know that we touched on it a bit when we first started talking about the commission. A number of questions arise. How many will be on the advisory committee? How will they be selected? Is this a term appointment also?

Hon. D. Miller: I don't have a specific number. Presumably it's an odd number -- not odd people, but an odd number. I would expect that, yes, there would be a term.

R. Neufeld: Maybe you could expand a bit. That's two questions: how many, and for how long? How are they selected?

Hon. D. Miller: Through consultation with the various stakeholders.

R. Neufeld: The last question is: do you intend to appoint MLAs to this advisory board? I'm not speaking for myself; there's no way I want to be on an advisory board. But are you intending to appoint MLAs? I see in subsection 7(2)(b) that "if the advisory committee member is not a member of the Legislative Assembly or a public servant. . . ." I just wonder why we would be looking at appointing MLAs to that advisory. . . .

[ Page 10241 ]

Section 7 as amended approved.

On section 8.

[11:00]

[SECTION 8, by deleting the proposed subsection (1) and substituting the following:

(1) The commission must encourage the use of consensual alternative dispute resolution methods for the purpose of resolving disputes relating to the commission's discretion, functions and duties under

(a) this Act in relation to a specified enactment, or

(b) the Petroleum and Natural Gas Act or the Pipeline Act in relation to a licence, permit, approval or other authorization under either of those Acts.]

On section 8 as amended.

R. Neufeld: The dispute resolution issue that happens with the advisory board and the commission -- will this in any way affect how the Mediation and Arbitration Board now functions in the northeast?

Hon. D. Miller: No. It will be completely separate.

Section 8 as amended approved.

Sections 9 and 10 approved.

On section 11.

R. Neufeld: This deals with the conflict-of-interest part of this act. I know that you have to be fairly careful about who is appointed as a commissioner. What it does is explain that whoever this person is, at the end of the day, they can't have even an interest in a device, appliance, machine, article, patent or patented process. The one thing they can do is go to the gas station and buy gasoline for their vehicle, and that's stated in here. But everything else is out.

I just wonder what happens in the case of. . . . I've got a question about retirement benefits, RRSPs -- you know, where you have them in a mutual fund or something, and someone else is administering them. I mean, we get that same thing in the House. How do you stay out of a conflict of interest? I'm wondering if this section isn't just a little bit tight.

Hon. D. Miller: I really do believe that we have to put these provisions in there. I mean, if the commissioner was questioned, in terms of the integrity of the commission and the process and all the rest of it, on the basis that there was some personal gain, then I guess it would all be for naught. It is unfortunate, in my humble personal opinion, that we do live in a society where we seem to be bound to regulate almost every level of human activity to protect against charges that somehow there's a "conflict" or whatever, but so be it. I lost that fight a long time ago. I don't want to argue it here, but we feel that these are important provisions to have.

J. Weisgerber: I wonder, considering these issues, whether the services of the legislative conflict-of-interest commissioner could be made available to those staff members for advice.

Hon. D. Miller: I don't know that it's required; I think the bill is pretty explicit. I think it's contained within the section.

Section 11 approved.

On section 12.

R. Neufeld: Section 12 covers officers and employees that will be transferred from government to this commission -- so, obviously, off the FTE roll into the commission. I wonder if the minister could inform the House what criteria will be used re who will be transferred to the commission -- not specifically the names, but what responsibilities will. . . ? Where will the line end, where people will actually be transferred to the commission? Maybe I'll just leave it right there to start with.

Hon. D. Miller: As a general response, clearly the work that's now being undertaken by line ministries will be undertaken by the commission. Presumably there are people within those existing government ministries and agencies who may want to transfer into the commission, in terms of their level of expertise in certain areas. They will remain public servants under the act and therefore will still retain their opportunity to go back into a line ministry for purposes of promotion.

R. Neufeld: I read that in the Public Service Act. But if it is someone who, for instance, is working in the Environment ministry and who spends much of their time working on oil and gas items, would it be 50, 60 percent, 80 percent or 100 percent of their time that is actually transferred over? The other thing the minister said was that they "may" want to. Do I understand that the employee will have the opportunity to decide whether they want to move over to the Oil and Gas Commission or back again, or those kind of things? Or is there an amount of people who are going to be transferred over?

Hon. D. Miller: I'd much rather have somebody apply because they want to work with the commission, as opposed to saying to someone: "You are now going to go over there and work with the commission." I think that's the preferable approach and one that we'll follow. Just to illustrate, there are currently five employees in the Ministry of Environment, Lands and Parks that work exclusively on oil and gas issues, and presumably some of those may want to consider the opportunity to move to the commission.

R. Neufeld: I don't want to belabour this, but I'm having a bit of difficulty with the setting up of a commission that's actually going to be responsible for the oil and gas industry. We're saying that people will transfer over there at will. They may want to stay in government service, and they may want to transfer over. How is that commission -- I mean, those two people -- going to be able to deal with these issues? If, let's say, out of the five people in Environment, Lands and Parks, four of them decide to stay with Environment and don't go to the commission. . . . Does the commission have the authority to get these issues pushed through the other four people that want to stay with Environment, Lands and Parks, or do they answer to a different person, a different deputy minister or something?

[ Page 10242 ]

Hon. D. Miller: We'll hire staff as required and, I presume, from the agencies I referred to. My understanding is that there is a great deal of interest on the part of individuals who work for those agencies in moving over to work for the commission.

R. Neufeld: My other question is on how many people from the different ministries are going to be transferred over, but I guess you've answered my question. If I've got this right, it's entirely up to the employee as to whether they want to transfer to the commission or not. There will be absolutely no mandatory transferring over to the commission of any kind. They could all stay within the government service, as they are today, and the commission will be working exactly the same as we've done it in the past.

That's the part I have trouble with. If we go to the Alberta example. . . . I know we're not exactly the same as Alberta, but in Alberta, actually, the commission -- it's not a commission, but a utilities board -- is not under the public service, and they go out and hire the people they need to be able to perform their duties, to live within the legislation that's set out.

This model is a bit different, but I'm just having a bit of trouble with how you're going to work it -- whether those people will be working for the commission or not. Will the commission, if they want to make a decision and they're having a bit of a problem with Environment, now be going to the Deputy Minister of Environment and asking them to help them out, or will they go directly to this person? How does that relationship work across ministries?

Hon. D. Miller: The commission has the authority under the act to deal with questions that now are dealt with by the line ministries. The commission will hire their staff. Presumably where they will go, first of all -- it seems to me to be practical -- is to those people who are engaged in this type of work in the line ministries, to see if they have an interest in coming over to the commission. My understanding is that there is a great deal of interest in them doing that, and I do not anticipate any difficulties.

Sections 12 to 14 inclusive approved.

On section 15.

R. Neufeld: I apologize to the minister for not getting this amendment to him sooner, but it's an amendment similar to the one that was put forward for the northern commissioner. The amendment reads:

[SECTION 15, to add the following:

(3) The minister must promptly lay the report before the Legislative Assembly if it is in session and if the Legislative Assembly is not in session the report must be filed with the Clerk of the Legislative Assembly.]

Section 15 as amended approved.

Sections 16 to 21 inclusive approved.

On section 22.

Hon. D. Miller: I move the amendment standing in my name on the order paper.

[SECTION 22, in the proposed section 22 by adding the following subsection:

(6) A regulation under subsection (5) may

(a) classify producers for the purpose of the regulation according to

(i) whether they produce petroleum or natural gas or both, or

(ii) the date on which production commences or commenced,

(iii) any other basis the Lieutenant Governor in Council considers appropriate, and

(b) provide differently for different classes of producers.]

Section 22 as amended approved.

On section 23.

Hon. D. Miller: I move the amendment standing in my name on the order paper.

[SECTION 23, by deleting the proposed paragraph (b) and substituting the following:

(b) the revenue derived from fees in relation to

(i) applications for and issuance of approvals, licences, permits and other authorizations issued by the commission under the Petroleum and Natural Gas Act and the Pipeline Act, and

(ii) annual fees prescribed under section 133 (2) (p.1) of the Petroleum and Natural Gas Act and under section 35 (2) (d) of the Pipeline Act.]

Section 23 as amended approved.

Sections 24 to 54 inclusive approved.

On section 55.

Hon. D. Miller: Mr. Chairman, I move the amendment to section 55 standing in my name on the order paper.

[SECTION 55, by deleting the proposed paragraph (p) of section 133(2) of the Petroleum and Natural Gas Act and substituting the following:

(p) prescribe fees for

(i) name changes and other required purposes,

(ii) under Part 4, applications for approvals to undertake geophysical exploration,

(iii) under Part 14, applications or classes of applications,

(iv) under Part 14, licences or leases or classes of licences or leases, and

(v) a provision of the Act that refers to a fee or a prescribed fee;

(p.1) prescribe annual fees for well authorizations issued under Part 12, payable by the holders of the well authorizations;.]

[ Page 10243 ]

Sections 56 to 66 inclusive approved.

Hon. D. Miller: I move the amendment standing in my name on the order paper.

[SECTION 66.1, by adding the following section:

66.1 Section 35(2) is amended by adding the following paragraph:

(d) prescribing an annual fee to be paid by a company described in paragraph (c) in

respect of the operations of its pipeline referred to in that paragraph.]

Sections 67 to 72 inclusive approved.

Title approved.

Hon. D. Miller: I move the committee rise and report the bill complete with amendments.

Motion approved.

The House resumed; the Speaker in the chair.

Bill 32, Oil and Gas Commission Act, reported complete with amendments.

The Speaker: When shall the bill be read a third time?

Hon. D. Miller: By leave now, Madam Chair.

Leave granted.

Bill 32, Oil and Gas Commission Act, read a third time and passed.

[11:15]

MISCELLANEOUS STATUTES AMENDMENT ACT (No. 2), 1998
(continued)

On section 9.

G. Plant: When we began to look at these provisions of Bill 24, which are intended to require wholesale dealers of tobacco products to collect from retail dealers the tax imposed on consumers and remit that tax to the government, I believe we had begun to explore the fact that these provisions are intended, in part, to fix the law as a result of a recent decision of the Court of Appeal.

The decision of the Court of Appeal concerned a bankruptcy. As I recall the facts, there was a limited amount of money available to the creditors of the bankrupt estate, and the government was essentially arguing, by reason of its position as a creditor, that it should be entitled to a sum in the order of about $6 million. I may not have the number right. Some of the other creditors -- the unsecured creditors -- argued that the tax scheme did not in effect operate so as to make the Crown a creditor in this case, because of the way in which the wholesalers were treated. So this, I think, is the government's response to the judicial decision which upheld the position of the unsecured creditors at the expense of the government and the consolidated revenue fund.

The issue that we had begun to explore when the provision was last before us was whether there was any other. . . . How much of the money, essentially, was at risk? Is this a change that is intended to rescue the government from its predicament in respect of one particular instance -- the one I've talked about? Or does this have broader application in terms of other claims or disputes arising up till this point? If the answer is that there's more than just this dispute at issue, then I'm interested in knowing the dollar figure that is at stake from the government's perspective.

Hon. U. Dosanjh: I'm told that there is one other company that has gone bankrupt, and the amount involved is about $100,000. To the knowledge of the ministry, there are no other moneys at risk at this point.

G. Plant: Leaving aside those two claims, the primary operation of these provisions, then, is on a going-forward basis, so that the regime will now be clearer for all those who operate as retailers or as wholesalers. Is that correct?

Hon. U. Dosanjh: Yes.

Sections 9 to 11 inclusive approved.

On section 12.

G. Plant: I move the amendment standing in my name on the order paper.

[SECTION 12 (1), by deleting the sub-section and replacing it with the following:

12 (1) Sections 1, 4, 8, 9 and 10 come into force by regulation of the Lieutenant Governor in Council.

and to delete sub-sections 12 (4) and 12 (5).]

On the amendment.

G. Plant: The amendment does this. First of all, there are two parts of section 12 which make the changes to the Tobacco Tax Act's regime retroactive. They do that, in essence, to save the government from the result in the Court of Appeal decision that I referred to a few minutes ago and also, presumably, to save the government from the same result in respect of the second claim identified by the Attorney General, which is apparently in the order of $100,000 or so.

What my amendment does, essentially, is delete the retroactive portion of this part of the legislation and say that the legislation will operate only from this point forward. It will provide all the certainty and clarity that the government needs in terms of the tax regime in respect of tobacco taxes and wholesalers and retailers. It will give all the certainty that the

[ Page 10244 ]

Let me just say something about retroactivity. I don't like it much. I'm not going to say that the government should never have the power to make retroactive legislation. I am going to say that this particular instance of retroactivity is, I think, bad public policy for a number of reasons. First, I think that whenever retroactive legislation affects what amounts to property rights -- even if, in this case, they are the rights of creditors in the estate of a bankrupt person -- then the burden on the government to demonstrate or justify retroactivity is pretty darn high. Secondly, when we are talking about fixing problems with the government's tax legislation, I don't much like retroactivity. When the government makes tax laws, they should do it properly the first time around and essentially pay the consequences, if there are any, when it fails to do that. People organize their lives around what the tax laws mean, and our economy depends on the kind of certainty which is undermined when the government retroactively changes tax legislation.

I think that for those reasons -- and there are probably others -- it is not good public policy for this government to essentially rewrite history in this area. It's not good public policy for this government to make this aspect of the Tobacco Tax Act retroactive; it's not good public policy for this government to essentially wield an unfair lever as a creditor in the estate of a bankruptcy based on the fact that it is government and can make up the rules for itself. What this amendment intends to do is ensure that these changes to the Tobacco Tax Act will not operate retroactively. I'm sure that the Attorney General shares all of my views with respect to the way in which government should avoid acting retroactively and that this will be a friendly amendment. I look forward to his remarks to that effect.

Hon. U. Dosanjh: I think the hon. member's remarks could be persuasive were they not flawed. Here is the flaw. In this particular section, what we're trying to do is make sure that taxes, which are legitimately owed and collected, are paid to government. We are protecting taxpayers in that regard. This doesn't apply only to bankruptcies; it applies to others who may still be in business but who have collected the taxes, going back six years, and who have not paid. There is no particular case of that kind that is known to the ministry at this time, but there could be. At any given time the ministry can assess six years back whether or not a particular individual or business has paid the taxes that are appropriately owed -- those which have been collected but have not been remitted.

To agree with the amendment submitted by the hon. member would mean that we would say to people who have collected the taxes legitimately but have not remitted them to government that they will be allowed to do that with impunity. I don't think that's a good message to send. Otherwise, if that were the case, then we should perhaps change the law in other areas where taxes have not been paid -- where they've been collected by wholesalers but haven't been remitted. We don't forgive them, and we shouldn't forgive those taxes in this particular case either.

No cases are known to the ministry at this time, but this is a tool the ministry has in its hands so that it can go back six years, at any given time. If we don't do this, for the next six years any amount could be at risk, if it hasn't been remitted, because we only go back six years. Within the next six years, we'd be able to go back six years first, then five, then four, then three, then two, then one. If we don't have the ability to do that, we would be putting some revenue at risk. There are businesses -- wholesalers -- that collect taxes legitimately but do not remit them to government, which is illegitimate. We are trying to make sure that we have the tools in place to deal with that. The amendment defeats the partial intent of this legislation.

G. Plant: The minister's remarks assume that government acts, in a sense, not in a vacuum but alone -- that it is the only player in this field. While I am sympathetic to the idea that the government, as a tax collector, needs to have the power to reassess and that that power needs to be in place over a period of time, the problem that arises when the taxing provision is defective is not simply a problem that has to do with the ability of government to reassess, but ultimately it is also going to affect the rights, interests and expectations of others and ultimately may do that at their expense.

[11:30]

I've listened to the minister's answer. I still think, on balance, that retroactivity, in the way that it has been done here, is not the way to solve the problem for the government. I stand by the amendment.

Amendment negatived on division.

G. Plant: It is my view, hon. Chair, that the section without the amendment contains within it a provision that is offensive to my sense of what makes good public policy. I think the only way to deal with that is to recognize that sections 12(4) and 12(5) are really the most important parts of that section. I intend to oppose the section when it comes up for a vote, as I'm sure it is about to do.

Section 12 approved on the following division:

YEAS -- 35
Evans	Zirnhelt	McGregor
Kwan	Hammell	Boone
Streifel	Pullinger	Lali
Stevenson	Calendino	Goodacre
Walsh	Randall	Gillespie
Robertson	Cashore	Conroy
Priddy	Petter	Miller
G. Clark	Dosanjh	MacPhail
Lovick	Ramsey	Farnworth
Waddell	Smallwood	Sawicki
Bowbrick	Kasper	Doyle
Giesbrecht		Janssen

[ Page 10245 ]

NAYS -- 30
Sanders	Farrell-Collins	de Jong
Plant	Abbott	Reid
Neufeld	Coell	Chong
Whittred	Jarvis	Anderson
Nettleton	Penner	G. Wilson
Weisbeck	Hogg	Hawkins
Coleman	Stephens	Hansen
Thorpe	Symons	van Dongen
Barisoff	Dalton	Masi
Krueger	McKinnon	J. Wilson

Title approved.

Hon. U. Dosanjh: Hon. Chair, I move the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; the Speaker in the chair.

Bill 24, Miscellaneous Statutes Amendment Act (No. 2), 1998, reported complete without amendment, read a third time and passed.

Hon. U. Dosanjh: Hon. Speaker, I call Committee of the Whole on Bill 25.

FAMILY RELATIONS AMENDMENT ACT, 1998

On section 1.

L. Reid: I rise simply to commend this bill to all in this assembly today in terms of paying tribute to the Canadian Grandparents Rights Association and particularly to speak to section 1(1), which talks about grandparents and other relatives of the child and persons who may not be relatives of the child.

I think it's time that this Legislature focused on family and the continuity of family. I believe this act speaks very strongly to that and will allow easier access for British Columbia family members to intervene in cases of family disruptions so that children are not subjected to the ramifications of going through the court process if it is possible to avoid that. Certainly I speak strongly in echoing the words of the Attorney General when he speaks of always having the best interests of the child as paramount.

We on the opposition benches fundamentally believe that as well. Indeed there are predicaments and situations that may preclude family individuals from coming forward. But in the instances that would see that placement being in the best interest of the child, I believe no stone should be left unturned when it comes to securing and ensuring that family members have been contacted. That has been problematic in the past, where they were simply not aware when decisions were taken in the courts. Family members were often left out. I do not wish to see that happen. I hope this sends a very strong signal to the court system and to judges and lawyers who I believe need to expand their thinking around the best interest of the child to include family members.

I urge the speedy passage of this bill, and I thank the Attorney General very, very much.

G. Plant: I want to take advantage of the opportunity presented by an examination of this section to put it in its context. I'm sure the Attorney General gets some of the same mail I do. For many, many people in British Columbia, the family relations system doesn't work. This amendment will do a good thing in terms of expanding the way the law examines the breakdown and breakup of families and ensuring that as a matter of law, there is a larger category of persons whose interests can be taken into account when determining issues like custody and access.

[11:45]

But I don't want this moment to pass without making the observation that there is more that we need to do. I know the Attorney General has as a priority in his ministry the continued development of programming which will make it possible for families to resolve the issues that arise upon breakup in ways that avoid going to the courts. Let me encourage the Attorney General to continue that work. Let me encourage the Attorney General and offer my assistance in working with him to try to find ways in which the right of access to a child following marital breakup does not become a lever in what is often an economic war. Let me encourage the Attorney General and offer to work with him in terms of looking at the family maintenance enforcement program to ensure that it serves its larger public policy purposes in a way which is fair, efficient, affordable and also flexible.

There are other questions that arise that are part of the larger context within which we are here making this amendment to this act. I know they are issues that the Attorney General is aware of. It seems to me that perhaps we don't get as many opportunities as we ought to, to debate some of those issues in the House. I just wanted to place a couple of those thoughts on the record at a time when I thought they were apposite. With that, I also want to indicate my support for this section and this statute.

Hon. U. Dosanjh: I thank the hon. members for their most appropriate comments. I know there are members on this side of the House who have actively worked on this issue, just as have hon. members on the opposite side, and those members in particular are the hon. member for Kootenay and the member for Burnaby-Edmonds. I think it's important for us to pay tribute to those who worked on this, including the members of this House as well as the Grandparents Rights Association. With that, we should pass this.

Sections 1 to 3 inclusive approved.

Title approved.

[ Page 10246 ]

Motion approved.

The House resumed; the Speaker in the chair.

Bill 25, Family Relations Amendment Act, 1998, reported complete without amendment, read a third time and passed.

Motions on Notice

RECOMMITTAL OF BILL 19

[That the proceedings relating to the third reading of Bill (No. 19) intituled Attorney General Statutes Amendment Act, 1998, be declared null and void and that the said Bill be re-committed forthwith with respect to section 8.]

Motion approved.

Hon. U. Dosanjh: I call committee on Bill 19.

ATTORNEY GENERAL STATUTES AMENDMENT ACT, 1998

Hon. U. Dosanjh: I move the amendment to Bill 19, section 8, that's on the order paper in my name.

[SECTION 8, by deleting the proposed section 8 and substituting the following:

8 Section 61 (1) (a) is amended by striking out "sections 37, 46 and 47," and substituting "sections 17 (4), 37, 46 and 47,".]

G. Plant: Is the purpose of the amendment simply to correct a clerical error in what was section 8 of this bill as it was originally tabled?

Hon. U. Dosanjh: Yes.

Amendment approved.

Section 8 as amended approved.

Hon. U. Dosanjh: Hon. Chair, I move that the committee rise and report the bill complete with amendment.

Motion approved.

The House resumed; the Speaker in the chair.

Bill 19, Attorney General Statutes Amendment Act, 1998, reported complete with amendment.

The Speaker: When shall the bill be considered as reported?

Hon. U. Dosanjh: Hon. Speaker, with leave of the House now.

Leave granted.

Bill 19, Attorney General Statutes Amendment Act, 1998, read a third time and passed.

Hon. M. Farnworth moved adjournment of the House.

Motion approved.

The House adjourned at 11:53 a.m.

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