[ Page 10745 ]

The House met at 10:06 a.m.

Prayers.

Introduction of Bills

RURAL HEALTH TRANSPORTATION ACT

R. Neufeld: Hon. Speaker, I move that a bill intituled Rural Health Transportation Act, of which notice has been given in my name on the order paper, be introduced and read a first time now.

Motion approved.

R. Neufeld: One of the most important and highly valued attributes of our health care system is the precept that all British Columbians and, indeed, all Canadians have access to the same standard of medical treatment, regardless of factors such as income or location. Unfortunately, however, hundreds of residents living in rural communities throughout British Columbia face the burden of travelling long distances to medical treatment facilities, mostly at their own expense, because the required medical care or diagnostic procedure is not available in the patient's home community. This bill, if passed, would significantly reduce the financial burden imposed on these patients and their families by providing them with airline tickets to the locations providing the required medical treatment.

The mechanism for such a worthy goal is the establishment of a Travelcare fund, into which would be deposited all the travel points accumulated on all taxpayer-funded airline tickets purchased on behalf of every employee in the public sector. The points, along with any points -- donations -- from individuals outside of the public sector, would be converted into airline tickets, which would then be supplied to rural residents in B.C. This bill also empowers the fund administrators to negotiate other discounts which would be of benefit to rural residents requiring travel for medical purposes, such as reduced rates with other transportation companies and hotel and hospitality enterprises. Importantly, this travel point initiative can be implemented at absolutely no cost to the taxpayers.

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

Bill M213 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Petitions

Orders of the Day

TOBACCO SALES AMENDMENT ACT, 1998

On section 1.

S. Hawkins: I wonder if, for the record, the minister could just explain how this definition changes the present status.

Hon. P. Priddy: This definition allows us to have some improved consistency with convictions under the federal legislation without redoing the whole part around charges and convictions.

S. Hawkins: My understanding, then, is that if someone is charged federally, the province will also consider that a provincial conviction and will apply the same penalties in the province. Is that correct?

Hon. P. Priddy: I thought I knew the answer when I stood up. I think I still do, but the end of the question was a bit different. What it means is that if somebody is convicted federally, we count it as a provincial conviction. So when we say, "If you've had three convictions, this is the penalty," a federal conviction counts. But if somebody is convicted under a federal piece of legislation, that doesn't mean that we then, in turn, impose a provincial fine as well.

Section 1 approved.

On section 2.

S. Hawkins: I see that the time frames have changed, and I'm wondering how much consultation was done in the retail community to come up with these. Was there any consultation done, or was this something that the executive council decided to do on their own?

Hon. P. Priddy: No, there was no consultation done with the retail community.

S. Hawkins: I'm just wondering, for information purposes, how many convictions there have been in the present state of things, and in what period of time those convictions would have taken place. Can the minister give me an idea of how many convictions a year are taking place presently?

[10:15]

S. Hawkins: Now that the time periods are extended, I wonder if the government has thought of what additional resources will be needed to monitor and police this. Will there be additional police resources?

[ Page 10746 ]

S. Hawkins: Is that $1.2 million greater than what was spent last year? Is that budgeted into the so-called tobacco strategy that the government is embarking on? We keep hearing about this tobacco strategy, but we have not received any document, framework or business plan for this strategy. I want to know if that's an increase in, say, what the government budgeted last year and if this is included in this so-called tobacco strategy.

Hon. P. Priddy: It is not an increase in this year's budget. It is considered part of the tobacco reduction strategy and would be seen as an item in that.

S. Hawkins: Whose budget is the $1.2 million coming out of?

Hon. P. Priddy: Of that, $600,000 is reflected in our budget and $600,000 is federal.

S. Hawkins: I want to know which ministry that money is coming out of.

Hon. P. Priddy: The Ministry of Health budget.

S. Hawkins: I also want to know if the ministry can give me the information, if they have a total number, on how many incidents of non-compliance there are and if they know how much non-compliance is out there compared to the actual convictions they get. Does the ministry have that information?

Hon. P. Priddy: It is obviously difficult to be exact about this, but in the checks that we have done -- which is the only way you can really try to determine that -- about 15 percent of retailers were not in compliance.

S. Hawkins: Again, going back to the resources that are going to be taken to apply to this, I want to know: is the ministry going to hire tobacco police, or will the police, the current forces, be expected to enforce this? Is the $600,000 overtime for the police? How is the ministry planning to use that money to actually enforce this?

Hon. P. Priddy: There's such an air of collegiality here in the House this morning.

This is not a function that is performed by police. We have tobacco enforcement officers that work with the ministry, primarily through the health authorities.

G. Plant: I guess I want to know what the $600,000 is actually being spent on. Is the entire $600,000 that the minister has talked about going to additional resources for tobacco enforcement? Is that all that the money is being spent on? Or is the $600,000 for a variety of things which include this additional enforcement function?

Hon. P. Priddy: It is all for tobacco enforcement officers.

Section 2 approved.

On section 3.

S. Hawkins: This is the signage provisions. As I indicated in second reading, there are some concerns around this. First of all, the minister tells me that there has been absolutely no consultation with the retail community with respect to the changes in this act. Can she confirm that in this section as well?

Hon. P. Priddy: No, there has not.

S. Hawkins: I think I heard the minister say no, there wasn't any consultation with the retail community. I gave an example of how the retail community is trying to be more responsible: the pilot project in Kelowna, Operation ID, where the retail association has actually gone out to educate their own, because we know there are young people being hired in retail business places.

The inconsistencies around this whole issue are quite striking. An under-age person can legally sell tobacco but can't buy it. There's a lot of education to be done around that, and the retailers understand that. When young people are confronted with older kids that want the product, there's some sense of intimidation -- those kinds of things that come into play as well. The retail community understands that, and they're trying to educate and enforce the law themselves.

I think it's unfortunate that the government embarked on these kinds of changes without consulting with the retail community. I can tell the minister that I did consult with retailers, and I don't think there's a huge outcry out there about this provision. I think a lot of them recognize that they do have a responsibility to abide by the law and make sure that their employees abide by the law. But I think it would have been more respectful if the ministry, in embarking upon these kinds of initiatives, had at least sent it out there for a little bit of consultation.

I think that was one of the main concerns of members on this side of the House -- that some of these changes just come out of the blue. Introducing these changes in this way could possibly lead to some confrontational types of problems. It could have been more consultative. Or you could have at least given them information that these changes were coming down the pike, so that their input could have been included or at least looked at.

I understand there are other jurisdictions that do this, and I appreciated the minister's staff sending me the regulations from Ontario, I believe it was, and the sign. I'm wondering if the ministry now has a sense of where those regulations are going to go. Can the minister can give me some idea of what exactly they are considering putting on the sign and what the size of the sign will be? Has any of that been finalized?

Hon. P. Priddy: No, it's not finalized. People are working on that piece of work, but it has not yet been completed.

S. Hawkins: I think the other inconsistency that some members on this side of the House did raise -- and I want to make sure that I raise those concerns here -- is that other places that have minors, like schools, allow smoking pits. They are public places. They're funded by the government, by the Ministry of Education. I'm just wondering if the minister has consulted with some of the other ministers to try and look at ways of perhaps working in concert with other ministers and making things a little more consistent. We're posting a sign in this retailer's business about selling to minors and

[ Page 10747 ]

There are some problems with how this has come about. I know the bill is targeted towards helping children, and I think we have to think about all that kind of stuff as well. In second reading, I did mention the problem with secondary sales, because I don't think this kind of legislation is going to stop secondary sales. It doesn't address that concern at all. When I speak to children, they just laugh. I did consult with teenagers about this bill, and I can tell you that some of the retailers and some of the other people we consulted have some problems with the signage and some of the inconsistencies -- I don't know a better word to use -- around this whole issue and around the whole issue of minors being able to sell but not being able to buy. I wonder if the minister can address some of those issues in answering on this section.

Hon. P. Priddy: I agree with the member that it is an inconsistency, and it's the reason we've been working with both the Ministry of Education and jointly with school boards as well. I do think it's inconsistent. I personally don't support smoking areas on school grounds. I think that if we're saying it's dangerous for kids and it's dangerous for you, too, but please do it outside -- wherever the smoking pit happens to be -- that sends a very mixed message to students. So that's why we are working with both school boards and the Ministry of Education jointly. We will also be initiating a fairly major education program in the fall with schools throughout the province.

I want to go back just for a moment to the tobacco enforcement officers, who also do training with retail staff, schools and so on while they're doing enforcement. So they do actually have a training component as well.

S. Hawkins: I know that when we had the technical briefing -- and I certainly appreciated that -- we asked about tobacco products being sold in liquor stores. The government controls those. I want to know how many convictions we've had at government-controlled liquor stores. I wonder if the minister's staff have found that information for me at this time.

[10:30]

G. Abbott: I'd like to ask the minister, given that we are setting a kind of precedent here in terms of making people responsible for who they sell to -- not only taking away their opportunity to sell the product but also imposing a substantial fine on them and, additionally, requiring them to post a sign saying that they had sold to minors. . . . In fairness, is the government planning to extend the same principles to government liquor stores, where they sell, inadvertently or otherwise, liquor to minors?

Hon. P. Priddy: I should think that would probably be a fine idea, but I also think it's one that needs to be raised with the Attorney General, whose responsibility that is. Actually, I personally think that's probably a good idea.

S. Hawkins: This bill targets retailers, and I know that there are restaurants that sell cigarettes too. I wonder, perhaps, if this bill sets up a double standard. I just want to clarify that this bill is targeting retail outlets. Does it perhaps, across the board, cover restaurant owners? Will they have to post a sign too? Or is this a double standard that we're seeing, that's becoming apparent in this bill?

Hon. P. Priddy: Anybody who sells cigarettes, whether it's a restaurant or anyplace else, has to have a vendor's licence or tobacco licence, or whatever it's correctly called, in order to do that. So whether it's a restaurant, retail store or whatever, if someone brought forth information that a restaurant was selling tobacco to minors without the proper checks and so on, they would be liable for the same fines and penalties. As it relates to vending machines, which is a bit different -- a bit of a stand-alone, if you will -- it's the federal legislation that would monitor that.

S. Hawkins: Just a follow-up question from before, as far as resources. We've got our tobacco police, then. How exactly do they work? Do they set up a sting? Is that what they do? If the minister can give us some guidance on how we are catching people that contravene the sections of this bill. . . .

Hon. P. Priddy: There are two or three ways in which tobacco enforcement officers work. One of them is that they do go around to retailers and those who have tobacco sales licences on a regular basis, checking for signage -- those kinds of things that people have a responsibility to have out. . . . Yes, we do also do compliance checks by using decoys. That's another way they do that.

G. Abbott: Could the minister advise how many tobacco vending machines there currently are in the province? Is that a piece of information the ministry has?

Hon. P. Priddy: We don't have that information. The best I could do is check with the Ministry of Finance to see if that information is available. I'm happy to try and find out for you.

G. Abbott: Thank you. I only wanted to know that figure to get some appreciation of what kind of logistical challenge the ministry faces in terms of the number and distribution of cigarette-vending machines around the province. I would think that the number would be in the thousands. Is there some control planned around the distribution of them and so on? How is the minister going to deal with that?

Hon. P. Priddy: One of the things that I think that makes vending machines somewhat more manageable is that the federal legislation says that vending machines can only be in places that are not accessible to children.

G. Abbott: Is that the case now? I see cigarette machines in a variety of places, but maybe I've just not been going to the right places recently. Is this a recent change, whereby, for example, cigarette machines would only be found in bars and that kind of thing? Is that the case?

Hon. P. Priddy: I think the largest majority are probably in bars, primarily -- I'm not a smoker and I'm not a drinker --

[ Page 10748 ]

S. Hawkins: As I mentioned, there are concerns with this section in regard to the infringement on privacy and the civil liberties aspects of it. At the technical briefing, we understand that there was advice provided by the Attorney General's office. I wonder if the minister can outline that advice given on this section.

Hon. P. Priddy: We did seek advice from the Attorney General ministry about whether this was an infringement of the Charter of Rights. The legal opinion we were given was that it was not. Since this is what is done in Ontario as well. . . . I don't believe there has been a challenge there.

S. Hawkins: Part of the concern, as well, is with respect to lack of consultation. I think -- and I'll just underline it -- that it would have been better if the ministry had gone out and done a bit of consultation or at least advised the retailers that this was coming down the pike. That was not done, and I think it will probably be a bit of a problem when this section is enacted.

Section 3 approved on division.

On section 4.

J. Dalton: I have a question that I know is not covered by this bill. I just want to draw the minister's attention to some of the things going on in the public schools of our province. She's probably aware of some of this. West Vancouver Secondary has a specific policy that their students must smoke in a designated area on the school grounds, because of the problems in the neighbourhood. It's an unfortunate circumstance that they're placed in. I guess my question would be twofold. Is there any discussion with the Ministry of Education about problems of this nature? And would it be permissible, for example, for a school district to post a sign in such a designated area, advising their students of the dangers of smoking?

Hon. P. Priddy: We actually just had a bit of this conversation earlier. We are working with the Ministry of Education and with local school boards around this issue. There is -- the word escapes me. . . . There is some cognitive dissonance, I suppose, in the fact that we're saying that you have to post signs and that kids shouldn't smoke. I, as a school trustee, understand the reasons that schools do that, but I would prefer that schools didn't do it at all, because I think it's a very mixed message. The reason they do it is to protect the neighbourhood, for the most part; that's always been my understanding of that. But we are working quite closely with the Ministry of Education and with school boards around this -- and yes, I think it would be great if school boards posted those signs.

S. Hawkins: Section 4 of the "signs and fines bill" is about labelling the actual cigarette package. When I do my research, kids don't read the package, and I think the whole strategy around this was targeted at children. Kids look at how cool the package is and what colours it has or what the flavour of the month is, or whatever. So I don't know how this helps children, because when I talk to kids. . . . I have a few schools around my constituency office, and I have them walking by, and they do drop in. I took the opportunity to ask them about this. There are very explicit warnings on the cigarette packages already, and what the kids tell me is that they choose which warning of the day they want. It's almost a game. I don't know the intention or the purpose of this section. If it's targeted at children, perhaps the minister can explain to me what her research has shown and how this will actually help children. She says this bill is targeted at kids, and kids tell me they don't care what it says on the package.

[10:45]

Hon. P. Priddy: I look at it in several different ways. One of them is that this is one piece of a much larger strategy. I mostly agree with the member that for lots of teenagers the package doesn't make a difference, although there are teens that I am working with in my community that actually say it could. But I think the packages and the ingredient disclosures, as they are currently displayed, do not make a difference for many teenagers.

What we have here is a two-step process. We actually do know that you can test for all those ingredients. The federal government hasn't delayed testing because the tests are not available; the tests are available and have been available for some time. The federal government's requirements are voluntary and will not become mandatory for another two years. I'm not prepared, as the Health minister in British Columbia, to wait two years for the federal government -- although they intend to do it -- to bring that into formal legislation. So one is about ingredient disclosures -- being able to test for the ingredients and ensure that the testing is done, and to disclose those on a package.

We've been working with some teenagers about how we can display ingredients on a package that might make a difference. The other thing that someone said to me -- a parent who is a smoker and whose 13-year-old had just started smoking. . . . She was part of a group that was talking about what the real ingredients are in cigarettes. She actually said: "If I'd known that, I would have tried to stop earlier so my child would not have started." So it does have an impact from a parental perspective as well.

S. Hawkins: Kids go for packaging that uses rich colours. If we want to do this smarter, maybe we could work with the companies or look at ways to make the packages less desirable, instead of putting on labels that we know the companies can't comply with, given the time frames that the minister has set out in this bill. I believe the minister's press release set September 15 as a compliance date. We know that the labs

[ Page 10749 ]

Hon. P. Priddy: I don't in any way consider this to be a cash grab. We do know that it is possible to. . . . What we're asking for is that the testing and the tests results be submitted to us. We know that is entirely possible. The leading testing lab in Canada is LabStat Inc. They did the research for Health Canada's office of tobacco control. Their research established that it is possible to test for a very wide range, a far wider range of toxins than are currently monitored, at a modest price and in a reasonable time frame. What we're asking the tobacco companies to do is to do that testing and submit the results to us. I don't think it's an unreasonable time frame for them.

G. Plant: I want to be sure that I follow the course of the minister's commitments here. Is the minister saying that everything they have promised to do in their press release and have said will be required by September 15 will in fact be done and be required by September 15, with the result back. For example, if someone is unable to comply, they will be breaking the law on September 16. Is that the commitment and the position of this government here today?

Hon. P. Priddy: Those are the ministry's time lines. We've also made some changes to say, you know, that we weren't sure when we would all go off to join our families in the sunshine, so we've also said that it will be 30 days after, instead of using a particular date.

Interjection.

Hon. P. Priddy: Have we not? Oh, that's another piece, sorry. Yes, we have set September 15, because we think it is reasonable for people to do that.

Clearly someone can appeal that and say: "It'll take us ten more days." Are we going to put a fine on somebody for that? No, we're not. But if somebody were to write to us and say, "We've no intention of doing this at all," then I think we would take a very different position on that. I don't think we're going to have people out the door on the morning of September 16, saying: "Whose isn't in?" and "Here's your fine." I mean, we're trying to do this for good reasons, hon. member. If someone wants to appeal and say, "For these reasons, we can't have it done for two or three weeks," we're not, I don't think, going to be taking that kind of action. On the other hand, if someone writes and says, "We have no intention of doing it," we would look at that much differently.

G. Plant: Well, here we are; it's July 30. September 15 is six weeks away. The government has presumably been working on this and thinking about it for some period of time. I'm sure the government would never rush headlong into a program like this or embark upon it without giving it adequate consideration. Surely the government knows now, today: is September 15 the deadline or not? Surely the government and the minister can make that commitment now. Or is the minister saying that there may be a kind of fuzzy sense of deadlines for some of the tobacco companies, the ones we like a little bit or hate a little less? We might give them ten days, but for some of the others, it'll be a different deadline.

The issue is: what will the legal requirement be? Will it be September 15? Can the minister say now that the commitment that she made in public when she commenced this exercise, when she issued the press release that led to and accompanied this legislation. . . ? Can she say now that it's still the commitment of the government, that it's the intention of the government that the law will be that these requirements will be in place on September 15? Or is she unable to make that commitment?

Hon. P. Priddy: The legal requirement is September 15. The tobacco companies have been notified some time ago, so they won't be sort of notified through the discussion in Hansard. I have written to them, and they know that the legal deadline is September 15.

Sections 4 to 6 inclusive approved.

Title approved.

Hon. P. Priddy: I move the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; the Speaker in the chair.

Bill 28, Tobacco Sales Amendment Act, 1998, reported complete without amendment, read a third time and passed.

Hon. P. Priddy: I call committee on Bill 29.

TOBACCO FEE ACT

Section 1 approved.

On section 2.

S. Hawkins: One of the main concerns about this bill is the bureaucracy that it sets up around the scheme of licensing. With respect to the position of the director, I'm wondering what the budget is around that position. What is the time of appointment? The minister can start with those two questions.

Hon. P. Priddy: We are using an existing position in the ministry. There's no increase to the budget.

S. Hawkins: Will that existing position work full-time on this project? How much is that position being paid right now?

[11:00]

[ Page 10750 ]

Hon. P. Priddy: I think that in this position there will be a time of the year -- because these are annual licenses, for instance -- where that person will be really busy. So for two or three weeks of the year, when annual licences are renewed. . . . But the remaining part of the time. . . . I mean, this is a person who is also director of other preventative health issues in the ministry. Although, if that happens, then we will reassess it. But we're not currently anticipating having to deal with the fact that the fee is being passed on to consumers, and therefore I think that the amount of time allocated is probably satisfactory.

S. Hawkins: Well, now that the minister mentions it, that obviously is contemplated, if not anticipated, because all those provisions are in this bill. When I look at what the director will be charged to do under this legislation. . . . Gosh -- licence fees, issuing licences, setting price controls, hearing appeals, suspending licences. . . . The director has powers of inquiry, injunctions, inspections and audit provisions. You know, if the minister is saying that the director is only going to be busy for one little part of the year, when the licence fees are set, then why do we need all the other sections in this bill that obviously can keep this director very busy?

The government obviously has a tobacco strategy, and everything in this bill is directed at the government's tobacco strategy. There seem to be a lot of provisions in this bill that could keep someone busy more than full-time. When we've seen the government appoint bureaucratic positions, we've seen little bureaucracies mushroom out of them. I can see this director having a 5 percent portion of his time perhaps growing into a nice little office with groups of people around: investigating, auditing, inspecting, investigating whether price controls are needed. . . . I just want to put on the record that the minister says that this is going to be someone who is in an existing position in the ministry and this will be, taking up 5 percent of this person's time. We will follow that up next year to see exactly how this director's time was filled.

Hon. P. Priddy: I don't think there was a question, but I want to comment just for a moment anyway.

The powers that are included in the legislation are, for the most part, what-ifs. We're not expecting non-compliance. A lot of the powers that are laid out for that position only come into effect if there is non-compliance. We're not expecting non-compliance, but if non-compliance occurs, then obviously we will have to reassess that. Under the current circumstances, and given what we've currently heard from tobacco companies -- at least, what I've read from the tobacco companies so far -- they intend to comply. They'll deal with it in a different way, but they intend to comply with it -- in which case, the powers that are laid out for that individual are unlikely to have to be used. If there is wide-ranging non-compliance, then obviously we would have to relook at that and allocate more of that individual's time.

G. Plant: I'm not going to get into the merits of whether it's appropriate to license companies who want to carry on business in British Columbia in this way. And I'm not going to get into the merits of the philosophy behind trying to ensure that such a licence fee comes off the bottom line or the profit line of a company as opposed to being passed along to consumers. What I am going to say, though, is that even if this is well-intentioned. . . . I'm sorry to put it this way, but it is naïve. In my law practice, I have spent hours and hours on some cases -- days on some cases -- working with forensic accountants, with people whose careers have been devoted to understanding how businesses run their affairs.

We have sat down and tried to figure out where the profit is, where the money goes, what happens when prices rise and fall, how the cost of goods is passed along to consumers, how you relate what's happening in the marketplace in terms of prices to what happens in terms of how the company organizes its affairs internally, how you assess costs as they rise and fall, how you decide whether or not a business is artificially inflating costs in one sector or depressing them in another, how you assess whether or not the people who are running the business are doing so in good faith and with the best of intentions, simply to maximize return for their shareholders. How do you sort out how the money gets from A to B?

All those things are pretty darn difficult questions. It took the accountants who tried to unpack the NCHS scandal months and months -- years -- to do that, and now this government is going to ask an official on a part-time basis to monitor some of the largest corporations in North America and determine whether or not they are passing along this licence fee to consumers. I'm astonished that the government thinks they can do that with one part-time official. The minister probably wants to believe that the companies will comply. She says she's been told on an informal basis that the companies are intending to comply.

That's a great way to impose a licence fee, a great way to impose a taxation regime. To the people of Canada, we say: "Pay your taxes. Come on. We're not really. . . . If you say in good faith that you're going to pay them, that's good enough for us." With great respect to a legislative intention that I'm not prepared to debate or don't want to engage in debate about right now, I just don't know how you're going to get there from here.

I just don't know how one official on a part-time basis, sitting in an office, is going to be able to unpack the financial statements of these major corporations and conduct market analysis of the price of cigarettes across British Columbia -- in 7-Eleven stores in Smithers and in the Safeways in Victoria and all across the Fraser Valley and up and down the Kootenays -- or to figure out how much the wholesalers are charging and how much they're getting paid, how much the retailers are charging and how much they're getting paid, whether the distributors are charging too much, whether the shipping companies are not charging enough, whether there is. . . . I mean, the marketplace is more complicated than the imagination of a socialist government.

I think this isn't going to work, frankly. The question, again, is this: does the minister really think that a part-time official, who may in fact have no expertise in accounting or cost recovery or any of those things. . . . I don't know. Whoever is chosen, whoever will be doing this job, I wish them well. Does the minister really think that that person, on a part-time basis, is going to be able to determine whether or not tobacco companies are attempting to pass along this fee to

[ Page 10751 ]

Hon. P. Priddy: I think it's important to keep in mind what it is that we're actually trying to monitor. This government is absolutely committed to doing this work, but we're not tracking. . . . Two things. One of them is that we work very closely with the Minister of Finance, which has a responsibility for tracking much of this information. They track it for all kinds of industries across this province. There is a methodology in place, because the federal government has been able to use it. But I think it's important to note that we're not tracking whether the 7-Eleven in wherever -- Surrey-Newton, just so as to not pick somebody else's riding -- is passing a cost on to the consumer. The part that is being monitored is whether the manufacturers are passing that on to the wholesalers. That's where the monitoring takes place, not whether every store. . . . Every store is not where you would see that price. Where you will see any evidence of the manufacturer trying to pass this on is in what they charge to wholesalers who are buying that product. That's what we will be monitoring, and that's what this individual, working along with the people in the Ministry of Finance, which tracks this for all kinds of industries in this province, will be doing.

G. Plant: Just to follow up on that, then, one of the things that this official will also be doing is tracking all of the costs that the manufacturers have in relation to producing their product, none of which is produced here in British Columbia. They'll be tracking the agricultural costs associated with growing tobacco, the cost of storage and dry-kilning, or whatever it is the tobacco companies do. The official here, the director, will actually be able, in an objective way, to get reliable data on all of that information. Is that correct?

Hon. P. Priddy: What we currently have from the federal government are the costs that the manufacturers have put forward as their current costs. If indeed the cost goes up for the manufacturer, for all the kinds of reasons that costs go up for businesses, then there is an appeal mechanism, where they come to the government and say: "This is the reason that we believe we need to increase our costs." There's a way to be able to do that. This individual doesn't have to be tracking the cost of ingredients or production. We have a baseline already in place, and that's the baseline we'll be using. If the manufacturers feel the need for an increase, then there is a mechanism for them to bring that forward.

[11:15]

If, hon. Chair, we do not see that anticipated compliance on the part of the tobacco industry, what is the game plan then on the part of the ministry? Do we move to a different scenario where we hire a full-time director and a directorate to deal with this? Or does something else happen?

Hon. P. Priddy: This act is predicated on compliance, because it is a piece of legislation. In point of fact, what I've heard to date from at least one tobacco company is that indeed they will be complying.

Let's try and remember why we're doing this in the first place. We're doing this so the tobacco companies can take some responsibility for providing some resources to do the kind of prevention and intervention work that needs to be done with children. Although it's been happening all along, I would hope that tobacco companies are not going to stand up and say: "No, we really want to be able to sell tobacco to children, of which 40 to 50 percent will die at some stage in their life of a tobacco-related illness. No, we don't want to help stop that at all." So you may be assuming that all of the tobacco companies are going to stand up and say: "No, we demand the right to sell products that kill children." I'm actually taking it from a different perspective and expecting compliance.

I know that people are most eager to stand and speak, but if indeed there is non-compliance, which is not what's been indicated by at least one of the companies, then we will put in the resources necessary to ensure that there is compliance. But I don't think that you pass a piece of legislation with the expectation that it's a piece of legislation that nobody will obey, so you'd better build into your budget enough resources for when everybody breaks the law. If everybody does, then we will put in whatever resources are necessary.

G. Abbott: Obviously we didn't understand the fine relationship that apparently exists between the tobacco companies and the Ministry of Health. It seems that they're not only ready but keen to participate in this particular program with the Ministry of Health. If that's the case, why are we doing it in this rather interesting fashion, where the ministry is saying: "We intend to exact a fee from the industry, but we intend to exact that fee in a way that it will not be passed along to consumers"? If you have that kind of relationship with the tobacco companies, why is there this several-paged bill with a labyrinth of bureaucracy to achieve that, if in fact you have this relationship where the cigarette companies are now proactive and prepared to comply with the direction and in fact to do everything, it appears, to assist you?

Hon. P. Priddy: I'm not for a minute suggesting that the government has a wonderful relationship with the tobacco companies and that all the tobacco companies are going to be very eager to do this at all. We have had no correspondence in response to my letters to them. All I've seen in the paper is that when the legislation passes, they intend to comply in the meantime. Will they, then, take legal action to challenge it? Absolutely -- I expect they will. Our information is that it will withstand a legal challenge. They probably will take that legal challenge forward; it is their right to do so. But what I've read in the paper, without formal correspondence from them, is that in the interim, they will comply.

G. Abbott: The minister has noted -- obviously, I think, naïvely -- that 5 percent of one existing position will be dedicated to the directorship role and the sundry responsibilities that are associated with this bill. What does this official currently do with that 5 percent of his or her time that they have right now?

[ Page 10752 ]

G. Abbott: Assuming that the same sort of thing happens that happens with respect to the criminal law in Canada -- that despite the federal government putting criminal law in place, people still offend. . . . If the worst-case scenario occurs here, where despite their apparent initial glee in participating in this, things go off the rails and there's a difficulty with respect to compliance, and the director's time moves from 5 percent to 50 percent or 150 percent, what's the game plan of the government at that point? Does the director get created as a full-time position, then, to pursue that?

Hon. P. Priddy: For the record, I want to be clear that no tobacco company has written to me and said: "It is with great glee that we support this." All I'm saying is that all I've read is what I've read in the paper. I've had no formal correspondence from them. So we know that it's not with great glee. We look across the United States, where there have been court cases in Florida and Minnesota -- cases all across the United States -- and we know perfectly well that the tobacco companies do not participate willingly. I'm simply commenting to you on what I have read about what they said they would do here in the interim before they might have launched a court challenge.

If in the end there is non-compliance, if that is what happens, then we will put whatever resources are necessary into this to ensure compliance, because we're talking about the health of British Columbia's children. If I can fill three or four or five or six or seven high school gymnasiums full of teenagers who are currently smoking and look at all of those faces of our sons and daughters and the kids of neighbours and know that 25,000 of them will die as a result of a tobacco-related illness in their lifetime, then we will put in whatever resources are necessary to ensure that we protect their health.

G. Plant: The question is not: are the public policy purposes of the government noble? The question is: are they going to achieve them with this bill? That's the question. The minister can make all the speeches she wants about the kids who are being victimized by tobacco companies, and the 25,000 of them that may die -- whatever the number is. We would work with this government to try and come up with effective workable strategies to make sure that this does not happen. That's not the question.

The question is whether this bill will in fact help the government achieve its public policy purposes or, alternatively, whether this bill will create an inefficient, ineffective bureaucracy that won't have the power to do what the minister would like it to do. The bill has loopholes that D-9s could drive through, let alone a second-year corporate law student at a law school somewhere. The problem is that this government has good ideas from time to time, but it doesn't care about the details of how to get there. We do know that when they get it wrong, when someone goes off to court and challenges them, they've got the solution for that: they just pass another bill that fixes the problem retroactively. It would be nice not to have to do that here. It would be nice to make sure that this bill actually achieved the parts of the public policy of this government that we do support. We are with the minister on what she says about tobacco reduction, but we are not with the minister when she stands up and says that this bill has the toughness in it, is tight enough, is right enough, is efficient enough, that this government will in fact put the right resources behind it to make it do anything other than waste the time of some poor official and the money of taxpayers. When the minister says, "We'll put in all the resources necessary," here's my concern: you could put all those resources there, and someone's going to come along and say: "This director can't do these things." So that's not very effective. Is the minister confident that this position of director and all of the powers that this director may have -- most of which are what-ifs -- will withstand any challenge and that we won't have to come back here at some point and pass a retroactive tobacco-fee-save-the-government-immunity act?

Hon. P. Priddy: I appreciate the member's comments, because I actually do know that people on the other side of this House are equally as concerned as people on this side of the House about this issue. People have spoken publicly on it. I appreciate your comment, but I take it as a given.

Am I confident that this bill will do what we want it to do? Yes, actually, I am, because what we're talking about this bill doing is having the industry match with us some dollars around promotion and prevention. We spend all of our resources -- or most of our resources; we spend some on prevention -- on meeting the health care costs of tobacco-related diseases. Am I confident that the content and the mechanisms of this bill will allow us to enforce on the tobacco companies their responsibility to contribute to prevention programs in this province that they take hundreds of millions of dollars out of. . . ? Am I confident that this bill, which has a fee of about $20 million. . . ? If the tobacco companies spend less on promotion, then it will be less than that. All we're doing is asking them to match what they spend on promotion in this province, which spending on prevention, so that children don't start smoking. Am I confident that this bill, with the powers that the director has, will enable us to do this? Yes, I am. Am I confident that the tobacco companies will merrily join hands with us and go out for recess and cookies? No, of course I'm not. But this is legislation that makes it illegal not to follow it, and I am confident that the tobacco companies, even if they challenge this, will still have to be part of carrying this out.

G. Plant: This question doesn't need to be answered now, because I know that the answer does not relate to section 2. But I want to put the question so the minister can tell me where in the bill we'll find this when we get to it. The question is: where is the provision in this bill that imposes a legally enforceable obligation on tobacco companies to pay the licence fee? I just need the minister's help in identifying the legally enforceable charging provision, the provision that they're going to show in court when someone makes the argument that there isn't any such obligation. I know it's not in section 2, because section 2 just talks about the director. It would be helpful to have that answer on the record when we get to wherever that is.

[11:30]

[ Page 10753 ]

Frankly, this is a badly drafted piece of legislation. There are loopholes big enough to drive a semitruck through them. We talked in second reading a little bit about how the companies can reconfigure, to take them out of the 5 percent market share. If that kind of activity begins, this director is going to be more than a full-time position; there's going to be a little bureaucracy built around this bill.

You know, it's interesting, because in the last bill the minister expected non-compliance; that's what she said with respect to one of the sections. She said that September 15 was not a date set in stone; she said September 16, 17 or 18, if people wrote back in ten or 15 days or three weeks if they needed. . . . You know -- that is the law, but it isn't really going to be enforced. In this bill, with her comments that she hasn't personally spoken to any of the tobacco companies and that all she's doing is reading in the paper that they're going to challenge this bill, she says she expects compliance. On the other hand, she says she expects non-compliance. So I don't know what she expects in this bill.

All I can tell you is that on this side of the House we have little comfort and little confidence that this minister is actually going to achieve the public policy purposes behind this bill. You know, she can stand up over and over again and talk about kids dying. We on this side of the House are definitely concerned about that. We would support real measures -- education measures, therapeutic measures, awareness measures -- to make sure kids don't pick the lifestyle choice of smoking.

She stands up and says that tobacco companies sell a product that kills children. Yes, we know that.

The Chair: Excuse me, member. We're dealing with section 2, which has to do with the remuneration of the director.

S. Hawkins: Thank you, hon. Chair. The director is responsible for monitoring a product and collecting a licence fee from a product that kills children. The government profits from this product; it will, to the tune of $400 million a year.

The Chair: Member, excuse me -- you're in second reading debate. We're dealing with section 2 of the bill.

S. Hawkins: Thank you, Chair. I'm trying to deal with section 2 and respond to the minister's comments that she made with respect to section 2. She spoke about tobacco companies selling a product that kills children. I'm responding to those concerns, because the government profits from a product that kills children, to the tune of $400 million a year.

This director is going to be very busy tracking the profits, the licence fees, the market shares of multinational companies. I think -- and this side of the House, from the members I've heard from, feels -- that the minister is being very naïve, thinking that one official in her ministry, using 5 percent of their time, is going to be able to enforce the provisions of this bill.

The Chair: The Chair would just caution members in regard to the standing order regarding relevance of debate.

Hon. P. Priddy: Hon. Chair, the director. . . . If we concentrate, as you have asked us to do, on the section -- which is section 2, the director's position -- the director's position is one piece of a larger strategy. We have said that the director will have support from Finance and support internally in being able to do his job. If his job turns out to be larger than we currently see, then we will address that.

But, hon. Chair, it seems to me that we are debating the entire debate around this piece of legislation and not around the director's position. So -- aye.

Section 2 approved on division.

Sections 3 and 4 approved.

On section 5.

Hon. P. Priddy: I move the amendment to section 5 standing in my name on the order paper.

[SECTION 5, by deleting the proposed subsection (1) (b) (i) and substituting the following:

(i) within 30 days after this section comes into force, to be considered for the 1998-99 fiscal year, and .]

G. Plant: Actually, that is an amendment which changes the deadline. I have no questions on the amendment.

Amendment approved.

On section 5 as amended.

G. Plant: I return to the question I asked the minister earlier: where in the bill do we find the charging provision that imposes a lawfully enforceable obligation on tobacco companies to pay this licence fee? Is it here in section 5? If so, where?

Hon. P. Priddy: There is not a section that says what the charging would be. Obviously if people do not submit the information in order to get their licence, they will not have a licence, and therefore they will not be able to sell to wholesalers or to retailers in British Columbia. The deterrent part, if you will, is the fact that they don't get a licence.

G. Plant: So there wouldn't be a charging provision in the conventional sense, as you'd find in a tax act, because the licence fee is conditional -- it's an aspect of the licence. So the minister finds the legal obligation to charge the licence fee to be conditional as part of the process for getting the licence. Is that a correct restatement? If not, could the minister try again for me?

Hon. P. Priddy: The licence itself is conditional on paying the fee.

Hon. M. Farnworth: I ask leave to make an introduction.

Leave granted.

Hon. M. Farnworth: In the gallery today are a number of friends of mine and distinguished guests: my administrative assistant Vanessa Coombes and her son Gareth, and Vanessa's

[ Page 10754 ]

S. Hawkins: Section 5(4) says: "The director may refuse to issue a licence if the information included with the application is inaccurate. . . ." How would the director make that determination, and what kind of information would be considered inaccurate?

Hon. P. Priddy: It is based on the market share for that particular company. We have that information, based on the federal research.

S. Hawkins: It seems to me that. . . . When we talked about the director's position, the minister said that there would be a certain period of time in which the licences would be issued and that the director would only be busy at a certain point of time. When I look at this section, and it says that a licence can be refused and that there have to be written reasons when it's refused and that the term of the licence is a year, and any time in that year they can lose a licence. . . . It seems to me that there are a lot of provisions here that will keep this director very busy. I'm wondering what time frame there is for issuing a licence. Is it all year round? Is that what it sounds like in this section: that a company can apply anytime during the year? They have to get their information in, according to this section, within 30 days of the act coming into force for this year. Is the issuing of a licence a year-round responsibility?

Hon. P. Priddy: I think it's important to note that there are about two dozen companies. There are not hundreds and hundreds of companies; there are about two dozen companies out there. The licence runs to the end of the fiscal year, so I think we would anticipate that people would want to renew their licences before the end of the fiscal year. I don't think they would be doing it throughout the year. With two dozen companies and the licences ending at the end of the fiscal year, I think it's manageable.

J. Dalton: One of my colleagues raised an interesting point, and I just want to pursue that for a second. People drive cars without licences, and if they're caught, there is a motor vehicle offence that kicks in. Under this section 4, if someone sells tobacco without a licence, what happens?

Hon. P. Priddy: We would enjoin the sale of the product.

Section 5 as amended approved.

On section 6.

The Chair: The member for Okanagan-Penticton has an amendment.

[11:45]

[SECTION 6, by adding the following subsection:

(5) Licence fees paid to the Crown pursuant to this Act shall be held in a trust fund and disbursed only for the purposes stated in paragraph 6(1) in accordance with guidelines established by the Select Standing Committee on Health and Social Services.]

The Chair: Having read the amendment, the Chair finds the amendment out of order. The amendment circumscribes the government's use of moneys and attaches conditions and qualifications.

G. Plant: Well, let's just make sure that we understand the public policy argument that's happening here. The government is trying to raise funds by means of a licence fee. Section 6(1) says: "The purpose of imposing the license fees is to help defray the cost to government to develop and implement a comprehensive tobacco consumption reduction strategy."

Now, the way the law works, the money paid as licence fees under this statute -- unless it's amended -- will go into the consolidated revenue fund. There they will be available for any purpose, by law. They will be available for purposes which we support and for purposes which we oppose. But, more importantly, the money will be there for the government to spend for purposes other than for developing and implementing a comprehensive tobacco consumption reduction strategy. That's just the way we organize our finances in British Columbia. Sometimes governments will draw on the consolidated revenue fund because there's a demand for the resources in that fund for some other purpose.

The result may be that -- to take this as a specific example -- if the demand on the consolidated revenue fund for the other purposes of government is too high, then there just won't be enough money left to develop and implement a

[ Page 10755 ]

There's an easy solution to that problem. What we can do is make sure that the licence fees collected can by law only be used for the purpose of developing and implementing a comprehensive tobacco consumption reduction strategy. We can ensure that the government would not be able to get its hands on that $20 million and use it for something else.

The people who support the idea of having that pot of money include the minister, and the minister says: "This is what we're going to do with that money." I'm sure that the minister is sincere and that she means that. But part of our job here in this Legislature, in this assembly, in this committee, is to ensure that, on behalf of all the citizens of British Columbia, a promise like that is made in a legal context where it has to be kept. This is, I think, an occasion where that would be the right thing to do -- to say to the government: "We will take you at your word. If this is why you want to raise this money, then let us be sure that it can only be used for that purpose. Let us be sure that we use the time-honoured legal techniques available to us -- other methods for administering the revenues of the Crown, like trust funds -- to ensure that when money is collected for one purpose, it can only be used for that purpose." As the minister knows, there are lots of examples of that in the statutes of British Columbia. This is not the first time that idea has been suggested.

We and my colleague from the Okanagan put on the order paper an amendment which would achieve that purpose. The amendment is out of order because it is not something that the opposition is allowed to do -- to in fact place limits around how the Crown discharges its obligations. We have an opportunity, though, because the amendment would be in order if it were made by the government.

So here's the test. When the government says that this is what it wants to do with the money, when the government says, "We are going to use the $20 million for the purpose of developing and implementing a comprehensive tobacco consumption reduction strategy," are they prepared to put that promise in writing and make it enforceable? Are they prepared to say: "Not only can we write press releases, not only can we make fine speeches in the Legislature, but we are committed. We are so completely committed to this strategy that we will make it a law, binding on us, the Crown, that prevents us from spending the money for any other purpose"?

Now is the moment. The government has an opportunity. Does it mean what it says? Is the government prepared to take that step to ensure that these funds, when they're raised, can only be used for the purpose that they say they are going to use them for? Now is the moment. I think that if the government were to move an amendment to this legislation which created that legal obligation, the official opposition would accept it. I think that we would accept it because it would ensure that the purposes that are described in section 6(1) of the act would be implemented. It would even be better if the concept embodied in our amendment -- which was to have the Select Standing Committee on Health involved in developing the guidelines in a non-partisan, cross-party, all-party forum -- were part of the mechanism. But, you know, desirable as that might be, as consistent as that might be with the reform of parliament, I don't even think we would insist on that. For us in the opposition, I think it would be a great step forward if the government were simply prepared to make the change necessary to ensure that the statement of purpose embodied in section 6(1) becomes legally binding on the Crown, so that it can't do anything else with the money.

I look forward to the minister's comments.

Hon. P. Priddy: When I look at section 6(1) in the legislation, I consider that to be legal and binding. It says that the purpose of imposing the fee is to help defray the cost to government of developing and implementing. . . . It does target where those dollars will go, and it does say what the purpose of the fee is and how those fee dollars are to be used. I consider that to be a legal, binding commitment on the part of this government to do that.

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

Motion approved.

The House resumed; the Speaker in the chair.

The committee, having reported progress, was granted leave to sit again.

Hon. M. Farnworth moved adjournment of the House.

Motion approved.

The House adjourned at 11:58 a.m.

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