Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

[ Page 11619 ]

Prayers.

G. Plant: I have an honour today. On May 27, Kwantlen University College will be awarding an honorary doctor of laws degree to one of our colleagues here in this chamber -- a colleague who was the first chair of Kwantlen University College's board of governors and who, in the many years before he joined this august assembly in 1991, served his community in a number of ways. I hope that all members of the House will today accord a very warm welcome and warm round of applause for Dr. Delta South.

The Speaker: Congratulations to our esteemed colleague.

Hon. S. Hammell: I rise to introduce the three-year anniversary of the horrendous murder of the nine members of the Gakhal and Chahal families in Vernon on April 5. The tragedy of what has come to be called the Vernon massacre, like the tragedy of so many other murders of women in B.C., must never be forgotten. The horror of the murder of the Gakhal and Chahal family members went beyond the loss of immediate friends and family; it affected the community as a whole, reaching into the playmates, classmates, friends and neighbours and the spiritual family. The tragedy of the deaths is remembered because so many people died at the hands of one man, but it is not an isolated incident. Women are stalked, beaten and killed by a partner every day, and each and every woman and child who lives in fear must be held in our hearts and minds as a life to be valued and protected.

We cannot undo that tragedy. We cannot fill the tragic hole left by the needless deaths. But each and every one of us can take a stand against violence against women, and I call on the members of this House to do that and to work to prevent violence before it starts.

L. Stephens: The members of the opposition share with the Minister of Women's Equality in bringing forward an issue that is as serious as this. We also share in the pain and suffering of the Gakhal family and all of those members and individuals who were affected by this terrible tragedy. There are a number of tragedies like this that have happened around the province, and we on this side of the House certainly share the need that we, in fact, do as much as we possibly can to make sure that domestic violence and violence against women are eradicated. I can pledge the support of the opposition, and we have put forward a number of initiatives to help make that happen.

I thank the Minister of Women's Equality. To those members of society and families who have been affected by these terrible tragedies, we want to pass on our condolences and our commitment to making sure that we eradicate this type of violence in our society.

D. Symons: I would like the House to recognize Rene and Leverne Baxter, who have come from Saskatoon in that fine province of Saskatchewan -- the province where, by the way, they're reducing the debt. They have come to see how politics are played in British Columbia. Would the House please make them welcome.

[1415]

Hon. C. McGregor: It's my pleasure to introduce today two friends of Rachel Bourne, who is my administrative assistant, one of the key staff people in my office. She has two friends visiting from Nanaimo today, Naomi and Doug Brinham. Would the House please make them welcome.

P. Nettleton: I would ask that members please join me in welcoming Prince George residents Linda and Candace Ford, here today with Aaron Gairdner of Victoria.

J. Wilson: Today we have three Young Liberals visiting from the University of Victoria. They've picked a very good day to come, watch and view the operation of government. I would ask the House to make welcome Herman Cheung, John Duncan and Gloria Brown.

L. Reid: In the precincts today is a lovely group of elementary students from General Currie Elementary in the riding of Richmond East. I would ask the House to please make them welcome.

Oral Questions

DEBT, DEFICIT AND GOVERNMENT ADVERTISING OF BUDGET

My question is to the Minister of Finance: when will this government understand that its out-of-control spending and its massive debt buildup are leading B.C. down the road to economic ruin?

Hon. J. MacPhail: It's interesting, the Liberal opposition leader's interpretation of talking to British Columbians. He went straight from the Legislature to Howe Street; that's exactly what he did.

Interjections.

The Speaker: Members, come to order.

Hon. J. MacPhail: We have had a very interesting debate over the last several hours, a dozen hours or so. I listened to my Liberal colleagues across the aisle stand up and ask for more spending in social assistance. I heard them stand up and ask for more spending for wages for people who work in the public sector. I heard them stand up and ask for more spend

[ Page 11620 ]

It is about time that the Liberals had -- I don't know -- some way of telling the people what their plans really are. It's time for them to come clean on the way they're going to cut education, the way they're going to cut health care. There is absolutely no sense carrying on the debate until they do that.

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

[1420]

Everybody across this country understands that this government's blueprint for bankruptcy will fail. Even the Premier used to understand that. My question is to the Minister of Finance: when her professional staff says that this strategy is doomed to failure and is not sustainable, when everyone across the country understands that this is the road to economic ruin, how can the minister stand there with a straight face and support this budget?

Hon. J. MacPhail: The Liberal leader is quite correct in saying that choices were made in this budget. Yes, choices were made. There were very specific choices -- he is absolutely correct -- to build schools in the ridings that are represented by members across the way and members here. There were very specific choices -- you're right -- to fund the Children's Hospital so that we can have an ambulatory care unit and deal with the backlog or the wait times for surgical procedures for children -- there's no question about that. There's no question that our government is committed to training a workforce for high technology through building a new university.

Yes, we have made those choices. Can British Columbians accept that? British Columbians can accept it -- they are demanding that these be built.

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

G. Campbell: This government made a choice all right. This minister made a choice all right. She chose to spend $600,000 on a propaganda campaign. How many classrooms did you decide to close for that $600,000? How many hospital beds did you close for that $600,000? How many people have you left on waiting lists?

The Speaker: Through the Chair.

G. Campbell: How many heart surgeries have you cancelled for $600,000 of NDP propaganda?

Interjections.

The Speaker: Order, please. Come to order.

Hon. J. MacPhail: Actually, I'd like to correct the Liberal Leader of the Opposition. We're actually spending closer to $700,000 on our advertising campaign. People want to know how they're going to access the programs that have been funded in this budget. They want to know about how they can perhaps work in partnership in building new long term care facilities. They want to know how they can access the free adult basic education programs that we have here. Organizations that want to help the homeless want to know how they can contact us to deliver on the promises we've made to help the homeless.

In this last budget, we saved over $70 million, letting the public know, letting contractors know. . .

Interjections.

The Speaker: Members. . . .

Hon. J. MacPhail: . . .about how we can more efficiently build schools and hospitals. We contacted the public. They came to us, and we saved $70 million.

I know that the Liberals won't be spending one single cent on advertising what they believe in. They won't be spending one single cent telling the truth about how they're going to cut education and cut health care. It's time to come clean.

[1425]

So I'll ask the minister this. We were up all night debating this budget because they can't introduce it until the very last minute. . .

Interjections.

The Speaker: Order, members.

C. Clark: . . .and before we're even finished our debate on second reading, she's got her mug on TV out there, selling her propaganda campaign. Can the minister tell us this: how many hospital beds, how many firefighters, how many police officers will not be on the street because she's spending $600,000 on her advertising campaign?

The Speaker: Before the minister responds, I wish to request that the member for Port Moody-Burnaby Mountain please withdraw one of the words she used -- and, in fact, if she would be so kind as to apologize. The Chair tried to interrupt in order to refer to one of the words she used. It's not appropriate. I think there was a word addressed to the minister in terms of television presence.

[ Page 11621 ]

The Speaker: I don't think that's. . . .

C. Clark: I'm happy to withdraw, hon. Speaker.

The Speaker: Thank you.

And for the response, I recognize the Minister of Finance.

Hon. J. MacPhail: On this side of the House we are extremely proud of the budget that we introduced. There's no question. . . .

Interjections.

The Speaker: Members, come to order. Members.

Hon. J. MacPhail: I actually wish I had a respite care program for the members of the Legislature, but unfortunately, we couldn't deliver on that.

We made some choices in this budget. There's no question that some elements of the business community don't fully understand the impact of this budget yet and are disappointed. But even the business community knows that when they go out and talk to their constituents, to their customers, that British Columbians have some very definite priorities. British Columbians want to know about the tax cut that we've made for small business. Small business people want to know about that -- a tax that is now the second-lowest business income tax rate in all of Canada. Small business people want to know that this year they'll have $63 million more in their pockets.

I'll tell you something, though. I wouldn't mind knowing what services the opposition is going to provide. That's what I'd like to know.

The Speaker: First supplementary, the member for Port Moody-Burnaby Mountain.

C. Clark: The minister says that the public just doesn't understand the NDP. It's not that the NDP have done anything wrong; it's not that they've taxed people out of the province; it's not that they've driven up waiting lists to amongst the highest in the country; it's not that parents are having to buy textbooks for their children's basic curriculum in schools. The problem is that the NDP are just misunderstood, so they've got to spend $700,000 of taxpayers' money to make sure that the public is just smart enough to try and understand the well-meaning government. Well, anybody who's seen their grandchildren move to Alberta or their grandfather not get his heart bypass or their kid not get a course in university understands NDP budgeting.

The Speaker: And the question is?

C. Clark: And if this minister wants to send a message to British Columbians. . .

The Speaker: And the question?

C. Clark: . . .that they'll understand, will she do the right thing? Will she send them a clear message? Will she drop the ad campaign? Will she yank the ad? Will she save the dollars, and will she put every single penny back into health care, back into education, back into police on the streets?

Hon. J. MacPhail: These are information ads. I must tell you, though, that if this government. . . .

Interjections.

Hon. J. MacPhail: No, no. Just a second. Relax.

If we had actually wanted to engage in partisan ads, we would have a picture of the member for Okanagan West saying: "Pouring more money into the health care system is like pouring money down a black hole." That would be a partisan ad.

Interjections.

The Speaker: Order, members.

[1430]

SOUTHERN CROSSING PIPELINE

My question to the minister is this: why has the government demonstrated support for this project by listing it along with the Nova and Alliance pipelines in this year's budget documents?

Interjections.

The Speaker: Order, members.

Hon. D. Miller: The issue of the southern crossing, or indeed the Westcoast Gas alternative proposal for an LNG facility on the Sunshine Coast, are matters that will be dealt with by the B.C. Utilities Commission. The government and certainly myself as minister have advised both parties that it's not a political decision; it's a decision for the Utilities Commission. The Utilities Commission is holding hearings and will, I'm advised, make a decision on that matter, I think, sometime this month. As to the evidence that the member cites with respect to costs, I'm not certain that those figures are accurate. But again, these issues will be determined by the Utilities Commission.

I think it's important to note -- going back to the activity in the northeast part of the province that is a result of the Oil and Gas Commission -- that with the changes in the regulatory regime that we have made and recent discussions with members of the Canadian Association of Petroleum Producers, all indications are that there will be significant new activity in terms of drilling for gas in British Columbia, which

[ Page 11622 ]

The Speaker: Apologies, member. The bell indicates the end of question period.

Orders of the Day

[1435]

SUPPLY ACT (No. 1), 1999
(continued)

On warrants 2 and 3.

C. Hansen: Just continuing with some of the Pharmacare questioning that we were doing prior to the break. Last year, the minister said that there was an external evaluation of the reference drug program that was being done. I'm just wondering if the minister could enlighten us as to what stage that evaluation is at and who is undertaking this review.

[1440]

C. Hansen: These are three separate, independent studies, are they? Can the minister elaborate as to what these studies are looking at and when we may expect them to report out?

Hon. P. Priddy: There are three very different studies going on, and what they're doing is studying three different categories of drugs. One group is studying antihypertensive drugs, one group is studying nonsteroidal anti-inflammatory drugs, and one group is studying GI drugs.

C. Hansen: I gather these studies have been commissioned specifically by the province of British Columbia, and I was wondering if the minister could tell us what the cost to the province is for these studies.

Hon. P. Priddy: These are not actually commissioned by the province; they are independent studies. We have given them each $15,000 as seed money, but they are applying for independent research dollars. Otherwise, we wouldn't be able to be sure that we had independent results -- if we were the funders.

C. Hansen: The inference from Hansard a year ago -- in talking about this reference that I made earlier to this external evaluation, at least -- was that this was an evaluation of the effectiveness of the reference drug program itself. Is that what the minister anticipates coming out of these three studies?

Hon. P. Priddy: Yes, that is what we hope and believe will be the result of the research -- that it will affirm that patients have not indeed suffered as a result of reference-based pricing and that it will affirm, in terms of its effectiveness and efficiency, that it's meeting its goals.

C. Hansen: The minister made reference this morning to the therapeutics initiatives committee set up by the College of Physicians and Surgeons. Last year, in Hansard, the minister was very optimistic that this was a very valuable tool when it came to utilization management. I'm wondering if she still has that same optimism a year later. To partly relate this back to this special warrant, if we have results coming out of this process of utilization management, why is it that we still see this tremendous volatility when it comes to forecasting demand?

[1445]

C. Hansen: I'd like to move forward. Specifically with regard to this special warrant No. 3, which is in the amount of $40 million. . . . Well, actually, I'll read from the supply bill that we have before us. It is to provide for the start-up costs associated with the new national blood program. Now earlier, when we were talking about special warrant No. 2, which was the $52 million. . . . When the minister gave me the breakdown of the $52 million, she mentioned that there was $7 million for blood startup and $31 million for blood services. That totals $38 million. Now I'm wondering if the minister can explain to me what the $40 million is, when it comes to the national blood program as well.

Hon. P. Priddy: I may have to ask for some clarification from the member on his question. There are two warrants; that's correct. One of them is vote 48, and the total is $40 million. Yes, $7 million of those dollars are one-time startup costs for the blood program, so that is $7 million out of that $40 million from the schedule A vote.

I need you to clarify the second part of the question. I lost it along the way.

C. Hansen: To go back to the minister's press release which I quoted from, a Minister of Finance press release explaining the special warrants at the time that they were issued said: "Funding is provided as follows: $52 million to reduce wait-lists and provide more funding for kidney dialysis and cancer drugs. . . ." I asked the minister to explain how that $52 million broke down. We knew there was $8 million that went towards the December 3 announcement regarding wait-lists. I was looking for an explanation of the balance of that, and the minister gave me these numbers: $7 million for blood startup, $31 million for blood services, $5

[ Page 11623 ]

If that was the $52 million, then what is under special warrant No. 3 which we have in front of us, that refers to the national blood program?

Hon. P. Priddy: I think it's the way it's reflected in the votes. The $7 million is part of the $31 million; it's not on top of it.

C. Hansen: I think the problem I've got now is that that doesn't. . . . I question whether the minister gave me an accurate explanation of the $52 million before. In the listing of the $52 million, which I remember she actually referenced as $59 million at the time. . . . When I asked her specifically to explain special warrant No. 2 -- the $52 million -- she included all of this money in that special warrant. It seems to me that she's counting this blood money, the blood services money, under both special warrants.

[1450]

If you look at the actual schedules, under acute and continuing care, you'll see $52 million under one schedule. . . . Under "Total base requirement," in vote 48 you see $52 million under acute and continuing care. If you move over to "Total one-time requirement" under vote 48, you'll see another $7 million under acute and continuing care. Sorry, this is like joining the dots. If you add the $52 million and the $7 million, you get $59 million, which is the whole total under acute and continuing care. They come in two places, in the way the schedule has been constructed: one under "Total base requirement," and one under "Total one-time requirement."

C. Hansen: Just so that I understand it, when we talked about the breakdown for special warrant No. 2, the minister gave me $52 million for wait-lists, kidney dialysis, cancer drugs; $17.65 million for northern doctors and increased funding for physiotherapy, chiropractic care and eye care. There was another $14.85 million to fund prescription drugs for seniors and HIV and AIDS patients. That actually adds up and corresponds to the schedule that we have in the supply bill.

What the minister is telling me, I gather, is that of that $52 million, $31 million is for Canada Blood Services. Then if you go to special warrant No. 3, in that number of $40 million there is an additional $7 million for the blood agency. I can see some heads nodding, so I will take that answer and move forward. Thank you. I think it's starting to make sense here.

I want to ask the minister about the transfer of debt from the greater Vancouver regional hospital district. How much does that amount to? Why do we see that in operating funds, as opposed to in capitalized moneys?

Hon. P. Priddy: Is it possible to move on for a few minutes and come back to this one? It's actually Finance staff, because of Transit, that should be speaking to this. We are just going to go and get a couple of folks who will be able to give you quicker answers than we can.

C. Hansen: Thanks. It's a matter that I would be quite prepared to get some answers on outside of the House. It's some background. . . . Basically, if I can leave it with the minister and her staff, I would very much appreciate getting some breakdowns of how those moneys were transferred, and where they show up. With that, I will conclude. Thank you very much.

[1455]

Preamble 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 54, Supply Act (No. 1), 1999, reported complete without amendment, read a third time and passed on the following division:

[1500]

NAYS -- 24
Whittred	Gingell	C. Clark
Campbell	Farrell-Collins	Plant
Abbott	L. Reid	Neufeld
Coell	Nettleton	Penner
Weisbeck	Coleman	Stephens
Hansen	Krueger	Thorpe
Symons	van Dongen	Barisoff
Dalton	J. Reid	J. Wilson

Hon. J. MacPhail: I call Committee of the Whole to debate Bill 51.

[1505]

[ Page 11624 ]

NISGA'A FINAL AGREEMENT ACT
(continued)

On the schedule, chapter 8 (continued).

Hon. G. Wilson: The last time we met, there was a request made by the official opposition -- and, I believe, also the member from Peace River -- for the draft fisheries operational guidelines. I had said I would get those. They are here. I would, if appropriate, like to table them now.

[1510]

J. van Dongen: I want to thank the minister for bringing those documents to the Legislature, and I'm certainly looking forward to having a look at those.

I think that where we were on the final agreement last time pretty well completed the questions on the agreement itself. I just have a few questions on the harvest agreement, if that would be appropriate. The first question is with respect to the definition of "consult." Certainly, the term "consult" is used quite extensively throughout both the final agreement and this harvest agreement. One of the concerns that I think very often exists with consultation processes is getting some closure on the process. I think, in particular, that section (b)(iii), in the definition of "consult" is really the area of concern. It talks about allowing a reasonable period of time to permit the party to prepare its views on the matter.

I guess the question to the minister is: what happens when someone who's being consulted, or a party that's being consulted, does not respond in a timely manner? How does the minister or other body seeking consultation respond in that situation?

Hon. U. Dosanjh: I ask for leave to make an introduction.

Leave granted.

Hon. U. Dosanjh: I'm absolutely delighted to introduce to the House. . . . Sitting right next to me is Boris Tyzuk, the legal services lawyer who is assisting me throughout this debate on many complex issues. He knows this thing backwards. He has visitors that are visiting him and watching him: his wife, Tess, and children Alex and Katie. Would the House please make them welcome.

Hon. G. Wilson: I take the question to mean: what constitutes reasonable? And if it's deemed by the person or the party that the time is unreasonable, who makes that determination? The answer would be that what constitutes a reasonable period of time largely depends upon the issue at hand. Sometimes it might be a couple of days, sometimes a couple of weeks and possibly, on a complex issue, a couple of months. It will be the Crown that will determine whether or not the time that is being granted is reasonable. But I think the intention is that all parties would act in good faith.

J. van Dongen: I know that is the intent. I think the concern we've seen before in consultation processes is that someone doesn't respond or that they respond in something less than a concrete fashion, and the minister, or whoever, is left with trying to make a decision. Too many times, this kind of consultative process has ended up being effectively used as a veto, because there is no answer forthcoming. Certainly in a lot of the consultative processes within our own Environment, Lands and Parks, that's what has happened. We've had resource industry decisions dragged out for a very long time because someone didn't respond. Yet the civil servant -- or in this case possibly a minister -- didn't take concrete action to make the subsequent action and get some closure on the process. I think that's the concern that maybe the minister could address.

[1515]

There must be "sufficient information in respect to the matter to permit the party to prepare its views on the matter" -- again, that's a specific directive with respect to this definition. "A reasonable period of time" -- which I've just answered -- may vary depending on the complexity of the issue at hand. "An opportunity for the party to present his views on the matter" -- that, I believe, is a positive protection, if I can put it that way, for people who believe that they have an interest affected. And "full and fair consideration of any views on the matter so presented by the party." So I think the definition is fairly comprehensive and provides a much better protection with respect to an orderly process than perhaps we've seen in other agreements.

J. van Dongen: I appreciate the minister's answer. I don't know if a similar definition has been used in other processes. Hopefully, this will help provide some closure where someone is not responding very quickly or clearly.

There was one other section that I want to address in the harvest agreement. Actually, a fair bit of the harvest agreement is simply a recording of provisions of the final agreement. So I just want to go to section 23, which is the section dealing with compensation. It says: "If a Nisga'a fish allocation under this harvest agreement is reduced or terminated, the Nisga'a nation is entitled to fair compensation from the party or parties that reduced or terminated that Nisga'a fish allocation."

I guess my question there is: if the harvest agreement is not intended to be a treaty or land claims agreement, why are the Nisga'a being guaranteed compensation for this allocation of fish? I contrast this provision to the general commercial fishery, where there is no guarantee of compensation to fishermen. That's my question, hon. Chair.

Hon. G. Wilson: I guess the easiest analogy would be to suggest that it is very similar to a TFL.

J. van Dongen: Well, I know that answer has been used before, and I don't know anything about a TFL, and I don't

[ Page 11625 ]

[1520]

J. van Dongen: I think the alternative that I would prefer to see is to have everyone, native and non-native, participate in one fishery. I certainly don't intend to belabour the point. I think that the comments that Richmond-Steveston made the last time we discussed this issue were quite valid: that when you look at the whole of the agreement -- the final agreement and the harvest agreement combined -- in terms of the management of the resource, the practical impact, I think, will be that the harvest agreement will kind of fall in with the fish allocation under the final agreement. There won't be much differentiation, in a practical sense, and then you'll have the commercial fishery over here.

I'm going to wrap this up. I do have a couple of quotes that I would like to read into the record -- one very short one from the minister. But I also have a quote from the lawyer that I've referred to before that I think provides a very balanced review of the fisheries chapter, and I want to include that.

I want to include the comments of the minister with respect to the general areas that we've had concern about. This comes from a fairly recent column that he wrote, which is quite short. It goes like this:

"So, is this a good deal? Well, yes, for the most part, but not in the area of the fishery. I strongly disagree with entrenching within the constitution a commercial right to any individual or group, and this agreement does that. The constitution provides for individual and collective rights within the framework of the law, it should not be used to entrench in perpetuity a commercial share of any resource. This is a very dangerous precedent to make, and could lead us down a very dangerous path."

I think that quotation really sums up some of the concerns that a lot of people have about this chapter, including the minister himself. And I understand his point of view that it's part of a total package and a deal that's been made, but I just wanted to register that concern.

To quote from Richard Keevil of Campney and Murphy, who I've spoken to a couple of times and who, I think, has a very balanced view of this chapter. . . . He does a lot of work on these issues, and has written:

"In conclusion, it is important for all of us to remember that the federal and provincial governments must actively pursue treaty and land settlements with the native peoples of British Columbia. This is not a matter of choice, since it has now essentially been mandated by section 35(1) of our constitution and recent decisions of the Supreme Court of Canada.

"We should also offer our best wishes to the Nisga'a people, who have been patiently seeking a treaty with British Columbia for well over 100 years and were one of the first native peoples in British Columbia to seek to establish aboriginal title to their territory in the case of Frank Calder v. The Attorney General of British Columbia -- Supreme Court Reports, 1973.

"On the other hand, the fisheries component of the Nisga'a treaty certainly raises some concerns about the future of the commercial and recreational fisheries in British Columbia. Many industry observers and participants have for years been recommending the so-called 'industrial solution' to resolve aboriginal fishing claims, whereby aboriginal participation in the fishery would have been enhanced by direct government funding to allow natives to acquire assets in the mainstream commercial fishery.

"In this way, management and enforcement of fisheries law and regulations would have remained fairly straightforward, being divided basically into recreational and commercial fishing. With the establishment by DFO of the aboriginal fishing strategy and now the proposal for a specific allocation of aboriginal fishing entitlements under the Nisga'a agreement, fisheries management will likely become even more difficult, complex and controversial, but it appears that we have now gone too far down this road to turn back. At the same time, government cutbacks have left less and less funding available for research and enforcement measures, which further complicates matters."

"There are currently 51 aboriginal groups involved in the British Columbia Treaty Commission process. I have been advised by an official at the Treaty Commission that this represents approximately 70 percent of the aboriginal population of B.C. In other words, 30 percent of our native population has yet to commit to negotiation through the Treaty Commission, although some of them have been negotiating directly with the federal government. It is impossible to predict how the fisheries claims of these other aboriginal nations will be resolved, but by roughly projecting the fisheries allocations contained in the Nisga'a agreement, it is safe to say that the impact on the commercial fishery in B.C. will be very significant.

"The treaty process remains volatile and controversial. Parties on both sides of the issue have cautioned against seeing the Nisga'a proposal as a blueprint for other settlements, and it should be pointed out that the Supreme Court in the Delgamuukw case stated that issues concerning aboriginal title have to be examined on a case-by-case basis. The proposed Nisga'a agreement is clearly only a small first step in what will likely be a very long and difficult journey."

Hon. G. Wilson: I think it goes without saying that we on this side of the House fundamentally disagree that what this treaty does is to constitutionalize a commercial right to a resource. I think that is a point of view that has been advanced by others and has been refuted by the majority who have read the text of this agreement and understand its operation. I would also say that the whole aspect of fisheries management in British Columbia right now is a highly volatile and very sensitive issue because of declining stocks. I think the real issue that is alluded to in the remarks the member reads -- and the source of those concerns is well known to me -- is the fact that we have had, for many, many years, inadequate fisheries management practices. As a result, we are now finding an industry that is in serious trouble.

[ Page 11626 ]

I think that the opportunity that is presented in this treaty, and the opportunity that is provided for, outweighs the legitimate -- I underline, the legitimate -- concerns of commercial fishermen on the coast of British Columbia who fear for their livelihood. I fully understand and appreciate their concerns. I meet with them on a regular basis. I'm doing what I can to work with them to make sure that we can find an opportunity for those fishing interests to be properly represented and to have their concerns properly addressed. I don't think the place to take out their concerns is on the Nisga'a people or in the Nisga'a treaty, because I don't think that they were responsible for the issues. I don't think that this treaty will do anything except provide a greater enhancement opportunity and therefore a greater opportunity for aboriginal and non-aboriginal people in that region.

[1530]

The Chair: I'll assume that we have completed chapter 8. If we could move on to chapter 9.

G. Abbott: The agreement between our Aboriginal Affairs critic and the minister is to proceed to chapter 5, the forest resources section.

Hon. G. Wilson: Earlier this week, there was a communiqué to the Aboriginal Affairs critic that given the absence of the Minister of Forests, who wanted to participate in this debate, we would just continue with chapter 9 and then come back. Having not heard to the contrary that that was a problem, I just assumed we could continue on in that direction. It would seem to me that given the fact that the Minister of Forests wishes to participate -- unless there are serious objections to doing that, and I can't imagine what they would be -- we would just continue on with wildlife and migratory birds, which I understand is not that controversial or difficult a section.

G. Plant: The Aboriginal Affairs critic is not here. He and I have spoken today. He was categorical to me that his understanding at this point was that we would do the forest resources chapter after we finished the fisheries chapter, and that's certainly the understanding that he and I have had all through the week. In fact, as we got closer to the end of the fisheries chapter -- whenever it was, a couple of days ago -- we were all set to warm up to do forests.

I guess part of my concern is that we actually were ready to do forests once before. We got to the end of chapter 4 and we were all set to do forests, and the minister wasn't available then. We accommodated the government; we accommodated minister and said: "Well, fine, we'll move ahead."

[1535]

From our perspective, that was the arrangement that we certainly understood. And I have to say that very clearly earlier this afternoon, the Aboriginal Affairs critic made it clear to me that his understanding was that we'd be moving to forests. We hadn't seen the minister, but we didn't know where he was. So I think, frankly, the thing to do now is to go ahead with forests and hopefully do the best we can with it. If that's acceptable to the minister, then I suggest that's the way we proceed.

G. Farrell-Collins: Clearly there is some lack of communication. These items are best discussed outside.

I understand the Lieutenant-Governor is in the precinct to give royal assent to the bill passed earlier, and I would move 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.

The Speaker: We are awaiting the arrival of His Honour the Lieutenant-Governor. I believe he is in the precincts and will be here in a couple of moments. If we will keep to our seats, then we'll proceed with that part of the ceremony.

[1540]

Law Clerk:

Supply Act (No. 1), 1999

In Her Majesty's name, His Honour the Lieutenant-Governor doth thank Her Majesty's loyal subjects, accept their benevolence and assent to this act.

[ Page 11627 ]

Statement by Lieutenant-Governor

CONGRATULATIONS TO NUNAVUTAND NEWFOUNDLAND

Hon. G. Gardom (Lieutenant-Governor): Madam Speaker and hon. members, let me also join with you and all British Columbians in welcoming and extending the very best of wishes to our great country's new and third territory, Nunavut, and also the very grandest to our sister bookend, Newfoundland, which is celebrating its fiftieth anniversary of joining Canada -- or, as you know, as they say there, "of Canada joining us." So happy, happy returns to them 50 times over. And finally, to all of them, to all of you and to everyone's families, I wish a most cheery, healthy and peaceful Easter.

His Honour the Lieutenant-Governor retired from the chamber.

[1545]

NISGA'A FINAL AGREEMENT ACT
(continued)

On the schedule, chapter 5.

G. Abbott: It's a pleasure to rise and join in this debate on the Nisga'a treaty and address a few questions to the minister with respect to chapter 5, the forest resources chapter of this treaty. I want to begin in the definitions section, and I want to begin with point 1: "In this chapter and in appendix H: "agreement under the Forest Act means a major licence or timber sale licence. . .before the effective date, provided for the harvesting of timber on Nisga'a Lands. . . ." Could the minister first of all advise me, for my information, of the effective date in terms of this chapter. The proclamation by both levels of government of the agreement -- is that the effective date?

[1550]

G. Abbott: So at some point, presumably after this House and the federal House have ratified the agreement, the parties will get together and determine that effective date.

Hon. G. Wilson: The discussions are ongoing now, but the finalization of the date will be done then, yes.

G. Abbott: One of the things I want to do at the outset here -- and I think this is the appropriate point, given that we are talking about major licences and timber sale licences -- is have on the record the firms or existing licences that will be affected by the agreement before us. Perhaps we can begin. . . . I know that the total number of cubic metres of harvest that will be affected by this agreement is approximately 220,000. I'd like to begin by having the minister provide more detail with respect to that, and I would like to begin with tree farm licence No. 1. As I understand it, there is going to be an alienation, I guess -- expropriation would be another way to put it -- of 157,700 cubic metres from TFL No. 1. The only company affected in that case, I understand, is Skeena Cellulose. Can the minister confirm if that's the case?

Hon. G. Wilson: Skeena Cellulose is the holder of TFL No. 1, yes.

G. Abbott: Could the minister also confirm that 157,700 cubic metres is the extent of the annual allowable cut in TFL No. 1 that will be alienated as a part of the creation of these Nisga'a lands?

Hon. G. Wilson: I'd like to introduce staff who have just joined me and who are out of the Ministry of Forests. Mr. Doug Caul is here. I think people know Mr. Trevor Proverbs, who is with me also and has been here.

Now that we have somebody from the Ministry of Forests, perhaps you might want to repeat your question.

G. Abbott: Where we are proceeding here. . . . For the information of the ministry staff who have just arrived, we are just getting on the record the composition of the 220,000 metres of cut that will be alienated or expropriated as a consequence of the creation of the 2,002 square miles of Nisga'a lands pursuant to this agreement. We began with TFL No. 1. The minister has confirmed that the only company that will be affected by the alienation of timber in TFL No. 1 is Skeena Cellulose, and he was attempting to determine whether in fact the volume of timber that will be alienated or expropriated is 157,700 cubic metres.

Hon. G. Wilson: That is the best guess that we have now, but the official number will be determined by the chief forester once the treaty's in place.

G. Abbott: On what basis will the chief forester be determining that level of cut to be alienated?

[1555]

G. Abbott: I just want to clarify this point. My understanding is that the total annual allowable cut in TFL No. 1 -- which of course is an area-based AAC -- is 720,000 cubic metres. The estimate, at least at this point, is that approximately 157,000 of that will be alienated. Is that determined based on the proportion of TFL No. 1 that will fall within those 2,002 square kilometres of Nisga'a lands?

Hon. G. Wilson: It will be the job of the chief forester to determine the AAC volume left outside of treaty settlement lands, and that's what will take place.

G. Abbott: Presumably the chief forester is going to assess this particular volume that will be lost to TFL No. 1 on the basis of the area of TFL No. 1 that will move into the 2,002 square kilometres, given that the total cut is area-based. Per-

[ Page 11628 ]

Hon. G. Wilson: I think the distinction that needs to be made is that settlement lands will no longer be Crown land. The chief forester will only make the determination on the portion that is left outside of those lands identified in the treaty.

G. Abbott: Thank you to the minister for that clarification.

Moving on to the North Coast timber supply area, my understanding is that out of a total cut of 600,000 cubic metres, it is anticipated that 31,800 cubic metres of that cut will be alienated or expropriated as a part of this agreement. Can the minister confirm that that's the case?

Hon. G. Wilson: That's the best. . . .

G. Abbott: Thank you. I presume that in this case -- in the case of the timber supply area -- the TSA and the companies affected are presumably working on volume-based rather than area-based terms and conditions. Can the minister confirm that?

Hon. G. Wilson: In the TSA, that's correct.

G. Abbott: My understanding is that there are three companies that will be affected by the alienation or expropriation of those approximately 32,000 cubic metres within the North Coast timber supply area. Can the minister confirm that the companies affected are Thomson Industries, West Fraser Timber and Boyle and Dean Logging?

Hon. G. Wilson: I don't think it's quite that simple. In the determination of what is left in the reallocation, it may well be those three named, but that doesn't preclude others from being affected.

G. Abbott: I think the minister's response -- certainly in my mind -- invites some further clarification of how other firms could be brought into this particular picture. How would it be that firms other than the three that I have mentioned would be affected -- at least in terms of licences?

[1600]

G. Abbott: Thank you. And just so I'm very clear on this, I'm talking about licensees as per the definition in section 1 of the forest resources chapter. The minister has indicated that there may be more than three licences affected, specifically within the North Coast timber supply area. Is that correct?

Hon. G. Wilson: Potentially, that's correct.

G. Abbott: Again, what conditions or actions might produce that potential? Given that the minister has suggested that others may be potentially affected, what would cause them to be affected -- to realize the potential?

Hon. G. Wilson: My understanding is that there are only three companies that actually harvested in Nisga'a lands. Now, in the reallocation of timber, there is obviously going to be a reallocation on a broader set of lands; therefore other companies that are currently operating may find that there will be impact with respect to that reallocation. As a result, they will be impacted. Now, what I'm suggesting is that that doesn't mean that those impacts will necessarily be negative. In fact, there may be a new opportunity which will offset any loss.

G. Abbott: I think I understand the minister's point now: that at this point, in terms of loss of actual annual allowable cut, there are three companies that have been identified. And I presume they are the three that I have identified in the North Coast timber supply area -- although, in a reallocation, others might be affected -- fair enough.

Based on those three companies, can the minister give to me, at least in approximate terms, the extent of the impact in terms of annual allowable cut? Out of the approximately 32,000 cubic metres in question here, what is the distribution between Thomson Industries, West Fraser Timber and Boyle and Dean Logging?

Hon. G. Wilson: Well, it'll be up to the chief forester to make a determination on the final allocation of numbers.

G. Abbott: In a reallocation, the chief forester may distribute the AAC in ways that are not yet to be determined. Based on the existing cut that those companies have, what is the loss in terms of cut that they are going to experience initially here? In short, what do they stand to lose?

Hon. G. Wilson: It'll be a proportional allocation. Frankly I don't have those numbers in front of me. I can certainly undertake to get those numbers as a best estimate for the member, if the member wants. It will be proportionate to the allocation.

G. Abbott: I presume that the Minister of Forests will be back on Tuesday, and perhaps he or the Minister of Aboriginal Affairs could bring that along. I think that's a useful thing for us to know in terms of the impact of this agreement on existing operators, which hopefully is a major consideration for the government as well as the opposition in this.

[1605]

Hon. G. Wilson: No, our best guess is 14,000 cubic metres.

[ Page 11629 ]

Hon. G. Wilson: That is correct, although it may also include the small business allocation.

G. Abbott: I missed the last bit of the minister's remark. Could he run the small business allocation comment by us again and what the impact of that is?

Hon. G. Wilson: In addition to the four companies the member mentioned, the small business allotment may potentially also be affected.

G. Abbott: The small business allocation, I'm assuming, is included in the 14,000 cubic metres -- that is, again, all within the area that will form a part of the 2,002 square kilometres. Is the minister able, in this case, to provide me with at least an approximate distribution of that 14,000 cubic metres between the companies?

Hon. G. Wilson: It's the same answer I gave the member before. The chief forester is going to have to determine the portion that is outside of treaty land. That is then going to have to be allocated on a proportional basis.

G. Abbott: As per the previous comment I had with respect to the North Coast timber supply area, again, given that we are dealing in this case with a volume-based rather than area-based tenure. . . . Obviously the minister's promise to bring back some more detail on how this will be done is not only important to me but obviously way more important to the companies that stand to be affected by this.

The final area -- at least, as I understand it -- of the four different cutting areas that will be affected here, in making up the approximately 220,000 cubic metres that will alienated or expropriated as part of this agreement, is the Kalum timber supply area. My understanding is that the licensees in that area will lose approximately 21,300 cubic metres out of 464,000 total cubic metres cut. Is that correct?

Hon. G. Wilson: You're pretty close. Ours is 22,000, but we'll take 21,000.

G. Abbott: Again, could the minister confirm that there are five licensees that will be affected by the alienation of those 22,000 cubic metres: Skeena Cellulose, Bell Pole, West Fraser Timber, TV Logging and Sharples Equipment. Is that correct?

[1610]

G. Abbott: In the case of the Nass timber supply area, it appears that probably the small business portion of the 14,000 cubic metres is around 5,000 cubic metres. In the case of the Kalum timber supply area, is the small business cut in the area of 1,000 cubic metres?

Hon. G. Wilson: I'm sure we didn't put a figure on the small business allocation in the Nass, and I wouldn't want to put an allocation on Kalum. As I think I have explained, it will be up to the chief forester to determine what those allocations will be on the lands outside the treaty.

G. Abbott: I'm presuming again, as with the previous questions about the Nass and North Coast timber supply areas, that it is not possible at this point to provide me with the figure, but I presume the minister's commitment to bring back some detail next week on that would apply here as well.

[W. Hartley in the chair.]

Hon. G. Wilson: I would be happy to get you what our best estimate of those figures is, but I want to let the member opposite know that the numbers that the Minister of Forests will make available to you next week are estimates. These are not hard figures. I want that to be clear. These are our best estimates, and we are happy to make them available to you.

G. Abbott: I can appreciate that we are talking estimates here, but I can also appreciate that there are a number of companies here -- I haven't totalled them up; I presume it's around a dozen or 14, or something like that -- within the 2,002-square-kilometre area that are certainly going to have their cutting rights affected and perhaps also have the viability of their milling operations affected by the flow of fibre. Obviously it's an important issue, and as we move through this forest resources section, I think that the greater certainty and clarity we can provide to those around what it will be is obviously an important thing.

The minister mentioned that other operators may be affected by the reallocation. Would these be licensees or operators who are outside the 2,002-square-kilometre area but who would be affected by reallocations to assist those presumably within that 2,002-square-kilometre area with their shortfall in timber? How many operators are there likely to be in that case?

Hon. G. Wilson: I can't give you definitive numbers. In all three cases, we're talking about the small business enterprise program, and I think that in addition to that, in one case, International Forest Products may be affected.

G. Abbott: So with the exception of International Forest Products, we have identified all of those companies, exclusive of the small business operators who will be affected by this agreement or the reallocations that are prompted by this agreement. Is that correct?

Hon. G. Wilson: I think the member is correct with respect to the list of affected companies. But I don't want the member to be confused, nor do I want to confuse the member into thinking that all of those companies operate on Nisga'a lands. They do not. There are currently only three companies that operate on Nisga'a lands. The others may be affected through a reallocation and an assignment through an annual allowable cut by the chief forester. As long as there's no confusion with respect to that, I think the member's list is pretty accurate.

[ Page 11630 ]

[1615]

G. Abbott: The area referred to as the Nass wildlife area. . . . What impact is that going to have on the new management regime or the annual allowable cut for those or any other companies in that area?

Hon. G. Wilson: It will have no effect.

G. Abbott: The minister is stating, then, that the Nass wildlife area and any new management regime that is incorporated with respect to that will have no impact on the fibre flow to licensees in the area?

Hon. G. Wilson: I thought we didn't want to talk about the wildlife section. However, if we do, I think it's sections 2 and 3 of the wildlife section. It suggests it will have no impact.

G. Abbott: The issue of compensation is obviously an important one. There are certainly the three companies that will be losing cut in a direct way and a number of others that will be losing cut through a reallocation in the TFL and the three timber supply areas as a consequence of the creation of the Nisga'a lands.

Can the minister describe for me the process for compensation or for achieving compensation for the alienation or expropriation of those timber cutting rights? What has been put in place to deal with that?

Hon. G. Wilson: This is obviously an important issue. We are currently in negotiation with Skeena Cellulose, and we have signed an accord with truck loggers, as the member opposite may know. So discussions are ongoing.

G. Abbott: In one of the booklets that the Ministry of Aboriginal Affairs has distributed in order to explain the agreement to British Columbians. . . . This is called "Bringing B.C. Together." It's the forest resources section of that explanatory booklet. Under "Obligation and Compensation," the circular reads: "The Nisga'a final agreement will require the removal of a portion of tree farm licence No. 1. Skeena Cellulose Inc., the present owner, will be fairly compensated for this transfer." Is there any particular significance to the mention of Skeena Cellulose Inc. and not of the other licensees that are affected by this?

Hon. G. Wilson: It's because we don't know that the others will be affected yet, whereas we do know that Skeena Cellulose will be.

J. Wilson: Earlier the minister made a comment on reallocation. He indicated that in some cases the operator or contractor may have a beneficial effect from the reallocation. Could he give me an example of how this could happen?

Hon. G. Wilson: I don't think that we want to preclude the opportunity that may exist for contractors to go in and contract with the Nisga'a. I don't think you have to assume that because the Nisga'a lands are signed, there won't be opportunities for people in the industry to contract with and work with the Nisga'a.

J. Wilson: If we are going to allow other contractors -- or these contractors -- to operate here, what one gains, will not another contractor or operator lose, in that area?

[1620]

G. Abbott: To go back to the minister's response to my question with respect to the note about Skeena Cellulose in the "Bringing B.C. Together" brochure, Skeena Cellulose is explicitly mentioned, and others are not. The minister's response, as I understand it, is to say that it is clear because Skeena Cellulose is within TFL No. 1, an area-based tenure. It's clear what they will be losing, but it is not clear what others with volume-based tenures in other timber supply areas will be losing. Is that a fair summation of the minister's response?

Hon. G. Wilson: We know that in the case of Skeena Cellulose, there's roughly a 22 percent impact. It will clearly have an impact that will require some form of compensation. First of all, we do not know in the other cases cited whether or not there will be compensable loss. And secondly, until we know what the reallocation is and the assignment, we won't have any data to be able to make that assessment on.

G. Abbott: So at this point the provincial position is that they have not yet concluded that the alienation of about 63,000 cubic metres. . . . The province has not yet formed a final conclusion that those 63,000 cubic metres can be lost in the 2,002-square-kilometre area without being picked up somewhere else. There's a possibility that through reallocations or finding timber elsewhere, those volume-based tenures can be kept whole. Is that the province's position?

Hon. G. Wilson: No, we're not saying that at all. What we're saying is that we have to wait for the AAC determination in order to have the data necessary to make a decision.

G. Abbott: I don't know when this agreement will be ratified and, as we talked about earlier, what the effective date will be. Presumably, the licensees that we've talked about who will be affected will have a very keen interest in seeing some resolution of this issue by the effective date, given that their universe changes significantly at the effective date, as per the range of conditions that are in the forest resources section. Can the minister advise when it is anticipated that the chief forester will have completed his analysis and the province will be able to pass along, presumably to the Legislature and to the licensees, what his determination will be?

Hon. G. Wilson: As soon as you guys stop delaying this process and we can get this treaty signed, then the sooner we can get that allowable assessment analyzed and give certainty

[ Page 11631 ]

G. Abbott: I'm very interested by the minister's response. Is the minister advising that the chief forester's work with respect to the reallocation cannot proceed until this agreement is ratified by all levels of government?

[1625]

G. Abbott: The chief forester can't proceed until the agreement is ratified. My understanding, then, is that all the companies affected by this agreement are in a "trust me" position until the agreement is ratified and the chief forester sets about his work. Is that correct?

Hon. G. Wilson: The companies aren't in a trust-me position. . . . I'm not quite sure what a trust-me position is, but I might find the definition in the Forest Act. I'll have to go and check it out.

I think the companies know that they will be in a position, once the determination is made and there is a compensable loss. . . . They know they'll be compensated; there is no fear about that. The determination of that is obviously something they are anxious to have in order for them to file their plans, as the member opposite quite correctly points out. They are going to want to know, so that they can plan their business. We are anxious to get this treaty finalized as quickly as we can to give them that certainty, so they can get that number, and so they can get on with the business of doing what they do best, which is harvesting timber.

G. Abbott: Just to ensure that I clearly understand the process that is ahead of us -- or more precisely, that is ahead of the licensees that will be affected here -- we will proceed to, presumably, ratify this agreement -- unless there is a change of heart by a number of members on the other side of the House. If that occurs, then at that point the Minister of Forests will be instructing his chief forester to undertake the review and reallocation of licences in that area. Is that correct?

Hon. G. Wilson: Well, that is correct, with one addition. And that is, of course, that the federal House of Commons must also ratify, because it's a tripartite agreement.

G. Abbott: The minister doesn't need to answer this. Just to be clear, the chief forester will not be instructed to undertake that review and reallocation until after the federal government has completed its ratification of this agreement as well. Is that correct?

Hon. G. Wilson: Yes.

Hon. D. Miller: Hon. Chair, I've just a very quick question. I was listening with some fascination to the discussion. I do have some passing knowledge of what's transpiring in the region. I just want to seek the minister's confirmation with respect to a couple of points regarding Skeena and fibre flow and those kinds of questions. I guess, to put it in this context, that the members may be aware that one of the issues in the region, of course, is that there's a very high pulp quality in the forest stands there. Therefore if you're going to have a forest industry base, you need to have a mill that's capable of processing that timber. Of course, that's a pulp mill.

But I wonder if the minister could confirm that, while these questions that the critic is asking with respect to specific details are important, it's also important to note that without a functioning pulp mill and a healthy Skeena Cellulose, it becomes a bit academic. In other words, there would be no place to send the timber to. And if he could confirm that there is a five-year fibre flow and that Skeena Cellulose in fact has publicly embraced the treaty and has also said that they look forward to the opportunities of doing business deals with the Nisga'a. . . . So all of these, I think, are also important factors with respect to the "health" of. . .whether you're talking about contractors or truck loggers or Skeena Cellulose or, indeed, the Nisga'a themselves in terms of opportunities to participate in this forest economy.

Hon. G. Wilson: I believe that's true.

Interjections.

G. Abbott: I thank the minister for the opportunity to have a rest and a drink of water here -- to have their polite, if somewhat chilly, exchange.

Interjection.

[1630]

We have, I think, identified to this point a couple of important points on the road to a compensation agreement for the affected licensees. The federal and provincial governments are ratifying the agreement. At that point the chief forester will be reviewing and reallocating. Based on that, the province will be able to determine -- based on the reallocation -- the extent of the compensable loss to the licensees in that area. Is that correct?

Hon. G. Wilson: Yes, that's correct.

G. Abbott: The issue of compensation to forest companies for the expropriation of both timber-cutting rights in volume-based tenures and timber-cutting rights in TFLs and other area-based tenures has been a controversial one. I know that in the last month there has been a significant agreement reached between MacMillan Bloedel and the government of British Columbia around, I think, a fairly longstanding. . . . I stand to be corrected by the minister's staff, but I think the dispute has been going on for some five years.

Will the principles that underlay the compensation agreement between MacMillan Bloedel and the government of British Columbia also be the principles which underlie the future agreement between the licensees in the Nass and the government of British Columbia?

[ Page 11632 ]

G. Abbott: Can the minister identify for me the principles which the province uses in making that evaluation of loss?

Hon. G. Wilson: The standard evaluation methods would take the value of AAC losses, and then there would be other improvement costs associated that would be added into that.

G. Abbott: I'd been hoping, actually, for a little fuller explanation based on the discussion with the official, but that's fine. That gives us some idea. We're talking about an AAC loss as being the fundamental principle in evaluating loss. Does the impact on fibre flow and the impact of any change in that fibre flow upon the viability of mills also enter into the evaluation of loss?

Hon. G. Wilson: Well, one takes into account AAC loss plus improvements, but generally we don't include what the member now refers to.

[1635]

Hon. G. Wilson: Roads, infrastructure, bridges and so on.

G. Abbott: So in the evaluation of loss, it is AAC plus the value of any bridges, roads or other infrastructure that would be alienated as a consequence of the creation specifically, I guess, of the 2,002-square-kilometre area which will be referred to as the Nisga'a lands?

Hon. G. Wilson: Yes, that is correct. Of course, it's adjusted for the value of the transition measures outlined in the agreement.

G. Abbott: Are there any other factors which will also enter into the evaluation of loss which is concluded by the province?

Hon. G. Wilson: Generally, no. But that's not to preclude the company making a very specific claim on a particular issue that they may wish to put forward on the table and make claim for.

G. Plant: I imagine it's possible -- if not desirable, even -- that some of the operators and the licensees affected by the provisions of the agreement in terms of their access to timber may negotiate harvesting rights with the Nisga'a within Nisga'a lands. If those negotiations succeed, they may have the right to harvest timber on Nisga'a lands. Would that circumstance constitute an adjustment or a reason to qualify the approach taken to compensable loss?

Let me be clearer. We're talking hypothetically about a licensee or an operator who has, through the province, lost access to timber within Nisga'a lands -- and therefore arguably has sustained a compensable loss in respect of that loss of access -- but coincidentally has happened to make other arrangements to carry on harvesting by negotiating a separate arrangement with the Nisga'a. My question is: would that circumstance be considered relevant from the province's perspective in determining whether the licensee or the operator has actually sustained a loss?

Hon. G. Wilson: I'd be curious to know if the member opposite is questioning on the pre- or post-transition period.

G. Plant: Post.

Hon. G. Wilson: Generally speaking, because you have a new landlord, and you still have rights to harvest, doesn't mean that you have sustained loss. So I would say that that would apply. I don't think that you can claim loss where it can clearly be demonstrated that no loss has occurred.

G. Plant: I appreciate the fact that the question left open the time at which my hypothetical scenario arose, and there is the transition period. After the transition period, the Nisga'a become the owners of the forest resource with complete discretion over -- well, subject to the provisions of the treaty -- the power to grant harvesting rights. But the harvesting rights of existing operators come to an end. They don't exist anymore, presumably, because the government that used to give them is no longer giving them. So there is a new arrangement between the operator or the licensee and the government and there is a loss.

Coincidentally, somewhere else, the operator or the licensee has managed to negotiate an arrangement with the Nisga'a as the landlords and the owners of Nisga'a lands, under which they manage to carry on some harvesting. Perhaps the minister could explain. . . . I'm not sure that the two are related. In fact, I think there would be an argument -- I'm not making it; I'm just suggesting that it exists -- that the two situations are completely divorced from one another. The licensee and the operator can come to the province and say: "What we've done with the Nisga'a on Nisga'a lands is irrelevant to the issue of compensation. We still want to be compensated for the loss that we've sustained in respect of timber harvesting, because there've been changes made to the agreements that we have with you."

[1640]

Hon. G. Wilson: There are a couple of points. I would just make a correction to the statement by the member for Richmond-Steveston. The Nisga'a take ownership on the effective date, not after the five years -- so that that's clear.

There is a general practice of mitigation that the companies enter into to try to mitigate against losses. The fact that they would sign a contract with the Nisga'a basically changes the landlord. If there is no loss as a result of that new arrangement, then we would take the position that there is nothing compensable.

G. Abbott: To return to the first part of, I guess, the process that has been outlined by the minister -- the evalua-

[ Page 11633 ]

When we are talking about these kinds of specific claims, would the notion of a specific claim here envision the negative impact of reduced AAC on fibre flows to mills? For example, to take the example of the Minister of Energy and Mines and Northern Development, if the fibre flow to Skeena Cellulose was affected in a negative way during the transition and post-transition periods -- and those may be two very different things -- would those be areas in which the company could be expected, or would be expected, to initiate a specific claim for compensation?

Hon. G. Wilson: That's a good question. The logs are compensated at cost, so that really shouldn't occur. In the compensation on AAC, once that's taken, our position would be that if there's adequate and proper compensation with respect to loss on the AAC, on the fibre side, that shouldn't be a problem.

There is, however, a nine-year agreement, as the member will know, with respect to fibre supply. I don't want to be definitive on it -- and this is something I'll consult with my colleague the Minister of Forests on -- but I don't believe that that should be an issue, and I don't believe that that would formulate a special case, as the member put it, for the company.

G. Abbott: The minister's response, I think, invites this response: not only is the question an interesting one, but from the perspective of licensees in the area, it is undoubtedly a critical one. It will have a very fundamental impact on where they will be sitting after this agreement has been concluded and after the compensation process has been completed.

I'll look forward to hearing -- next Tuesday, I guess -- from either the Minister of Aboriginal Affairs or the Minister of Forests, as to whether in fact, in the view of the government, negative impact to fibre flows to operations will be compensable as part of the evaluation of loss. That's a critical point, and I'll look forward to hearing that. I assume I'm characterizing the minister's remarks in a fair way here.

[1645]

Again, obviously the pulp mill may be fundamentally affected by it; the solid wood lumber operations would be affected by it. So I think it is a fundamental issue here in terms of developing a proper outline or understanding of what the compensation process would be. I'll invite the comments of the Minister of Aboriginal Affairs with respect to that.

Hon. D. Miller: The minister has asked if I might respond, although I see he's back in the House. Just a couple of points, I guess, with respect to the member's question. Again, I suppose I am struck by what I think is a puzzling aspect to this discussion, in that the member quite clearly has stated, as have all his colleagues, over and over and over again, that if, in the unhappy circumstance that they should ever come to office in this province, they would shut the pulp mill down. Their questions are interesting in that light.

I would make just a couple of observations with respect to the issue of compensation. First of all, there is a process to determine valuation. It's a technical process. There are professionals who are no doubt engaged by all parties to work on that issue. The company has not made a specific claim for a dollar value of loss. Therefore there's really no basis other than this sort of theoretical atmosphere on which to discuss that question. Secondly, I think there are professionals in the valuation field. . . . And notwithstanding Repap's claim at that time for compensation of a certain value in excess of the $80 million the member quoted, I do recall that Repap, not long before they bit the dust, purchased a tenure in the region. According to forestry sources that I know, they paid what was described to me as an inflated price. The volume was, I think, in excess of 300,000 cubic metres, and the price, believe me, was considerably -- in fact, dramatically -- smaller than the $80 million that the member cites. So I guess that maybe one of the conclusions you might draw from that is that it's risky drawing questions from the newspaper or indeed from what companies might have said at any given point in time that they thought might be in their own best interests.

G. Abbott: I appreciate the response from the minister. I'm happy to be placed in your hands, hon. Chair, with respect to how we proceed here if the ministers on the other side would like us to set aside this discussion of the forest resources chapter so that we can have a full discussion around the evolution of the purchase and the future of Skeena Cellulose. I'm delighted to do that. It's an issue which I have pursued in estimates with the Minister of Employment and Investment, but if the Minister of Northern Development feels that in some way the opposition's ability to debate the forest resources chapter of the Nisga'a agreement is impaired by the inability of us to have that open and uninhibited debate, let's go at it. I place myself in your hands.

[1650]

G. Abbott: Perhaps you'll want to consult with the ministers across the way first in doing that.

The Chair: Thank you for that request. I guess my answer would be that points were made on both sides. Now could we get on with chapter 5?

[ Page 11634 ]

The Chair: Well, I'd prefer that we went on with chapter 5.

Hon. D. Miller: I just want to make a point of order, hon. Chair, that the rules do not restrict answers coming from a specific minister. In this case I clearly indicated when I rose that the Minister of Aboriginal Affairs had asked me to respond to the question. That's quite within the rules. There has been no offence of the rules at all. . .

G. Abbott: Let's set this aside so we can go on and talk about the more important things. . . .

Hon. D. Miller: . . .and I think the answer was fairly straightforward and forthcoming with respect to the specific question asked. I don't know why the member is now going off on some other track.

An Hon. Member: Was that a point of order, or was that just a speech?

G. Abbott: I'm delighted to hear that in fact the Minister of Northern Development does not seek that wide-ranging debate around these issues at this point in time. But I just want to confirm that we're happy. . . .

Interjections.

G. Abbott: No, we're happy as heck to proceed with that debate at any point here.

Let me just leave it this way. Hon. Chair, given that we're coming up to an Easter long weekend here, and I'm sure we all want to depart in an amicable way, let me just confirm again for the record that at any point the ministers opposite want to suspend debate on this agreement so that we can talk about the important issues around the future of Skeena Cellulose, we're delighted to do that. Just for the record, we're just confirming that.

On the second part of the useful explanation from the Minister for Northern Development. . . .

Hon. D. Miller: Have a good weekend.

G. Abbott: Yeah, same to you, Dan. Have a nice time.

The Chair: Order, members.

G. Abbott: Unfortunately, the Northern Development minister has to leave us now.

The second part of his comments, which I hope we can bring back to the serious level that we need here in this discussion of the compensation process. . . . I presented the comments, which are actually found in the Vancouver Sun of January 27, 1996. I provided those for the House. Whether it's Repap or Skeena Cellulose, it is just an example of the importance which I think licensees clearly will be attaching to the impact on fibre flow in relation to the impact in terms of actual cut loss. Again, of course, the licensees in most if not all cases have made substantial investments, presumably into the hundreds of millions of dollars. Certainly in the case of Skeena Cellulose it is in the range of at least $330 million, which has been used to acquire Skeena Cellulose. There's a huge investment there. Obviously any change in fibre flow to the mills which results in that capital investment not being used as intensively or as efficiently as the licensees would wish is something that is going to affect them negatively. Where we were going prior to the intervention of the Minister for Northern Development was whether that impact would be a part of the compensable loss which the companies could advance a specific claim for.

Again, my understanding is that the minister intends to discuss that very important point with his colleague the Minister of Forests over the weekend, and we can pick it up again on Tuesday, if that's the case.

[1655]

Noting the hour I would move that the committee rise, report progress and seek 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. D. Lovick: First, I want to wish every member of the House a safe and happy weekend, and with that I would move that the House at its rising stand adjourned until 2 p.m. on Tuesday.

Hon. D. Lovick moved adjournment of the House.

Motion approved.

The House adjourned at 4:58 p.m.

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