Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

[ Page 12429 ]

The House met at 2:08 p.m.

I. Chong: Earlier today all members of this Legislature were invited to a lunch that was hosted by the Certified General Accountants Association of British Columbia. Many of us who attended enjoyed that lunch, I think, as well as a very insightful presentation. Now it's my pleasure to introduce some members of the board of the CGA Association. Attending are Mr. John Nagy, FCGA president of CGAA-BC, and Mr. Jay Norton, past president. Also in attendance are some staff members: Bill Caulfield, our executive director; Edward Downing, communications director; and Kathy Hurst, director of member services. Accompanying Mr. Norton is his son Shannon. I would ask the House to please make them very welcome.

Hon. M. Farnworth: I have two introductions to make today. We have some distinguished guests in the gallery. Visiting the House today are some members of the Independent Order of Oddfellows who are having their annual convention here in Victoria. They are the Honourable Connie "Mac" Riley, sovereign grand master of the sovereign grand lodge of the Independent Order of Odd Fellows from Nebraska; Dino Fiorin; Yvonne Isenor; Annie Laurel Cassell; and William Scott, grand master of the grand lodge of British Columbia. Accompanying them is a constituent of mine, Preben Kent-Nielson. Would the House please make them welcome.

We also have a 12-member delegation from Sweden in the members' gallery. The delegates are senior non-political directors from Sweden's newly formed four regions representing southern Sweden, including two directors from the national level. They are here to study regional development in British Columbia, and they will be travelling to the Premier's Summit on Economic Opportunity in the Cariboo-Chilcotin. Would the House please make them welcome.

[1410]

Interjections.

The Speaker: Order, members.

Hon. P. Priddy: . . .to help us celebrate Nursing Week. They are Dr. Deborah Northrup, who's an assistant professor of nursing at the University of Victoria and the education research representative of the greater Victoria chapter of RNABC -- the Registered Nurses Association of B.C. -- and Roseanne Black, who is a nurse and regional coordinator for the RNABC for Victoria, Saltspring and Duncan. I would ask the House to please make them welcome.

B. McKinnon: It's my pleasure to introduce to the Legislature a large group of grade 5 students from the Pacific Academy in my riding of Surrey-Cloverdale. They are here to learn all about government, and they're accompanied by their teacher and several adults. I ask that the House please make them feel welcome.

C. Hansen: The College of Family Physicians of Canada is holding its annual scientific assembly here in Victoria, starting tomorrow. One of the delegates is Dr. Barbara Gallagher, with her husband Peter from Melbourne, Australia. I just want to assure the Gallaghers that their son-in-law is a very capable and efficient member of the official opposition caucus staff. I hope the House will make them welcome to Victoria.

S. Hawkins: In the Legislature today is Senator M. G. Pandithan from Malaysia, the chair of the International Dalit Organization, as well as Mr. V. Panjamurti, the general secretary of the organization. I was invited to a seminar in Vancouver last night where he was presenting. Unfortunately, I couldn't go, but I understand it was very successful. He was there to help raise awareness of the plight of those known as untouchables in India and to assist in gaining social and human rights for this group. The official opposition extends a very warm welcome to Senator Pandithan and to the general secretary and the delegation that's here.

Hon. M. Sihota: In keeping with the introduction made by my colleague from the Okanagan, I'd like to give our warm regards from this side of the House to the Senator and the general secretary, both of whom have been introduced. Joining them, as well, is a member visiting from Calgary, Mr. Mesharam, as well as a number of members from British Columbia: Mr. Bill Basra, Mr. Raminder Bhuller, Mr. Ramesh Owan, Mr. Bhag Singh Lanji, Mr. Satwinder Bandhan, Mr. Satwinder Rahul, Mr. Darshan Kherha, Mr. Malkiat Rai Sohpaul, Mr. Sita Ram Ahir of the CRD youth association in Surrey, and Ms. Seema Ahluwalia of Kwantlen College. Will members please give them a warm welcome.

Hon. U. Dosanjh: I want to add my welcome to the members of the International Dalit Organization. Many of them are my friends, and I've known them for a long time. They work hard in the community to achieve equality for all of us. Would the House please make them welcome once again.

Hon. I. Waddell: It takes real genius to create a TV show to reflect British Columbia to other Canadians and get the CBC to show it nationally. I have the honour to introduce to the House such a genius: Chris Haddock, the producer of "Da Vinci's Inquest." With him is the chair of B.C. Film -- and the chair of my working group on film and TV -- Mr. Michael Francis. Will the House please make them both welcome.

Hon. D. Streifel: On behalf my special assistant, Chloe Burgess, I'd like to introduce Angela, Jim and Faye Burgess and Esther Sayer to the House. They're visiting the precincts today from near and far. I bid the House make them welcome.

Hon. J. Kwan: It is with pleasure that I introduce Mr. Eugene Oscapella, one of the founders of the Canadian Foundation for Drug Policy, whose aim and mandate is to educate and promote drug policies that would save lives and stop the spread of diseases amongst drug users. Would the House please make him welcome.

[1415]

[ Page 12430 ]

Introduction of Bills

PENSION BENEFITS STANDARDS AMENDMENT ACT, 1999

Hon. D. Lovick: I move that the bill accompanying the message be introduced and read a first time now.

Motion approved.

Hon. D. Lovick: Hon. members in the House, I am sure, may be aware that the Pension Benefits Standards Act, which governs conditions in employment pension plans, came into effect in 1993 and received minor amendments in 1994 and 1997. Amendments to this act are now required to achieve the following: enhance protection of B.C. pension plan members and pension funds; reduce costs and red tape; increase flexibility for employers and employees; provide consistency within the act and with income tax -- i.e., federal legislation; and provide the superintendent of pensions with the tools to enforce the provisions of the act.

These amendments demonstrate government's commitment to increasing flexibility and protecting the interests of the pension plan members, while reducing red tape. They provide new enforcement and prudency rules, increased disclosure and flexibility, and other provisions to generally increase member access and protection. Portability of pension benefits will be increased in several ways, providing flexibility for members and relieving employers of the administrative burden of those funds. Hon. Speaker, I therefore move that this bill be placed on orders of the day for second reading at the next sitting of the House after today.

Bill 58 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.

Oral Questions

JOB PROSPECTS IN FOREST INDUSTRY

Hon. D. Zirnhelt: The investments, we think, will total some $658 million. I'm not sure how many jobs that will create. But we've said that in these difficult times, we are lucky to maintain the employment. I'm happy to report that the survey of employment and payroll hours, which we quote here all the time, indicated that in February we lost no jobs.

G. Campbell: Hon. Speaker, the opposition has obtained a leaked document from senior government officials that points out the lie that the government is trying to propagate across the province -- that the forest sector is on a rebound.

The Speaker: I beg your pardon, member.

Interjections.

The Speaker: Member, take your seat, please.

I recognize the Minister of Energy and Mines.

Interjection.

The Speaker: We don't take points of order -- you're quite right about that.

Hon. D. Miller: Well, neither, then, Madam Speaker, should people disobey the rules of the House.

The Speaker: All right. We'll have a discussion about this later.

The Leader of the Official Opposition knows the rules of the chamber about language.

G. Campbell: According to this leaked report of senior officials, some 10,500 forest sector workers can expect to lose their jobs in 1999, and 7,500 people are expected to lose their jobs in the year 2000. That's more than 18,000 people who will be out of work as a result of this government's overtaxation and overregulation.

My question to the Minister of Forests is: why hasn't he been honest with people in forest-dependent communities, people who depend on forestry for their jobs, and pointed out that they could lose up to 18,000 jobs in the next two years?

[1420]

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

G. Campbell: Hon. Speaker, this report was prepared by senior government officials. It says: "Many mills operating in British Columbia are in crisis, not just the ones that are permanently or temporarily closed." It goes on to report that in the year 2000 "direct employment in the British Columbia forest industry is forecast to be. . .down 9 percent from 1998 and 14 percent from the 1996 levels. . . ." My question, again, to the minister is: why hasn't the minister told forest workers that his own officials are secretly predicting that 18,000 people will lose their jobs in the next two years?

Hon. D. Zirnhelt: This is the opposition that said there would be 15,000 jobs lost last year. But guess what: it was zero.

[ Page 12431 ]

G. Campbell: The incredible thing is that this Forests minister doesn't seem to understand the damage that has been done in people's lives as a result of his government's forest policies. Let me quote again from these senior government officials. The truth is, hon. Speaker, that the document says this: "A simulation of the impact the estimated job losses might have on unemployment levels in each regional district shows the forest industry crisis spreading to almost every. . .forest-dependent community in the province." The document goes on to say: ". . .some inefficient mills must close in order to return the industry to profitability. . . ." This government's tax and regulation has made a number of mills inefficient, hon. Speaker, as I know that you know. So my question to the minister is: which inefficient mills does the ministry think must close before a return of the industry to profitability?

Hon. D. Zirnhelt: It's not for this minister or this government to decide which mills should be closed in the province. Industry itself predicted. . . .

Interjections.

Hon. D. Zirnhelt: You should listen. Industry itself predicted a number of closures if we were to do nothing. We did something. In fact, we reduced. . .

Interjections.

The Speaker: Order, order!

Hon. D. Zirnhelt: . . .the costs of doing business in British Columbia by $1 billion, and that's now showing up on improved profit pictures for the industry. They are on a restoration of profitability, and it's that opposition that is putting the fear into people when they have no basis for the fear.

G. Plant: The document is a document prepared by senior officials in this government for presentation to the federal government in Ottawa. On every page of this document we read the details, and the words used are "crisis," "devastation" and "disaster" in the forest industry of British Columbia. Apparently the government of British Columbia is prepared to tell the truth to the government in Ottawa, when it insists on hiding the truth from the people of British Columbia. My question for the minister is: why doesn't he stand up now and admit that his government's own officials have acknowledged that the results of his government's policies are crisis, devastation and disaster?

[1425]

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

G. Plant: Imagine this, hon. Speaker: after eight years in government, a Deputy Premier stands up in a room full of forest workers and describes his own government's policies as soviet-style. Every day some master of the NDP spin machine stands up and says: "Oh, roses just around the corner; happy news just ahead." Well, the fact is that this document makes it clear that this year and next year. . .

Interjections.

The Speaker: Order, order!

G. Plant: . . .there will be 18,000 more jobs. . .

Interjection.

The Speaker: Minister, minister.

G. Plant: . . .lost in the forest sector.

Interjection.

The Speaker: Minister, enough!

G. Plant: So my question. . .

Interjection.

The Speaker: Minister. . . .

G. Plant: . . .for the Deputy Premier is: will he stand up and say how many mills is it that will have to shut because of his government's incompetent overregulation of the forest industry?

Hon. D. Miller: I will note, hon. Speaker, that when I was speaking to the Northern Forest Products Association and took a risk by raising some controversial issues which were embraced by the industry leaders present, I do recall the courageous comments of the Liberal Forests critic, who said: "Oh, I don't know what we'd do."

Interjections.

The Speaker: Order, members.

G. Farrell-Collins: Well, I'm sure that the forest sector around the province was relieved to hear that this government had some alternative to the last eight years of Stalin-like management of the forest industry in British Columbia and the thousands of job losses. The government's own document -- which it appears that members of cabinet didn't get a chance to see, but we'll be glad to provide them with copies -- from early this year says that 4,500 direct forest jobs were lost last year. That's what the document says. It says that during the same period, forest industry employment in other Cana-

[ Page 12432 ]

Interjections.

The Speaker: Order, members.

Hon. D. Miller: Hon. Speaker, you know, the empty rhetoric from the opposite side. . .

Interjections.

The Speaker: Members, members. The minister has been recognized -- to provide an answer.

Hon. D. Miller: . . .does not do justice to the forestry issues we face here in British Columbia. Hon. Speaker, the members opposite. . . . I note, hon. Speaker, that the Forests critic has been removed from even asking questions about forestry, which speaks volumes. The members opposite know, particularly on the coast of British Columbia, that the Asian market is the market for forestry. They know we have been exposed on that. Hon. Speaker, I can say that on this side of the House we have nothing to apologize for in putting together. . .

Interjections.

The Speaker: Members, members.

[1430]

The Speaker: Thank you, minister.

Hon. D. Miller: . . .occasionally supported them instead of doing this fearmongering day after day after day.

Interjections.

The Speaker: Order, members.

First supplementary, member for Vancouver-Little Mountain.

Interjections.

The Speaker: Order, members!

G. Farrell-Collins: What the people in forest-dependent communities would like to know is that when the ministers of the Crown stand up, they tell them what's actually happening, they tell them the truth, they get the news, and they know what they're dealing with. Hon. Speaker, this document is not even two months old -- 4,800 jobs lost last year, and it's only going to get worse. The document says again, and I quote. . . .

Interjection.

The Speaker: Minister. . . .

G. Farrell-Collins: I will be glad to give copies of the document to members of cabinet, particularly the A team, which apparently has been totally asleep at the switch as far as it deals with the forest sector. This document says: "While the British Columbia forest industry is in crisis, the forest sector in other Canadian provinces has seen its lumber production and total forest industry employment increase" -- dramatically.

Does the minister responsible for the devastation in B.C. forests. . . ? Will he finally stand up and tell the people of this province what he's done to the forest sector and how bad it's actually going to get before it gets better?

Hon. D. Zirnhelt: We have said that we will rely on the statistics from Statistics Canada, and they report, year over year. . . . There's been zero job loss. What is happening in the forest industry is that some of the larger mills that are inefficient are shutting down and being replaced aggressively with jobs in the value-added sector. We have said to the federal government: "Come and assist us in replacing those jobs. Come and assist us in replacing those jobs in the primary industry by retraining people, by investing in silviculture and by assisting those communities that have to go through transition." We have said that we have policy on this side to the tune of $22 million to assist in the preparation of jobs. . .

The Speaker: Thank you, minister.

Hon. D. Zirnhelt: . . .in the value-added strategy, and those jobs will replace the lost ones. We do something about it; you just talk about it.

C. Clark: The Deputy Premier is wrong. He does owe an apology. He and the Premier and this government and this Forests minister owe an apology to all those workers and all those forest-dependent communities, because the Premier. . . . It wasn't long ago that the Premier paraded through every one of those communities and promised them 22,000 new jobs. They owe those people an apology, because we've seen in this document that there are 11,000 jobs already lost and 18,000 more jobs to go. That's 29,000 jobs down the drain.

Will the Forests minister stand up today and apologize to all those people and admit that the Premier, when he was parading through their communities promising them new jobs, was making fraudulent promise. . .

The Speaker: Thank you, member.

C. Clark: . . .after fraudulent promise?

Hon. D. Zirnhelt: Hon. Speaker, it has always been clear that the restoration of employment in the forest sector will happen when the markets pick up. The reason that there are jobs. . . . The reason there is an expansion of industry in other parts of the country is because they're moving into areas that they haven't cut. That's happening in British Columbia, as I've explained. We've just seen a $283 million investment plan for the creation of 500 jobs in northern British Columbia. Why?

[ Page 12433 ]

[1435]

Hon. D. Zirnhelt: . . .maybe the confidence would come back.

Ministerial Statement

NATIONAL NURSING WEEK

Day in and day out in this province, nurses perform an array of demanding roles and responsibilities, often carried out, as we all know, under the most challenging of circumstances and with the competence and caring and compassion that have earned them the respect of all of us who've come under their care -- and that's just about everybody.

The role of nurses has always been varied, but it is becoming even more so, as nurses face increasing opportunities and challenges. Whether caring for frail grandparents in extended-care homes or frightened children in emergency rooms, whether supporting new babies and moms at home or assisting complex surgeries, nurses are indeed the heart of our health care system.

This year, in honour and support of the United Nations International Year of Older Persons, the Canadian Nurses Association has chosen as its theme "Older Persons and Nurses -- Partners for Healthy Aging." Nurses play a vital role in the health of older persons. I congratulate the Canadian Nurses Association on using National Nursing Week as an opportunity to focus on educating Canadians about the health issues of older people and on providing older people with practical information to promote healthy living.

As Health minister, I've talked to many people about our health care system, and I've heard very often that it's by the quality of the nursing care that people receive that people judge their overall health care experience. I'm proud to say that the recognized high quality of nursing care in this province helps create positive experiences from what are very often very difficult circumstances. During National Nursing Week, it's important that we take time to recognize that fact. That's why I'm now taking this opportunity -- I hope on everyone's behalf -- to let nurses know how much we value them as individuals, how integral they are to our health system and how much we care about nursing and the future of nursing in our province.

I know that the nurses of this province are well aware that our appreciation of them and their profession extends well beyond Nursing Week, but I am delighted to stand up today during Nursing Week to express publicly the gratitude of this government and all British Columbians for nurses' dedication and achievements on behalf of us all.

C. Hansen: I'd like to join the Minister of Health in saluting the work that nurses do in our province and the tremendous dedication that we see from all who have been part of that profession in years gone by. Certainly I think anybody that has had any contact with health care in this province -- whether in a hospital, in the community or in the public school system -- stands in awe of the work that is done by nurses throughout British Columbia.

Nurses have some very real challenges in the year ahead, and as a society, we have some real challenges. Certainly, if we look at the potential for shortages of nurses in the future, we have to do everything possible to encourage those in the profession to make sure that their jobs are rewarding and fulfilling and that we give young British Columbians more opportunities to pursue this career in the future. So I would certainly like to join with the minister in saluting the nursing profession and wishing them every success in their continued progress.

Petitions

Hon. D. Lovick: I too wish to present a petition, if I may.

The Speaker: Yes.

Hon. D. Lovick: This is signed by 36 members of my constituency who wish to go on record as protesting the aerial spraying in British Columbia.

Orders of the Day

[1440]

ESTIMATES: MINISTRY OF ENERGY AND MINES AND
MINISTRY RESPONSIBLE FOR NORTHERN DEVELOPMENT
(continued)

The Chair: Just before we start with committee, members, the Hansard recording people would like me to suggest that you allow a pause after being recognized, before you speak. Otherwise, your first few words are lost to the recording.

[ Page 12434 ]

K. Krueger: The minister made what, on the face of it, sounded like a very good-news announcement yesterday at the commencement of these estimates, with regard to a deal that has been made on the Highland Valley Copper situation with B.C. Hydro, concerning hydroelectricity rates. While the minister expressed a need for some confidentiality on a commercial arrangement, I'm sure he understands that there has been tremendous stress on families in Logan Lake, Kamloops, Ashcroft, Merritt and Cache Creek. Some 1,046 people were directly employed by Highland Valley as of the date of the layoff announcements and the press release by the mine on January 18, '99. Some 100 of those jobs have now apparently been lost forever -- which, of course, has tremendous ramifications for those communities and the families that were involved.

[1445]

And respecting that need for confidentiality on a commercial arrangement, I would ask the minister if he would nevertheless offer some further detail, some clarification to the people of our region who have been so tremendously concerned. I received 31 letters from employees of a single supplier to Highland Valley Copper, for example. They're desperately concerned about their futures and the future of their families and the way closure could affect them.

Would the minister be willing to give us a little more commentary, a little more detail -- to flesh out the bones of that agreement a little?

Hon. D. Miller: No, and I can say that I don't think the comments made by the member publicly have helped to try to resolve the issue. I think they've hindered that. I only wish that the member who displays such compassion for people in the regions and their employment would try to devote just even a tiny piece of his mind to developing the same compassion for the people who live in northwestern B.C., and get off the silly position he's taken with respect to Skeena Cellulose.

K. Krueger: Well, of course, that isn't the answer that I was hoping for -- nor the people that I represent, nor the people that the members for Kamloops and Yale-Lillooet represent.

The minister made a comment in the House yesterday about a column of mine in the local media and said that if you replaced the words "Highland Valley Copper" with "Skeena Cellulose," my request would mirror what he actually did at Skeena Cellulose. Since he raised that issue as well, I'd point out that Highland Valley was never looking for subsidies. Highland Valley was never looking for the government to purchase part of its operation. There were no banks about to foreclose on Highland Valley. The government hasn't been left holding the bag for Highland Valley. It's a totally different situation. But what the column did point out was that the layoff notices were issued in January -- that's pursuant to this government's employment standards legislation -- and that by the time the column was published, dozens of jobs were already gone, and they'll never be back. Those jobs aren't going to be filled. It made the point that Highland Valley Copper's payroll and the payrolls of companies dependent on the mine for their viability, together with the business incomes that Highland Valley Copper provides those suppliers, and the spinoff effects throughout the region, make up at least 25 percent of the local economy -- an $80 million payroll a year; $36 million a year in B.C. Hydro fees; approximately half a billion dollars a year to the economy of British Columbia, most of it in our region; and something that probably is the basis for at least 3,000 jobs in our region.

The column went on to say that if we lose that, our region will not make it up for many years. Property values will fall. Other businesses will collapse and shrink. Children and neighbours of my constituents will have great difficulty finding jobs in our region. Many will become longer-term unemployed or be forced to leave the area. Highland Valley's closure will be an economic disaster, manufactured by the NDP.

Interjections.

K. Krueger: As I speak, hon. Chair, you're not seeing fit to silence the member from Prince George, who is supposed to represent children and families, apparently oblivious to the fact that hundreds and hundreds of children in Kamloops are dependent on the food bank to get through each month because of the economy. . .

Interjections.

K. Krueger: . . . being created by this government. So I would ask that the Chair silence the member for Prince George - Mount Robson -- she should take some responsibility for what this government has wrought in our economy.

[1450]

The column went on to say the solutions are obvious: tax relief and a cut in B.C. Hydro rates are required. It is the NDP who have raised these costs so high that B.C. industry cannot be competitive. They can drop the cost. In fact, B.C. Liberals have located two American customers, Intalco and Longview Fiber, who are buying electricity from B.C. Hydro for half the price which Highland Valley is being charged. That is ridiculous and shameful.

The column summed up: "In fact, if the NDP would reverse the huge costs it has imposed on the mine and other

[ Page 12435 ]

So yes, if that was a mea culpa by the minister yesterday that in fact his government is responsible for the situation that the people of the northwest and the forest industry there find themselves in, I agree with him. We accept that guilty plea, because in fact it is this government that has created the problems that the entire economy of British Columbia is mired in. Skeena Cellulose was an early victim of that, and mines across British Columbia and other forest operations across British Columbia are victims of that. Now the housing construction industry and industries of many types across the spectrum are victims of those stupid and flawed approaches.

The minister has said no, he's not willing to give more commentary. Having taken this crisis at Highland Valley Copper to the eleventh hour, having refused to treat it as an urgent situation, having in fact argued to the Speaker that it didn't meet the test of urgency, now this minister blithely announces some sort of deal yesterday that he's not going to give any details of. He's going to leave the mine and the union to try and resolve the issues in the couple of days that are left.

I remind the hon. minister that this mine is scheduled to close this week, and the layoff notices are in effect. Having taken things to that point, now the minister says no, he's not going to bother giving any detail. Maybe the minister would care to explain to us why he waited so long. This solution was perfectly obvious to everyone. The mine has been talking to the official opposition and to the government for years about the fact that this government's gouging on B.C. hydro rates was making them uncompetitive and that they were getting closer and closer, as copper prices fell to the borderline, to where they would have to have relief or they would be closing. Why did the minister wait until yesterday to finally deal with this situation?

Hon. D. Miller: In the immortal words of Pierre Trudeau in the House of Commons, I'm almost tempted to advise the member to close his sphincter, because, really, that's what we're dealing with.

An Hon. Member: Hey, hey, hey! That's absolutely unacceptable, Mr. Minister, and I would ask. . . .

Interjections.

The Chair: Members. . . . The member for Peace River North on a point of order.

R. Neufeld: I know that tempers run a little far, and people can get stretched to the end a little bit. But that kind of language, hon. Chair -- and you heard that kind of language clearly, as well as I did -- is not acceptable in this House, and the Deputy Premier of the province of British Columbia should know better than that. I would ask him to withdraw that comment immediately.

The Chair: Minister, withdraw the comment.

Hon. D. Miller: I'm happy to withdraw the comment.

The Chair: Thank you, minister. Just before you begin, minister, I would like to remind all members that so far in this debate, since we've started this committee, there has been language that is not parliamentary on both sides of the House. I would suggest that we all reflect on our tempers and the moderation and the characteristics of our language as we proceed.

[1455]

The Chair: Through the Chair, please, members.

K. Krueger: I'm reminding the minister of what he said in response in question period yesterday. The quote is that if we took the words "Highland Valley Copper" out of my newspaper column and inserted the words "Skeena Cellulose," the column reflected exactly what the NDP did at Skeena Cellulose. So let's do that, in which case this column in the summation would read as follows:

"The solutions are obvious: tax relief and a cut in B.C. Hydro rates are required. It is the NDP who have raised these costs so high that B.C. industry" -- Skeena Cellulose -- "cannot be competitive. They can drop the costs. . . . In fact, if the NDP would reverse the huge costs it has imposed on the mine" -- mill -- "and other B.C. industries" -- Skeena Cellulose -- "the pressure would be off the union and Highland Valley, enabling them to properly conduct their collective bargaining."

People are in desperate times. Small contractors were tricked into supporting Repap B.C. before it pulled out, having run its debt up to the maximum -- tricked into supporting

[ Page 12436 ]

Sure enough, the minister stood in the House yesterday and said: "Put Skeena Cellulose in that column instead of Highland Valley Copper, and that's what the NDP did." He's right, hon. Chair. I'm kind of shocked that he would have said it, but that is exactly what he said.

Now the minister has stepped out of the House for a while. Who knows if he's coming back? It'd be better for us if he never did. It'd be better if this government walked out of the House. . .

The Chair: Order, member.

K. Krueger: . . .and never came back.

The Chair: Order, member. Member, perhaps I could ask, if you're willing to contribute to the debate, that we move on and that you ask a question relative to the estimates.

K. Krueger: Until there is somebody here to answer my question, I'll extend the question. I want to look at the government's pronouncement about this alleged deal that was published yesterday and ask the minister why we have some contradictory comments about who's making the deal and what it's about. Obviously he's not going to be able to answer the question until he's here. Since he isn't, my question will continue for a little while. Hopefully, he's listening somewhere, although it seems doubtful to me.

Highland Valley Copper announced. . . .

The Chair: Excuse me, member, would you take your seat, please?

The Attorney General on a point of order.

Hon. U. Dosanjh: I understand that one of the rules of the House is that members are not to comment on the absence of other members from this House.

The Chair: That's quite correct.

R. Neufeld: Point of order also, Mr. Chair. I mean, it's obvious that the minister who was here to answer the questions has left the House during questioning. I don't think it's unnatural for the member for Kamloops-North Thompson to ask: "Who do I ask the question to?" Is the deputy minister going to answer the questions? Is the Attorney General going to answer the questions?

The Chair: Member, if you could take your. . . .

R. Neufeld: They're the ones in the House.

The Chair: Thank you, member. Take your seat, please.

R. Neufeld: Who is going to answer the questions? The minister has run out again, like he usually does. This is not untypical of this minister.

The Chair: Thank you, member. It's quite within reason for the member to ask the question and wait for the answer.

[1500]

Before he walked out, the minister expressed what he called befuddlement and puzzlement. Again, that's a pretty frank admission from a tough guy such as himself -- befuddlement and puzzlement. It's been pretty obvious in the economic results in British Columbia all through the 1990s, a decade that should have belonged to British Columbia but instead belonged to the NDP. Look at the ruin it's brought. The minister has said. . . .

The Chair: Member, could you take your seat, please. I'm going to remind members once again that using language that is suitable for this parliament requires good temper and moderation. I find unsuitable language which is of a personal nature within these estimates.

K. Krueger: I hope it isn't offending the Chair if I quote the minister, because the minister certainly wasn't reproached for saying he was befuddled and puzzled.

The Chair: Member, could you take your seat, please? Maybe you need time to consider what I just said a few minutes ago.

K. Krueger: The minister said that he knows business better than the banks. The government press release says that the job protection commissioner has developed a power pricing structure that will allow Highland Valley Copper to benefit from this program, whereas other government information released yesterday suggests that this deal was arranged through the Power for Jobs scheme. Could the minister please clarify for the House which it is?

Hon. D. Miller: The press statement I put out yesterday is very clear.

K. Krueger: Well, the press statement says that the job protection commissioner has developed a power pricing structure. Is the minister saying, then, that this has nothing to do with the Power for Jobs scheme?

Hon. D. Miller: I'd be happy to send the member another copy, if he hasn't read it thoroughly.

K. Krueger: Well, I have read it.

Referring to another government press release -- this one dated May 27, 1998, when the Premier was running around our region talking about creating a Power for Jobs scheme which would potentially result in a mine-life extension at Highland Valley Copper to 2012 and indeed the development of a copper refinery at the Highland Valley Copper mine -- the Premier is quoted as saying: "The government's Power for Jobs initiative provides for the negotiation of competitively priced power for a new investment project." And the Minister of Transportation and Highways, the MLA for Yale-Lillooet, said: "These joint industry-government initiatives are part of the B.C. government's overall strategy to draw job-creating

[ Page 12437 ]

The press release went on to say: "The plant would create 500 person-years of construction employment, 110 full-time jobs, plus protect existing jobs representing an investment of $200 million. With the extension of mine-life to the year 2012, investment would be nearly half a billion dollars and would support more than 1,200 potential jobs." Wow! People in Kamloops just thought that that sounded too good to be true, and of course it was, like all of the job creation announcements from this government.

That was supposed to have been a Power for Jobs deal. I'd like to ask the minister: what went off the rails? Why did that never materialize? Why was it necessary to bring in the job protection commissioner? And why, then, is the minister saying that it was the job protection commissioner who managed to put this deal through and that it has nothing apparently to do with Power for Jobs?

[1505]

People from around the province are asking, and I think it's a legitimate question: since this is obviously an answer to the crisis that this government has placed British Columbia's industries in through its overtaxation, overregulation, gouging and B.C. Hydro rates, why not cut the power for all British Columbians, for all rate-payers, residential as well as commercial -- for all B.C. industries? It's a precious, renewable resource.

The infrastructure was put in place by a competent government before these people ever came to power. The water is flowing over the dams; we're having to spill water to lower the reservoirs to try and prevent the flooding risk. The water just keeps falling out of the sky. Thank the good Lord that he put that in place for us, because we've sure needed his help in the last ten years. Water keeps coming; the power is generated; it belongs to British Columbians. Why not cut the rates for all of B.C.'s industries, for all of B.C.'s mines and mills, for all of B.C.'s ratepayers? Why not give the authority back to the B.C. Utilities Commission and tell them that the power ought to be made available to British Columbians at cost? If we can just lower the cost of inputs in British Columbia, we can cut taxes and power rates, perhaps we can get investors creating jobs again; perhaps we can create the environment where private sector investment will create employment in British Columbia again. So perhaps the minister would answer the question: why not cut the power rates for all British Columbians and all B.C. industries?

Hon. D. Miller: As was pointed out before lunch, the power rates in B.C. have been frozen since 1993. We had an extensive discussion, and I think a productive discussion, with the two critics, and we acknowledged to each other that B.C. Hydro is not within my portfolio. But notwithstanding that, we had a brief and, I thought, productive discussion around the issue of power rates, the marketplace and those kinds of things. I don't think that we have to recanvass that, and quite frankly, it's not within the purview of my estimates.

K. Krueger: It was the minister who introduced the issue of power rates yesterday with regard to the alleged agreement with Highland Valley Copper. In a B.C. Hydro backgrounder issued December 17, 1998, this is said: "In the year ended March 31, 1998, B.C. Hydro's net income hit an all-time high of $440 million, in spite of the depressed state of the province's resource industries. B.C. Hydro's recently released financial results for the period March 31 to September 30, 1998 show that this year should be even more profitable."

Mr. John Sheehan, in his civil action against this government, was quoted as saying, in a meeting between B.C. Hydro's senior managers, that essentially B.C. Hydro had been gouging B.C.'s industrial users and intended to continue doing that, and that he certainly didn't want that to become common knowledge outside that room. Of course, he changed his mind once he had some personal motivation to allow it outside that room. But the fact is that -- and again, it's fairly common knowledge -- this government skims about one-third right off the top for itself.

The Chair: The minister on a point of order.

Hon. D. Miller: Mr. Chairman, I am not the minister responsible for B.C. Hydro. The member is wasting valuable time, during which the critics and I could have a much more productive discussion.

The Chair: Thank you. I was waiting to see if the member was going to relate his remarks to the estimates. It seems that your remarks are probably better directed to the Minister of Employment and Investment.

K. Krueger: I think I will wrap up this line of questioning, since the answers are so unproductive. But, once more, I would make the point to the minister and give him one last opportunity to answer a question.

There are thousands of people in Kamloops, Logan Lake, Merritt, Ashcroft and Cache Creek -- people whose families have been on pins and needles for months, people who have seen this crisis coming on for years and employees whose union has now been left in the position of having two days to try and salvage the situation with Highland Valley Copper. These people have not been well served. I think the minister could show the courtesy to those people, to our region, of at least offering what detail and hope he can with regard to the crisis that this government placed Highland Valley Copper in and what was agreed to yesterday.

Hon. D. Miller: I'm happy to report that both I, as the Minister of Energy and Mines, and the two other area MLAs, the Minister of Highways and the Minister of Environment, have been working extremely hard over the last couple of months on the Highland Valley issue -- ever since the company first announced that because of low copper prices, they were going to have to shut down unless they could reach an agreement on a power deal and reach agreements with their employees and other suppliers. We are working very, very hard.

[1510]

I was extremely disappointed -- as, I understand, are a number of the constituents of the member who just spoke --

[ Page 12438 ]

It's a significant disappointment -- a significant disappointment, Mr. Chairman -- to that member's constituents. I have talked to many of them. They're unhappy about what he's been saying publicly. They're unhappy about how he's positioning himself. He's a major disappointment, and he has offered nothing -- contributed nothing -- to try to find a solution to this very serious problem. That will be duly noted by the people who live in that member's constituency.

The Chair: The Chair would like to offer that we've canvassed this subject, and perhaps we should move on to another one.

D. Jarvis: I will not pursue this discussion that much longer. I do want to say that the member has contacted me many times about what's going on and advised me of many things that have gone on with regards to the situation in Logan Lake, with regards to Highland Valley. It's not quite what the Minister of Energy and Mines is trying to relay -- that he's done nothing. In fact, he's done quite a bit. He's been in contact with them continually.

In any event, I'd like to get back onto a subject that's. . . . We were going to go on to coal, but I'd just like to jump into Bill 12, the right-to-mine bill. I've had reported to me that all that has been done is put into process the tenure in parks and that they're still working on it. Then again, yesterday you said that you had acted quite a bit on that process with regards to. . . . I think your words were, in fact: "We've already settled four claims." I was wondering if you could tell me what claims you have settled on and if there is a list coming down the line as to how many more you expect to process. Also, is any of that out of the Windy Craggy area?

Hon. D. Miller: Yes. I think it's safe to say that we could give you a list of those companies that we have settled with, although there may be some issues of confidentiality around the details. I'll ask my staff in the front of the House here to provide as much information as possible without breaching any confidential agreements we might have with those companies.

D. Jarvis: Could the minister tell us how many they expect? Is there a lineup now as to what tenures are going to be settled? How many are there? I can appreciate the fact that he may not want to give us the dollar figures of them, but if he can give us some idea as to how many they expect to settle tenure situation with. . . .

[1515]

D. Jarvis: Just before we close off that subject, Bill 12 effectively came into place last year at approximately this time. Are the claims for the time that Bill 12 came in? You have not gone back into the past to settle some of the tenure problems that occurred.

Hon. D. Miller: The four claims that have been resolved arose prior to the passage of the bill. Now, when I say that as a matter of policy we will resolve claims established prior to the passage of the bill, I'm not talking about going back to the turn of the century. So the industry knows what I'm talking about when I say that.

D. Jarvis: Now, on coal, the minister has had quite a bit to say lately on coal. Whether his party is happy about it or not, I don't know -- or whether they are trying to fool the troops out there or just what the situation is. . . .

There's no question that we have a considerable problem with coal in this province, in the sense that our markets are slowly dissipating and that we're in great competition with Australia. I guess Australia is our main competition at the moment. Someone told me that BHP in Australia, for example, has about eight million tonnes on the ground waiting to be sold, and they can't sell it.

I was wondering if the minister could clarify some points on coal, as to if his ministry has given any thought to using thermal coal for power or creating another industry other than a straight export industry -- in other words, using coal in this province as a method to create power, like Alberta is doing, so that we can use that for our industries.

Hon. D. Miller: The member is correct. There is a lot of coal on the world market today, and the Australians, with a lot of surplus, have driven the world price down to $41. While most of the mines in B.C. have managed to adapt to that, northeast coal is in some peril, in my view. I don't want to overstate that, but I think we should be upfront with people about the difficulties. The fact is that it's a combination of things, but essentially the cost of the infrastructure, the distance from tidewater and those kinds of things. . . .

Most of this is being driven by a dramatic decline in production in the Japanese steel industry, so their problems are real as well. I think it's going to be really. . . . With respect to coal, until there's a real resurgence, I think, not just in Japan but generally in the steel market. . . . It's a bit difficult right now with a lot of protectionism afoot -- the U.S., etc.

There is an assessment being done by the Columbia Power Corporation in response to a proposal put forward in the Kootenays to utilize coal for power generation. It's very much in the early stages. We obviously have to do the economic assessment as to whether or not it would be competitively priced power. There is a lot of coal in the region, and there are also markets, I think, particularly in Alberta, which has experienced some difficulty in terms of their capacity.

That issue is being looked at. I think we also have to be cognizant of the fact, as I mentioned earlier, that greenhouse

[ Page 12439 ]

[1520]

The reduction in tonnage. I know that the Japanese. . . . In fact, the member for Peace River South went to Japan, along with the minister, to talk to the industry there. Is the ministry in any position to say that they've in fact been successful in. . .at least looking like the Japanese will accept the fact that we can't cut any more northeast coal? I think probably everyone is aware that if we start taking another cut, it's going to mean something a lot more dramatic than just 60 or 70 jobs, which we just read about a while ago. I wonder if the minister could just give us some sense of what his feeling was when he was over there talking to the industry.

Hon. D. Miller: I did describe the meetings we held in Japan, not only with the assistance of the member for Peace River South. . . . But the federal Deputy Minister of Natural Resources Canada was also a member of our group. As I described it, I think we delivered our message well; I think they understood what we were saying -- that is, that northeast coal ought to be distinguished from other projects. It clearly was put in place almost on a government-to-government basis between the government of Japan and the government of Canada. There was significant investment by the federal government, by CMHC, and by the British Columbia government through B.C. Rail.

All of that was based on a desire by the Japanese at that time to have an alternative market. Rather than to be captive of the Japanese for their coal supplies, they wanted to open up new markets, and we followed along and spent a lot of money. The member is as familiar with the history as I am.

Since that original project, of course, there have been a few bumps along the road, and a lot of debt has been eaten -- to the point now where there are two mines, one owned by Teck and the other owned by what is commonly referred to as vulture funds, faced with the request by the Japanese to reduce their tonnage by a further 30 percent.

I wish I could offer some sort of detailed plan to say where this thing is going to go, but I'm not able to do that. It's a mix of private ownership and previous government investment. The member is quite right in saying that we ought to pay close attention to this, because it's not just the community of Tumbler Ridge. It's the commodity that's carried on B.C. Rail and the potential impact on B.C. Rail in terms of its revenue. It's the loss of the commodity on the rail lines -- both B.C. Rail and CN -- and the questions raised about whether the other commodity shippers have to pick up the slack in terms of cost. It's the issue of the federally owned Ridley Terminals in Prince Rupert.

So there's a lot at stake in this one. It is one of the most important files that my ministry and the Ministry of Employment and Investment are dealing with. We are aware of all of the ramifications. I can only say that we're attempting to play a productive role, with other parties, to see if we can't be instrumental, over time, in ensuring that the northeast coal operations continue. But at this stage I can't give any assurance or comments, negative or positive, with respect to that question.

R. Neufeld: I want to just touch on a couple more issues in the mining part of your portfolio. Then we'll be pretty well wrapped up with the mining part of it, and we'll go on to energy.

The minister will recall the creation of the Tatshenshini park. Of course, we talked earlier about Windy Craggy and the compensation that was paid there. There are quite a number, as I understand. . . . I've tried to get this number from your ministry. Last year in estimates you said that you would provide me with a copy of the outstanding placer miners that still haven't been dealt with in the Tatshenshini.

[1525]

Would some of these claims from the Tatshenshini actually be ones that the member for North Vancouver-Seymour asked questions about earlier? I relate to the four that the minister talked about that were prior to Bill 12, that have been settled. Are they part of the Tatshenshini?

Hon. D. Miller: I certainly apologize. If we had made a commitment to get information, even if it wasn't possible to do it, we should have still notified you. My officials have taken notes, and I'm advised that none of the four are related to placer claims in the Tatshenshini.

I did run into one of the people who is active in placer mining up in Atlin last Friday. We just chatted briefly at the airport, but he. . . . All he said was that he acknowledged the positive change in the tax collection system for placer miners that's contained in one of the budget bills. We will, if we have that information, ensure that the member receives it.

R. Neufeld: Okay, then, I appreciate that the minister will forward to me the number of claims that are outstanding and a brief description of where they're at.

The other issue I want to briefly talk to the minister about is an issue that he and I have discussed previously in estimates, and that's gravel mining -- as it relates to northeastern British Columbia, not down here. We're all aware that the federal government and the Ministry of Environment have agreed that there will be no gravel extraction below the 100-year floodplain. That has caused some difficulties in the northeast.

The minister knows the problems that we have in Fort St. John, I'm sure, because I've relayed them to him -- and so have others. It's probably not the same problem in Dawson Creek, other than the fact that there's just not enough gravel around. But in Fort Nelson, it's getting down to being quite

[ Page 12440 ]

This is going to cause some pretty big hardship, because there is no gravel in Fort Nelson. I mean, there's very little of it that's available. The federal government has tied up almost all the gravel that there is in the northeast because of the Alaska Highway -- the construction of the Alaska Highway and those kinds of things. So I have some serious problems with one operator that is going to run out in the not too distant future, and that's going to cause some real problems. I guess the only alternative I can think of is going into the mountains some 100 miles away and starting to knock down rock and crushing it up there or something. We already have fairly expensive concrete in the community of Fort Nelson already, because it is so remote and there's such a small amount. We're probably lucky we have someone there that will actually do the concrete work.

I just wonder if the minister could -- maybe through his ministry -- talk with, or have officials talk with, the Ministry of Environment about trying to resolve these issues so that we can actually get on with life and these companies can have access to the gravel that's needed. I'm clear it's not in the river. It's not mining on an island in the river. It's mining gravel quite a bit higher than the river bottom, but obviously not as high as the 100-year floodplain. That is probably well over 80 feet above what the river is now. I've seen that river flood pretty high. Maybe the minister would like to comment briefly on that, please.

Hon. D. Miller: No, again it's not an issue that I've had the opportunity to visit, actually, for quite some time. I've asked my officials to make a note here, and we will look into the circumstances you describe.

[1530]

We do need gravel, clearly. The member is very aware, coming from the Peace River, where supplies are limited. Ironically, in the lower mainland region, where there really is a fair amount of gravel, the problem there is that people don't like gravel pits. Yet we use, by some estimates, 50 to 100 million tonnes of gravel per year -- used by provincial, federal, municipal and regional governments, individuals, builders, etc. It's a very valuable and necessary commodity with a lot of trouble around its extraction.

I've met on numerous occasions with the operators. In the ministry we try to have the best regime we can to protect the environment. Notwithstanding that, there continues to be extensive conflict. Perhaps it's time to maybe look at a different process to review this more broadly -- and one which might be able to encompass some of the issues in the Peace River region as well.

R. Neufeld: I appreciate that. I'm glad to hear the minister say that. It is getting down, as they say, to the nitty-gritty, where we're going to have to act on it or do something different because of the availability of gravel in the whole northeast. In fact, whether it's Peace River South or Peace River North, I'm told by the Ministry of Transportation and Highways that the available gravel today is not enough to put one inch of gravel on all our gravel roads in North and South Peace. It's no wonder that we're running with roads with no gravel. I think it's got to the point where it's serious enough that the Minister of Energy and Mines has to look seriously at this problem, both in the south and specifically, I know, in the Fort Nelson area. I appreciate that.

My colleague wants to ask some questions a little bit further about gravel extraction in his constituency.

B. Penner: I appreciated the comments of my colleague from Peace River North. I listened intently to the difficulties that legitimate gravel operators have in his constituency in obtaining gravel.

In Chilliwack, in late April, we had a situation where the Cheam Indian band -- without obtaining prior approval or permits, as required, from the Ministry of Environment -- extracted large quantities of gravel from the middle of the Fraser River, just east of Chilliwack. I'm told by some observers that up to 150,000 metric tons of gravel were extracted from the Fraser River in a period of about ten days by the Cheam Indian band.

My question to the minister is: does his department have any plans to levy the royalties normally associated with gravel extraction upon the Cheam Indian band? I'm told, again by observers of the gravel industry in my constituency, that the typical royalty would be about 50 cents per metric ton. If that's correct, and if it's also correct that the Cheam Indian band removed 150,000 metric tons of gravel from the Fraser River, then B.C. taxpayers are owed about $75,000. Could the minister please advise this House whether his ministry plans to collect that money on behalf of B.C. taxpayers?

Hon. D. Miller: I can report that in response to that activity, we did issue a stop-work order under the Ministry of Energy and Mines. As well, I believe, both Environment and the Department of Fisheries and Oceans took actions under their regimes. The issue is, I think, caught up between some agencies. The fundamental question the hon. member asked about whether or not we would bill for royalties is more appropriately addressed to the Minister of Finance, who collects royalties on gravel.

[1535]

Hon. D. Miller: That's correct.

B. Penner: Just for the record, I'd let the minister know that I have written to the provincial Minister of Environment, as well as the federal Minister of Fisheries, and have demanded that there be a consistent policy on the issue of gravel extraction from the Fraser River.

I don't think it's acceptable that private operators who obey the law are not allowed to extract gravel, but other

[ Page 12441 ]

Hon. D. Miller: I don't fundamentally disagree with the member's contention that there ought to be consistent policies consistently applied. There are obviously other agencies -- DFO and Environment -- involved. But I can't disagree with the fundamental premise being put forward.

M. de Jong: I won't be long with the minister. He referred to the difficult situations with respect to gravel extraction that arise periodically, particularly in the more populated, southern parts of the province. One of the issues that we in this chamber occasionally hear about when these disputes occur relates to the notice requirements under the relevant legislation, requiring notification where permits for gravel extraction are being sought.

I'll try to caution myself. I know that this is an issue that is the subject of at least one -- possibly two -- matters that are before the courts. So I won't ask a specific question about those matters. But is that, from a legislative review perspective, something the ministry is looking at? Or is the ministry satisfied that the legislation as it presently exists is comprehensive enough -- does the job it's supposed to do -- and that these are anomalies that will simply arise over the course of time?

Hon. D. Miller: No. I don't take a hard-and-fast position. In fact, I'm certainly open. . . . As I indicated in response to a previous question, I think that the broader issue is one that needs to be looked at. We're in a position as the ministry where, if people make application to us for a gravel pit or a quarry operation, we're obliged to treat them seriously -- to give the due diligence required by our legislation and Ministry of Environment legislation that may apply. If we satisfy ourselves that the applicant passes all of those tests, then from a legal -- really a moral -- point of view, we're obliged to issue a permit for extraction.

Most frequently, the difficulties arise between my ministry, having done that, and either a municipality or regional district that objects in some way or another to that taking place. There's a patchwork of bylaws at the municipal-regional level that govern these activities -- soil removal bylaws. Quite often the finger is pointed at the Ministry of Energy and Mines as being the bad person, if you like, for having issued a permit, when in fact we're complying with the law. Maybe notice provisions and those kinds of things -- opportunity for public consultation and public comment -- should also be subject to some review. I'm happy, if the member has some specific recommendations to make along those lines, to receive them. But I'm increasingly, as I say, coming to the view that we need to do more, perhaps.

[1540]

M. de Jong: I don't think I quarrel with the observation that the importance of the resource is something that is frequently lost on those of us that enjoy its benefits but don't like to see a cloud of dust in our neighbourhoods. I think that if you spoke to those individuals -- those operators -- who derive their living from the extraction of aggregates and gravel, they would tell you that the notice requirements are, if anything, onerous. Then two weeks later -- as the minister points out -- one will hear from residents who will decry the fact that. . . . "How could this permit have been issued without us knowing about it?" Lump in the demands of regional and local government, and sometimes it's one of those regulatory areas that it is very difficult to achieve coordination and difficult to satisfy all of the parties. Nonetheless, I will offer to the minister this observation: on at least two occasions at my end of the valley that has been an issue that I think has ultimately become the subject of litigation, where there is a dispute about the adequacy of those notice provisions where an application has been made for extraction of aggregate.

R. Neufeld: That ends our questions on the Mines part of this portfolio. If we want to just briefly stop for a few minutes and wait for other staff to come in. . . .

The Chair: By agreement, we'll take a five-minute recess.

The committee recessed from 3:42 p.m. to 3:48 p.m.

[W. Hartley in the chair.]

R. Neufeld: I want to touch briefly, to start with, on the Energy part of the minister's portfolio, on projected revenue in table H5, in the consolidated revenue fund. There are some projections there, of course, from last year, and again from this year. Last year -- in fact in June -- the government announced a reduced oil and gas royalty rate of 20 to 40 percent, depending on when the land was purchased and when it was drilled.

What we see, if we look at the natural gas royalties estimated for the year 2000, is an increase to $205 million from $192 million. That's an increase of about $13 million. Yet we see that the number of wells being drilled is about the same. I'm just wondering if what I understand is projected here is correct, or if there is something else happening in the northeast about the production of natural gas that maybe I'm just not aware of.

[1550]

[ Page 12442 ]

R. Neufeld: The other estimate that's in that same table -- H5 -- puts petroleum royalties at $68 million, both for last year and for the upcoming year. Maybe the minister could tell me why that would stay consistently the same, knowing the price fluctuation that took place. We're back around, I think, about $18 a barrel. But for a good part of last year, the figures were fairly high. I know they went down around $11. Why would that stay absolutely consistent? Or is there expected to be no activity or very little activity in the drilling for oil?

Hon. D. Miller: Again, there's a combination of factors, I guess, in determining projections for revenue -- in this case, in terms of oil. I think we had maintained a fairly conservative projection on price. The member is right: there has been a bit of a roller-coaster on the price of oil. While it did go down to a very low level, it's now come back up. Volume is up slightly. So all in all, when you balance all those factors, our view is that the revenue will stay fairly flat or consistent with last year.

R. Neufeld: The June 12 press release indicated that, along with industry, the province expects to achieve the goal of doubling the provincial oil and gas production over the next ten years. I guess we're almost one year into that ten -- from June. What I can ascertain is that there has not been much of an increase in drilling for either oil or gas. It's almost consistent with last year. Is there something that is going to maybe happen within the latter part of the year that I'm not aware of? Are there some big land sales coming up so that there may be some increased activity in the latter part of the year or the first part of next winter? Or maybe there's some other explanation why this hasn't -- I would hope in a kind of a gentle curve -- started going up to meet those targets. What I see right now is a flat line -- in fact it's maybe even dipping a bit -- even though the price of oil has come back.

[1555]

All of that, I think, had a negative or dampening impact on activity in the gas and oil patch. But I think there's been a strengthening. I think some of these mergers have actually been good. There's some real muscle in the gas and oil patch, both in Alberta and in British Columbia. And increasingly. . . . Just a little item from today: Chevron has discovered a massive find in the Northwest Territories. It could produce 70 million to 100 million cubic feet a day. So I think that more and more, as the marketplace looks pretty favourable moving out, we're going to see more activity. But I think the main reason for the dampening impact has been the oil price and the consequent impact on companies that are in the business.

R. Neufeld: Okay. I hope that the minister is right that we're going to see an increase now, with the price of oil back again for the latter part of the year -- the last half of the calendar year, at least.

It's interesting. I didn't hear about the hit that Chevron just made. Would the minister tell me which part of the Territories that was in?

Hon. D. Miller: What did I do with that? I just pulled it off the Net earlier today. Actually, someone pulled it off the Net for me earlier today. I tried. . . . I don't want anybody rushing out and buying stock on the basis of this.

Chevron Canada has discovered this find near Fort Liard. They estimate it could produce at 70-100 million cubic feet a day -- this is just 25 miles north of the border -- with reserves estimated to be 400-600 billion cubic feet. Interestingly enough, I was meeting with CAPP yesterday, and one of their representatives talked about the potential for activity to head up into the Territories. There's some confidence that there are significant reserves in there.

But that's not to denigrate British Columbia at all, because we. . . . Just to give you some statistics in terms of the falloff -- the impact that I talked about in the answer to my previous question -- we experienced a 56 percent drop in bonus bids. Just to illustrate, Alberta was off 40 percent, Saskatchewan down 59 percent and Manitoba was off 95 percent. So it affected, really, the western provinces which are into oil and gas. I think there's a good recovery underway now. Let's hope the. . . . One prognosis for the price of oil was that it would go to five bucks. I don't think that we are going to see that happen now. With the discipline that OPEC seems to be exercising, there should be a decent -- hopefully, stable -- price and a return to not only normal activity but. . . . I'd suggest that gas will drive a lot more activity than we've normally seen.

[1600]

[ Page 12443 ]

Hon. D. Miller: Just to answer the first question, the communications shop of Employment and Investment serves the Ministry of Energy and Mines, so perhaps that's the reason why. I wonder if the member might restate his second question relative to some tables that don't appear to jibe.

R. Neufeld: If you look at the bonus bids for '98-99 -- the list put out by the Ministry of Employment and Investment -- it shows $67,388,729 for the fiscal year. Okay? Now, when you look at the fiscal year in table H5, there is no number that even comes close to that. Obviously there is some mixup of. . . . I would think it should be under "Permits and fees." Permits and fees show $104 million, so I'm not exactly sure where the $67.4 million comes from.

I'm going to send these two over to the minister. Rather than take the time here, you can look at it and maybe give me an answer later on.

Hon. D. Miller: That's fine. I think it would probably give my officials time to look at these, and I'll respond in due course.

R. Neufeld: The Oil and Gas Commission. I see we have the oil and gas commissioner here with us today, and I want to ask some questions around the commission. Before I do that, I want to say that I am particularly pleased with how the Oil and Gas Commission has worked -- with the competency of the people that are there and how they're working -- and that I think it actually will be positive for the oil and gas industry. I just want to put that on the record so that you don't take some of the questions I ask the minister as meaning that I don't appreciate what's happening with the oil and gas commissioner.

Last year -- the minister knows this full well -- we in fact supported the bill when it came to the House. We debated it very little to put it through, knowing the time frames that we were going to be faced with -- and always are in the oil and gas industry, as it relates to the weather. We were hoping that it would have actually been up and running long before the end of October. Unfortunately, I think that that delay caused some problems. In fact, I know it caused some problems -- and not of the making of the Oil and Gas Commission. The actual implementation of the process -- or the length of time it took to get it implemented -- was not very good.

[1605]

Hon. D. Miller: I was almost going to say that in terms of the complexity of government -- and let's depoliticize that answer -- some people think that three months actually isn't a bad time frame. I know that in previous portfolios, where I've been made responsible for splitting a ministry -- for example, in Skills, Training and Labour, taking the training portion out of the then Human Resources ministry and transferring it to my ministry -- it involves an incredible amount of logistics in terms of staff transfers and those kinds of things. I would have liked to have had that up and running sooner. It did take three months, but in a general sense, that's not bad. I do appreciate the member's comments about the commission.

I believe I said -- I'm paraphrasing myself -- when I spoke in Fort St. John about the commission. . . . I was up last year signing a couple of MOUs. I said something to the effect that, really, now the work is just starting. I truly believe that we're still in that phase. As much as I think that the commission has shown very positive potential. . . . I think there are some statistics -- I'm not going to quote those -- in terms of turnaround time for applications and the rest of it. I think there's an enormous job yet to do. When you start something new, it's not surprising that sometimes it takes a period of time before you can really get good at what you're doing. The commission is up and operating. It still has to deal with a number of issues with respect to the advisory board and the environmental fund -- those kinds of issues. There are ongoing issues on the ground, but I think we've got the right model and the right people. So, over time, I think they'll do nothing but get better.

R. Neufeld: I appreciate that explanation. I'm not as familiar with it as the minister is, but I can understand that it would be difficult to start something up basically from scratch.

I guess the minister talked about staffing. As I understand, staffing is still taking place. I think the commission now has a fair number of staff recruited but is still staffing. As I understand from the previous commissioner, when he arrived there, basically he had a seconded executive secretary. It was difficult for him, at the time, to even start working on the 200-plus applications that were sitting on his desk, let alone try to get staff in place to get it up and running at the end of October. That's almost -- well, it is -- wintertime where I come from, and people are wanting to have their permits processed. I just wonder if the minister could tell me how staffing is progressing and when we will be staffed to what the ministry feels it needs for staff to operate in the present environment.

[1610]

[ Page 12444 ]

Hon. D. Miller: By and large, yes. Of the eight people we're currently engaged in hiring, there are vacancies, and six of those will be on the aboriginal staff. Of course, a deputy commissioner needs to be recruited as well.

R. Neufeld: The deputy commissioner. . . . Is that position -- and I know the gentleman that's filling it now, quite ably -- being advertised? What process are we going through to fill that position permanently?

Hon. D. Miller: We're going through some discussions now in terms of the best way to fill that vacancy. We haven't really made a final decision.

R. Neufeld: Maybe I can just explore that a little bit more. How will that position be filled? Will the deputy commissioner be an advertised position? Or will this be someone that applies from within house that will get the job? How are we going to go about that?

Hon. D. Miller: We may not advertise. In other words, we make take the approach we took at the outset. I think I argued at that time that we had to get moving. I think we made the right choices, quite frankly. I was a bit disappointed in the resignation of the original commissioner. But notwithstanding that, I think that things have worked reasonably well, and so my view is that we ought to look for the best person for the job. I think the member appreciates what I'm saying. In fact, if he has ideas in that regard, I'd be happy to talk to him about it.

R. Neufeld: Not wanting to get slayed with one of my own letters again, I'll not bite on that offer but hope that we fill the position as quickly as we can with a permanent person so that, actually, that person -- whoever that happens to be -- can get on with their life. I know it's expensive, the process we're using now, and there could be alternative ways of doing it.

The other question I have is the funding, and I understand what the minister talked about earlier -- that it's funded basically by the oil and gas industry. The budget, I think, is for just over $8 million. Yet in the estimates I see $13.4 million. Maybe the minister could explain to me the difference there -- why?

Hon. D. Miller: It's a combined number. It reflects both the commission's budget and payments made to first nations under the MOUs.

[1615]

Hon. D. Miller: After discussion with my officials, I'll stick to the same answer: it's a projection of both the commission budget and payments that would be made to first nations under the MOUs. That's the answer, after some brief discussion.

R. Neufeld: I'll pursue that a little later on when I deal with the MOUs and the aboriginal part of it, and it will give me a little bit of time to reflect on my numbers also.

I wonder if the minister could briefly explain to me the operations to date of the Oil and Gas Commission -- maybe give me a bit of its successes and what the challenges are that the commission is looking at in the next six months of this year.

Hon. D. Miller: Sorry -- I just wanted to get some statistics on the applications and turnaround, because I think that is important. I'll give you those first and some previous numbers just to contrast.

In the November-to-February time frame, '97-98, 485 well authorizations were approved and 387 wells drilled. In the same time period for '98-99, 479 well authorizations were approved and 356 drilled. Since October '98, the commission has processed 491 applications to drill, 298 pipeline applications and 83 geophysical applications. The average time for processing well applications has decreased from 44 days in October '98 to 16 days in February '99. The commission appears to be fulfilling its mandate.

In addition to that, the ongoing issues of dealing with environmental considerations. . . . There are issues around trapping and those kinds of things that require constant work: the advisory committee, which needs to be finalized; the environmental fund; and continuing to focus on the issue of ensuring that you've got a system that works, so that when people make applications, they get the response as quickly as possible.

R. Neufeld: Does the Oil and Gas Commission have a mission statement or strategic objectives? What would they be?

[1620]

R. Neufeld: Is the commission responsible for the oil and gas industry provincewide, which would include the north coast?

Hon. D. Miller: It's a bit of a moot point in this respect. We've not had to face it. The commission was set up to deal

[ Page 12445 ]

The offshore is somewhat different. If we look at the experience on the east coast, it's subject to an accord between the federal and provincial governments. There are many pieces to that accord, so we'd have to consider that question down the road a ways.

R. Neufeld: You know, in the northeast. . . . I know the minister was up there and signed some MOUs, and there's all kinds of ongoing discussions with first nations, which is great. I don't take any umbrage with that. I think that's important with the local communities and environmental groups in the northeast. There are discussions with all of them. In fact, anything I've read always lists out in that form -- first nations, communities and environmental groups.

The minister talked about it earlier, and that's what brings it to mind. It is the issue of drilling around the community of Fort St. John -- Kaiser's well and sour gas and those kinds of things. What kind of. . . ? There's nothing said about having some kind of relationship with those rural residents or the farmers. I think the farmers are becoming, as I said in my opening remarks, a bit more -- not intolerant. . . . They want a bit more explanation of how some of the land sales go, where they actually drill, whether they're able to drill right close to their home place, especially in the sour gas fields. I mean, it's a huge issue for them, with animal health and those kinds of things. So I just wonder: is there something that the Oil and Gas Commission is going to set up to actually start relating with that industry specifically -- that being the agricultural community in the northeast, which, of course, is huge?

[1625]

R. Neufeld: I just would like to see, maybe in the. . . . What I'm asking is that we start including that agricultural community, because it's a huge component around Dawson Creek and Fort St. John, mostly. There's some in Fort Nelson, but not specifically where a lot of the drilling takes place. But around Fort St. John and Dawson Creek it is an area of concern, and one that's brought up to me. I'd like to maybe see it included in the documentation we have -- that we're actually going to set that up and start working with those different organizations. Whether it's a grain farmer or a cattle rancher or whatever, they're all represented by agencies. I think they will feel more comfortable being able to go to the office in Fort St. John. I agree with what the minister says, but it's always mentioned in any. . . . When you talk about it not being there, people feel a little bit left out. So it's just something that has been brought to my attention. I'm aware of the commissioner setting up a meeting with people in Blueberry, and I think that's great. I just think it has to be a little bit more formalized and part of the process of the business plan.

The minister touched briefly on the advisory committee. Could he tell me where we're at with the advisory committee?

Hon. D. Miller: We are in the process. I'm advised that last Wednesday letters of invitation went out. There's been some advertising for people to put forward names. The member is aware that there will be representation from CAPP, local government and others, as well as at large. That's in the process now.

The other question the member asked with respect to agriculture. . . . It's important to note that the commission is developing a comprehensive stakeholder outreach program for the next six months. On an ongoing basis the commission will meet with individual trappers and farmers, including first nations consultation between January and March. More than 600 stakeholder consultations have been achieved. It appears to me that they're out there talking to the people, and hopefully, it won't take too long to formalize the committee and get on with that work.

R. Neufeld: I guess, dealing with the community at large, and trying to get their input. . . . How does the commission work in interagency. . .with the Ministry of Environment, the Ministry of Forests and the Ministry of Transportation and Highways?

I'm particularly interested in transportation and highways and how they relate to the Transportation and Highways ministry in construction of roads or upgrading of roads into areas where the ministry is intending to have some large sales that have the probability of some good returns on oil and gas -- that we start looking at some of that infrastructure in the northeast. The minister is quite well aware that it's fragile at best. In fact, it's in terrible shape. I think that there has to be some working between the ministry and the Ministry of Transportation and Highways to start getting some direction on where some of those scarce dollars that are spent in the northeast. . . . In fact, in my constituency this last year $6 million was spent on road upgrading on about 3,500 kilometres of gravel road. I think the minister will know that doesn't go very far.

[1630]

[ Page 12446 ]

Hon. D. Miller: Yes. Well, the short answer is that the commission is aware of the issues and has worked and will continue to work on an interagency basis. The member makes a very good point. If you can collaborate in terms of your planning so that Transportation and Highways knows where there's going to be more activity and you can coordinate, it makes all the sense in the world. I think that is happening.

The regional districts also did a very good road study some time ago for the region. The member may want to pursue this -- it's another line of questioning -- but they're also trying to play some assisting role in the Ministry of Finance on some issues of ensuring that revenue is collected.

R. Neufeld: One other issue that I would like to just ask the minister about is the purchase of equipment for the office in Fort St. John, in the building. I don't quite know how that procurement takes place. Was it done by tender? Was it actually equipment that came from other offices within government? Was there a tender? If there was, could I at least see it? I ask that -- I'm going to be upfront with the minister -- because I've had some rumours that it wasn't done fairly. I'm not going to say whether it was or not. But I always hear that, and I'd like to have the information to demonstrate, to those that tell me that, what the process actually was. It can shorten up the heated feelings fairly quickly.

Also, the equipment that obviously was purchased. . . . I shouldn't say obviously, because I'm not sure; maybe it came from other offices. But would the equipment that the Oil and Gas Commission has be the most up-to-date equipment so that we can keep track with industry? We know that they're updating all the time and have the most modern equipment. Are we in fact tracking along with that?

Hon. D. Miller: Just a series of responses. The industry apparently agreed to pay for both the computers and the furnishings because they wanted good equipment, and they wanted the place to look nice. It went through the Purchasing Commission. There was a complaint, I believe, from the second bidder, but the commission itself ruled that it was fine. I think they're Pentium 300s -- which, of course, we're all familiar with.

[1635]

I want to talk a bit about the regulatory process or, as the minister and the government talk about, the removal of red tape. The minister and I have had quite a few discussions over the years about regulatory issues, regardless of what ministry he was in charge of. I researched back to August 1996. This ministry -- or the Minister of Employment and Investment at the time, but responsible for oil and gas -- talked about streamlining regulations. In fact, in November '96 the minister met with CAPP to discuss industry concerns. One of their big concerns was the overlap between federal and provincial regulations -- those kinds of things. And getting on towards February 1998 the CAPP president, David Manning, said the regulatory requirements may be the number one impediment to oil and gas industry growth in the province of British Columbia.

We had a business task force in Fort St. John, put together by CAPP and the local Northern Society of Oilfield Contractors and Service Firms. They put forward quite a few issues about regulation and some other issues -- financial, taxation -- and what could be done to enhance the industry. Even the petroleum titles branch had quotes in their business plan from '97-98 about the province of British Columbia having some onerous regulations and that we're trying to compete with Alberta and the federal government in the Northwest Territories. They're reducing their regulation -- not to nothing, but they're actually making it easier for government to work. . . .

It's an issue that comes all the way through. I don't mean this to be hugely critical. I would rather that we got on with doing the things that are best for the province of British Columbia and, of course, the oil and gas industry specifically and how we're going to deal with that. Maybe the minister could briefly explain to me what regulations have been changed or what legislation has been changed to actually make the industry more competitive. We go right up until July '98, seeing issues. . . . In fact, we see them today in the newspapers, but I'm not going to talk about those too much. But we see issue after issue where regulation and interference in the industry is causing it not to be as productive as it could be.

Hon. D. Miller: I'm overwhelmed, Mr. Chairman, by the advice I'm receiving in response to the member's question. But I would say that the biggest initiative, clearly, is the creation of the commission and establishing legislative authority for the commission to act. As the member is aware, in debate on the legislation itself, the Forest Act, the Forest Practices Code of British Columbia Act, the Heritage Conservation Act, the Land Act, the Waste Management Act and the Water Act. . . . The fact that they've been put under one roof, with authority vested in the commission to deal with all of these issues is, I think, in and of itself probably the biggest single streamlining. . . . I won't say deregulation but streamlining.

Quite often I think you have to separate issues around regulation into two categories. One is the regulations themselves. Do they make sense? Are they required? Should they be updated? Should they be dropped? But equally important, in my view, is the application or the implementation. When applicants previously had to make the rounds of the various agencies to get approvals, obviously it was more time-consuming and cumbersome. Under one roof it's, I think. . . . Certainly the numbers, the turnaround time -- the statistic I cited earlier, from 44 days to 16 days -- is testament to that.

We are working with individual companies who've made cases. For example, there are the royalties on heavy oil. They claim -- and I think we've accepted their arguments, because we've not been too much in the heavy oil business; we've not focused on it -- that we ought to review that and look at other jurisdictions like Saskatchewan and see what their royalty curves are like, to encourage exploration and development in that field. Similarly, there are companies that have, I think, innovative proposals to try to extract gas in areas that were previously thought to be uneconomic -- lots of water, for example. So we're prepared to look at adjusting royalties in those kinds of circumstances.

[ Page 12447 ]

[1640]

R. Neufeld: I appreciate that response, and I think that probably. . . . In fact, I know -- not probably -- that the Oil and Gas Commission will help a lot. I said that in my opening remarks. I think it will make it easier for the industry. But to just say that we've taken all the regulations we have and put them into one body now, and they can administer it. . . . I don't think that was the drift I was getting from CAPP, from the task force in Fort St. John and from the ministry's geological branch -- that that's what they meant. I think what they're meaning is that there is some problem with overregulation. That's what I'm trying to get at.

I appreciate how the process works now, and I think it will work better. But I will maybe just read into the record from the 1997-98 business plan for the petroleum titles branch: "At home, an industry-oriented government in Alberta is attracting spending by reducing red tape and the Northwest Territories are making available for exploration large tracts of high-geological-potential land." So within the ministry itself, we know that there are some issues. Maybe the minister could tell me. . . . You don't have to tell me today, and I don't think you'd have it at your fingertips. But you could send to me, when you get an opportunity, any regulation that has actually been changed -- other than the creation of the Oil and Gas Commission. That aside, has something been changed? Have we removed some needless regulation that would affect the oil and gas industry? I'd like to have that, if in fact it is the case that there is something like that in place. Because I always get asked the question, and obviously. . . . The answer so far has been that, no, nothing has changed other than the creation of the Oil and Gas Commission. I get that same drift from the minister. So if you could provide me with that, I'd appreciate it.

The other thing when we talk about regulation. . . . Obviously, even the Oil and Gas Commission recognizes that they have to deal with the regulatory burden in some way. It talks about, in the report: ". . .to operate, integrate and redesign the regulatory process." Maybe the minister could just explain to me a little bit what that process is going to mean? Is that going to mean that we're going to remove some regulation or redesign it -- or what's going to happen there?

Hon. D. Miller: I am informed that the commission intends to proceed with an examination of the production and drilling regulations. It's their view that they're out of date and that they need to be revamped, and they will be embarking on that process. Again, as I think I indicated earlier, I've really put the commission on standing notice to advise the member of these kinds of activities that they're engaged in.

We did respond to some issues that were raised about the application of the Employment Standards Act, and there were some modifications to deal with workers in the oil and gas industry. But beyond that. . . . Again, I don't have that at my fingertips, and I'd appreciate the members not asking me to go through an extensive list. I would say, however -- going back to one of my previous answers, where I read a list of the acts that the commission is charged with administering -- that if changes are made in those acts, they apply universally in the province -- and clearly would apply as well in the region.

[1645]

I want to touch briefly on an issue about taxation as it applies to and affects the oil and gas industry in northeastern British Columbia. The minister's quite well aware that at the end of January or February, I wrote a letter to the minister which was the result of meetings I had with some operators in Fort Nelson who felt that far too many Alberta companies were coming across the border, through the back roads, and taking work away from northeastern British Columbia -- and how we deal with that. The minister responded to me at the end of April about those issues.

Somehow, I'm not sure when, the Ministry of Finance finally got involved. I do have a copy of a letter from the Ministry of Finance -- from a Mr. Greg Reimer, executive director of the consumer taxation branch -- which is dated March 15. I just want to bring to the minister's attention the fact that on March 15 the work was just about done. I know it's not easy; I'm not trying to say that it is easy. But somehow we have to react to these issues long before the end of the drilling season, which happens to be. . . . Specifically, in Fort Nelson -- where most of the work took place last year -- the major drilling season is, for all intents and purposes, done by mid-March. There's a little bit of finish-up, and people are moving out.

But it's a problem that's related to, again, the price of oil. In Alberta, there are companies that actually operate a lot cheaper. The taxation regime and those kinds of things are a lot less onerous than they are in British Columbia; everybody knows that. In fact, by the ministry's own figures, it's about 20 percent cheaper to operate in Alberta than it is here. This is a study done by the ministry itself a couple of years ago. So what they do is. . . . They come over. They don't abide by the labour standards, to a certain degree. They don't pay the sales tax. They come in and work out. . . . It's a huge area. It's not as though we're talking about downtown Victoria and just going out to Colwood or something. We're talking about a huge part of the province that stretches to the Yukon and the Northwest Territories border and that's serviced out of Fort Nelson. But it can be accessed very easily from High Level and Rainbow Lake -- actually, real easily.

That's where they come in. I know I've brought this to the attention of the minister -- and ministers prior to you taking over the ministry, year after year. I don't know what the answer is, or I wouldn't be standing here just complaining about it all the time. I'd be giving some recommendations. I have one that maybe I'll give a little later on after I hear what the minister says about what we can do to try and alleviate this problem. I know you're not going to stop it totally. The bigger companies pay their tax. It's the smaller ones, the smaller contractors, that don't. That's a real serious issue with folks in Fort Nelson and Fort St. John -- to a greater degree this year because of such a slowdown in Alberta.

[ Page 12448 ]

I suppose it's fair to say there may always be some slippage, even with the best regime. We want to certainly have that at a minimum. Again, I don't know that the solutions are necessarily simple. But the commission will play an active role to try to assist to ensure that British Columbia's fair taxes are collected from those who come into British Columbia to work and that our laws are generally applied, whether they be labour standards or you name it. I suppose there are always people. . . . There are even people, I've heard, who cheat on their income tax. Having been audited a few times and passed with flying colours, I'm not one of them, I can tell you. I'm just a regular guy with a Sears account, that's why.

[1650]

Hon. D. Miller: Yeah. I don't want to diminish the issue the member raises, because we don't want to do that. We don't want to have people come into this province and work and take advantage of the opportunities here and avoid paying the kind of taxes they ought to pay and following the rules and regulations that they ought to follow. It's a serious issue. If the commission and the consumer taxation branch can bring about some improvements. . . . I hope that is the case. I should say that we're always open to suggestions that anyone might have in terms of how we might improve the situation.

R. Neufeld: I think there are probably some things that we could do, I guess, if we had the will to do it. I don't think there's any way that you can hire enough people to chase everything around, and I'm not saying you can do that.

In Dawson Creek there are three people that work in the administration of sales tax. They're busy harassing our own folks that operate in British Columbia without going across the border to harass anyone in Alberta. So basically they get away with murder in many cases.

Secondly, labour standards. I don't think that they have the staff in Dawson Creek, either, to be out there actively looking at up to 80 rigs drilling and all the associated equipment that goes along with building leases and roads, and everything that goes along with that. I know that they're, again, for the labour standards. They're busy harassing the people that actually operate in British Columbia and don't want to cross the border and go hassle anyone in Alberta.

I know that last time, when I brought this forward to the minister. . . . I just want to quote his response. This was in June 1997: ". . .if they" -- cross-border oil and gas industries -- "think that they can come into B.C., break our laws, flee across the border and then return with impunity, then maybe we ought to look at that. . . . So I'm quite prepared to look at protecting the interests of British Columbians in those kinds of circumstances. . ." It's a good quote. That's why I read it into the record. To my knowledge, what I experienced last winter was no different than what I experienced the year before; in fact, maybe it was protracted a little bit this last year because of the downturn in Alberta.

So my response is: I don't think we've done anything to really address the issue. Unemployment has gone from 4 percent, which we had been enjoying for a while, to 7 percent sometime through the winter. People have been unemployed in the northeast specifically because of that issue, so it's a serious issue.

I do have one suggestion. Possibly through the Oil and Gas Commission, where everyone has to go for their permits. . . . Part of the process is that the company that is applying for a permit to drill a well is held responsible. They must demonstrate to the Oil and Gas Commission that people who have actually worked on that particular well or that pipeline or that seismic activity -- because all of it has to go through the Oil and Gas Commission before they get their permit. . . . They actually have to show that (a) their subcontractors have paid the particular tax that they should and (b) they have abided by our labour laws and paid the minimum wage as stipulated in the B.C. labour standards, and those kinds of things. And if they don't do that -- if people sneak in and do it, and they can't demonstrate that they've paid the proper fees -- then maybe the onus should be on the oil company that came in and got the permit in the first place to ante up and pay that to British Columbia.

It may be a simple thing to do and probably won't even have to be enforced, because I think that the oil companies will say: "Hey, we want to make darn sure that these folks are doing what they're supposed to do." Then we don't have to run around the country with people from the tax branch and all those to find out what's going on; it will be actually almost self-policing.

Maybe the minister could give me a comment on what he thinks about that.

Hon. D. Miller: Well, the two other areas. . . . I was going to suggest that the member and I should get in a 4-by-4 and patrol the territory.

[1655]

Hon. D. Miller: No smoking.

Interjections.

Hon. D. Miller: And no hunting.

There are two other areas where that approach -- the one the member suggested -- is used; in other words, the onus is put on the parent company, if you like. One is in forestry, where if you are a contractor for a licensee and for some reason you abscond and you don't pay the bills, then the licensee is responsible. I recall, when I was Minister of Forests, getting a lot of complaints about that; but notwithstanding, that was the rule.

The other was far more controversial. That was in the agricultural sector, where, as you recall, I was the author of the bill on employment standards where we made the farmer ultimately responsible for wages owed to farm workers who may have been hired by farm labour contractors. I remember the arguments that the farmers made at the time: "Why should we be responsible? We don't hire the labourer." And I said: "Well, I guess, really, that when you boil it down, those people are working in your fields, and you're paying,

[ Page 12449 ]

Now, I think you made much the same argument a moment ago. With all my powers of persuasion, I was not able to convince the farmers that what I was proposing was the right thing. So I don't know. I'd probably prefer to test that with the industry as opposed to being arbitrary and unilateral about it, because we don't want to send out negative messages to the industry.

Really, all I can say is that you've got to continue to bear down. I think the dilemma for governments and other agencies that do regulate is this: with the best of intention, regulation often requires enforcement. My experience is that -- as you said yourself a moment ago -- you can never hire enough people to enforce every regulation. The costs would be prohibitive, as the regional district here in the capital found out with their smoking bylaw. They brought in a smoking bylaw -- I've read that that's the case -- making the individual responsible. In other words, if you violate the bylaw, you are subject to a penalty, a fine. But the fact is that the capital regional district couldn't hire enough smoke police to run around to make sure that nobody was breaking the law and, in a very short period of time, changed the bylaw to make the owner of the establishment responsible. The owner of the establishment gets fined, and not the people who are breaking the bylaw.

So enforcement is a dilemma for government, I think. More and more, the trend has been towards self-policing mechanisms, where we don't have inspectors. We require people to obey the law, and we put substantial penalties in place for those who disobey it and, hopefully, have a system of checks so that we can find out if that's happening.

There's no simple answer to it. You just have to. . . . I think the member, actually, by bringing this issue up every year in estimates, puts a new focus on it and reminds us that we've got to be vigilant. I know the commission is committed to working with consumer taxation. Hopefully with all those efforts we can reduce the incidence of non-payment of taxes or not following regulations.

R. Neufeld: I appreciate your response. I guess it's a little different than the farm organization or the oil company, whatever it happens to be -- Mobil Oil, Chevron or whatever. They would be responsible for the subcontractors that they hire. I don't think they go to a pool and pull out of that.

I wonder if the minister would provide me with the results of what took place when Mr. Reimer met with Mr. McManus over who was drilling and where, and those issues. I provided the minister with a list of, actually, drilling rigs that were working at that time in different areas and companies that were working there and assumed to not be paying their taxes. But if I could maybe just find out whether there's been some success from. . . . I know, again, it's not your ministry, but it affects your ministry, and maybe we could find out exactly what took place.

[1700]

[J. Doyle in the chair.]

Hon. D. Miller: Yes. The first question, with respect to the discussions between consumer taxation and the commission. . . . I'd be happy to have Mr. McManus advise you about that. I don't know that we've heard back from them yet, but we've offered some advice. As to the breakdown of the funding of the commission, again, I'd be happy to have Mr. McManus or maybe the appropriate official give details around that question. We have some ongoing challenges in terms of that. We don't want to have a huge bureaucracy. We want to have it sufficient to do the job.

I talked earlier about. . . . If increased activity requires an expansion of the commission. . . . Some of those issues we're still discussing with CAPP. There were startup costs, for example, that were not explicitly defined in the agreement. I've let it be known that I thought it was quite appropriate for CAPP to pay those costs. I don't know that they necessarily agreed with me, but. . . . So some of those issues are ongoing, and we need to resolve those, but I will ask the commission to keep you fully informed on the questions that you've asked.

R. Neufeld: I should have asked you at the same time: do you have any involvement with the fees that are charged on the Sierra-Desan road system? Does any of that go through the Oil and Gas Commission or your ministry, or is that strictly the TFA, and I'll have to get the breakdown from them?

Hon. D. Miller: Yes, the commission is fully involved in terms of being the administrators, if you like, of the arrangement around the Sierra-Desan to sand. They send out the letters; they collect. There is a bit of a tiff going on, though, I understand, about who should be included, in terms of user charges. I'm not going to get involved in that, quite frankly. I think that it's an issue that can be resolved in the region, perhaps with the assistance of the commission. What we committed to do was to try to do something novel, which was to capitalize the work on the road and have that recovered over time by user fees.

R. Neufeld: Could I get the breakdown on those fees and the information on the Sierra-Desan road system through you or the Oil and Gas Commission also, then, if that's possible?

Hon. D. Miller: Yes.

R. Neufeld: Thank you. That makes it much easier for me.

The green tax. There's been talk about a green tax federally and these kind of issues that probably bother most of us, especially in the region I come from. Can the minister maybe bring me up to date on what's taken place there? Or maybe there's nothing taking place. Just brief me on that, please.

Hon. D. Miller: I've just confirmed with one of my officials that there have not been any decisions made on the

[ Page 12450 ]

Without being too expansive here, I think all of us should know that it's not a simple matter. I think all of us want to be part of reducing emissions that contribute to the greenhouse gas problem; all of us do. There is some scientific debate around these questions. But the question is: how do you do that? And what is your role?

My view is this. British Columbia is a very small contributor to the greenhouse gas emission problem -- very small. In the last decade we have experienced, really, a massive population growth through in-migration. which has made our emissions greater. But should we not have accepted those people into our province? I don't think so. Alberta is now going to have the same problem: increased automobiles, truck traffic and that kind of thing.

[1705]

R. Neufeld: That'll be an ongoing saga, I guess, probably for a long time.

I want to deal a bit with the aboriginal issues, the MOUs that have been signed in the Treaty 8 territory in recent months. I know that it's been a hindrance, to a certain degree, in trying to get permits approved in the northeast -- less and less as we get more signed on. But maybe the minister could tell me how many of the Treaty 8 bands have actually signed MOUs with the province.

Hon. D. Miller: Yes. We have concluded MOUs with five of the bands. One of those bands is outside of B.C., as the member appreciates -- so, five of the seven.

R. Neufeld: Which ones are they?

Hon. D. Miller: Saulteau and Doig are outstanding.

R. Neufeld: Are all the MOUs the same for each one of the bands in the Treaty 8 territory?

Hon. D. Miller: Essentially the same. There are some fairly minor variations in wording, but they're essentially the same.

R. Neufeld: Are they significant differences, or just small differences as they apply to different bands? Maybe he could just expand on that a little bit for me, please.

Hon. D. Miller: There is really no significant difference at all.

[1710]

Hon. D. Miller: No, just oil and gas. For the member's information, and in fact for all members of the House who are Internet users, the agreements are on our web site.

R. Neufeld: Have you had someone in your office take it off for you? Is that what you're trying to tell me?

In the agreements -- and I ask because I have a number of them here. . . . I haven't read them in their entirety. . . . They talk about economic development agreements in the MOUs. Maybe the minister could briefly explain to me what the intent is of the first nations industry economic development agreements.

Hon. D. Miller: I think that the general theory we approached the question on was that we had to be inclusive. In other words, first nations had to have a sense that there was something for them as a result of this kind of activity -- drilling for oil and gas in the region. The MOU was an attempt to sit down and try to formalize the relationship, as opposed to the completely informal situation that had existed prior to that.

If I could just indicate some of the principles behind the MOUs, they are to establish and formalize a new business relationship between first nations in the Treaty 8 area and the provincial government and the oil and gas industry and to provide certainty for first nations, the oil and gas industry and the province. For the first nations themselves, the understandings are to provide a clearly defined framework for consultation about the impacts of oil and gas sector related activity. On Treaty 8 first nations' treaty rights, the MOUs have established a framework to allow the government to meet its responsibility to first nations. For the oil and gas industry, the MOUs provide predictability, define time lines and operational guidelines and create a positive environment for investment in the province. Those are the substantive reasons behind the decision to try to seek these MOUs.

I want to repeat something I said earlier. My own view is: let's not kid ourselves. You sign an MOU and you think every problem is solved? I don't have that view at all. Really, it's dependent on the ability of the commission and on the bands themselves to work out problem areas on the ground.

I mentioned that there are some issues around trapping rights. There have been some recent moves in Alberta that have other Treaty 8 bands looking at taking some issues through the courts. Whether that has an impact on British Columbia, I'm not certain at this stage. But generally -- and it was confirmed with the CAPP representatives yesterday -- they think the approach we've taken is the right one. We talked about a number of the problem areas that they see, but by and large, they think it's the right move.

I said that I thought they could play a role as well; it wasn't just the commission. The relationships that they as operating companies establish with first nations are also quite important. Everybody's got to be involved in the exercise and

[ Page 12451 ]

R. Neufeld: I don't disagree with that. I also think it's important. . . . It will depend a lot on the commission and how well they deal with the individual bands, and the bands themselves -- how they deal with the issues at hand. Obviously some do a bit better than some of the others, but I think that by and large, they're coming along pretty well.

I just want to bring to the minister an issue about the processing of the permits. They go to the different bands, depending on the traditional territory of where the well is going to be drilled. Most of them have decided to get into a certain amount of equipment, whether it's cats or trucks or those kind of things -- pipeline issues that go along with it. What happens is that that information, let's say, goes to the Doig or the Blueberry first.

[1715]

Hon. D. Miller: No, I would say not. Just to explain. . . . It's probably fairly common that a lot of companies have contractors that they use on a consistent basis. Generally, if there's been a complaint on the other side, it's this: that the company has already lined up their contractors before they make the application. So in that case the first nations were arguing that they'd never had an opportunity. No, I don't think there's been a skewing of advantage, if you like.

One would hope that over time, the development of expertise in the oil and gas sector by first nations will increase and they'll feel a genuine sense that the industry is actually something that benefits them and their families and their communities. It'll probably take a while before you get that kind of level of confidence, but I don't think anybody gets an unfair advantage.

R. Neufeld: Basically, as I see it and with the agreements I have, each band is receiving $235,675 -- at least, that's the information that I had someone pull off the web site for me. Also, there are some additions to that, depending on whether it's a new well or an old well or a seismic or a compressor station. It's all divided up evenly amongst every one of the bands. I know that the $235,000, as I understand from discussions with the oil and gas commissioner, is divided up evenly amongst the seven bands. The signatories, I guess, at the present time may be the seven, and part of it is in a savings account for them.

When we come down to the actual number of wells per traditional territory, or compressor stations, let's say, is that amount of money divvied up in exactly the same way so that each one of the bands shares equally in that kind of stuff -- the seismic, the wells, the pipelines and the compressor stations?

Hon. D. Miller: Yes, that's correct. It's global; it's distributed equitably.

R. Neufeld: There are two bands. . . . Actually there's one -- Dene Tha -- that is headquartered in Alberta. In their traditional territory that they claim in northeastern B.C., do they receive the same as the Treaty 8 bands on that process? What kind of a dividing-up of the proceeds do you use in that case? The second part of it is the Fort Liard band, which obviously has some territory in the Maxhamish area; I'm sure they do. How do we deal with the Fort Liard band?

Hon. D. Miller: Fort Liard is not part of the agreement, so there's no revenue. The split in terms of distribution for all but the Dene Tha is four twenty-ninths of the revenue. With the Dene Tha, given their location in Alberta on a smaller land base, it's one twenty-ninth.

[1720]

Hon. D. Miller: As I indicated earlier today in response to a question about the commission staffing, we are in the process of hiring eight people. Six of those people are intended to be allocated to the aboriginal affairs branch.

R. Neufeld: Orphan wells. I know that a number of years ago there was quite a bit of concern about orphan wells in the northeast. I'm just wondering -- not that I've heard a lot of things, but I haven't heard anything about them for quite a while -- what process has taken place there. As the minister spoke about earlier, there are so many companies changing hands and selling for actually less than what they're worth, and those kind of things that are taking place now. Maybe you could just briefly bring me up to date on that.

Hon. D. Miller: There's been an identification process taking place. We've identified about 17 potential orphan wells in B.C. -- interesting, compared to Alberta, which has about 10,000.

Interjection.

Hon. D. Miller: Yeah. At any rate, a program is being developed where there would be an industry-capitalized fund established to pay for the cost of abandoning these orphan wells. So that work is in progress. I'm not certain when there might be a final resolution, but again, I would ask Mr. McManus to keep me fully informed on the progress of that. In fact, I would think that it would probably be of general interest in the region, as well, once the apparatus or the system has been put in place.

R. Neufeld: So it's much the same as the mines. Do all the companies pay into a fund?

Hon. D. Miller: No. Again, my note does not indicate the magnitude of the cost issues involved, but mining is completely different. In the case of mining, individual companies post reclamation bonds on the properties that they are developing or producing on -- those are issues that are deter-

[ Page 12452 ]

R. Neufeld: I'm just reminded of a couple of questions I forgot to ask about the MOUs between the different bands. As the minister said, five have signed on and two haven't. Are they going to receive money from the point that the other ones signed on, or will they start receiving money when they finally sign the MOU? How will that work?

Hon. D. Miller: Those issues are being discussed with the bands in question.

R. Neufeld: We discussed it earlier and I said I would come back to the $13,400,000 that's listed in the estimates book for the Oil and Gas Commission. I understand that the Oil and Gas Commission's budget is $8.5 million, so that leaves about $5 million left over. Is that the amount that would be divided between the five bands that have signed on for the last year? Are we talking about $1 million per band? Is that what they would have received?

Hon. D. Miller: Yeah. Unless my officials provide a contrary statement or advice to me -- and they never do that -- the explanation that I offered earlier is the correct one. The commission budget is $8 million. There's $13.4 million in the line item, I believe, and that remainder -- the $5.4 million -- constitutes our projection based on the volume of activity that will take place on money that would be allocated to the bands under the MOUs.

[1725]

The other one I want to go to is vote 26, which is the resource revenue sharing agreement: $1.2 million. Last year it was $1.6 million. I know the Fort Nelson band is involved in that one. In fact, when I asked the question last year, because it had increased substantially, the minister responded that Blueberry and Doig had not been named in the estimates book, but they actually were included in that $1.6 million. Is that true, in fact? I don't see them named again this year, and I wonder if there is some reason for it -- or it was just an omission?

Hon. D. Miller: I don't know if there's any particular reason why they are included. That agreement goes back to -- when? -- 1970 or somewhere around there. Again, if I do get an answer to that question. . . . But I don't know if there is any reason why they were either in there or not in there.

R. Neufeld: Maybe you can also provide me with that information at a later date.

I want to deal quickly with sour gas recommendations that were made by the committee -- and the ministry said that they accepted the recommendations. Are they now actually part of the process, and are they the actual regulations that we're dealing with when it comes to sour gas? I know that the last indication I had was that it was just accepted by the ministry; it really wasn't, you know. . . . They agreed with the recommendations, but there was no particular action on those issues.

Hon. D. Miller: The recommendations did not require regulatory change. In fact, we're trying to reduce the amount of regulation.

I thought I'd get a little bit of a response there.

Interjection.

Hon. D. Miller: Thank you.

We have accepted the recommendations, which were really operating guidelines. I think a significant amount of that had to do with consultation issues, those kind of things. We don't anticipate that there needs to be regulatory change.

R. Neufeld: I appreciate that. I guess where I come from on some of the issues that arose around sour gas. . . . There are some good regulations, and there are some needless regulations. That's maybe where the minister and I differ.

I want to deal briefly with reserves. The statistics for British Columbia in both natural gas and oil -- and I have information given to me by CAPP, which I have no reason not to believe -- are that there is 8.6 trillion cubic feet of proven reserves in natural gas and some 132 million barrels of proven oil reserves in British Columbia. Most of that, if not all, is specific to the northeast.

I was wondering, that being the case -- with Alliance coming on stream and shipping some 300 million cubic feet a day from northern British Columbia to the Chicago area -- how the minister feels about reserves in British Columbia and whether we have enough reserves to carry on our commitments to southern British Columbia, specifically Vancouver, Vancouver Island and all those places -- maybe just to get a feel of where he's coming from.

[1730]

But I have a hard time accepting that we would even contemplate within government, within your ministry, talking about a line from Yahk to Oliver which will eventually come

[ Page 12453 ]

Hon. D. Miller: First of all, with respect to the question of reserves, I really think I'm pretty much in sync with the member in terms of his view. While reserves are listed, for example, in gas as 8.6 trillion, if you look at probable, there's maybe another 80 trillion. I'm not sure what the numbers are for the other basins in the province. The offshore has been described as being significantly larger than Hibernia. So I'm not in the least bit concerned about that question.

I guess, maybe, to bolster my contention is the news release that came off the Internet about the Chevron gas find in the Northwest Territories -- reserves of 400-600 billion cubic feet. It appears to me -- and I think history has shown this, in fact, in some unique ways -- that we've not really tapped that question. In fact, there's an interesting well in the Gulf of Mexico that was estimated to contain a certain volume of gas. It was being produced; the well was producing as anticipated. The well was behaving normally. Pressures were reduced as they started to get into the end of the life of the well, and -- lo and behold! -- for reasons that they had never anticipated, pressures came up again. There's some theories about plates below the surface and gas and all the rest of it. I don't understand that; that's very technical in nature. But I think there's probably lots of gas, and I don't think we have any concern about it.

[W. Hartley in the chair.]

As to the budget documents, I quite frankly don't know. The member is aware that there were -- really, I guess, are -- competing proposals. Westcoast had proposed to do a peak- shaving LNG facility near Squamish. We -- or they, more properly -- submitted that to the environmental assessment office. That was approved. Both the Minister of Environment, Lands and Parks and I announced that the project had received approval through the environmental assessment. But we also pointed out in the news release that that approval did not mean that the project would proceed. It was subject to other rulings -- zonings, the B.C. Utilities Commission. Similarly, the issue of the southern crossing is very much subject to a decision by the Utilities Commission.

[1735]

I repeat: they are very highly technical issues dealing with economic analysis, gas usage, all those kinds of questions. I think the B.C. Utilities Commission is in a far better position to make these determinations than to make them political determinations. I think that's going to happen fairly soon. I'm not sure what the time line is for the Utilities Commission to produce a result. In the meantime, we have to deal with the environmental assessment application of the southern crossing. I have reason to believe that that may be forthcoming to ministers sometime soon. We'll receive their submission and listen to their recommendation and see what comes.

I'm informed that the L-G waits without, hon. Chairman.

The Chair: We should have a motion. . . .

Hon. D. Miller: Mr. Chairman, I move the committee rise, report progress and ask leave to sit again.

Motion approved.

The House resumed; the Speaker in the chair.

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

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

The Speaker: Members will know that the Lieutenant-Governor is in the precincts and will be joining us shortly. The bells were rung to bring some of the MLAs to the chamber. We will not be doing other business until that happens.

Members, take your seats, please. The Sergeant-at-Arms has gone to escort the L-G into the chamber.

[1740]

Clerk of the House:

Budget Measures Implementation Act, 1999

Probate Fee Act

In Her Majesty's name, His Honour the Lieutenant-Governor doth assent to these acts.

His Honour the Lieutenant-Governor retired from the chamber.

Hon. D. Lovick: I want to advise the House that we shall indeed be sitting tomorrow, and with that I move the House do now adjourn.

Hon. D. Lovick moved adjournment of the House.

Motion approved.

The House adjourned at 5:45 p.m.

[ Page 12454 ]

PROCEEDINGS IN THE DOUGLAS FIR ROOM

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

The committee met at 2:46 p.m.

ESTIMATES: MINISTRY OF AGRICULTURE AND FOOD
(continued)

I. Chong: Before we adjourned for the lunch break, I was inquiring into issues concerning the organic agriculture industry. I think I received all the answers from the minister at that time. I will check the Hansard later, so I won't go back over those points. I just want to make a few other points to the minister. I think what I was referring to just before the break was the pest management guidelines. I want to note that in 1993 -- reviewing the Hansard back then -- I believe it was the Minister of the Environment who stated:

". . .we have recently released the pest management guidelines, which function jointly between the Ministry of Agriculture, Fisheries and Food and the Ministry of Environment. Through those guidelines we are seeking to help some aspects of the organic farming industry in that regard. But again, the Ministry of Agriculture Fisheries and Food appropriately, has the lead role in this, and we appropriately keep a watching brief and are in consultation."

I am concerned that this industry and those who have made an investment in this industry will be set back three years now. If this were a larger industry with much greater economic impact, how then would the Minister of Agriculture go to the table to his colleague the Minister of Forests and decide which economic benefit is the one that you have to risk? Perhaps it's only because the economic benefits from this industry are still at a growing stage, versus those in the forest industry, which stand a greater risk, that perhaps the latter has won out in the decision. I don't know. If the minister cares to answer that, that's fine. If he doesn't have that answer, I understand as well.

It's just that this is a growing industry. It is certainly one that is growing on this island, in particular on southern Vancouver Island. For the benefit of those people in that industry -- who aren't necessarily my constituents, but I am going to speak on behalf of them -- I implore the minister to do everything in his power to investigate and bring to the public's view exactly what is in this pesticide so that we can, at least, move on and preserve the industry.

Hon. C. Evans: I appreciate the comments of the hon. member. I think she does an admirable job of looking after this industry, and I certainly will take her comments to heart. I will do a better job in future of trying to convince this particular laboratory to release their information. I think all of the organic producers around her constituency should continue to look to her to do an excellent job of representing their interests. That's on the record. You can mail it out.

[1450]

Interjection.

Hon. C. Evans: Well, not only that, but an echinacea producer, who is the head of the B.C. Herb Growers Association, is in that hon. member's constituency. So it's a big enough industry to be represented by all of the hon. members opposite, and if these guys were paying attention, I'd prove that I know their people too.

The gist of it is that it is a large industry. But farming is at least as threatened by gypsy moths as forestry is. We're not doing this for the big bad logging companies.

One of the environmental -- not economic -- disasters of the modern era is that you have species that move around the world and who don't belong there. Imagine if the Australians could have controlled an infestation of frogs before they got loose in their country and became permanent. Imagine if we could have controlled those zebra mussels in the Great Lakes before they got loose.

We are probably into the situation of having to manage periodic outbreaks of gypsy moths forever. And I want the hon. member to defend the ecosystem -- for example, the Garry oak. There is certainly an hon. member in this room who has constituents who are quite attached to the Garry oak. That's an ecological niche which is not replicated elsewhere and which is threatened by this moth. Similarly, the nursery industry. This island is just for the first time beginning to compete with the United States and to send materials south. That's a wonderful thing. That's agriculture.

The hon. member surely is doing a wonderful job of looking after the organic industry, but she does everybody a disservice if she wishes to portray this thing as farming against logging or agriculture against forestry. Nothing could be further from the truth.

I, on behalf of the farming industry, have driven the need for the spray campaign. And it isn't fun or facile; it isn't simple. But it's necessary, on behalf of everybody who cares about the agriculture industry or the ecosystem.

I. Chong: I want to thank the minister for his kind words, and I want to assure him that I was not trying to portray one industry against another. But when you speak to constituents, they raise these questions. That's why we're here as elected representatives: to bring forth their issues, concerns and questions as well. We certainly do try to answer them in our constituency offices. But when we can't get those answers, then of course we have to raise the bigger question: is it because this decision was made due to these other param

[ Page 12455 ]

As to the environmental concerns that he mentioned, as I indicated, I did earlier canvass those in the Ministry of Environment estimates. I too raised the issue that the use of this pesticide is of some concern, because we have those conflicting opinions as to the safety or the risk involved and what it could do in terms of destroying the balance of nature. Where it may remove foreign pests that we now have, it also destroys perhaps some domestic things in our environment and ecosystem. So again, I did bring those issues to the Minister of Environment's attention. So I want just to give the Minister of Agriculture assurance that I wasn't only raising this here, in that nature.

I just want to say, on the issue of the Garry oaks. . . . And certainly the minister is correct. In southern Vancouver Island, particularly in Oak Bay and Gordon Head -- for which perhaps the Garry oaks were part of the formation of the name of the municipality -- there very much is a concern about the fact that there is a threat to the Garry oak system here. Whatever surviving trees are left, everyone is doing their best to protect them. But recently, the symposium on the Garry oaks, which was held here in Victoria, indicated that there was more of a threat to the Garry oak ecosystem from urbanization than from the gypsy moth infestation.

[1455]

G. Abbott: I have a couple of constituency issues I want to put to the Minister of Agriculture and Food. One is related to the organic production of food in British Columbia, which we've been talking about, and the second is completely unrelated to that.

I'll start with the issue of organic production. I confess to being blessedly -- or unfortunately -- ignorant of this, generally speaking, after 20 years in horticulture. I think I had a little bit of an idea of what was going on there, at least enough to get a second job. That was probably the wisest thing I did in horticulture. I don't know a lot about organic farming, and I don't know a lot about the dairy industry. The minister will have to forgive my uninformed line of questioning, as I'm doubly ignorant of the organic production of dairy products. However, I think the minister will be pleased to hear about this, because I think it's an emerging success story in my riding.

An entrepreneur, a gentleman from Armstrong named Dwight Johnson, has put a $2 million investment into an operation he calls the Village Cheese Co., which is located in Armstrong. It is an attempt, through this operation, to imitate some of the success that has been enjoyed by the cottage wine industry in the Okanagan and perhaps elsewhere in British Columbia and to extend that success to a different agricultural commodity -- in this case to organic cheeses. The investment they've made there is substantial -- as I say, about $2 million. It's a very impressive plant, and of course, I invite the minister to come and have a look at it, if he hasn't already. It's a remarkable operation that they have set up there.

At any rate, Mr. Johnson has one or two issues that I want to explore with the minister, and that's around what impediments or roadblocks there may be in the province in the way of broadening the production of organic cheeses and other organic dairy products. I understand from Mr. Johnson that the ministry has developed a draft policy which addresses the situation of organic industries as they relate to regulated markets -- in this case, the Milk Marketing Board. I understand, as well, that the draft policy identifies the need for close consultation and cooperation between organic producers and processors and the relevant marketing boards.

I'll put my question this way to the minister: has the draft policy moved beyond draft to official ministry policy in this area? Second, does that policy remove any of the systemic roadblocks, impediments or hindrances that may stand in the way of expanding organic dairy production in British Columbia?

[1500]

There's a similar operation in the constituency of the hon. member representing Grand Forks, using organic milk. There's a similar operation in your constituency, in a barn in Armstrong, using goat's milk, and one on Saltspring Island using goat's milk. All of these people, I think, desire to advertise their product as organic. For years we had an impediment in that we had no regulations that allowed these folks to have quota. Ergo, they had no product to make their cheese out of.

Yes, we have draft regulations in place to allow the expansion of the organic milk industry -- but not just milk. We're trying to find a way to accommodate organics in all supply-managed commodities so that there is no contradiction between the very Canadian idea of supply management and the growing entrepreneurial opportunity for organics. A couple of years ago there was a very broken working relationship, where people in the organic industry actually thought that supply management was antithetical to their needs. There is an individual who I think deserves a little bit of credit for helping to solve this. That's John Jansen -- the new chair of the Milk Marketing Board -- who, when I discussed your constituent's issues with him, proceeded to go directly to Armstrong and attempt to solve it and come back with some recommendations.

I want to assure the hon. member that we've moved light years in the last 12 months compared to where we were

[ Page 12456 ]

G. Abbott: I thank the minister for that comprehensive answer to the question.

The second issue I want to raise is a very human dilemma for a farm family in the Salmon Arm area that is struggling with the aftermath of the fire. The couple in question -- Gordon and Fern Muik -- lost a lot in the Salmon Arm-Silver Creek fire. They lost their home. They lost barns. They lost outbuildings. They lost equipment. They lost vehicles. There wasn't really much they didn't lose. They've been in a tough situation ever since that event occurred. I'm not going to get into the event itself and all that, because there are still discussions going on around that. But most of the things that the Muiks lost were covered by insurance. Fortunately for them, they had good insurance, and they have been able to rebuild the house and their outbuildings and all the rest.

[1505]

As the minister knows -- and I know he's as well-acquainted with agriculture as I am -- it's always a tough grind to make ends meet in agriculture. It's just impossible to make ends meet plus find $80,000 to rebuild a bridge that was lost. Now, I don't know if the minister has any answers to this, but I'm throwing it out there because I don't have an answer, and Mr. Muik doesn't have an answer. It's a sad, unfortunate situation for which somehow, I think, in order to keep an agricultural operation viable we need to find some answers. I'll throw that out to the minister in the hopes that he can make some constructive suggestions here that will help get the Muiks back on their feet and find a way for them to get access to their property across the river.

Hon. C. Evans: I had similar experiences when we had the heavy snowfall here on Vancouver Island, and insurers had told clients with hundreds of thousands of dollars' investment that insurance was not available. Other insurers had given a contrary answer. Consequently the PEP program did not assist those who had been advised that they couldn't get insurance, because it turned out some was available. People lost many hundreds of thousands of dollars, not based on their unwillingness to insure but on the incorrect information that they couldn't insure.

Because I had that experience and because I tried very hard to get the rules bent at that time and failed, I would be loath to suggest that we could bend the rules around the insurability clause -- which reminds me that everybody who ever looks at this situation should take the lesson from it that in order to get disaster assistance in flood, fire or snow conditions, you have to insure everything you possibly can. I would be pleased to work with the hon. member to see whether there are ways to deal with the regulatory regime around what kind of bridge needs to be built in order to decrease the replacement investment required. I would like, perhaps not in estimates. . . . If the hon. member wants to give me a map or share his file on the family, I would be pleased to see what I can do.

[E. Gillespie in the chair.]

B. Barisoff: The mandate for the Okanagan Valley Tree Fruit Authority will expire in the year 2000. For 1999-2000, the program has a budget of $2 million for grants and contributions. For '97-98, the acre allotment for the replant program was 1,000 acres. Only 849 acres were actually replanted. Last year, the acre allotment was 700 acres. What is the acre allotment for this year's replant program? How many acres were replanted last year?

[1510]

B. Barisoff: This is the final year for the Okanagan Valley Tree Fruit Authority. Is the minister considering an extension of this program?

Hon. C. Evans: This isn't really the last year for the OVTFA; the year 2000 is. It is sunsetted to end in the year 2000.

The answer to the hon. member's question -- am I considering its value? -- is yes. I have asked the OVTFA to supply me with an evaluation. What was their intent? What was their target? Did they meet the target? What was the cost per acre?

I have received that evaluation and then given it over to my staff to answer a completely different question, which is: does it pay? Do those people who engaged in replant during

[ Page 12457 ]

I know I'm not allowed to ask the questions, but I am allowed to muse aloud. I would really wonder what anybody else in this room thought about the replant program and whether they would be arguing that it has worked, because I'd be interested in considering the thoughts of any hon. members who wanted to muse aloud about it.

B. Barisoff: I guess my concern is the fact that the program was set up. It was a contract made with the growers and with government, whichever government it might be. It might not have been the minister himself at the time. But there was a contract made with the growers that they would enter into this replant program.

I must say that in my particular area in the South Okanagan, the replant program has been extremely successful -- it's in the Similkameen Valley. I'm sure it's been relatively successful in the North Okanagan, but maybe not as highly as in the South Okanagan. So if the minister is looking rather than. . . . I know he can't ask the questions. But there's no doubt in my mind that it's been an extremely successful program.

Considering what you read in the newspapers about the apple growers in the Okanagan. . . . I read in the headlines of this morning's paper: "Okanagan Growers to Rally Next Week at B.C. Legislature. Orchardists to protest lack of government aid for apple industry." I suspect that when you see these kinds of headlines in the morning newspapers in the valley, for growers to actually do these kinds of things, they've got to be in trouble. I think that the only salvation they have -- or one of the salvations they have -- is probably the replant program.

So I would hope that the minister would give some serious consideration to continuing the program. I guess it all becomes a matter of priorities and whether it's a matter of choices. We all know that the fiscal responsibility of government is to look after a lot of things. I guess that, from my perspective, I would look at farming as one of the most important areas that should be looked after. Probably why the minister, seeing comments from me about when the ministry's budget was cut. . . . I feel strongly that if everything is on hold and it's coming down, well, that's fine and dandy. But when the budget -- the overall budget -- of government goes up by $890 million and agriculture is left out, I have some problems with looking at that -- and that's not just simply because I'm the Agriculture critic. It's more to do with the fact that I grew up in the Okanagan, and I know the value of agriculture. After becoming critic and travelling throughout the province, I realize how important it is to the entire province.

[1515]

Hon. C. Evans: The hon. member is quite right that if you perceive the objective of replant as, say, 50 percent of the total acreage in the Okanagan Valley, then we're only halfway there. If you perceive it as 100 percent, then we're only a quarter of the way there.

I am considering the cost-benefit of arguing with Treasury Board for the continuance or the change of the replant program. That consideration involves the kinds of things that I just discussed, like whether or not it can be shown that the growers that engaged in replant actually made money.

But there's another thing that at least I feel, and that is that one of the things that has been wrong with the replant program is that it is perceived, as the hon. member says, as a contract between the grower and the government. There are a lot of institutions in the Okanagan Valley -- and in the Creston area as well -- besides the grower and the government that ought to be involved in deciding the future of the industry -- for example, regional districts and municipalities, tribal councils, the university, federal Agriculture experimental scientists, the Farm Credit Corporation and the nursery industry. Anyway, that's just to scratch the surface.

It seems to me that the fruit industry has enough issues around water, zoning, noise, the ALR, commercial use of land and residential incursion -- all that kind of stuff with all those other institutions -- that if we were to try to look at the replant program as a sort of renewal strategy or to try to extend it, I guess my answer to his question -- what would my thoughts be? -- would be that there's a whole lot of other people that need to be brought into the process who have heretofore kind of stood on the sidelines.

[1520]

Hon. C. Evans: As the hon. member knows -- I'm not sure, but I actually think he was there -- we took the quite wonderful step last year of engaging an agrifood policy process, which twice centred in the Okanagan Valley. On those occasions we attempted to bring into a room not just the fruit-growing community -- which is kind of the symbol of agriculture -- but also the retail community, the people who actually sell the food, the municipalities, the people who create the operational regulatory regime, the ALR and the educators. On two occasions we began to build the relationships with those other players that I think need to be in place in order to make some kind of vision happen. On the second occasion, we brought in the federal government and invited them to the table with municipalities, tribal councils, growers and the province.

I guess my answer to the hon. member's question would be that we are trying, in short order, to build relationships between all of the players that impact on the primary producers' ability to make a living, raise capital, acquire land and process, distribute or market food. We will continue to do so, ramping up that sort of community-building exercise.

R. Thorpe: The fruit growers -- in particular, the apple growers -- feel that the government has not lived up to its

[ Page 12458 ]

Hon. C. Evans: A bunch of the last ten or 20 minutes has been sort of musing aloud with questions of a relatively philosophical nature that are answered in a relatively philosophical nature. Anything I said in the last ten or 20 minutes that indicated that there was a conclusion to the deliberations over the future of the replant program was incorrect. I apologize for that.

I think I was clear in saying that I had asked the OVTFA to do an analysis, because I actually think it makes sense that governments create sunsetted programs. I do not think it's a mistake that the OVTFA and the replant program had a sunset clause. I also do not think they have failed. They have -- and will have, by the end of next year -- exceeded the prediction of the number of acres replanted. I also think that they have quite a wonderful record, in that, to my knowledge, to date not a single grower has ever been turned down for replant -- not one.

I think it makes sense that governments create programs with a sunset clause, because everything should end. Whether or not that sunset clause should be overridden, and the replant program restarted, should depend on data. The OVTFA should have to prove that the program was successful technically, in terms of doing what we said we'd do. Then the ministry should have to prove that it makes money, because that's the ultimate point. The point is not to get people who are $15,000, $18,000 or $24,000 per acre in debt simply to replant trees -- to go from tall ones to short ones. There's nothing in that. Does it put money in your pocket? We'll conclude that analysis as fast we can. If it shows that actually there's money in your pocket, then I would want to consider extending, in some form, the replant program beyond the sunset date.

[1525]

R. Thorpe: Perhaps I didn't phrase my question clearly enough, so I'll try once again. Some of the shortcomings with the program that have been expressed to me by fruit growers in the Okanagan were that when the program was launched and people bought into it, there was a set of understandings. In their opinion, they believed there was a contract in place. In 1996, there were substantial changes to that. My question is: in a replant program, if people, as the minister rightly said, take money out of their pocket and put it in the ground or on the table -- wherever they're putting it -- is it not incumbent upon the other partner in the agreement to live up to the contract in all aspects?

Hon. C. Evans: I'm getting lots of advice. The hon. member is for sure correct that the best things governments can ever do is keep their word. The hon. member also will know that the one thing that we don't get to do -- whether we sit over there or sit over here or even get to sit up at the front of the room -- is bind future governments. That is why it's fun to be opposition, because you know that if you ever get to work on the other side, you're not bound by the decisions of the people who made the decisions previously. That's also why it's good to be a backbencher. You know that if you ever get to sit here, you don't have to do what the guy who was here before was doing. You can go and do something else, because you can't bind future governments. The balancing act in a democracy is for governments to keep their word and for previous governments not to bind or fetter future governments.

Now, let me say something that might surprise the hon. member. I was against the creation of the OVTFA; I didn't like Lusztig's report. I don't actually have any thoughts about Dr. Lusztig, because I never met him, but I didn't like what he wrote down. So I was, of course, opposed to the creation of the program in the first place. That's because my friends in the fruit-growing business were opposed. Of course, it was a Social Credit idea, this Lusztig idea and the OVTFA. So I thought it must be wrong. Sure enough, I get elected, come to work on this side of the table, and I start thinking that this isn't a bad idea, and it's a good thing that you can't fetter future governments, because future governments even have the capacity to learn. Maybe they didn't have it right before.

If the hon. member is saying, "Don't you think everybody should live up to what they say?" -- absolutely. If the hon. member is saying, "Next year or the year after, should the budget-making process or the government of the day be allowed to be honest and real for the moment and not be precommited by something I want to say in this room at this time?" I would say that that also is a precept of democracy that the hon. member doesn't want to mess with.

R. Thorpe: Hon. Chair, as you're well aware -- and perhaps even the minister may be aware -- there are even governments and even ministers who support retroactivity in changing the law. But we won't get into that right now.

Obviously the minister does think this is a good idea, because in his May 10 letter to the B. C. Fruit Growers Association. . .the current program expires at the end of the fiscal year. So a new program would, hopefully, be in place next year.

My question is very simple: when the program is put in place, will it be very clear that when people are taking their hard-earned money from their savings, or borrowing it, and putting it on the table, putting it in the ground and making commitments on a contractual basis. . . ? Will the government of that day stand up and stand behind those contracts that private citizens have put their money on the table for?

Interjection.

Hon. C. Evans: It's okay. I'll just answer the way I want to answer.

I am sure that whether or not the government of the day, if and when there is a program. . . . Remember, this program runs to the year 2000, so surely the hon. member is asking a much-in-the-future question -- say, 2001. I'm sure that whether or not the government of the day keeps its word in the year, say, 2001 will depend on who the government is.

[1530]

[ Page 12459 ]

With respect to the whole-farm insurance program, the minister has committed to providing some information to the fruit growers. When will this action be taken, so that they can take appropriate action?

Hon. C. Evans: Now.

R. Thorpe: Also, this letter to the president of the British Columbia Fruit Growers Association indicates that an analysis has been done that. . . . "To change benefits from farmers would benefit some farmers and disadvantage other farmers with respect to the exclusion of all labour expenses from program margins." Will the minister undertake to provide us with the analysis that his staff has obviously prepared for him on that issue?

Hon. C. Evans: Staff did that analysis, actually, with the BCFGA. So if the hon. member means that he can't get it from the fruit growers themselves, then I would be loath to give it to him without asking them. First I'm going to ask the BCFGA whether or not they would like to give it to him or want me to give it to him. If they say yes, I'll give it to him.

B. Barisoff: In a letter to Gordon Campbell dated February 18, 1999, Mr. Ron Parkes reported that he had heard on a radio program that the NDP was considering increasing the farm income level ceiling from $2,500 to $10,000 per year to qualify for farmland taxes. Is the ministry considering an increase in qualifying farm income level? I've had that call from a number of people over the last little while.

Hon. C. Evans: The ministry isn't, no. But repeatedly -- in Abbotsford, in Williams Lake, in Kelowna, I don't think in Creston, and I don't remember about Duncan or Nanaimo -- the B.C. Ag Council members have asked us to raise the limit. It is my understanding that that request predates my arrival in this job -- by years, if not decades.

There is quite a creative thought that has been put forward through the agrifood policy-making process, which is that perhaps this notion of being or not being a farmer according to receipts only is a wrongheaded way to define a farmer. Perhaps farmers should have the option of receipts for income earned or receipts for expenses invested, so that if you were a beginning farmer or if your ambition was to build up your farm rather than to make a bunch of money, you could spend money forever on investments in your land and qualify as a farmer by showing the receipts for your investment. That's just one of many thoughts, including the one that the hon. member discusses, which is the possibility that the limit go up.

Personally, I would be opposed to seeing the limit go up exponentially, as the hon. member suggests. I think that any kind of change of any sort, up or down, should be gradual. But I am very happy that the standing committee, through the standing-committee process, is going to travel around the province and ask this question.

What the smallholder community is saying to me -- the people who tend not to be members of the Ag Council except through the representative of the Farmers Institute or COABC -- is that it's tough for them to make more than $2,500. Some people are even saying that $2,500 is impossible. I think the definition is archaic and needs change. The best possible way to have change is through wide consultation and then bipartisan discussion, and that's the standing-committee process.

[1535]

Another question. Rather than reading all the background to it. . . . The minister knows the background. It is the silage boxes that Mr. Poelman from Sunny Vale Farm has written letters to the minister about. I'm just wondering: has the minister made any effort to alter the policy of the tax exemption for this type of farm equipment?

Hon. C. Evans: I have been an abject failure in solving that problem. I apologize to the hon. member, more so to the MLA and finally to the family involved. If I find the staff member who failed to make the Finance people change their position, I'll deal strongly with that staff member.

R. Kasper: He's right there.

B. Barisoff: It was appropriate that the member for Malahat-Juan de Fuca was in the room at the time that we asked the question, because Mr. Poelman has called me on a number of occasions wondering what was happening with this.

R. Kasper: With photographs, eh?

B. Barisoff: That's right.

The issue of the 600 acres of ALR land that would be used for the trans-Canada walking trail -- what is the current situation pertaining to agriculture and the trans-Canada walking trail?

Hon. C. Evans: I didn't quite understand the question.

B. Barisoff: Well, with the trans-Canada walking trail, from the best that I can gather, it's going to involve 600 acres of ALR land. I'm just wondering what the minister's stance is on this 600 acres of ALR land that's going to be traversing the province. What stance -- are we going to be taking land out, or what's going to happen with it?

Hon. C. Evans: I'm advised that it is expected that at some point, some entity will apply to the ALC to have that use designated an acceptable use. I don't know who the entity is or when it will happen.

B. Barisoff: Recently in the House, the government has talked about the introduction of legislation that would require major new regulations affecting business, which must be accompanied by a business impact statement. The government has referred to this as a business lens on regulation that's supposed to reduce red tape. Now, in regard to the application of the business lens to the ministry's activities, is the ministry committed to this?

[1540]

[ Page 12460 ]

B. Barisoff: Another question: is the minister taking any steps to research the possibility of moving hemp -- the non-drug crop -- into the agriculture sector?

Hon. C. Evans: It actually is in the agriculture sector. I'm the minister responsible for trying to make it proliferate on the land, and I'm working at it in your constituency.

B. Barisoff: I know that; that's why I asked the question.

On July 13, 1998, the minister announced the creation of a new steering committee to develop a market research and feasibility study for poultry processing on Vancouver Island, as a result of the job protection commissioner's report on the Lilydale poultry plant in Langford. Can the minister provide an update on the progress of this committee's study?

Hon. C. Evans: As I understand it, the industry is presently preparing to come to government to ask for the study to proceed. I do not know whether it will have a cost component to government. I don't think industry's made up their mind about what they want to do. I met with three of the poultry producers as short a period of time ago as a week, and we discussed these issues. I don't think it's any secret that everyone -- from people that work in this building to people in the industry to people in the retail sector -- is awaiting the outcome of various policy-making processes regarding the transfer of quota in various industries in the supply-managed sector.

B. Barisoff: During last year's estimates, I asked if the high taxes and overregulation that are plaguing the chicken industry were going to be issues to be dealt with, to which the minister responded, and it was a good answer: "Yes." Has the minister made any progress since last year in addressing those issues?

Hon. C. Evans: Absolutely. The chicken industry is a bright spot. We have done such a great job -- not we the government, but we the people of British Columbia: the industry itself, various municipalities, the province, but mostly the producers -- of overcoming the changes in the grain-pricing system in Canada and the transportation-pricing system. Whereas when I came into this job -- and even when the hon. member asked me the question a year ago -- I thought that the ending of feed-grain assistance payments might result in the cratering of the poultry industry and the processing sector in B.C.

The opposite has happened. Led by poultry, British Columbia was the second-fastest export growth province in the country last year. That's because of their creativity and actually figuring out how to produce what the world wants to buy and doing it in Vancouver, where there are obviously much higher land costs and labour costs and a much more difficult regulatory regime than, say, Saskatoon. They're doing it because there's an excellent labour force.

I visited a poultry plant in downtown Vancouver -- right downtown, with the highest land costs, probably, in western North America, except maybe the odd place in San Francisco or something -- right in the heart of Vancouver. I said: "Why are you guys here? Why don't you at least move to the Fraser Valley or something, where there's more land?" They said: "Because we have the finest workers in the world right here in downtown Vancouver. Those workers are so efficient that going anywhere where the workers don't live would be a mistake."

[1545]

B. Barisoff: The roads in the Peace River area -- in Peace River South and Peace River North -- have been deteriorating to unacceptable levels in recent years. There are a lot of roads that are actually being decommissioned and turned into 8F roads. Does the decommissioning of roads in the Peace River area translate into missed agricultural opportunities for B.C.?

Hon. C. Evans: The question is really in the purview of the Minister of Transportation and Highways, and I would encourage the member to save it for the Transportation estimates.

B. Barisoff: The question that I asked the minister was: is this having an effect on agriculture? I didn't ask whether the roads are going to be repaired. They're being decommissioned. I was up there. They're showing sections of roads, where the Ministry of Transportation and Highways is actually taking them out of existence and putting the onus on the farmer to look after them. What I'm asking the minister is: if these roads are being decommissioned, are they affecting agriculture in the Peace River country?

Hon. C. Evans: A fair comment. I will attempt to answer for Agriculture. A year ago or 14 to 16 months ago, I received a delegation of Peace River primary producers for a series of meetings in which they wished to show me and the Minister of Forests, the Minister of Mines and the Minister of Transportation a transportation network plan created by the industries themselves. They said: "Look, we need a whole lot of investment. El Niño has essentially left us in a wrecked condition."

The supersaturation of the base had resulted in a deterioration of the surface to such a degree that industrial and also residential and school traffic was made difficult. They said: "Fixing it all would probably be impossible, so what we would like to do is work with you to create a grid of those roads most important to agriculture, to oil and gas, to forestry and to mining."

We engaged in that process. We identified those roads, and that was the network that defined the investment for the 1999 investment regime, I believe. I would encourage the hon. member to ask in the Ministry of Transportation estimates whether 1998 and 1999 investments are actually going to that road infrastructure. If we were successful with the farm community in defining the roads that needed to have money spent on them, then I would say that the deleterious effects of El Niño are probably held to a minimum for the agriculture community.

[ Page 12461 ]

Hon. C. Evans: It's not just in the North Peace, as the hon. member knows. There are wildlife damage issues involving swans in Courtenay, all kinds of wildfowl in Delta, deer eating replanted orchards in the South Okanagan and in Creston, lots of elk damage and the like in the Peace, and on and on. In fact, I would say that it's almost a universal problem everywhere except West Vancouver, where the wildlife drive cars.

What do we do about it? This year, in an attempt to resolve these issues, we restarted the Environment, farm community and Ministry of Agriculture wildlife committee in order to attempt to change the regulatory regime in a way that we could deal with it wherever possible.

[1550]

I don't want to duck, though, the fact that there's a lot of money at stake. British Columbia does not allow wildlife damage to be a compensable expense. So you can buy crop insurance against weather, and you can be in the whole-farm program against a commodity price crash, but essentially there is no insurable way to cover yourself for wildlife damage. It's one of the issues that I raise every year with federal and provincial ministers, and I hope that when we change the relationship of the Canadian agricultural safety net system to British Columbia, we can take another look at this issue and see if it can become a compensable form of cost in future. But it isn't going to unless we get more money for the safety nets.

B. Barisoff: In a letter dated January 4, 1999, Mr. and Mrs. Jansen outlined a legal battle they had been engaged in with the district of North Cowichan for the past three years. In 1995, polluted water came onto their five-acre property by way of the district of North Cowichan's ditching and culvert, leading to contamination of their wells and flooding of their land, making their property unsaleable. They have been to the corporation of the district of North Cowichan, the Central Vancouver Island health region's environmental health unit on several occasions, asking for this matter to be dealt with and resolved. Is the minister aware of the situation, and does he intend to rectify the situation -- at least get the ball rolling?

I had the opportunity to go up there and visit, and actually, almost that whole Cowichan Valley is flooding. There was a gentleman looking to plant cranberries and whatever else, and he was stopped for part of the process just because of the flooding. It seems to me that the answer is down at the mouth of the river there -- to open it up and let the water drain out. I'm just wondering if the minister is aware of the problem.

Hon. C. Evans: Yes, I have been made aware of drainage problems in the Cowichan Valley for a long time. I'm advised that the Cowichan Watershed Council was formed in 1996 to deal with precisely these issues, and I'm also advised that our water engineer has been working with the Cowichan municipal council or regional district to try to deal with the drainage issues related to the river. I want to assure the hon. member that we will remain seized by the issue as we work it through.

The other complication that we haven't discussed is the ditching question. As the Cowichan Valley has become somewhat saturated over, say, the last decade because of changing regimes about drainage and the like, farmers have had to use ditching or reopen ditches in order to drain their personal property. At the same time, the Ministry of Environment and DFO have come forward with new sorts of regulatory regimes that make it very difficult to reopen a water channel, which your family may have built, if it has fish or the possibility of fish in it. I also want to assure the hon. member that on that front I think we're making progress too. We will have guidelines published within two weeks' time in order that farmers can know exactly what the rules are everywhere in the province -- I hope.

[1555]

Hon. C. Evans: I believe that they're getting a $200,000 quality grape and wine grant this year.

R. Thorpe: Can the minister advise if the government remains committed to the quality program of VQA and the development of the premium British Columbia grape and wine industry?

Hon. C. Evans: Yes, we are.

R. Thorpe: Can the minister advise what role, if any, the ministry is playing in the negotiations and discussions that are taking place with respect to the establishment of VQA Canada?

Hon. C. Evans: The ministry is part of ongoing discussions with, I think, every wine-producing province in the country on quality issues generally. The VQA negotiations constitute part of a much larger ongoing discussion, attempting to expand the market for all the provinces in the country.

R. Thorpe: What role, if any, is the ministry playing to ensure that British Columbia VQA wines have available and ready access to the European market?

Hon. C. Evans: Trade issues generally tend to be federal issues. Marketing is -- in part, at least -- a provincial responsibility. If the hon. member's question has to do with trade law and tariffication and the GATT and what have you, or international food quality standards, it is best directed to the federal government. However, we are part of the Canadian general standards decision-making process, trying to come up with national wine standards that will allow our country freedom of access to the European continent.

J. Wilson: Last year the minister came out with a ten-point plan. They were going to work in cooperation with

[ Page 12462 ]

[1600]

We said that our objective would be to enlarge the table from where we were a year ago -- which the hon. member refers to. We now have the B.C. Ag Council, the Ministry of Environment, Lands and Parks, the Ministry of Agriculture and Fish but also the federal DFO, UBCM and Environment Canada all involved -- and Ag Canada and the Canadian Wildlife Service.

We said that we would gather and compile all existing environmental regulations and guidelines that affect the industry. The summary is created and has been forwarded to the Ag Council. We said that we would develop a process for evaluating the financial impact of environmental regulations on the industry. Such a process was funded by Investment Agriculture, and it is happening. We said, in one of the most contentious issues that we started out with, that we would develop a framework for riparian management in agricultural areas that was compatible with the goals of fish and yet didn't constitute some form of expropriation of wealth creation opportunities. I would argue that we are well on our way. We said that we would develop, with the Fraser Valley dairy industry and MELP, jointly developed guidelines for manure management. Guidelines are in place and the consultation process to make them work, facilitated by the Fraser Basin Council, is being initiated.

Lastly, we said that we would make all this stuff work by instituting a peer advisory process in which. . . . For example, in dairy there would be a group of dairy people who would, when there was a complaint about the manure management of another dairyman, go out and see that person and attempt to resolve the problem in order to avoid a kind of cop relationship with government -- to keep the Ministry of Environment and police from having to go to the dairy and issue some kind of an order, and in order that everybody would learn how to handle manure better. I'm pleased to say that peer processes are in place in quite a few commodities and regions and are frequently funded in partnership with the province.

J. Wilson: The single window -- is this for proposed regulations that are coming up, or does it include existing ones that are already there?

Hon. C. Evans: It's intended to deal with new initiatives so that something new doesn't come into the operating environment by surprise. However, I should say that the problem wildlife issue that the hon. member raised earlier is an example of an old issue which needed a forum for discussion, and so we brought it back. However, its primary objective is a place to table any new regulatory rules.

J. Wilson: Is it possible to get a copy of the guideline summary that you've referred to here?

[1605]

J. Wilson: Regarding the riparian areas, could the minister maybe explain how this, or what they've done to this point, is actually. . . ? Maybe I'll rephrase this. At this point, what can the producers out there dealing with these riparian areas expect to see, or what has been achieved to this point that's going to affect them?

Hon. C. Evans: Well, the hon. member's question was: what can producers expect? What producers were afraid of was that the riparian guidelines would be imposed on people. There was a lot of concern, especially around the legislation called the Fish Protection Act. What we are doing to attempt to avoid that sort of imposed regulatory regime is that the B.C. Agriculture Council, the Ministry of Agriculture and the Ministry of Environment are working on a set of voluntary guidelines which we hope will apply to riparian zones around the province. It will be based on a self-auditing principle where, if you own riparian lands, you take this set of guidelines and some options and create for yourself an audit of whether or not the management of your property is safe for the riparian ecosystem.

J. Wilson: In the meantime we have MELP staff going around and investigating any activity that's going on in riparian areas and laying charges if they feel that they can -- and they do. So this has not done anything that I can see that has given the landowner any benefit yet, because this is not yet implemented.

Hon. C. Evans: I would suggest that the hon. member ask the three people to his left and the two people to his right that question, because that's not my impression. My impression is that whereas two years ago, we had a haywire and unpleasant on-the-ground relationship between some government employees and primary producers, I do not get those hysterical phone calls anymore, saying: "Someone has come onto my property, and it is a total surprise to me. He's enforcing rules I've never heard of in a way that I don't understand, and I'm upset."

My impression -- and I want you to ask the people sitting with you -- is that from the Fraser Valley, where it was manure, to the Creston Valley, where it was deer in the orchards or what have you, the relationship between the Ministry of Environment people and the primary producers has calmed down. I don't want to say that everything's fixed yet. The Chair herself has a wonderful producer running a wonderful farm and getting in trouble every month because some regulator has a bee in her bonnet. But we're working on it, and I would say that to say nothing has changed yet is the ultimate in exaggeration.

[1610]

Hon. C. Evans: I'm not sure if I understand the question, but I'm going to try this for an answer. No, we're not doing

[ Page 12463 ]

It's not on a regional basis. It's everywhere, I hope. But if the hon. member is suggesting that perhaps it's working better in some places than others -- I would certainly give you Courtenay as an example where it isn't fixed yet -- the hon. member may be correct.

J. Wilson: In the riding that I come from we haven't yet seen any benefit from this. We are still having people, basically, being harassed by the Ministry of Environment if they even attempt to do anything on private lands anywhere near a stream that's in a riparian area. I can give him examples of that if he would like.

Another question which I have for the minister is on the Ministry of Environment and the Fish Protection Act. Have you had absolute, complete buy-in from DFO on the recommendations that you've come forward with? Or is DFO just sitting there as an observer?

Hon. C. Evans: I don't think we have complete buy-in from anybody, but on the ditch guidelines the DFO has been a contributor -- much more than just an observer.

I want to clear up one other -- perhaps -- misunderstanding. When the hon. member said that the Ministry of Environment people in his area or his constituency might be operating differently than I had described, I have to say that staff have advised me that there is a difference. In-stream work -- like actually physically working in a stream -- is still strictly the purview of the Ministry of Environment. The riparian rules that I was talking about. . . . It's that area that's sort of wetlands out beyond the border of the stream itself. That is the area for which we're trying to solve the problems. But if you desire to do works actually in the water or in what they describe as a watercourse, the Ministry of Environment has sole jurisdiction.

J. Wilson: I would like the minister to be specific here on what he means by "in-stream." Is that within a certain distance of the stream bank? Or is it the actual channel itself?

Hon. C. Evans: I would like to encourage the hon. member to ask the question of the Minister of Environment, whose legislation it actually is.

[1615]

The Chair: Order, members.

J. Wilson: The freshwater fish habitat, which is your fish protection, is actually the responsibility of DFO and not the Minister of Environment. The Minister of Environment may enforce it, but in the end, it is DFO responsibility entirely. For that reason, unless this has DFO buy-in, it is not going to succeed, regardless of what MELP or the Ministry of Agriculture and all the other ministries and departments decide to do. With that, I would close.

B. Barisoff: At the briefing session I had with your staff, hon. minister, we asked a number of questions. If I can be assured that I can get all the answers to those questions, even if I have to resubmit those questions to them. . . . If it's the case that I can get those answers, then we can close at this point in time.

Hon. C. Evans: I would be pleased to volunteer all these wonderful people to answer any questions that anyone would like to put to them. Any failure to do so is purely my own and not their responsibility. Any wrong answers that may have been given in the last two days are purely my own and not their responsibility -- and certainly not with any intention to mislead.

Vote 14 approved.

Vote 15: Provincial Agricultural Land Commission, $2,666,000 -- approved.

Vote 16: British Columbia Marketing Board, $895,000 -- approved.

Vote 17: Okanagan Valley Tree Fruit Authority, $2,000,000 -- approved.

Hon. C. Evans: So you think all these officials are here to help you. But really, they just want to see if they get their money.

[1620]

Motion approved.

ESTIMATES: MINISTRY OF FISHERIES

Hon. D. Streifel: I confess that I haven't really been following estimates this year, except to recognize that there's been quite an interesting line of discussion and questioning in most of the estimates procedures that I've sat in on. I have a few opening remarks, if you'd bear with me. I think the members would be interested. It might set the tone of debate. I'll give a little bit of an overview of what we've been doing this last couple of months -- the last 12 months or so.

Before I do that, I'd like to introduce my staff. On my left is my deputy, Bill Valentine; behind Bill is the CEO at Fisheries Renewal, Paul Kariya; behind me is ADM Linda Hannah; beside Linda is ADM Bud Graham; and -- I don't know what her title is -- Pat Jackson does everything that nobody else will do.

A Voice: She probably runs the place.

Hon. D. Streifel: Probably.

[ Page 12464 ]

I'm honoured to open the debate this year after our first full year of operation. It's been somewhat rocky from time to time but very rewarding to establish a new ministry -- the first one in the history of British Columbia to deal with fisheries issues. We were created to provide a consolidated approach to all of British Columbia's fisheries initiatives in the province. It hasn't been without misunderstanding, I would say; a number of the interest groups weren't sure what we were creating with this ministry.

We believe in forging cooperative relationships and strong partnerships. We encourage development and diversification of the fisheries and processing sectors to maintain the economies and the vitality of B.C.'s coastal communities. We are working on the enhancement of recreational fisheries to increase the contribution to the economies of both rural and urban British Columbians. We're really evolving into an economic development and policy ministry, as we move through our first year. We've really looked at our first year in hindsight. We've achieved some milestones that are really quite innovative and exciting, I believe.

We've held our position as a strong voice for coastal communities around PST talks, which has been tough. We have quite a number of fishermen and fishing families without income -- going into their third year -- and with little or no help or support from the federal government on this issue.

We've developed an action plan to deal with the coho crisis and its impact on coastal communities, based on the recommendations of Dr. Parzival Copes. It was a far-reaching plan at the time we introduced it. We were somewhat criticized for stepping into that realm and daring to offer advice to someone else who has jurisdiction. But in fact, many of the Copes recommendations and the positioning in the Copes report have been embraced and accepted by not only the coastal communities but the federal minister as well. After the fact, he has picked up a number of the issues around the Parzival Copes report and has implemented them as his own. I think I'll accept that compliment from the federal minister, because it was innovative work by Dr. Parzival Copes.

[1625]

We're continuing to build a world-class sport fishery on our coast, and I believe that with our initiatives around steelhead and habitat and our lake stocking and aeration program, we'll ensure that B.C. is well known for both marine and freshwater sport fishing.

We're continuing to invest in fisheries habitat and enhancement. We launched Fisheries Renewal B.C., which invested, it says here, $10 million in fisheries projects last year and will invest $8 million this year.

What's more important about Fisheries Renewal -- and I expect to examine a little bit of this -- is the kind of community partnership endeavours that have been undertaken by Fisheries Renewal, bringing together diverse interests in a community on a common goal around fish. The focus and the work that Fisheries Renewal has done on development and diversification, value-added and job production, as well as environmental protection, has really been quite rewarding. Just yesterday I participated at Steveston in the announcement of the salmonid renewal projects, including ones for the lower mainland partnership group, where we focused on another $10 million to go out this coming year across British Columbia. I expect that we will be looking at some of those expenditures, but it's important to note that Fisheries Renewal was also able to cobble together a partnership with B.C. Hydro. B.C. Hydro committed some $5 million last year and has committed some $10 million this year to salmon problems and the difficulties in bringing the communities together. I think that's important.

We're also continuing to help the commercial fishery develop new products and markets and diversify its production. Our goal is to develop more value-added products and allow more diversification in the fisheries. Through some of the announcements I've been able to participate in this past year. . . . There's one I'll focus on, without getting into a list that would fill this whole room. One that I found particularly interesting was at Port Hardy, where we're importing Alaskan and eventually Russian cod to process to a value-added stage in a British Columbia plant. It was bulk-harvested in somebody else's country, and through the help and the focus of Fisheries Renewal diversification grants, we're able to add value to that and sell it off and keep British Columbians working in that aspect of the fishing industry. It bodes well for the future. It says that if we do it properly -- if we work well with communities and the resources we have -- we can add value to anybody else's fish and participate in the economy in that way.

One of the other things I've been involved in is the hake allocation question. I've yet to see it addressed appropriately in our House in any form of debate. We have a circumstance where we have the largest fishery in Canada, located out of Ucluelet. We have access to growing and abundant stock, where the biomass is moving more and more into Canadian waters. We have private sector investment that's unprecedented. We have public support investment that's unprecedented in the establishment of infrastructure to rebuild and reopen what really were, in the past, defunct fish processing plants -- moving completely out of salmon and other groundfish competition and focusing completely on the hake industry. As we speak today, we have construction of a new processing plant to add value to hake in Ucluelet.

All of this is only possible because we have the stock. None of it will be completely possible forever or for the long term unless the federal government changes its policy on onshore priority allocation of our hake resource. Currently the onshore allocation is enough to keep folks going and almost get enough earnings this year to qualify for support in the downtimes. There's not enough allocation onshore to support

[ Page 12465 ]

[1630]

Here's an opportunity where we can have a vibrant community based on this fishing resource -- a vibrant community doesn't need any help at all. All it needs is access to their own fish. So far, at this stage it's been denied them.

Two of the initiatives that I've worked on. . . . Actually, I'm going on longer than I thought, but this is kind of fun for me, because it gets me to review what I've done this past year. Some of it's kind of fun, actually. Two initiatives that I've worked on. . . . I've found particularly personally rewarding -- there's really not a lot of reporting on it here, but that's okay too -- the leadership that came from this ministry in September of 1998, when the Fisheries ministers from all provinces and the territories met in Victoria with the federal minister.

Basically we said as a united group, led by this province, that we'd had enough of the DFO-style relationship that we live under, whether it was freshwater habitat problems on the Prairies, an east coast fishery or our own fishery here in British Columbia. British Columbians and Canadians in general, across the country, wanted more say in the future. They wanted to get out of the circumstance of complaining about hake allocation to the Poles or -- who knows? -- turbot allocation to somebody else on the east coast. We wanted to get beyond that and be involved in the day-to-day decision-making, so that we can refocus the common-property resources of our country on behalf of the folks who should benefit most.

[H. Giesbrecht in the chair.]

That began here in September. It was carried on just a couple of months ago in Quebec City. All the provinces and the territories and the federal government will sign on -- I believe it's this coming June, in a meeting -- to a protocol arrangement that stemmed from our Canada-British Columbia agreement and the leadership by this province for the rest of the provinces and territories to forge and build a new relationship with DFO -- to take us from being after-the-fact complainers and street-corner whiners to actually doing something on a leadership basis to address the multiple problems that are found within the fishing communities.

[1635]

We consequently invited the American legislators to come and visit us. They will be doing so at the end of July, in Nanaimo. We'll be holding a couple days of meetings where we have Senators and state legislators from Washington, Alaska, Oregon, possibly Idaho and California. We would meet and discuss common problems and look for common solutions. I was able to bring to these folks, on behalf of British Columbians, the on-the-ground problem as a result of not being able to address the fishing arrangements under the Pacific Salmon Treaty. They're more interested than ever before in discussing those problems from a local community perspective. I'll be introducing them to the successes of Fisheries Renewal. Hopefully, with the newfound moneys the federal government is focusing on habitat and salmon problems south of the border, maybe we can help them work out some kind of a protocol, particularly in the Fraser system, where we can work together. They can learn from us, because we are far ahead of them on habitat protection and what we've been able to do.

I'd like to go on and finish this, but I think I've probably said enough about where we are and what we're beginning to look like as a ministry and maybe what we need to focus on in the future. I hope that helps form some of the debate that we'll engage in in the next couple of days, particularly around issues like aquaculture -- particularly shellfish, where we have an initiative on the ground, and finfish, where we haven't yet made a decision on what we're going to do as we move forward in a consultative process for that.

I would caution the members that there are some things we can talk about that are currently under my ministry, and I don't really want to talk about too many of the federal problems, as I have no jurisdiction there. For other issues, I will be alerting the members as we go along whose jurisdiction they are in and try to focus the debate where answers can be had to the questions, as opposed to just trying to pontificate or philosophize on something that I have no involvement with. With that, I think we should have a roll and see where we go.

J. van Dongen: I'm pleased to engage in the estimates debate this year for the Ministry of Fisheries. I want to thank the minister for his opening statement. I certainly agree with him that there are issues within his jurisdiction. I think we learned that lesson last year, and we're going to try and to stay within those goalposts and certainly talk about the issues as they relate to the industry.

I did review the Hansard of last year, and I think there was actually a fair bit of positive discussion there. It seemed more positive last night when I read it than when we went through it, but anyway. . . .

[1640]

We talked last year about a sector which was struggling through a period of change. I talked about the role of the

[ Page 12466 ]

I think it's important for the government to continue its role of fostering realistic expectations within this sector. All of us in government have a responsibility in that area to assist the industry in coping with change and in setting realistic expectations. I refer in particular to the job protection commissioner's report, which was done in 1998, I think. It talked about some of the tensions in the industry, identified some of the sources of the problems and set a blueprint or at least set a course of direction for some of the positive things that could and should be done.

If I compare the general state of the industry today with where we were a year ago, from an economic perspective I'd have to say that we probably haven't made a lot of improvement. Certainly commercial fishermen are hurting. They continue to hurt big-time as a result of not a lot of fish available for the commercial sector, as a result of the federal minister's decision to build a conservation policy based strictly on the weakest stocks. The commercial sector is also faced with a voluntary buyout program that for many is hardly a voluntary program, and I think that sector continues to hurt from, as I said, the situation they're facing and the need to find other options.

The thing that I consider significant -- and I've really started to note it in the last three or four months, in particular about the recent Coastal Community Network conference -- is what I see as a change in attitude of the people involved. I think it's a positive change in the sense that people are realizing that they have to deal with the situation. They're taking more of a can-do, positive approach. They are deciding that they are going to be survivors. I'm talking about fishermen; I'm talking about coastal communities. I sense a more positive, aggressive decision to do something for themselves. I get that from talking to mayors of coastal communities. Talking to a number of them, there is certainly a different tone to their view of the world. I get it from talking to union leaders or people in the fishermen's union, for example. I think it's set a different tone for themselves and their membership in the past year. And I get it from talking to fishermen themselves, recognizing that they need to look at diversification. They need to look at alternative fisheries; they need to look at intensification of what they are doing. They need to look at quality; they need to look at marketing -- this kind of thing.

So I think that's a very positive development. It's the first step for people in the sector and the communities they live in, working with government to solve some of the current economic and job-related issues. As I said, none of this will put food on the table today, but it will be a key to a brighter future for these communities.

I think there is also recognition that government cannot solve all their problems for them. Certainly in my discussions with sectors that are struggling -- and I have some background on this in agriculture -- I've always encouraged people to really make an honest and realistic assessment of their own situation. I think that's happening now in this sector. I didn't see it happening a year ago. The sport fishing sector, I think, is also somewhat more optimistic. They take some comfort from the chinook-coho announcement that the federal minister made. I think that the prospect of some stability and predictability in terms of fishing plans this year and next year is positive for them.

I see some positives in terms of the provincial government's role and its performance in playing its role in the sector. The first one that I think is positive is basically the laying down of arms in the federal-provincial fish war. I know, from comments that the minister has made, that he's under instructions from the Premier to try and develop a better working relationship with the federal minister, and I can only say that that is a positive thing. Judging by some of the comments and responses at recent meetings, I think that's also something that all parts of the sector are looking for.

I noted the tacit support of the provincial minister for the chinook-coho announcement, which gave some priority to the recreational sector in times of low abundance. Again, I commend the minister for that. I think that's a positive signal in terms of what needs to happen to assist people in the sector and in our coastal communities to deal with the current economic crisis.

I note the November 24 announcement by the provincial government to embark on a shellfish strategy, and I think that was initially greeted with some optimism by the sector. Just the fact that there was a decision to at least proceed in that area was positive.

I'll even indicate the positive side of some of the comments that have been made with respect to aquaculture. This is the salmon farming moratorium. In fact, I think it's considered positive that at least three senior cabinet ministers have indicated an interest in seeing that moratorium lifted.

[1645]

The shellfish industry expansion -- as I said, the announcement was positive. I think there have been some difficulties in terms of the execution of the strategy. Certainly there's been work ongoing with the sector and probably some unrealistic expectations by government in terms of revenue. Hopefully, some of these outstanding issues can be resolved for the betterment of the fishing communities, the betterment of the industry and the people in the industry and the betterment of government in terms of increased economic activity.

The salmon farming moratorium is probably the biggest concern I have in terms of an inability by government to deliver. This is an industry where there is huge economic potential. It's a good industry that's already in place -- $170 million a year. It's certainly turning a greater level of economic activity than the commercial fishery. It's an important economic driver in our coastal communities.

[ Page 12467 ]

I look forward to discussions with the minister. Certainly it's my intent to try and address a number of topics in a positive way and to try and get on the table some of the key issues that need to be addressed for the future.

In reviewing the estimates for last year, I'm just going to highlight a few things, because we did engage in some discussion on the mission statement last year. It's not my intent to belabour that issue or really to spend any amount of time on it. In view of where we're at in the past year, the ministry's really had an opportunity to establish itself. I'm wondering if the minister cares to comment on the mission statement of the ministry. It certainly strikes me that the ministry itself is going to be an economic development ministry, a job creation ministry -- an industry advocate, if you will. I wonder if the minister would have anything to add to that.

[1650]

I think it was appropriate in my opening remarks that I referenced where we're kind of fleshing out to be as a ministry. It's clear that we're not a recreational ministry. Our vision is still solid on behalf of the healthy and diverse fish populations, protection of fish habitat and sustainable fisheries that we would have for the benefit of all British Columbians. That's really where we build our premise from.

Our mandate, really, is to lead the government's efforts to build and sustain diverse fisheries. The evidence over the past year has been that we have been very active in that role, particularly around diversification and undertaking, frankly, to get off the ground circumstances that haven't been addressed for a number of years by governments -- this one and in some instances some of the previous ones -- when we reference how we address land use and whatnot.

We have undertaken, I think, some pretty innovative things. I believe our mission and our vision is still, at this time, virtually intact -- but clearing, I think. Folks that live on the coast understand what happens when the fog bank rolls in. We were created for a specific purpose, and we are now maturing into that purpose. I recognize some of the work that has been done to try to change who we are. There are other options on the table. I think the member is well aware of the last work with Rhodes.

I think that if you are looking at whether our vision statement would include a transition into a recreational ministry -- a fish and wildlife, parks and recreation ministry -- I would say at this time: no, it's not there. We're still solid on what we view as a very small, compact ministry with a really large job. We have to take some national leadership on fish issues, as we have done this past year. We have to take some provincial leadership and not blindly move ahead in accepting what some folks would like to see. I think there is more of a diverse set of interests out there to be addressed. We will always consider those interests as we move forward to fulfil our vision around diversification, support, habitat and these other issues. We're really starting to mature. I appreciate the member's question to try and get us started on what the vision is for this ministry.

J. van Dongen: I appreciate the minister's comments on the whole Rhodes report and the development of the ministry. We will get into that a little bit in a few moments.

I wanted to just start with a couple of fairly open-ended questions -- admittedly open-ended questions. Then certainly the minister is free to respond in whatever way he thinks appropriate. I think, to kind of tag on to what the minister talked about, that the role of the ministry not being a recreational one but more focused on the commercial side of the sector, economic development. . . .

I wanted to ask the minister, in terms of his -- and he did allude to it somewhat in his opening comments. . . . I wanted to ask him: what progress does he feel the ministry made? Could he just highlight some of the key areas that he thinks the ministry made progress in, in terms of economic and job development in the past year? I wanted to just take a quick look back over the past year and highlight the strengths and weaknesses of the economic development agenda in the fisheries sector.

[1655]

We have to go from two ends on this issue. We have to protect the existing industry, to consider how they'll grow and how they'll sustain and how they'll work through this system, as we establish a process that may have some different values -- for instance, community support focus. With the changing economy on the coast, there's more of an interest in things like community-based tenures and community activity around some of these initiatives. This allows a larger and stronger buy-in from community groups and first nations folks that want to know that their traditional lands are somewhat protected, that we're not forcing them into commercializing their section 35 rights under shellfish and what not. In fact, they'll be able to participate, as anyone else on the coast, in a commercial venture. So that's the second one -- Fisheries Renewal and all the work they've done.

The work we've done on diversifying fisheries around dogfish in Masset, restarting a dogfish industry; the work

[ Page 12468 ]

We're working on the development of a product side where, for instance, we have kick-started an initiative to work through the McMillan Fisheries plant in downtown Vancouver. Actually, that's one of the ec development projects of government that was really spearheaded by this ministry -- to support McMillan Fisheries through a transition period while they could come back and become whole on their own again, with access to groundfish. As a result of that, through the McMillan Fisheries plant, we've been able to work with a British Columbia entrepreneur that wants to develop a fishburger -- not a fish patty or a homegrown fish stick or something, but a fishburger initiative -- to come head to head in competition with fast-food outlets that concentrate on red meat, where he can concentrate a marketing regime into a culture that doesn't consume red meat and that is satisfied with fish.

In fact, that is off the ground and working. Development and diversification. There's $2 million invested in 31 projects and they've levered $19.3 million and created 930 jobs. I don't know what the reference is to first nations -- 125?

A Voice: Twenty-five percent.

Hon. D. Streifel: Twenty-five percent are in first nations. That's the work that Fisheries Renewal has brought forward.

We've worked on the other side with what we can do with our ministry to begin the development of policies around aquaculture, as I said, and shellfish in particular. We're now working on a strategy on some freshwater work to see what we can do. How can we work with other interests -- local interests, community interests and other ministry interests? This is a little bit dangerous. I know the member respects my need not to get into future policy, but it's something that's exciting, and I invite his input on how we would effect an initiative with tourism and other communities where we can actually develop a stronger and broader-based freshwater fishery.

Those are some of the economic development proposals that we've undertaken. I've probably left a whole bunch of them off. We supported the development of the hake industry on the west coast. We're doing the dogfish. I guess this ministry is supporting some research and development in aquaculture around black cod and some halibut research. We have some money involved in there to see how far that can lead us. That sets up kind of the excitement vibes on what we can do. It has really kept us occupied.

Of course, the big one where we've really led the parade. . . . I appreciate the member's reference to the retoning of the discussion on the Pacific Salmon Treaty with the federal government and with the Americans. I agree completely that we have to bring this down to a civilized level if we're ever going to achieve success on this one, and we're doing that. We've led the parade to bring that back, because probably the largest economic development initiative that we can have underway is to have access to our fish -- to effect a proper fishing arrangement under the treaty so we can have access to our fish -- so we can carry on and do more on the diversification of fishing methods and processing and adding value to it.

[1700]

J. van Dongen: I appreciate that overview by the minister.

Again, in terms of just establishing our context at this point in time, what would the minister say were his biggest disappointments in the past year in terms of things that he had hoped to achieve and is still working on?

Hon. D. Streifel: The only reason I'm going to answer this question is because I actually trust the member across the way.

Really, the biggest disappointment is the relationship with the federal government and our inability to influence the Pacific Salmon Treaty fishing arrangement negotiations -- being marginalized, not as a provincial government or a political movement called the New Democratic Party, but marginalized as Canadians that should have a realistic voice. Every individual or group or pairs of individuals that has gone forward to study this relationship question of what we do under the Pacific Salmon Treaty has set out some requirements that, in fact, you can't leave the stakeholders out. You have to gather their information. They may not sit at the table with you, but you have to find a way that they have input so that they trust the decision-making process. They don't want to be lorded over. They want to know that they're involved.

I believe that's my single biggest disappointment. Not only did the federal government not take British Columbians seriously -- whether first nations or the political government -- they didn't take their own advisors seriously on this issue. They've cut out everybody. They are prepared to give away our coastal communities' ability to provide for themselves in favour of some other regime with the United States. Coupled with that is the absolute inability for us to get the message out. It's extremely frustrating, and it's misunderstood. The public believes we want to catch the last fish, which is not true. We were the first ones out the gate with a conservation-based arrangement under Copes. When the federal minister said, "Conservation of coho is a prime objective; shut it all down," I got on the news as quickly as I could to compliment him for a gutsy move. But what's next? In the face of this conservation, do we just abandon the communities? Or do we work with them so that they've got some comfort over a year or two or three and we can build into a new fishery and stabilize the fishery for them.

That's my top regret. The second one is the inability to unravel finfish aquaculture. The diversity of opinions out there is absolutely spectacular. It's been complicated over this past year by the evidence of spawners in the Tsitika River. This was something that we were guaranteed could never happen. The misunderstanding on all sides -- both from political quadrants in this House and in the general public -- of the real position that we have on this issue. . . . It's misunderstood. I think some people just pass this off in a very lighthearted, flippant manner and say: "Oh, what the heck. No problems ever, and no problems ever in the future." It's just not true.

I think we have to work with an abundance of caution in developing what we can have as a homegrown British Colum-

[ Page 12469 ]

I've asked my folks to work forward on that so that we can understand what our international waterway is -- what the current flow is and where these fish flow. We could develop whatever policy we want here, yet still be negatively impacted, or adversely affected, by happenings in Washington State. That's progressing and moving forward. The inability to unravel it is my second-biggest disappointment, but the work goes on.

[1705]

I did go back -- and I think the minister gave the answer expected. . . . As I said, I went back through estimates, and the three goals that the minister had last year were (1) to get the Canada-B.C. agreement working better, (2) to get the Pacific Salmon Treaty resolved and (3), as the minister said in his opening comments, to be a voice for coastal communities -- in particular, "equity" and "access" were the terms that he used.

I think that it's always good that the real test of accountability is to go back and see how well you did in terms of the goals that you set for yourself. I thought we might just spend a moment -- and I know in the summary that I gave the deputy, I had it farther down on the list. . . . I thought it might be appropriate to talk a little bit about the federal-provincial relationship, starting with the Canada-B.C. agreement in particular. I think that at the time we had estimates last year, the minister was just ready to go to a meeting with the federal minister under this council of ministers provision in the agreement. My understanding is that that's an annual meeting between the two ministers. I'm wondering if the minister today could just tell us how that relationship is working -- how the provision in the agreement is working from a provincial perspective.

Hon. D. Streifel: That's an easy one, actually. It's just not working. We do actually meet periodically. We have had -- what? -- three meetings since last year and some phone conversations and have exchanged letters. I have to admit that although there has been progress on the Canada-British Columbia agreement, it hasn't been between British Columbia and Canada. As I referenced in my opening remarks, it's been British Columbia leading the rest of the provinces and the territories in the same relationship difficulty that we face under our Canada-British Columbia agreement. And that sprung forward as a result of us flashing our agreement, quite frankly, before the other ministers from the other provinces and territories. They wanted to build that kind of a relationship, so they were looking at ways to do that. I had to educate them, in a way, saying that it's just not working. We have a very, very uncooperative federal minister, who believes that those kinds of agreements are a constitutional attack on his authority to make decisions without consultation. So we still have that polarity in the relationship.

We have a bit of a better working relationship under the agreement at the staff level. I believe that the staff -- these folks here -- have been working very, very hard under my instructions -- and, I think it's fair to say, at the federal level, almost in spite of some attitudes that still yet have to be adjusted. But there is some progress being made at the staff level, so that tells me that over time there will be the political-level cooperation as well under this agreement.

This agreement, frankly, is the key to coastal community survival, because it provides all the necessary tools for folks there to take control of their destiny through almost a joint management or a participatory management decision-making process.

[1710]

So to say that we have successes because we've met and talked to each other would, I think, be to put an extra layer of icing on the cake on this issue. It's still very, very difficult. It's hard to get through that wall of, almost, mistrust or discontent from the federal side on what our motives are. I would say, hon. Chair, that if the member opposite and I were to sit down and lay out what our motives are in the management of these fisheries, they'd probably be a mirror image or a carbon copy of each other. Yet the individual out of the loop. . .or the processes that are out of the loop are really in the federal minister's office. It's still very problematic.

J. van Dongen: I appreciate the minister's answer. I think my sense of the history of the agreement is that the federal government signed the agreement but never really bought into it right from the start. That's my sense of it. From our perspective, we thought it was a fairly bureaucratic document at the time. Nevertheless, it does provide a framework, at least a starting point, and I think the minister and his government certainly supported the framework. It was a starting point.

Maybe the question I might ask the minister now is: has there been a history of provincial fisheries ministers meeting with the federal minister on an annual or a semi-annual or bi-annual basis? I know that in agriculture that has happened for a number of years. Has that happened over a number of years? At the same time, maybe the minister could tell us which provinces are the key players, in terms of the kind of national fisheries ministers' meetings that he's been involved in?

[ Page 12470 ]

They weren't "had enough" in anger or "had enough" in huge demonstrations. But they'd had enough in not being listened to on issues that deeply affect their economy and the lifestyles, hopes and aspirations of their people. Whether it's the federal government shutting down logging in Alberta because of the federal Fisheries Act, or shutting down expanding aquaculture in New Brunswick without any alert to the provincial minister there, or getting involved, as they have here, in the SkyTrain issue, there was never a consultative process developed.

We have now formalized the process, and it's coming together this June. There will be a format and a mandate to meet on national issues, we'll be able to break out into subgroups for regional or local issues, and we'll be able to carry on our own particular relationship. Ours is the Canada-British Columbia agreement, where I and this government remain fully and completely committed to the premise and the ideal that's focused on in that agreement -- which is really a movement of authoritative decision-making, a kind of mandate to move ahead on where the communities want to go in their decision-making processes.

[1715]

When I was Human Resources minister, I began the discussions in Ottawa on the national child benefit, based on our B.C. family bonus program. What we ended up with, after a year and a half of head-knocking and negotiations and meetings, was a national child benefit. I won't judge whether it's perfect or not. But the fact is that it's there, and that's how it began.

We've seen the focus on health care dollars that came out of the last federal budget. It began with initiatives from this province and this government, on a national basis, at these kinds of tables. What our folks said last September was that the fish people want the same level of input. This isn't an attack on the federal government's authority. It's a way to change the decision-making process to where we can in fact rationally decide what we do -- take the politics, so to speak, out of fish so that we have the ability to look, assess and evaluate the relationship we have with the federal government.

We will now. . . . I guess this June we sign on the lines, in Quebec City, that all provinces and territories -- including Nunavut -- will participate in a council of fisheries and aquaculture ministers to be formalized this year. In fact, the end of the member's question was kind of: "Who's onside with us?" I would say that our number one ally in this issue at this time is Quebec. They fully and completely understand the issues. They are probably our strongest ally. I guess everybody else would probably stand shoulder to shoulder on the line that we want input on these issues -- very strong input from Atlantic Canada and Alberta. It was really quite rewarding.

J. van Dongen: I think it's worth spending a little time on this issue, because I know it's important to the minister. I think it's also very important to our fishing sector and our coastal communities that there is so much of an interaction and interrelationship between the two levels of government in terms of policy development and delivery. I think this is a critical area that warrants a bit of time and discussion.

The minister made a number of comments that involve the division of authority between the federal government and the provincial government on fish-related issues. I think that's an area that is relevant, in the sense that once you get beyond the point of taking the position about where you think that division should be -- certainly within the government and probably within the opposition -- there is some thinking that more of the authority should be vested at the provincial level. Having said that and having established that, I think that one of the critical things in making the relationship work is to respect the fact that currently the authority lies where it lies. I think it's important for us to distinguish between those two things. We may not agree with where it is. Once we've said that, we have to set that aside and work to make the relationship work.

I want to ask the minister just a couple of specifics with respect to the agreement and about one of the elements in the agreement -- 3.0 under "New structures. . . ." The Pacific Fisheries Resource Conservation Council. . . . It seems to me that there was a decision made on that by the federal minister, if I recall correctly. The minister can correct me, but as I recall, there was a decision made to appoint some people to that council, or that type of organization, and there really wasn't much consultation with the province. I wonder if the minister could fill us in on that provision and on how that is working at the present time.

[1720]

That's not really unlike what we did with Fisheries Renewal. It's also referenced in the next one down -- the fisheries renewal advisory board. We put together the Fisheries Renewal process, and we didn't put any federal folks or at that time provide space for federal folks. It depends on who you talk to. You get a different version of why that happened. But to heck with it -- it happened.

I've been in recent contact with the federal minister to suggest that we stop the scrapping and show that in fact there are some areas where we can focus together. We can cut out duplication, and we can pool our resources. I've asked that the federal minister provide space on the Pacific Fisheries Resource Conservation Council for one of our appointees --

[ Page 12471 ]

I've told the federal minister -- five, six or seven months ago, maybe longer -- that at the time of the reappointment of the board I'll be holding some places on that board, and be prepared to expand from 12 to 14 members on that board, to accept the federal minister's appointees. I said that if we did this, then in the next budget cycle we could work out the finances, because they have money allocated to habitat. We have money allocated to Fisheries Renewal. This says $7 million each or $15 million each, or something like that, on the renewal side and a financial commitment on the conservation side.

I thought that first steps are small steps and that we would exchange appointments first and work out the financing arrangement later, because of the work that Fisheries Renewal has done and the deep respect they have within the partnership community. So far, we have a verbal commitment from the federal minister that this will happen, but we don't have anything hard on the ground yet. I still remain hopeful and optimistic -- like a brand-new grad or something -- that we can in fact put this together. I think it's part of the key to making this document work on behalf of the coastal communities.

J. van Dongen: I will just ask the minister: is the fisheries renewal advisory board that's referred to in section 3(2) something different, or was that a predecessor to the existing Fisheries Renewal board of directors for the Crown corporation? Or is it an additional body? If it's an additional body, what is its role as contemplated in this agreement?

Hon. D. Streifel: The role is rather self-explanatory, if you read the agreement. The Fisheries Renewal board that we have is not this reference. That's for sure. It's not this reference. It's our address to fisheries renewal in British Columbia -- to create that small Crown corporation.

What I'd like to do is get into dialogue with the federal minister on how we fit what we have into these provisions, if that's possible. His conservation council is not this one, either. It's a different mechanism and a different structure. Again, it's important that we get together to see. . . . We have provisions under the signed agreement. Can we fit what we have into these moulds? Can we make that work? Or do we have to change what we have, and what do we have to do? The idea is to show that we can actually cooperate on something. So far, we're exchanging. . . . They have a conservation council and we have an advisory board, but they're not the ones that were envisioned in this document.

[1725]

Section 4(2) talks about reducing duplication and overlap and improving the efficiency in service. Certainly in my experience of dealing on the ground, that is an area of great need and some potential for improving the situation. I'm wondering if the minister has any comments on whether or not there has been any progress made on that point in the past year.

Hon. D. Streifel: Actually, when I start talking about this agreement, it's one of my disappointments that it's not in place and fully functioning -- except, really, at the staff level. We can always find where the staff are completing the tasks as assigned or, I guess, as envisioned in this document. What we've done under that section, hon. member, is that we've completed the steelhead protocol and stock assessment, with a cooperative project and a traditional knowledge workshop. We're completing some data-sharing circumstances where we will actually, for the very first time, exchange information. I'm not quite sure what "urban inventory standards" refers to, but it's an expenditure here, so it must be working. It's in the spirit of ending some of the duplication.

Under enforcement, there's planning and protocol development -- some with us and some with MELP -- that I think you'll find might fit loosely under this. We've put together habitat protection workshops and those initiatives. If the member needs it, we can, through correspondence, flesh out some of the areas of cooperation. Suffice it to say, there are some positives.

Water use planning is another example of where we're working together. Suffice it to say, work actually does go on in a cooperative venue. Really, the difficulty is, again -- I don't want to say it too many times, because someone will send me a note and say, "Quit whining" -- at the political end; that's where the problem lies. The staff really want to work on this document. It's a well-thought-out agreement. It provides for just the kind of folks the member has periodically met with up and down the coast. It provides them with an avenue for input and an avenue, in some cases, for alternative activity while their input is being considered.

J. van Dongen: I do think that this is an opportunity for us in British Columbia to collectively get our views on the table in a constructive way. That's really my intent in engaging in this discussion on this agreement. A final question on this agreement deals with section 4(3) -- which is stock assessment, scientific advice and coordination. It talks about the Pacific stock assessment review committee process. Again, I would just ask the minister: is that process established? Is it an independent body of scientists that is providing an independent opinion? If it isn't working, do you have any comments about why it isn't working?

Hon. D. Streifel: I'll keep this answer relatively short. We understand that the Lieutenant-Governor is just approaching. We don't want to be charged an entrance fee to tour the grounds; we must treat him nicely.

It is working in a number of areas, hon. member. It's another section where we took political folks out of the picture and put staff to work on it. Lo and behold, they can actually get together. They were members of the salmon subcommittee working on steelhead issues -- we had input there. It's all scientists, so it's removed from the political forum. We're also working on a habitat subcommittee of PSARC. So yes, there is work under that section. The member will surely want to canvass this in a more extensive way in future days.

With that in mind and the L-G on the way, I move the committee rise, report progress and resolutions and ask leave to sit again. Don't worry. The member shouldn't worry, because the resolutions were on the previous estimates -- the Ministry of Ag and Food. It's not resolution of this ministry. That's the motion that I understand has to be passed.

Motion approved.

The committee rose at 5:30 p.m.

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