1998/99 Legislative Session: 3rd Session, 36th Parliament
HANSARD
The following electronic version is for informational purposes only.
The printed version remains the official version.
(Hansard)
THURSDAY, MAY 20, 1999
Afternoon
Volume 15, Number 9
[ Page 12669 ]
The House met at 2:07 p.m.
Prayers.
Hon. J. Pullinger: I have the pleasure today to introduce two special people. John Katsiris, who is visiting us from Australia, is in the gallery today. He's a friend of my son and his partner, and they met in Australia when my son was there on an exchange co-op experience with the University of Victoria. With him is Trina Somers, who is my son's partner. I'm delighted to welcome them both, and I ask the House to do the same.
E. Walsh: I am pleased to introduce Dave Byng to the House. Dave is from Cranbrook, and he is the district highways manager for the East Kootenay district. Dave works very hard for all those residents who travel through the Kootenays, to ensure that they have safe and convenient travel. I would ask everybody to welcome Dave to the Legislature.
D. Symons: Today we're privileged to have in the House a group of students from James Thompson Elementary School in Richmond. There's a total of 75 people -- students and adults, with their teachers -- and I believe that they're coming in two groups. I would like the House to make them welcome -- and maybe doubly welcome, because half of them are here now and half will be coming shortly.
Hon. L. Boone: In the gallery today is a gentleman who works for the information technology management branch of the Ministry of Finance and Corporate Relations. Like many government employees, he has worked for many years for government but has never actually attended this chamber or attended question period. Today he is here, and I trust that we will all be on good behaviour and show him how well behaved we are in this chamber. Would the House please welcome Mr. Ron Burleson.
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J. Cashore: Saturday, May 22, marks a very special anniversary in the life of the Minister of Small Business, Tourism and Culture, the member for Vancouver-Fraserview. That day will be the twentieth anniversary of his first being elected to public office -- in 1979, when he was elected as Member of Parliament for Vancouver-Kingsway. He was re-elected in 1980 and 1984; and then in 1988, his riding having been eliminated, he was elected as MP for Port Moody-Coquitlam, where he was my colleague. It was great working with him.
In 1993 he was subjected to the dastardly vagaries of political life, when he lost his
seat and he was forced by defeat into the ignominy of lawyer's work. But there is
redemption
The Speaker: Member, this is going on a bit. Is there
J. Cashore:
The Speaker: Does anyone else want equal time? Seeing no further introductions
Hon. C. McGregor presented a message from His Honour the Lieutenant-Governor: a bill intituled Wildlife Amendment Act, 1999.
Hon. C. McGregor: I move the bill be introduced and read a first time now.
Motion approved.
Hon. C. McGregor: Bill 63, Wildlife Amendment Act, introduces a variety of measures that will assist in preserving the natural legacy of wildlife in British Columbia. Beyond its intrinsic value, this legacy provides social, cultural and economic benefits to British Columbians, including the opportunity to live in harmony with an abundance and diversity of wildlife found in few places in the world. These amendments will encourage the protection and appreciation of this legacy.
The bill focuses on two main areas. First, we are dramatically toughening penalty preventions against those who take part in poaching and other illegal activities related to wildlife. For example, people trafficking in grizzly bear parts or engaged in grizzly bear poaching will now face a maximum $100,000 fine for a first offence. Previously, these individuals faced only a maximum fine of $25,000. Second, we are introducing new provisions aimed at reducing conflicts between humans and dangerous wildlife. These provisions respond to both public and local government demands to ensure early actions are taken to limit bear attractants and the conflicts they create. Other amendments contained in this bill are aimed at increasing the compliance, enforceability and cost-effectiveness of our conservation management programs.
The people of British Columbia place a high value on the diversity and health of their environment. This bill responds to those values and clearly reflects this government's commitment to safeguard our wildlife resources.
Hon. Speaker, I move that the bill be placed on orders of the day for second reading at the next sitting of the House after today.
Motion approved.
Bill 63 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.
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SECURITIES AMENDMENT ACT, 1999
Hon. J. MacPhail presented a message from His Honour the Lieutenant-Governor: a bill intituled Securities Amendment Act, 1999.
[ Page 12670 ]
Hon. J. MacPhail: I move the bill be read a first time now.
Motion approved.
Hon. J. MacPhail: I'm pleased to introduce the Securities Amendment Act, 1999. The purpose of this bill is to increase investor protection and to make sure that streamlining amendments will provide uniform regulation with other jurisdictions. This act is being amended to protect investors by providing the Securities Commission with additional tools to use when the Securities Act is contravened. The Securities Act is amended to expand the existing prohibitions on fraud and market manipulation, to expand the offence provisions so that any material false or misleading statement or omission is a contravention and an offence under the act, and also to permit the B.C. Securities Commission to apply for certain court orders that would allow an aggrieved investor to recoup losses suffered as a result of others' non-compliance with the act. The amendments also clarify the jurisdiction of the commission to decide questions of law and to sanction an individual who authorizes, permits or acquiesces in a company's or other entity's contravention of the Securities Act.
The Securities Act is also being amended as part of our commitment to reduce red tape. A number of amendments are being introduced to harmonize provisions in the Securities Act. These amendments represent a significant improvement in investor protection and also a streamlining of the Securities Act. They'll contribute to a very effective and efficient regulation of the Securities Act.
I move that the bill be placed on orders of the day for second reading at the next sitting after today.
Motion approved.
Bill 64 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.
ACCURACY OF FORESTS MINISTRY SUBMISSION TO FEDERAL GOVERNMENT
M. de Jong: Madam Speaker, it's another day in Victoria, and that can only mean that we have another leaked Forests ministry document. This one is dated March 30, 1999. It's part of the submission that the government made when it sought a federal bailout of its failed forestry policies. Interestingly enough, each one of the pages is labelled "confidential -- do not distribute." The question's a simple one for the minister: what is in this document that the minister didn't want British Columbians to know? What's in this document that he doesn't trust with British Columbians?
Hon. D. Zirnhelt: The document is simply a document we used for the basis of negotiating with the federal government.
The Speaker: First supplementary, member for Matsqui.
Interjections.
The Speaker: Order, please.
M. de Jong: I have a feeling, Madam Speaker, that this is going to be one of those rare occasions when the information we get in question period is actually going to be helpful. I know that the minister won't disappoint me in that respect.
So again, not a complicated question
Hon. D. Zirnhelt: Yesterday the opposition released a document that was dated November, which said: "In six months, we may have job losses if something doesn't change." Six months later we're reporting out that things have changed and that the number of job losses has been drastically reduced. The forest industry is in a slight rebound, and we're a little optimistic on this side, unlike the other side that continues to want to pour doom and gloom on those communities that are dependent on primary resources for their economic base.
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The Speaker: Second supplementary, member for Matsqui.
M. de Jong: We'll try to keep it simple for the minister: his document, last
month. All I want to know from the minister
Hon. D. Zirnhelt: Last week -- already -- I said that things had turned around
since that document was produced. When we submitted documentation
Interjections.
The Speaker: Members, members. I'm having trouble hearing the minister.
Minister, finish your
Hon. D. Zirnhelt: It's very clear that when we submitted the documentation to
the federal government, we expected, based on projections from the industry itself --
PricewaterhouseCoopers, back in the November era
Interjections.
Hon. D. Zirnhelt: Figures that we used through the new year
Interjections.
FRBC RECORDS AS REVEALED BY FORESTS MINISTRY SUBMISSION
G. Abbott: I guess this is probably the first government in history that's dated a report after they apparently negotiated it -- a most interesting twist.
[ Page 12671 ]
Over the past five years Forest Renewal B.C. has spent nearly $2 billion. Yet this report -- this document -- says that another billion dollars is needed to implement those initiatives that were supposed to be taken care of by Forest Renewal B.C. To the Minister of Forests: is this document not a full, candid admission of the dismal failure of Forest Renewal B.C.?
Hon. D. Zirnhelt: Not at all. I don't think anyone in their right mind would
have predicted only a five-year transition in the forest industry in British Columbia. The
opposition might think
Interjections.
The Speaker: Order, please.
Hon. D. Zirnhelt: It was a full understanding that Forest Renewal or programs like that would be necessary for many years in British Columbia.
I'd like to point out a few of the highlights from Forest Renewal's first five years. They spent $1.7 billion fixing watersheds, retraining workers and replanting forests. All of those things have helped to stabilize those communities that so many British Columbians are dependent on.
The Speaker: First supplementary, the member for Shuswap.
G. Abbott: The NDP government and Forest Renewal B.C. have succeeded in one transition. They've taken the forest industry in British Columbia from being one of the low-cost producers in the world to being the highest-cost producer in the world. What an achievement!
When Forest Renewal B.C. was first announced by this government in 1994, the government said it would "ensure healthy, productive second-growth forests." And yet, this last month, as this NDP government spoke to the federal government, they told them that after spending $2 billion, the level of funding was "insufficient to enable the transition to high-quality second-growth forests." Will the Minister of Forests not admit that this document is a failure, their whole forest policy is a failure and FRBC is a failure?
Hon. D. Zirnhelt: On the contrary, this side of the House puts strong value on
environmental protection. That side of the House wouldn't support Forest Renewal
Interjections.
The Speaker: Come to order, members.
Hon. D. Zirnhelt: They wouldn't support the 150 watersheds that have been restored by this side of the House. That side of the House would not support any of the surveys for wildlife and forest inventories by Forest Renewal that have been supported on this side of the House. It's this side that supports policies for the new forest economy. It's that side that wants to turn back the clock, rip up the Forest Practices Code, rip up the environmental standards that are there to protect the forests of British Columbia for British Columbians into the future.
B.C. SHARE OF FEDERAL HIGHWAYS MONEY
J. Doyle: Most of those people over there
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Interjections.
The Speaker: Order, members.
J. Doyle: I'd like to ask the Minister of Transportation and Highways a
question. Despite 25 percent of Canada's national highway system being in British
Columbia, the fact that
Interjections.
The Speaker: Members
J. Doyle:
Interjections.
The Speaker: Order, members. It's hard to hear the question.
J. Doyle:
Interjections.
The Speaker: Come to order, members.
Hon. H. Lali: I could take all day, if that's what the members opposite want, but it's eating up their clock time.
Interjections.
The Speaker: Come to order, members.
Hon. H. Lali: I want to thank the hon. member for Columbia River-Revelstoke for
that very important question. As this House is quite aware, last year when I went to
Edmonton with the council of transport ministers from all across Canada, I presented a
paper on behalf of all of the provincial transport ministers, calling on the federal
government to institute a national transportation investment strategy. The hon. member is
correct that Ottawa takes $700 million out of British Columbia in fuel taxes but only
gives us back about $1 million, as it was last year. We're working very hard to correct
that. We made our message clear to Mr. Collenette to take it to the federal Finance
minister, and we're calling for a ten-year, $16 billion program, so
The Speaker: Minister
[ Page 12672 ]
Hon. H. Lali:
The Speaker: Thank you, minister.
CONDITION OF FOREST SERVICE ROADS
G. Plant: I have a question for the Minister of Forests about Forest Service roads and the March 30 confidential document. According to this confidential document, his ministry has identified 1,100 bridges and culverts that need to be replaced over the next five-year period. The report is clear. If this reconstruction work isn't done, there will be "little option but to close the structures" as they become unsafe and close the roads.
My question to the minister is: when was he planning to tell British Columbians that their economically vital forest roads and bridges are becoming unsafe and will have to be closed?
Hon. D. Zirnhelt: We're in the process of assessing which roads should be kept open. As you know, we create thousands and thousands of kilometres of new roads every year. Some of them are no longer needed after forestry harvesting has been finished, but we go through an assessment as to the economic necessity.
It is true that all our budgets are under scrutiny, are under pressure, in order to support education and health care in this province. We are asking that we do a careful assessment, road by road. When that assessment is complete, should there be a necessity to close any Forest Service road, then we would be happy to inform the people who would be affected by it. But until a decision is taken to close a road, there won't be anyone informed.
The Speaker: First supplementary, the member for Richmond-Steveston.
G. Plant: Well, on my reading of the report, the ministry's already done
Interjections.
The Speaker: Members, come to order.
G. Plant:
But the point is this: there are 43,000 kilometres of forest roads, and the document calls these major public assets. The Ministry of Forests says that these assets are at risk. So will the Minister of Forests admit, after eight years of failing to protect these assets, that it's his government's policies that have put this economically vital infrastructure at risk?
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Interjections.
The Speaker: Come to order, members.
Hon. D. Miller: Only in British Columbia, hon. Speaker
Interjections.
The Speaker: Come to order, members.
Hon. D. Miller:
Interjections.
The Speaker: Members, come to order. We heard the question; now we hear the answer.
Hon. D. Miller: When we try to lever federal assistance, only the opposition here in British Columbia would undercut British Columbia citizens. In Saskatchewan, when there was a failure in wheat and hogs, the opposition in Saskatchewan didn't attack the government. They joined with the government in Saskatchewan, and they got federal money.
Interjections.
The Speaker: Minister, finish up.
Hon. D. Miller: In Atlantic Canada, when there was a failure in the fisheries and they rightly deserved some federal assistance, the opposition in Atlantic Canada didn't attack the provincial governments. They joined with them, and they received assistance.
The Speaker: Finish up, minister.
Hon. D. Miller: Here in British Columbia, when we try to get assistance for forestry and fishing, the opposition attacks us. They agree with the federal government. I say shame! Stand up for British Columbia.
Interjections.
The Speaker: Order, members. Come to order.
BREW PUB BEER MARKETING REGULATIONS
I. Chong: Let's talk about what this government is doing for B.C
Interjections.
The Speaker: Order, members.
I. Chong:
Will the minister responsible for the liquor distribution branch tell us
Interjections.
The Speaker: Order, members.
I. Chong:
[ Page 12673 ]
Interjections.
The Speaker: Order, members. Come to order. The minister is not going to reply until the House comes to order.
Interjections.
The Speaker: Members, members. Come to order.
Hon. I. Waddell: The matter is essentially before the court, and they'll look at
it. The problem is this, and I can tell
Interjections.
The Speaker: Members, members. Come to order.
Hon. I. Waddell: The problem is that under section 18 of the Liquor Control and
Licensing Act of the province, a manufacturer can't be a retailer. The reason is that
years ago the government separated, on the advice of a royal commission
Interjections.
The Speaker: Order, members.
Hon. I. Waddell: In 1980
The Speaker: Minister, finish up, please. We're over time as it is.
Hon. I. Waddell: All right. There was an exception made for pubs like Spinnakers so that they could sell, in their own restaurants or their own bars, the brew that they made. The industry generally is not in favour of the change on this matter, but I'm prepared to listen to what they say and to look at it. We want to change the liquor laws; we want to make it good for consumers. We want to eliminate red tape, and this is what we intend to do.
The Speaker: The bell terminates question period.
D. Symons: I ask leave to make a response to the Minister of Transportation and Highways' ministerial statement.
The Speaker: No, leave's not
Hon. M. Sihota: I have the honour to present Public Service Employee Relations Commission annual reports for the years '96-97 and '97-98.
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Hon. J. Kwan: I have the honour to present the Property Assessment Appeal Board annual report for 1998.
Hon. I. Waddell: I have the honour to table a report by the working group on film and television -- Michael Francis, Chris Haddock and Anne Wheeler -- that was presented to me yesterday in response to the federal report called "The Road to Success: Report of the Feature Film Advisory Committee."
Hon. J. MacPhail: In Committee A, I call Committee of Supply. For the information of the members, we'll be debating the estimates of the Ministry of Municipal Affairs. In this chamber, I call Committee of Supply. For the information of the members, we'll be debating the estimates of the Ministry of Labour.
The House in Committee of Supply B; H. Giesbrecht in the chair.
ESTIMATES: MINISTRY OF LABOUR AND MINISTRY RESPONSIBLE FOR
THE INSURANCE CORPORATION OF BRITISH COLUMBIA
On vote 39: ministry operations, $24,045,000.
Hon. D. Lovick: Mr. Chairman, I discussed with my colleagues in the opposition the other day, when we heard that my estimates would be up sooner than I had thought, that I would begin by making a brief statement about the labour part of the ministry and then we would go directly into the ICBC portion. I understand that my colleagues opposite want to begin with ICBC. So just for the benefit of you, Mr. Chairman, and any others who may be paying attention to what happens here, let me start by saying I'm pleased to be introducing the 1999-2000 budget estimates for the Ministry of Labour.
Today I'm going I'm going to speak briefly about the responsibilities of this ministry and also about the structure through which its mandate is fulfilled. I also hope to say something about the accomplishments of the past year, as well as where the ministry intends to go in the coming year.
Let me start, then, with ministry budget and structure. The Ministry of Labour operates with a proposed 1999-2000 budget of $24.045 million which includes recoveries of some $13.6 million and an allocation of 447 full-time-equivalent positions. Of these, 140 are attached to the employment standards branch. As Minister of Labour, I also report to the Legislature on the activities of the Workers Compensation Board and the Labour Relations Board, both of which operate in an arm's-length relationship from me, as agencies at arm's length from government.
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In addition, I share responsibility with my colleague the Minister of Advanced Education, Training and Technology for the Industry Training and Apprenticeship Commission -- albeit he has all the money. The Labour ministry, moreover, serves the public through offices in 18 different communities around the province, and that includes some 17 employment standards branch offices, three employers adviser offices, five workers adviser offices and the pension standards branch and collective agreement arbitration bureau, located in Vancouver.
Let me turn now to something about the ministry mandate and a brief overview of operations. The Labour minis-
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try's mandate covers a rather broad spectrum of responsibilities that relate to the workplace, including the following: first, to promote harmonious relationships between employers and workers; second, to ensure that workers enjoy basic standards in terms of working conditions and compensation as well as healthy and safe working conditions; next, to ensure that employment pension plans meet basic standards in providing retirement income for workers and for retired persons; moreover, to promote workplace-based apprenticeship training to ensure that British Columbians have the skills necessary for jobs.
Coming under that mandate, then, is responsibility for a number of things -- namely, employment standards, the skills development and fair wage program, labour relations, apprenticeship, workplace safety, workers compensation and pension standards. What ties all of these together is that they are part of the fundamental framework for relationships between employers and employees. It is the quality of that relationship that will ultimately determine how successful we as a ministry are.
This is a ministry that deals with employers and employees on an everyday basis, and we do so on many different levels concerning many different things. For instance, the Labour ministry is usually among the first to hear about changes in skill demands as new occupations and new business opportunities emerge. We also see the impact on workplace relations when different sectors come under economic stress. That may mean layoffs or it may bring added pressures to the bargaining table, and that's when, of course, it becomes my concern and comes to my attention.
Our constant need, of course, is to be competitive in a global economy. Needless to say, I'm not surprising anybody when I say that that can put employers and employees on a collision course. The much-vaunted idea that some embrace -- that somehow the old adversarial system has gone, and this is the nineties, and trade unions are no longer necessary, and we can all sit down and work things out -- alas, is belied and denied constantly by the facts. The reality is that we are often on a collision course. The job, of course, is to try and somehow decrease the severity of those collisions.
Similarly, those relationships can also create opportunities -- opportunities for cooperative effort, with shared responsibility and shared decision-making. Bad workplace relations generally result in the former, the collision course. Good workplace relations are essential to the latter.
In short, my work as minister is about building economic success based on good relations and on fair treatment for both workers and employers. That is why laws that affect the workplace must fairly balance the needs of employers with the needs of employees. For example, while the Pension Benefits Standards Act provides minimum standards for every private pension plan in areas such as eligibility, investing and portability, it also requires that there be a structure in place to deal with disputes, because inevitably there will be disputes.
The Skills Development and Fair Wage Act establishes wage rates that are in the middle range for construction employers, the construction industry. Now, I know that causes concern for some employers. Certainly we've heard those concerns. But the same employers have the option of taking on apprentices, giving young people and people in career transitions the chance to learn new skills. Apprentice pay rates, accordingly, are commensurate with experience. The company that commits itself to apprentice training is rewarded through more competitive cost structures.
Mr. Chairman, this ministry has been very active in the past year in promoting workplace cooperation and shared decision-making. We've done that with the high-technology sector, with the film sector and in forestry, to name just three. What we've demonstrated, I think, in each of those instances is that economic growth can be fostered in an environment based on cooperation and on mutual gains. We don't have to sacrifice workplace protection in order to have job growth.
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What we continually endeavour to do, however, is to keep the playing field level. Therefore we set and enforce minimum workplace standards in areas where there is a consensus that such standards are in fact needed. Beyond that, it is up to employers and employees to negotiate conditions appropriate to their particular enterprise and their particular industry. In fact, under recent changes to the Labour Relations Code, construction workers and their employees are able to negotiate agreements right down to the individual project level.
Let me briefly turn now to the labour relations climate. Before I move on to future objectives, I want to talk about the current circumstance. I think it is important to say something about labour relations in general. First of all, let's have no illusions that the labour relations climate is inextricably entwined with the economic climate. Where this ministry plays a vital role is in ensuring that labour relations issues get resolved. In the vast majority of contract negotiations, differences between employers and employees are resolved at the bargaining table.
What we've seen since 1992 is increasing stability in labour relations in British Columbia. Indeed, in the period since 1992 we've had an average of 44 work stoppages per year. From 1983 to 1991 the average was 70. Comparing the number of workers involved in work stoppages and the number of days lost during those two periods, we see a similar trend. In the years 1983 to 1991 an average of 50,851 workers were involved in work stoppages, with an annual average of 674,843 days lost. Between 1992 and 1998 the annual average was 23,536 workers involved in work stoppages, with 312,938 days lost. Throughout that period, from 1992 forward, the rate of unionization has remained constant -- around 35 percent of the workforce. What that tells us, surely, about the labour relations climate is that it is much improved from what it was prior to the current code coming into effect.
This is where I must make a point that may be perceived to be slightly partisan, because when the code was introduced in 1992, it is true that there were people on the other side of this chamber lighting their hair on fire, figuratively speaking, and saying the sky was falling, the province would be crippled with strikes and lockouts and we'd lose day after day and week after week, and the economy would be in disaster because of bad labour relations. The evidence points to the exact opposite conclusion. Indeed, a modern, balanced, fair Labour Code of the sort we introduced in 1992 has had precisely the opposite effect; it has improved that climate significantly. That doesn't, of course, mean that everything is okay and that we can rest on our laurels. Rather, we need to look forward, and we need to recognize we can indeed do better.
In the coming year we've established building closer relationships with stakeholders, both business and labour, as a key priority. Just as the success of any enterprise hinges on building cooperative relationships, our ability to deliver ser-
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vices and to ensure that our legislation stays current flows from positive and productive stakeholder relations. What often hampers our relations with stakeholders is a lack of adequate and credible data about labour-management issues that are specific to British Columbia. Accordingly, I have directed ministry staff to move ahead with the development of a framework for an economic cooperation institute. That was recommended, you will recall, Mr. Chairman, by the 1998 section 3 committee -- Ready, Lanyon, Gropper, Matkin -- which undertook a review of labour relations in B.C.
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Our objective here is to facilitate the creation of an independent agency that will provide reliable, impartial and consistent information about economic and labour-management issues. Let me just digress for a moment about that point. Labour relations is largely, alas, about crisis management; it's about dealing with problems that arise. Most of us, I think, when we get involved in that field and look at the complexities and the difficulties, say: "Is this the best way to do it always? Or should we be looking at other jurisdictions? Maybe somebody else has found a better way." My experience has been that nobody has yet found a better way than to have free and fair collective bargaining -- but, as we know, people get bruised in that process.
Let's look, then, with the most creative kind of mindset we can bring to the table, at other ways of perhaps solving some of those problems. Accordingly, then, when I see a recommendation such as was made in the Ready-Lanyon-Gropper-Matkin report -- I think those were all the names -- that talks about a forward-looking approach to labour relations, I get excited. Maybe it's because I'm an academic by background, but that kind of approach strikes me as absolutely necessary and may indeed have huge, huge rewards for us all. It's certainly worth trying, in my opinion. Therefore we are doing so.
I'm also, in the coming year, planning on building very much on the work that was done by the Royal Commission on Workers Compensation, which, as we recall, was to both improve the workings of the compensation system and improve British Columbia's workplace safety record. For the latter, we have already taken significant steps. We made improvements to workplace safety based on the royal commission's interim report, and I'm looking forward, of course, to bringing to this House a response to the final report as well.
I also believe, speaking on the theme of looking forward, that there is room within branches of the ministry itself to do a better job in delivering services to the public. Just as we have seen lower injury rates resulting from the Workers Compensation Board having made accident prevention a priority, I believe that other ministry programs must ultimately focus greater efforts on client education to head off in order to head off problems before they arise -- and that can be done, I think, in a number of ways.
One very recent exercise that can perhaps serve as a model for the future was the special forum on the changing workplace rules in the high technology sector. This forum gave ministry staff the opportunity to talk face to face with some 200 high-tech industry leaders, professionals and ordinary workers. What's most interesting and encouraging to me in all of this is that all of that was driven, not by government, but by people in the industry itself -- people who want to build long-term partnerships with government. They see government as their ally in creating that kind of climate I referred to earlier.
As in all ministries of government, Labour is also faced, of course, with the need to invest in its own state-of-the-art technology, but we have to provide people with the very best tools if we expect to them to give everything they can. In these days of shrinking budgets and cutbacks in ministry complements, we obviously have a double obligation to provide them with the best tools, the best equipment we can, to carry out their work. With that fiscal challenge also come some opportunities: the opportunity to provide, perhaps, faster service and the opportunity to serve people in more ways.
The Ministry of Labour, then, is continuing to play an important role in the growth of our province's economy and in improving the lives of British Columbians. The ministry is committed to helping create a positive economic and social climate that will contribute to the creation and protection of well-paying, family-supporting jobs. I think that's what all of us in this chamber would agree ought to be the aim. Nobody wants a McJob culture in this province. I don't think it's the case that any of us would accept that people, in order to raise families, should have to work at three jobs. Good-paying, family-supporting jobs is the goal all of us have, and we should do whatever we can to create those.
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By the same token, of course, we recognize that we need to do what we can for business to give it the flexibility it needs to thrive and create those jobs while ensuring that adequate minimum standards are in place for all workers. Over the past year, we've continued to develop close and valuable partnerships with the business, labour and education communities, as well as with other levels of government. We look forward to these partnerships continuing in the future, and I certainly look forward to discussing our plans and our accomplishments in detail with my colleagues on the other side of the House. Indeed, I look forward to both their comments and their questions.
Having said that, I want to turn now to the ICBC part of my mandate, as minister responsible for that large corporation -- the fifth- or sixth-largest insurance company in North America, I believe. I'm looking to the side, because the ICBC staff have arrived, and I haven't yet invited them to take seats beside me. Why don't I do that now and just invite you to come over as I chat?
Let me start by making a couple of brief points. First of all, when we talk about ICBC, we should recognize that it does have a history. It's 25 years old. This is the celebration, the anniversary, of 25 years. The theme, if I had to pick one to describe what I'd like to say about ICBC and what I think will become part of our discussion, is that it's not just another insurance company. Albeit it is an insurance company and a very good one, it's not just another.
The best way I can capture that to begin with is to quote just a little bit from the annual report which I tabled in this chamber yesterday. I want to just read, if I might, a few paragraphs about ICBC and what it does and what its mission is. "British Columbians reap the rewards of ICBC's 25-year investment" is the headline for the section I'm reading, and I mention that in case anybody watching this would like to get a copy of that annual report. One can certainly do so by writing to the corporation or indeed to me, and we'd be happy to make that available.
"Twenty-five years ago ICBC was created with a mission to bring equity, fairness and affordability to auto insurance in B.C. and to ensure that investment dollars stayed at home to help
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build B.C.'s economy. We have held up our end of the bargain" -- says the ICBC report. "Fairness is built into the way ICBC sets auto insurance rates. For more than two decades we have based premiums on factors that the policy holder can control -- avoiding being at fault in a crash, for example -- rather than age or gender.
"ICBC has also lived up to its promise of economic benefits to British Columbians. Over the years, many billions of dollars have flowed through ICBC back into the provincial economy. Last year alone, we paid out almost $2 billion in claims and other
. . . amounts paid to claimants, the rest went to B.C. businesses and professionals, such as auto repair shops, glass shops, doctors, lawyers, towing companies and physiotherapists. Aside from the 5,100 British Columbians we employ directly, Autoplan sales provide a living for over 900 independent insurance brokers in virtually every B.C. community."While we continue to fulfil our original mandate, ICBC's mission has grown into something much more. Our merger last year with the former motor vehicle branch has completed this evolution, giving us even greater accountability for road safety. Today ICBC's mission is to help British Columbians take the risk out of road transportation -- a goal whose achievement directly benefits all auto plan policy holders, as well as the community at large.
[1500]
"In this sense, the resources that ICBC devotes to preventing crashes and reducing auto crime represent investments on behalf of our stakeholders. Our efforts to combat drinking-driving and speeding, to take unsafe vehicles off the road, to improve road and vehicle design, to combat theft and fraud -- all of these provide a significant payback in both financial and human terms. Every B.C. driver shares in the dividends."
That's the key point -- why I say ICBC is not just another insurance company.
[P. Calendino in the chair.]
Three years ago, Mr. Chairman, the Premier froze ICBC rates. This year the corporation took an even further step. Based on better driving, fewer claims and an improved financial picture at ICBC, a road safety dividend was introduced. A dividend worth 2 percent was returned to ICBC customers this year, and that represents savings of some $47 million for B.C. motorists. Translated into individuals, it's not a lot of money, but across the province that 2 percent dividend was $47 million in the pockets of British Columbians.
The key point, though, was that that money went to those people who had got the message about safe driving. What it was and what it is and what it should be is a reward to safe drivers for their performance. Almost two million ICBC customers are benefiting from the road safety dividend. I want to stress that, if I might, because whatever ICBC does in terms of all its road safety activities -- wonderful and creative and energetic as they may be -- all those efforts will work if, and only if, the public buys in and the public says: "Yeah, you're right. We should also do our part to reduce the hazard on the roads and highways of this province." And do you know what? They've done it very well. Hats off to the public, because they have participated in a very big way, and therefore we have had good success.
We've had good success for a number of reasons. A number of programs, as I referred to earlier, have indeed been creative -- things, for example, like graduated licensing for new drivers and crackdowns on fraud and auto thefts. These things are helping to reduce the number of ICBC claims, and I think we will all applaud that. We do those, of course, working with the police and with community groups who share with us the ambition to reduce crashes and to stop auto crime.
All of this effort, as I said, is reflected in the corporation's bottom line. It's not only good in human and people terms; it's also good in pure economic terms. We have moved from a $135 million loss at ICBC in 1996 to a $120 million surplus in 1998. And all of that, I would remind people, was accomplished when ICBC rates were frozen. In fact, under ICBC our insurance rates are close to, and in many cases lower than, the rates that many motorists pay in Ontario and in Alberta, for example.
Unlike the private sector, our public auto insurance system in this province ensures that all licensed motorists get access to insurance coverage based on their driving records, not on their age or sex or marital status. And that's the difference between us, in a public corporation, and private sector insurance.
ICBC, as I alluded to earlier, is also a hugely important economic engine for this province, by investing more than $300 million a year in the province through its real estate and other investments. By being creative and working with other partners in the community, like the Technical University in Surrey, ICBC is exploring some other innovative ways to match our investment dollars with new opportunities to help create new businesses. We're looking for win-win solutions that will ultimately mean good value for our policyholders.
I want to just put this in context -- in perspective, if I might. You know, a number of people have said -- indeed, I've even heard it said, I think, by members opposite: "Well, why is ICBC investing in real estate?" The short answer, of course, is because every insurance company in the world invests in real estate. You always keep a part of your investment portfolio, which you have to have to protect yourself to pay off claims, in that form. But the difference in B.C. is that we invest that money, or a significant portion of it, in British Columbia. The money doesn't leak out of this province. Rather, it stays here to do good things in this province, and that's an important, important distinction, it seems to me.
[1505]
ICBC investments and investment capital also provide hundreds of jobs for British Columbians in communities across the province. ICBC keeps these dollars in the province and earns an excellent return on their dollars, largely because B.C. is a good place to invest. Every dollar that we earn, of course, helps to reduce the costs of auto insurance for B.C. drivers. ICBC's investments in community, road safety and auto crime prevention programs are unmatched in the Canadian insurance industry. Nobody else can make the claims that ICBC does in terms of preventing accidents. That's what we do, and we do it very well indeed.
I think it's fair to say that ICBC is responding very well to the needs of its policyholders. We can't, as I said earlier, though, do it alone. Every British Columbian has a role to play in road safety, and that's why we continue to work to build partnerships with the police, with local governments and with community groups to reduce crashes and to reduce auto crime.
I take some pride in the fact that ICBC, despite its size and despite the fact that
many of us look at it and wonder how you would ever figure out exactly what goes on there
[ Page 12677 ]
-- indeed, frozen -- not only in terms of providing that wonderful economic engine for
the province, not only in terms of its role in creating that new culture of safety and
even in doing its bit to decrease pollution -- that's ICBC's other activity
As well, despite doing all those things above and beyond just providing insurance, I take some pride in the fact that ICBC is also, according to all the evidence I've seen, one of the most efficient insurance companies in North America. Indeed, I'm advised that our administrative costs have remained low. Something like only four cents out of every premium dollar is spent on ICBC administration, and that, I gather, is a record that's competitive with any other corporation, public or private, anywhere else.
ICBC, then, is an efficient and customer-oriented operation -- by listening to customers, by improving the way claims are handled, by attacking fraud and auto crime and by supporting an aggressive crash prevention program. I think we can all take pride in the fact that British Columbians want to work together to create the safest roads in the world; that's our mission.
I'd like, if I may, to introduce the people here with me who are going to assist in answering questions. On my extreme left is Thom Thompson, chief executive officer of the corporation. To my right is Greg Basham. Greg, I'm sorry; I'll have to look at the note to get your title: government and corporate relations executive.
On my immediate left is Anwar Chaudhry, who is the corporate comptroller. Behind me is Donnie Wing, who is the manager for strategic planning and corporate relations.
Again, I welcome this opportunity to answer questions about the Insurance Corporation of British Columbia. I look forward just to hearing the members' comments about it as well. With that, I will close and look forward to comments.
K. Krueger: I thank the minister for his opening remarks, which were not concise but were uplifting.
I appreciate also and want to thank the minister and the senior people in the many departments of his ministry for their assistance in providing briefings to the official opposition as we've asked for them. They've been very helpful. I think it will save us a lot of time in these estimates, in that we covered ground which we won't have to cover here, taking up the time of the officials in the Legislature or the time of the Legislature itself.
[1510]
These briefings have given us once again a sense of the scope of this ministry and the tremendous size of the responsibilities that rest with the minister. People have often in the past drawn parallels with the responsibilities of the Attorney General. Indeed, there is a very significant portion of the population of British Columbians who look to this ministry to ensure that they receive fair treatment when they're hurt, both on the roads now and in the workplace -- also for the parallel justice system that the Ministry of Labour provides. It's a tremendous responsibility. To many British Columbians, this ministry and the boards and commissions and departments that it manages are the court of last resort for a lot of their problems. It's an awesome responsibility.
The minister talked about people's fears when Labour Code changes were made in the early nineties and referred to members on this side of the House setting their hair on fire. I wasn't here to see that. Regrettably, we're still on this side of the House, and I haven't seen that in my time here.
An Hon. Member: Figuratively.
K. Krueger: Yes, figuratively, of course.
The province has suffered economically, and I don't think the minister would dispute that, although he might dispute with us the reasons why we believe that has happened. But there is -- and I think the minister would allow this -- a tremendous perception of bias against job creators in this province. People simply aren't bringing their money here. There has been really consistent input from the various business summits held, those organized by the government and those organized by the business community themselves.
There has been a consensus that there are three main reasons for the economic difficulties that British Columbia finds itself in. Those three factors are like pillars, legs of a war machine that has been used to destroy this economy, in people's minds. Many people are convinced of that.
One of those pillars is what are perceived to be labour laws that are out of balance, and that's an area that I hope the minister and I will sincerely be able to work on together over the coming years and in the course of these estimates. We don't intend to waste any time going over simple facts that we could find and have been given through briefing meetings. We want to talk about the concerns that British Columbians are raising, and I will touch on a few of those shortly. But we want this to be a meaningful and productive exchange both in the issues we're dealing with today and in those many other areas that we have to cover over the coming days.
The other two legs of that war machine, in people's minds, have been overregulation and overtaxation. Taxation may not seem to have too much to do with the Labour ministry, although there are issues around Workers Compensation Board assessment rates and around ICBC premiums -- which to many people are not that much different from forms of taxation. Certainly the ministry has to do with a great deal of regulation, and that is something I'm hoping we can work on together in these estimates and over the coming years.
The economy of British Columbia has been blasted by something. It's like the ruins of a war. We've gone from the best-performing economy in Canada to the worst-performing economy in Canada. Whether or not we agree on the reasons for that, we all have an obligation to try and work to undo the damage and to restore prosperity and confidence in our economy. We certainly face fiscal challenges, as the minister alluded to. There's always an onus on government, even in good times, to ensure that there is careful and good stewardship of public funds, because we're not dealing with any of our own money. We're dealing with money that is extracted from the public -- however we want to view it, every government does that -- in the form of taxation, fees, licences, premiums, assessments and so on. There's a tremendous onus to make sure that we only spend the public's money wisely.
Some of the issues we'll be dealing with, of course, are ICBC, beginning today, and Labour Relations Board issues, the Workers Compensation Board, the employment standards branch and so on. Certainly the pension benefits standards branch is top-of-mind, because we have legislation pending, awaiting second reading debate. So we have lots of things to cover.
[ Page 12678 ]
[1515]
We've chosen to cover ICBC first, for a number of reasons. The government assigned ICBC to the Ministry of Labour not long after I was appointed the critic for Labour in the shadow cabinet. I wondered if that was coincidental or if that was mischief. Perhaps that's flattering myself. But as the minister said, I did work for ICBC for a long time. ICBC is 25 years old. I started with them 24 years ago -- so almost from the beginning, with many observations along the way, working for ICBC for 20 years. I desired then, and I desire now, to help ICBC be a high-performing company and to really serve British Columbians well.
When I joke that it may have been government mischief assigning ICBC to this portfolio
after I was appointed critic, I'm referring, of course, to the concern that all members of
this House have that we never find ourselves in a conflict-of-interest situation, nor even
in one where we can be perceived to be in a conflict of interest. Certainly the Minister
of Advanced Education is well able to deal with that, being in a similar position to me.
So, for the record, I am a long-term ICBC employee on long-term leave without pay. That
leave began in 1996, shortly before the election. I have an obligation, of course, to
avoid conflicts of interest. That's carefully laid out in the applicable act. I've been to
the new conflict-of-interest commissioner, H.A.D. Oliver, as well as to Mr. Ted Hughes in
the past, and they've each given me letters that say the same thing, which essentially
boils down to
So I'm going to ask the minister -- his government having put me in this situation -- for the courtesy of alerting me if he intends to deal with any matters that could be perceived to potentially provide benefits to me from the corporation. Certainly my colleagues are going to assist me in that regard as well.
Very shortly, I'll turn conduct of this debate over to the member for North Vancouver-Seymour, who has graciously agreed to serve as my deputy for ICBC purposes. But I will remain involved in the debate in those areas that affect me and my constituents as a broad class of electors. I think that I have an obligation and an onus to do that, because 20 years at ICBC were a real learning experience for me, and there are things that I can contribute -- and I intend to. But out of an abundance of caution, my colleague will conduct the debate, and I'll just get involved here and there.
[W. Hartley in the chair.]
Only yesterday, the ICBC annual report was tabled -- pretty late, from our point of view. One of the things we'd like is an explanation of why it was so late. I appreciate the minister's courtesy in that as soon as he got it, he sent me his own copy with, as he refers to it, his chicken scratches on it. That was kind of him, but it was a very late report. The corporation's fiscal year ends at the end of the calendar year, and this Legislature is owed the courtesy of timely reports. My colleague will be dealing with that in more depth.
When things like that happen, MLAs can't help but wonder if contempt for the Legislature is being shown. In fact, the opposition has experienced the frustration of not having some of its questions from past estimates debates answered by ICBC. I have some ideas as to why that might be, but again it's considered a sign of disrespect. We represent people who want answers to these questions. If the corporation's unwilling to give those answers, it should say so, rather than simply ignoring the questions.
For example, the premium freeze is seen by many people of the interior and Vancouver Island as not being a positive thing for their interests at all. Like the B.C. Hydro rate freeze, which freezes hydro rates at artificially high levels, the premium freeze has not been something that's been greeted with enthusiasm by people in regions whose premiums were dropping before the freeze happened. For years many people had advocated that ICBC shift to a rating structure that reflected the loss experience in geographic regions, and ICBC had begun to do that prior to the premium freeze by the current Premier. That had been a fairly minor reduction -- somewhere on the order of 1 to 2 percent across the board for each of the two years preceding the freeze. But the freeze not only stopped escalation, it stopped reductions, except in the case of rewarding people's individual loss experience -- which is a positive, and one that we endorse.
[1520]
In the course of this debate, we will be hoping to get the answer we've asked for for
several years, which is
I was interested that the minister touched on the issue of pollution and how ICBC's initiatives help in that area, and I believe some of them do. But I believe that if ICBC's rating structure and this premium freeze are causing some regions of the province to artificially have to subsidize other regions of the province which are more congested in traffic and have worse loss experience, then that policy of this government and of ICBC is contributing to pollution. If people were paying their own freight in these regions and were paying as much as they ought to pay in such congested regions, with the loss experience they have, some of them might choose not to drive.
Briefly, some other issues that I've been sorry to see arise recently are areas where ICBC has experienced bad press for things that it never used to do. We'll want to know some of the reasons for those. For example, my experience over 20 years was that the public was very clear on the matter of advertising. Surveys were done, and those were expenses -- probably very reasonable and intelligent expenses. The public said -- time and again, loud and clear -- that they not only would tolerate but thought it was a good idea for ICBC to advertise its loss prevention initiatives. The minister has commented with pride about the success of those initiatives.
I share that pride. The public doesn't mind advertising that, and the public doesn't mind seeing advertising that explains the product. But other than that, it was always very clear that the public has no tolerance for ICBC spending people's premium money blowing its own horn or, for example, comparing its premiums to premiums across the country, especially if the advertisements are subject to suspicion and question -- no tolerance for that.
The minister referred to the purchase of real estate or the rumoured purchase of a mall. Again, I would caution the minister that, in my view, that should not be allowed. ICBC has to own some real estate or, at least, lease some for its
[ Page 12679 ]
operations. ICBC's premium funds and revenues are to be held for administration of the company and primarily for the payment of claims.
Again, the minister has commented with pride on the statistic that ICBC is reporting that 4 cents out of every premium dollar is spent on administration. That does compare very well to insurance companies across the board. There have been years where ICBC pretty well ran the whole company on its investment income, so it would have been close to zero cents on the dollar, I believe. In these times of low interest rates, 4 cents on the dollar sounds like quite an achievement to me. Nevertheless, any money that ICBC has, whether it comes from interest income or from premiums, belongs to the motoring public of British Columbia and, again, should only be spent or invested very judiciously.
Most of the time when this government refers to expenditures of operating funds as investments, it causes cynicism. I do think there is some justification for referring to the expenditures on loss prevention initiatives as being investments, in that I think there is a direct payback to the people of British Columbia.
My party and the official opposition have come out against photo radar. We are not happy with the administration or results of the program. We've committed to scrap it, and that's what we intend to do. But that being said, there are many other programs that are showing positive results.
To sum up, I have this brief commentary about advertising. I would like to see ICBC cease advertising, other than for those areas the public has expressed support for. In dealing with the issue of the purchase of a mall, we think that it is at risk of mixing the responsibilities of other ministries in with those of the Insurance Corporation of B.C. It ties up ICBC money in an asset that is not liquid. ICBC's claims reserves are there to pay for people's injuries and damages. It is something that the opposition is certainly opposed to. We also don't think that this government has a great record of successfully investing, and we'd like the government to stay away from it. There are also deep concerns over the expenditures of the corporation on its software, the so-called NGIS -- next generation of insurance systems -- and I believe my colleague intends to cover that.
[1525]
And finally, there is tremendous concern over the move of ICBC executives to offices in downtown Vancouver. When I was at ICBC, and certainly in the management literature that I've seen and studied since, there's been a tremendous emphasis, toward the end of this century and throughout the nineties, on managers who are really in touch with their people, who in fact include people in management decisions. Popular terms like "management by walking around" have come and gone, but there's a general understanding that it's good for managers and the people they manage to work closely together -- to have frequent formal and informal communication and thereby benefit from the insights and input of the experienced people who are doing the work on the ground and who can make recommendations.
This seems to many people like elitism, like a group of managers moving across the water away from the people that they're supposed to be working with. It isn't a good thing. If the corporation's head office is becoming too crowded, which we understand has been one of the responses, then the corporation should look at regionalizing -- genuine regionalizing -- which has been discussed many times in the past. There are communities up and down Vancouver Island and throughout the interior that are hurting for lack of economic activity. If ICBC's head office is bursting at the seams in North Vancouver, then ICBC could move whole departments -- hundreds of people, hundreds of jobs -- into communities in the interior that could really use the economic activity. People would soon find that they like living there. By the way, there's this cocooning mentality that seems to happen in big cities. People don't realize what they're missing by not living up the Island or living in Vancouver. I think that it would be a positive move for people. Also, it would make more sense than taking your top echelon of management and moving them across Burrard Inlet, separating them, at great expense, from the people that they're supposed to manage.
In wrapping up, when I started with ICBC, it was still something of a hodgepodge cobbled together. Wherever there was a warm body that had been working in insurance, ICBC pretty much had to grab them and throw them into the breach in the middle seventies, when the corporation started. It took a few years until things settled down and ICBC began to develop a corporate culture and take directions that were, I'm proud to say, firmly grounded in a belief that customer service, quality claims-handling and being a quality employer for employees were very high priorities. With some hitches, ICBC moved along in a good direction for the 20-plus years that I was with them.
The minister commented about the success of ICBC's loss prevention initiatives and how few can pretend to have accomplished as much, when you look at other insurance companies across North America and perhaps around the world. I'm a believer. I spent 18 years in claims dealing with the tragedies and destruction that happen in motor vehicle crashes, and the last two and a half years of my ICBC career in loss prevention. I wondered why I had spent so much time dealing with consequences and so little time dealing with the things that really could make a difference. So I applaud the road safety initiatives. Many of these initiatives were advocated by the line staff for many years before they were actually implemented, including graduated licensing and harsher, quicker responses for impaired drivers. With many of these initiatives, it was a tremendous frustration to people that it took so long.
[1530]
That's exactly the kind of problem that we're concerned about when ICBC management moves away from the people that it needs to be listening to and liaising with on an ongoing basis. I think moving managers away from the staff is a negative symbolic move. It's deliberate ostracization perhaps. I think it's offensive to people, and I don't think it makes sense -- let alone the cost. Once again, these are public dollars. Even if ICBC is showing a very positive bottom line -- and we see that it is; again, my colleague is going to be examining that in detail -- every dollar there was either collected from people as premiums, or it's money earned as investment income on their money. Every dollar must be carefully safeguarded and only used very wisely. Investments have to be liquid; the money has to be there when people's claims need to be paid. One day they may well have a catastrophic event, such as an earthquake in the lower mainland, where a great deal of money is required. ICBC should never rest on its laurels or feel as though it has money to burn. I trust that it doesn't.
With those comments to the minister, I look forward to moving on into the bulk of Labour estimates. I'm pleased to
[ Page 12680 ]
turn the direction of this debate over to my colleague from North Vancouver-Seymour.
D. Jarvis: As my colleague from Kamloops-North Thompson has said, we're dealing with public funds here, public moneys. We have to make sure they're handled properly. As you can appreciate, it's our duty as members of the official opposition to make sure that ICBC is being run in the best possible way. Actually, my feeling toward ICBC probably isn't quite the same as his. I feel that ICBC is, in a sense, a bureaucracy expanding unchecked.
The minister has said that everyone seems to be happy with ICBC. Later on, perhaps in
the next couple of days, I'll bring out my file, which is probably eight to ten inches
thick, and show him letters I have received over the last two years with regard to how
ICBC does handle their claims and the way the company is operating. It is certainly not to
suggest that ICBC has gone off on a tangent when they show the graph in their magazine
here saying that
The fact that most of the people in ICBC don't know whether it's an insurance company,
a health and welfare company or a road safety organization
There's a question that I wanted to bring up to the minister to start with -- a few
questions. I'll sort of lump them together. I'd like to admonish the ministry over there,
in the sense that the financial report for the year ending December 31, which we received
late last night -- I received it somewhere around 5 o'clock
Interjection.
D. Jarvis: We're in the same session. That's what it says here. You're now about 60 days behind when this report should have been submitted. Of course, we haven't had too much time -- less than 24 hours to really examine it all. But, fortunately, there's a long weekend coming up, and we'll have some questions more readily available and to the point than what we're discussing today. It's now approximately 3:30, and we only have a couple of hours left.
As I say, ICBC certainly appears to be a monopoly to most of the people out there who
are involved with it -- or not involved with it, one or the other -- through accidents or
just through having a policy. It's a true monopoly, from the top to the bottom. There just
seems to be no room for a choice. I think that the company itself or the monopoly itself
is deathly afraid of competition. Instead of having confidence in their corporation,
instead of just saying: "Come on in. Let's see what you have. This is how we work;
let's see how you can do. We think we can do better
[1535]
I was also surprised that last year at this time, I asked if Bob Williams would be made the chair, I was told no by the minister. So it's rather interesting to see that he's been in the chair now for about ten months.
Interjection.
D. Jarvis: I have psychic ability. I would suggest that the minister listen to what I have to say in the next few days, because this is what it's all about.
The other aspect was that I've now got into a position where I feel I've been asking questions on ICBC estimates for the last two years, and in each of those previous two years I've had a different minister. I'm now on the third minister. We have put before them questions, and sometimes, due to the lack of time, they've asked that the questions not be answered at that point because they didn't have the information available. They said: "We will get back to you and write to you and give you the answers."
Well, it's not just one or two questions. I'm talking about half a dozen to a dozen -- maybe two dozen in the last couple of years. I regret to say that the promises were broken every year, because, even with our follow-up letters to them asking them to answer them and listing them again, they've never been replied to. I read them out of Hansard at one time, too. So there's no question that they got lost in the mail.
Another aspect that I'm concerned about -- and I'm sort of bundling these together just
to make them part of my opening statement -- is that I wonder if it's in order that the
Premier has been setting these rates -- I was informed that he may have violated the
corporation's act -- or that he has announced the rates last year and the year before.
According to the act, the rates have to be set for ICBC one year prior to
If I could possibly go on to another subject -- because the minister can probably answer these questions with just a couple of words -- I'd like to say that I'm somewhat concerned about the position of ICBC, in the sense that, being a monopoly in British Columbia, there's a possibility of manipulation of the company itself to the benefit of whoever is running it on the government side. I think that is ostensibly wrong.
Interjection.
D. Jarvis: Mr. Chair, the minister is asking me to explain what I mean. Well, I
intend to explain it. There are decisions that have come down that are potentially coming
down through political expediency, which would cause the corporation to take a short-term
view of ICBC's physical realities. ICBC does not pay any income tax, so, of course, they
have extra moneys. As they pay no income taxes, they have
[ Page 12681 ]
as is done by all the other insurance companies across Canada
Now maybe at this point I could sit down and have the minister sort of respond to some of the statements that I've made -- which I think he probably wishes to do.
[1540]
Hon. D. Lovick: The member raises a number of points, and I will endeavour to deal with each of them as briefly as I can.
First of all, regarding the annual report, he makes a couple of points. First, why is it so late? And are we violating the rules by not having the information? He might like to know that the year-end financial information he refers to did indeed appear in the government's third-quarter financial report. So certainly in terms of its financial obligations and its legal obligations, the corporation's doing precisely what it should. It's true the report was indeed delayed a little bit. One of the problems was technical. With the first batch of reports we got, the spines were faulty, and therefore they had to go back to the factory and be glued. But that's not, frankly, an important matter.
What's important, though, is to correct the record. The member alluded to the fact that they only got the report yesterday, and the estimates were supposed to begin yesterday. I want to make two points. Number one is that we decided to go ahead with ICBC with agreement from that side of the House and this side of the House, knowing you didn't have the report. You could have waited. But you didn't; you chose to go ahead. And second, we offered that member a technical briefing, and he told us he wasn't available until the 27th of the month.
So it's a little difficult, member, for you to stand there and say to us, "Oh, we didn't have time; we didn't have an opportunity to look at it," when you turned down the technical briefing and when your own people agreed to when we'd have this estimates debate. Let's get that straight, first of all, and let's hope that we don't have to have more of these silly kinds of games where people are trying to take shots at each other for no good reason. Let's talk, rather, about the issues.
Re the matter of whether questions were ever answered, if you would be good enough, member, to share with me a list of all of those questions, I will endeavour to ensure they get answered sooner rather than later. My information is that there were no specific questions; rather, there were various statements made. But we will certainly deal with that.
Re the process of making a rate change, what happens is that the corporation's senior management sits down and looks at what the circumstances are and what they think ought to be, and then they make a recommendation to cabinet. Cabinet then announces the rate change. That's the standard practice.
I think I've covered your principal points.
D. Jarvis: I don't want to get into a long discussion about this, either, but with regard to setting up briefings and all the rest of it, that's not what we're talking about. First of all, I put up some dates, and they put up some dates. No one could meet together, and at that time, the 27th was the only date that we could possibly get together, because I was tied up on different dates and you were tied up on different dates. It wasn't as though it was available any time I wanted to up until the 27th. The minister and his staff were tied up on a lot of those dates.
[1545]
It's a silly little argument, and that's not what I brought up. The aspect I brought up was the fact that I felt that the financial statement should have been brought forward sooner. And according to the rules and regulations, it should have been.
First of all, I would like to say something good about ICBC. It happened through one of my constituency offices; a constituent was having a problem. She is a senior, Mrs. Shirley Iaci -- and I think that maybe the gentlemen over there are aware of her. She had been complaining that the discount to seniors wasn't following its way down to the seniors that should have been entitled to the discount. Ostensibly, it's because the agents gave such different statements like: "We didn't want to ask you because we were embarrassed that we might be considering that you're older than what you are" -- and all the rest of it. She was having a devil of a time getting her discounts for the previous years, the years that she has been a senior. I understand that ICBC is now going to go back through their files on this, for those that are 65, and automatically give them their discount, heretofore not having done that. So that was one of the good things.
I want to ask the minister's opinion about ICBC being a bureaucracy that is controlled
ostensibly by the government, to a certain degree. But it is a monopoly. An article came
out the other day from Trac Insurance Services, which I imagine staff are aware of. Trac
bases its calculations
It's interesting to read some of their information with regard to establishing insurance risk ratio. ICBC in 1997 had a grade of 99.9 percent, which is off the scale, evidently. It had failed for the fifth year in a row in comparison to other insurance companies. That was the insured-risk ratio. It got a pass in the change in net premiums written; that's a nice pass. It was very low in what they call a test 4, two-year underwriting ratio, and failed on that one for the seventh year in a row.
[1550]
So it's obvious that ICBC isn't what you would call -- as the minister has tried to suggest to us -- the best insurance
[ Page 12682 ]
company in Canada. It's a good insurance company, but it fails on a lot of things. I'm wondering if the minister would like to comment on that.
Hon. D. Lovick: The minister would be delighted to comment. Trac is the advocate of the private insuring lobby. You're dealing with a public corporation insurance company here in British Columbia, which is arguably, of course, a monopoly. That's what Trac and the private insurance lobby is opposed to. Now, are we all surprised to discover that they give a rating to ICBC and say: "Hey, hey, you guys didn't get an A-plus"? Let's get serious.
The reality is that one of the criteria that the private insurance corporations use in terms of evaluating the public corporation is the rate of capitalization. Because of the fact that 60 percent of ICBC's premiums are in fact as a result of monopoly, they're guaranteed. Therefore we don't have to have the same ratio in terms of investment. But by that standard of the private sector, the public sector fails. So that's the only answer, effectively, to the member opposite. If you're somebody whose objectives are diametrically opposed to a public corporation, and you evaluate the public corporation by the private sector's rules -- which, as I say, are opposed -- then demonstrably and clearly you're going to get the conclusions that the member refers to. ICBC doesn't require the same capital-to-investment ratio simply because, as I say, it's got that monopolistic position. It also has the government of British Columbia standing behind it.
D. Jarvis: Well, that's probably the point that I and the rest of the people are trying to make: that ICBC is not running a good insurance company, in that sense. They are monopolistic. ICBC failed four of the eight, I think. I mean, they didn't get a complete fail; they did not fail all eight of the Trac solvency tests.
Interjection.
D. Jarvis: The minister may say, Mr. Chair, that it's irrelevant, but it's not. I know I'm supposed to talk to you, but the minister keeps hollering at me across the floor.
It's not irrelevant; it is what is happening out there. There's a problem with ICBC.
It's quite apparent that there are things out there in private industry that would benefit
the insured of British Columbia. You are inflating the rates in B.C. to benefit -- not the
insured of British Columbia
I have another article here. I was going to bring up that
We have asked ICBC several times -- and it was alluded to by my friend or associate
from Kamloops-North Thompson
[1555]
Hon. D. Lovick: I understand that this is precisely the same set of questions that the member posed last year, and therefore pardon me if I bore him by giving him the same answers. But there are only so many answers to the same questions.
The fact of the matter is that it's largely because we are in competition with others that we are not going to broadcast and open our books as the member says. ICBC, as I'm sure the member knows, is in fierce competition for that 40 percent, roughly, of optional coverage -- and it is fierce competition. Other people can come in here and can do what in the trade is called "creaming." They can go to some individual who has driven a small, underpowered sedan for 40 years and who has never had an accident and say: "Maybe we can give you a better rate." They will try to get those people -- those people who are low-risk candidates -- and try to entice them away from the corporation. That's what's happening.
ICBC therefore is in the role, so that it doesn't become simply an insurer of last resort, of having to compete with those people. Therefore all kinds of programs -- RoadStar and RoadStar Gold, those kinds of programs -- try and compete with those private sector ventures and thereby maintain the integrity of the total insurance package. Because of that fierce competition, obviously they're not going to publish the rates in Abbotsford versus the rates in Courtenay, or something like that.
What I can tell the member is this: no region is subsidizing others. In particular, we are looking at more specific things like some of the challenges within particular rate groups that may be problematic. We are therefore attempting to deal with those where we can. But again, for the reason I just gave, we're not about to suddenly say, "Here is everything we're doing," because what will happen then is that somebody else will come in and try to steal that particular niche of the market. It's fierce competition out there. The member, I believe, has a business background, and I would think he would be persuaded by that argument.
The other point I want to make -- and I must make -- at this stage goes back to the issue of whether ICBC functions on the same basis as the private insurance corporations and needs to have the same amount of cash in the bank, as it were. The reason the private sector demands that so rigorously is simply because there is a fairly significant history of private insurance company failures. If an insurance company fails, what happens to all the policyholders? They're are obviously caught. To protect against that kind of thing happening -- as it can happen, obviously, in the private sector -- the regulatory authorities are going to demand much more stringent regulations and restrictions. Given ICBC's position -- its monopolistic position in this province -- we don't need to do that.
The other point I want to make
[ Page 12683 ]
words, there's an opposition and there's a government side, and the opposition stands for X and the government stands for Y or Z or something else, and I am having real difficulty when I hear the principal for ICBC on that side of the House praising ICBC and apparently endorsing the concept of a public insurance corporation, but the deputy critic seems to be leading us in a line of questioning that says there should be no such thing as a public insurance corporation. I'd like to suggest that maybe the opposition get its line straight, so I will know what the position is that I'm supposed to be debating.
D. Jarvis: It was very interesting to hear what the minister had to say. There is really no conflict between the two of us, referring to my associate from Kamloops-North Thompson, in the sense that neither one of us said that we should get rid of ICBC. All we're saying is that ICBC should be competitive out in the marketplace.
Interjection.
[1600]
D. Jarvis: With regard to the last statement that the minister made
Okay, let's give him the situation where he said I asked him last year about the non-compulsory rates -- to have the information put forward. But what about the compulsory rates? Why does ICBC not open those compulsory rates out so that we can examine them and see whether they are competitive? ICBC enjoys a legislative monopoly over the business that we're talking about. Other insurers cannot use this information against ICBC, because they have competitive control in this province. There are no competitors for mandatory auto insurance in British Columbia. The rate system for compulsory insurance cannot be used against them, because ICBC has a complete monopoly on it. British Columbians are required by law, as I said, to purchase their mandatory auto insurance from ICBC. Therefore, the information, even if it was released -- on the compulsory side of it -- couldn't be used to discredit ICBC or give them any discomfort.
Hon. D. Lovick: The primary reason that the information the member refers to as part of the compulsory package hasn't been published is simply because: why would we? There is nobody else who is competing for that market. Remember that nobody else is in that game of having to insure everybody. That's what ICBC does as a public corporation. It says: "We will insure you, and we won't violate you in the same way that the private insurance companies did for years before ICBC" -- which the member is old enough to remember, as I am. If you happened to be a kid who was 22 years old, you couldn't have a car. You couldn't afford it, because you were being ripped off, effectively, by the car insurance company. The vision of ICBC was to say that we will make that insurance available to everybody, and we will spread, if you will, the risk among a larger portion of the population so we can afford to do that. If anybody else were working in the same universe, then there might be an argument for presenting that information.
The second point I would make is that I understand the information the member is requesting has indeed been offered by way of briefings, and those briefings have not been accepted.
D. Jarvis: I am completely unaware of the briefing that
As I say, the public has a right to know. This is a public corporation. They have the right to know if they are being treated badly by ICBC with regard to their compulsory rates. Most of them out there feel now -- the good drivers -- that they're paying too much. The bad drivers are getting a good break and probably paying too little. That's why this information should be made available.
K. Krueger: The minister said flatly that there is no subsidizing from one region of the province to another. If that's true, we could clear this issue up right away and get on with things. We haven't been asking for a person-to-person comparison or even a rate-class-to-rate-class comparison. We've been asking for the statistics as to the dollar amount of premiums collected in each region and the amount spent on claims in each region. I gather that the minister's advisers just told him that there is no subsidy; in other words, each area's premiums pay for that area's claims and no more.
[1605]
I can tell the minister that in the early nineties or late eighties I kept track of the premiums collected in the region I was responsible for and the claims that arose out of that region. A single broker -- the largest broker, mind you, with multiple branches -- collected enough money in premiums each year to pay all of the claims for a huge area around Kamloops. The rest of the money went somewhere else. I and others tried to convince the corporation for years to rate regionally, to deal with that discrepancy. The corporation was moving in that direction prior to the premium freeze.
I don't believe that information is accurate, because of the premium freeze. But the minister has stated that flatly, and we take it as truth. Therefore we'd like those numbers to be turned over to us promptly. That will end this line of questioning.
Hon. D. Lovick: My information is that the policy is that no region will be used
to subsidize others. If indeed that's happening, then changes will be made. That's why I
said this is under review -- that's the point. I understand that it is under review, and
perhaps some changes will be made. I hope that clarifies
I take the member's point that what we're looking at is not individual drivers but rather discrete measurable clusters, if you like, in regions. Obviously that is the policy that the corporation is looking at. I hope we will have some information for him. However, that same problem with competition, I think, is the reason why the corporation is not about to give out every bit of information every week as it gets it, which the member, of course, will appreciate.
K. Krueger: Just to be really clear, then, we're asking for the global numbers for each region. If the corporation's response was, "We don't want to give you that, because it would give our competitors an advantage," then the corporation is saying: "We are charging too much in certain regions, and our competitors would wipe us out for that reason." If
[ Page 12684 ]
that's the truth, the public's got a right to know. Will the minister commit to give us those numbers today?
Hon. D. Lovick: I'm advised that since the member left the corporation, a new regional system has been imposed, and we will be breaking it down in precisely the way he mentions. That hasn't yet happened, but it will be announced fairly soon.
D. Jarvis: Perhaps we should change the subject, get off some of the philosophy
end of it and ask some basic things. With regard to the financial report that came out for
the year ending December 31, 1998, I was wondering if the minister could explain to me why
income is rated at $120,465,000 -- or $120.5 million. Then, they have deleted the road
safety dividend of $47 million from it to show a net income of $73.4 million. That's in
your statement on the first page. It shows the net income and/or loss for the year as plus
$73.465 million -- right? I assume it's right. I was wondering why they would delete the
road safety $47 million
F. Gingell: And they'd charge it out in '98 instead of '99.
D. Jarvis:
Hon. D. Lovick: It was a dividend paid from '98 premiums.
[1610]
D. Jarvis: In the meantime, we have a little confusion. My associate from Delta South would like to ask a question on that subject. He'll only be in town for the day. He's a gentleman politician, so I'm going to allow him to step in and ask that same question or a question related to it.
F. Gingell: I take it that the dividend is earned. There's no action that you can take; there's nothing that can happen after December 31, 1998, which would take away your right to the dividend. It's for actions in the past, for your record in 1998. If you had an accident in 1999, you'd still receive it.
Hon. D. Lovick: That is correct.
F. Gingell: That was a long walk for one question. Thank you.
D. Jarvis: The member tried to clarify that point, but I was really concerned
about it. Again, why would you take
Hon. D. Lovick: I confess that I am entirely at the mercy of my officials here, because I do not claim to understand this dimension of the corporation. But I am advised simply that dividends are always declared at the end of the year, once all of your books are completed and all of your accounts are in fact settled. That's when you decide whether you can declare a dividend.
D. Jarvis: I was wondering if the minister could give us some information with
regards to the different -- I had a little slip of paper here; I'm going to find it
somewhere -- programs that they're running and if he could give me the dollar-and-cent
figure, the gross figure for each one, starting with CounterAttack. Can I read off the
list for you, and then we can do it? It's CounterAttack, photo radar, intersection radar,
road safety
Hon. D. Lovick: Road safety?
D. Jarvis: I'm not sure whether it's road safety or improvement -- one or the other. And it's commercial vehicle safety, graduated-licence safety, vehicle design improvements and community involvement. I don't know if community involvement also takes in the fact that ICBC gave money for crossing guards. Is that community involvement, as well, or is that a separate item?
[1615]
Hon. D. Lovick: There may be some others that I didn't pick up, but I'll give these ones first, and then we can come back. Under the road improvement category, we're talking $8 million. Under photo radar, we're talking $3 million. Under red-light cameras, we're talking $2.2 million. Under speed corridors, we're talking $3.4 million. Under CounterAttack, we're talking $5.5 million.
Let me, if I may, comment on a couple of those that I have some personal experience
with. I was in North Van a month and a half or so ago when they did an announcement about
the speed corridors and how that program worked. It's essentially a matter of the old
deterrence policy in action. What you say you're doing
An Hon. Member: The risk of apprehension.
Hon. D. Lovick: Yeah, the risk of apprehension, if you will -- exactly. That, I think, is the explanation for it. Certainly it's something that the law enforcement authorities were enthusiastically supportive of. The reason I'm saying this now is that the conclusion from this program and indeed all of the others is that those kinds of things will pay huge dividends in the incidence of crashes and in the severity of crashes. It's true that you may not see the immediate return within this fiscal year, but down the road you're going to. Indeed, we've seen that evidence already, we think, in terms of what the corporation has done. We're talking about -- what? -- 10,000 fewer accidents in the past year. To be sure -- and I wouldn't for a moment pretend that everything is directly connected or that
[ Page 12685 ]
there is a clear causal relationship between programs like this -- they certainly have had some impact.
The speed corridor one
So that's the basic argument for all of these initiatives that I have referred to and why we think the money is well spent.
F. Gingell: I must say that that was a most interesting discussion, because I always knew this government believed that the way you run the world is by having a press release, a photo opportunity, a slogan and a new T-shirt. I'd like to suggest to you that if it happens to be working in this case, it is a rare occasion indeed.
Hon. D. Lovick: That's what the federal Liberals do all the time.
F. Gingell: Yes.
If I may, I would like to engage the minister in a little philosophical discussion. I think that it's worthwhile, and I know the minister likes that. Over the years when you work in your constituency office, and the phone rings and you pick it up, there's usually somebody who's mad at someone. The advantage of being in opposition is that it's usually the government that they're mad at. If you look at a list of who they're mad at, it's a social worker who won't approve a welfare cheque, it's anybody who's got an outstanding claim with the Workers Compensation Board, and right at the top of the list -- right at number one -- is anyone who has an insurance claim.
[1620]
Years ago when I was in practice, I used to do a lot of work for insurance brokers -- some reasonably large ones. They insured you; they looked after you. They got a commission of 7.5 percent to 15 percent, depending on whether it was a homeowner policy, a liability policy or an insurance policy. There was a clear understanding -- a very clear understanding -- that they represented you.
In this day and age we seem to be getting some of those issues confused. We deal with banks that will both lend you money and underwrite your house insurance. Whose interests do you think they're looking after if the house burns down -- the underwriter or the poor mortgage holder, the mortgagee or the mortgagor? We get confusion into the issues of the stock market, where banks are in the business of making substantial loans to business corporations and selling you their shares. Perhaps the issue of keeping share prices up is of concern to them.
I look at these interests that I see as conflicts and get concerned about them. I see them particularly in ICBC. If I have an accident now -- and pray I don't -- the first person that I talk to is an ICBC employee, an adjuster. I don't phone my broker, who says: "I will get an independent adjuster to look after your interests." In fact, I don't even get my broker -- maybe "broker" is wrong. But the broker doesn't immediately volunteer and say: "Forget it. I will phone them. What time did it happen? Do you have an accident report number?" They have become employees -- paid on a commission basis -- of ICBC.
It seems to me that nobody is looking after the interests of the insured. We're not trained to; that's not our business. We're not lawyers -- well, some of the members of this House are. But we aren't trained to those specialties. But I have to deal with someone who is. I have to deal with someone who does it seven hours a day, five days a week and is a real expert. I'm at a disadvantage.
I think what it does, of course, is make the system more adversarial. Instead of
adjusters settling claims, I would imagine, statistically, that if you were to go back
pre-ICBC
Hon. D. Lovick: I thank the member for his question. He and I, I think, make common cause, because we both believe that too often we get caught up in the minutiae, and we forget what the philosophical underpinnings of systems are and why we do what we do. I'm happy to join that particular debate.
He began by offering some experience as a constituency representative. Let me offer mine, as somebody who has done it a little bit longer. When I was first elected in 1986, ICBC was not only one of the major problems my constituency had to deal with, it was the worst. It was the top of the list -- worse than welfare and WCB, and that's a horrible commentary. In the last two or three years it's become about number six or seven in terms of the regular complaints. Now, that may have something to do with the people who operate the office in my riding, as opposed to the member's riding. I don't know that. All I know is that there has been, from my perspective, a demonstrable shift -- okay? -- in rates of approval.
Not too long ago I met with the representative of the Trial Lawyers Association of B.C. who lives in my constituency. Listening to his perspective, of course, it was very different. He said: "Nothing has improved. It's still awful, etc., etc." His primary contention was -- and I think the member will appreciate this -- the insensitivity and the fact that it appeared that nobody was looking out for his interests and that, rather, "I was the adversary," as he points out.
[1625]
I disagree with that, by the way. I don't believe that because you have a corporation such as that, where you deal directly with an employee who is the adjuster who deals with your case, that it necessarily (a) is an adversarial relationship or (b) is insensitive. I don't mean to play dirty pool, but I would just suggest that if the member were to talk with his colleague from Kamloops-North Thompson, who worked in that business for a long time, he would probably say that he and most of the people he worked with as ICBC employees were probably doing their level best to treat customers with sensitivity and understanding and to treat them as fairly and expeditiously as possible. I don't think that because it is a public corporation, set up in the way it is, that will necessarily have any other influence or impact.
In terms of the alternative model
[ Page 12686 ]
Interjection.
Hon. D. Lovick: Yeah. I would suggest: absolutely not. I would think quite the opposite.
The paradigm illustration would be a place like California or something, where car
insurance is the game -- okay? Indeed, one of the problems
That appeal to an individual's greed -- larceny, in some cases -- is powerful indeed
and I suspect, one of the reasons why people
To wrap up this rather discursive and lengthy answer, I know that the corporation is mindful of that. In my two or three meetings with senior management, I've raised the same issue. I understand that they are investing significant time and money and energy into the matter of training their people to ensure that the interaction between customer and corporation is indeed sensitive, respectful and so forth. The member asked a philosophical question; there's a philosophical answer.
F. Gingell: I actually referred to other provinces. I think statistical information would be a little more relevant. Does the minister have the feeling that the insurance agent, though, has been taken out of the picture, that the insurance agent has become a commissioned salesperson for ICBC? One hears from constituents who are brokers, who are unhappy about reduced rates of commission, etc., and I wonder what the attitude is within ICBC -- hard to measure -- in dealing with the agents. Are they treated truly as representatives of the insured?
Organizations tend to become what senior management wants them to become. Over the years, I dealt with businesses which were entirely different. You could see attitudes in senior management that were reflected in the actions of the next level of management, because that's how people think you get on. If the senior management are a bunch of s.o.b.'s, you become an s.o.b. -- that's the way you'll get promoted. But if there is understanding and respect and, more importantly, your word is your bond, then that becomes the approach. So I hear the minister responding, saying: "Yes, ICBC is conscious of the issue. They're trying to do something positive about it."
[1630]
I'd just like to finish with one last question, then: has the role of the agent been
evaluated recently -- i.e., what is it reasonable for us, as insured, to expect from the
agent, and what is reasonable for the insurance corporation to
Hon. D. Lovick: I thank the member for the question. I'm not sure whether he's aware that the corporation recently signed a five-year accord with the brokers, some 900 people that sell on behalf of the corporation. Part of the arrangement is an ongoing discussion, I gather, to work with us in terms of perhaps modifying that role of a broker. So there is that additional -- I won't say obligation -- commitment to the customer in terms of being the interface and the connection with the corporation. Those discussions are ongoing. What may come of them I don't know, but I do know that the five-year agreement has been signed with the brokers. They're apparently happy. They've obviously bought into it.
I also know that there's another trend in the industry, apparently, which is to do away
with brokers entirely in the private sector, where you simply walk in, and they
L. Stephens: I'm pleased to join the estimates debate on ICBC. I have a couple of questions. One of them relates directly to an ICBC-proposed project in Langley, along with the BCTFA and the Ministry of Transportation and Highways. It's a joint safety improvement program, and it is the one that is being proposed for the Langley bypass, Highway 10.
This initiative had been talked about, about a year ago, and there had been plans and consultations with the businesses along that particular corridor. That consultation didn't happen. What we have now is a proposal from the three -- ICBC, the BCTFA and the Ministry of Transportation and Highways -- to proceed with this particular initiative.
I have a study here which was done by G.D. Hamilton Associates that looked at the
reason for why this may come forward. It was 60 accidents a year -- that's two accidents a
month -- and 32 percent of those 60 accidents were rear-enders. That was by far and away
the largest number of vehicle accidents. It seems to me that
The whole bypass has businesses. As a matter of fact, there is one right at the corner
of 200th Street and the bypass that is new. It's a huge, huge retail and commercial
development. There's a piece of property just east of that, which is now vacant, that is
going to be even more dense. For those businesses not to have access in and out onto the
bypass is
That's on the north side of the bypass. The south side of the bypass is where Langley
city is proposing their Liberty Street development. That's the one where we're looking for
[ Page 12687 ]
safety. The federal government has been pretty adamant about trying to make sure that people aren't parked on the railway track, and that's what's happening.
[1635]
If we're going to talk about safety, that would be a more appropriate place to look at getting some kind of joint effort going, as opposed to the bypass, because at the moment the bypass is operating just fine. With the proposals that are coming forward with the channelization, that means that there's going to be a lot of businesses that are not going to have access.
I would just like the minister's direction as to how to proceed with this or what to do with it. This has just been presented to the city, the residents have just become aware of it now, and there is a high level of anxiety, to say the least. I think that there are other projects that would be a lot more effective -- certainly security-wise and road-safety-wise as well.
Hon. D. Lovick: I feel like a Highways minister. I remember that in the old days of the estimates debates, every time a Highways minister stood up, what used to happen was that somebody would do precisely what the member opposite does -- which is absolutely appropriate -- and say: "Look, I've got a problem in my constituency; please have a look at it."
What I will do is I will respond in the appropriate way. I'm not familiar with the case. I know about the ICBC road safety improvement program. What it is, essentially, is that the corporation has a certain budgetary item to do that. It does it in consultation with the Ministry of Transportation and Highways. Our basic rule for that program is that we need to have guaranteed payback. In other words, show us that if we invest money improving this particular piece of road, doing something of that kind, there will be a return that is demonstrable, measurable and immediate; otherwise, we don't buy into it.
If in fact the case that the member describes is problematic and isn't going to work, then she has every right to question the wisdom of proceeding. What I will do is give her the assurance that we will review this matter. I'll discuss it with my colleague the Minister of Transportation and Highways and see if we can't get her an answer. I'd be happy to do that.
L. Stephens: Thank you very much, minister, for that direction. I will be speaking with the Minister of Transportation in his estimates as well.
On the issue of the economic benefits of this, I think that if you look at 60 accidents
a year and 32 percent as mid-block collisions that are rear-enders
There's one other issue I want to raise as well. That's the towing companies that tow for ICBC. What I've been told is that they are under considerable strain. They're having to pick up cars that people just kind of push out of their driveways and park on the side of the road. You know, ICBC calls them and away they go. They pick them up and take them to their yard. There are no plates on them. So there they sit, taking up space in their yard. Then they, of course, are responsible for disposing of these abandoned vehicles. Then you get vehicles coming in from out of the province that are unregistered. The same thing happens. The problem here is that the yards are having to store these vehicles, and then they are having to dispose of them themselves. Is there any way -- or has there been some discussion on how -- to resolve this issue for these towing companies?
Hon. D. Lovick: I'm pausing before answering the question because I want to ensure that we're talking about the same problem. Certain vehicles -- perhaps the orphaned vehicles, which I thought the member was referring to -- usually belong to the municipality. That becomes a municipality's obligation to deal with. We're talking, rather, about the impounded ones, and that's when it becomes ICBC's problem.
[1640]
We're working on that, I gather. There have been meetings with industry to talk about the difficulties; how do we solve this problem? Where did it come from? What can be done about it? We're not aware -- at least my officials here tell me they're not aware -- of a problem in the member's own constituency apropos that. But if there is one, perhaps she'd like to share that with us too, and we can have a look.
L. Stephens: The problem seems to be in all the municipalities with all of the towing companies, with the abandoned vehicles and the vehicles that the RCMP call the towing companies to come and pick up. I understand that if the RCMP call and say, "Come and get this vehicle," that is an ICBC call. Those cars are taken to that yard, wherever it may be, and they are then in fact responsible for the disposal of that vehicle if the owner does not come back for it.
As I've said, on many occasions those vehicles have been abandoned on the side of the road, or they're people from out of province that the RCMP have stopped for various reasons -- it could be from lack of insurance -- and the RCMP call, and off they go. So it's all of the towing companies from around the lower mainland, certainly -- and, I suspect, the rest of the province too -- that are faced with this difficulty.
Hon. D. Lovick: I understand that ICBC has responsibility if, and only if, somebody is picked up without a driver's licence or something like that, and therefore the vehicle is impounded. Then it becomes ICBC's responsibility. Apparently what also happened, however, was that there were problems with abandoned vehicles and the RCMP calling. The tow operators therefore called us and said: "Wait a minute, we're getting stuck for that." The corporation has therefore done something to assist them -- is that it? I'm sorry, I'm not entirely clear, so let me see if I can get clarification.
I'm glad I stopped when I did, Mr. Chairman, because I think what I was saying was
probably not entirely correct. What ICBC has done is dealt with the problem of vehicles
that were being impounded, and they work then with the towing companies and the car lot
people to ensure that they
L. Stephens: It continues to be a problem, so whose problem would it be? Does it come under another ministry of
[ Page 12688 ]
government? Or is it going to be the problem of the tow operators only?
Hon. D. Lovick: My understanding is that it usually is the municipality's problem, but we'll get more information on that for you. But I do want to say -- and I have a cautionary note -- that I think ICBC, because it's a big corporation and because everybody is covered by it, is increasingly looked to as some kind of cash cow. "Well, why can't they deal with it?" The reality, of course, is that if somebody abandons a vehicle, why should the Insurance Corporation of British Columbia be suddenly expected to take responsibility for it? It could be a significant cost to the driving public. I don't have a solution to the problem, but I'm careful of saying: "Well, don't worry. ICBC will take care of it." But in any event, as I say, we'll be happy to look into it, and I'll see if I can get the member some more information.
[1645]
D. Jarvis: Back to the questions that I was asking with regard to some of the
programs that ICBC has going. Really, I can't help but go back to your answer of: "I
make a comment
As I said earlier, I have got a stack of letters where the corporation -- whether from the top level or the bottom level; I don't know -- have not treated a lot of claimants the way they should be treating them. It goes on and on and on and on. You suggested that the people are accustomed now, as soon as they get in an accident, to expecting large sums of money, and that the lawyers are always out there advertising, saying: "Come to us; come to us."
Well, there is a reason for that -- because things aren't working out the way that
people think they should work out, and ICBC has somehow, I think, probably changed their
philosophy somewhat with regard to
I was asking you about the programs that ICBC has, from CounterAttack
But at the same time, while your staff is looking up those other numbers, perhaps you
could explain to me
Hon. D. Lovick: I'd just refer the member, if I might, to page 29 of the annual
report, which gives a broad breakout of all those questions that he posed, including
commercial vehicle operations. What I want to offer him, however, is: should he wish a
more detailed breakdown of those particular expenditures, we would be happy to provide
that for him, and we can have that by Tuesday. If he wants to indicate to me if he would
like that
[1650]
Regarding photo radar more specifically, some $2.5 million was spent on development. The operating cost is $4.5 million, for a $7 million total. The question the member was asking, I think, had to do with the relationship ICBC has with the Attorney General as far as that program's operation is concerned. And the answer, essentially, is that it's their program; we administer it. Another way of putting it is that that is one of the many things that we invest in, expecting a return on our investment -- in other words, reduced incidents and crashes, which will save us money and save lives. That's our relationship. It certainly is in no way interfering with the enforcement of justice or the operation of the Attorney or the police activity.
D. Jarvis: I'll get that information from you on Tuesday, or else I'll use what's in the book. I'm sorry I didn't see that in the book, but as you know, the financial statement didn't come to me as fast as I thought it should have. We've discussed that aspect before.
I was wondering if the minister could tell me at this time, then, how many contract employees are with ICBC and the total payroll for them.
Hon. D. Lovick: I would refer the member to the first page of the book. The heading it's under is "Five-Year Comparison," at the bottom of that page, on the inside cover. If he goes to the bottom of the page, he will discover something called "average number of employees," and the number there is 5,144. That figure refers to all the full-time-equivalency employees within the corporation. Within that number are some 266 contract employees. The reason for that number and the reason why those are contract employees rather than full-time employees is that for the most part, they are working on short-term projects. For example, the information technology branch is doing things with our computers, obviously, and there are also a number of other short-term programs that these people are involved in. That's why the number of contractors is as high as it is. I'm sorry -- I don't have a breakout in terms of what the total budget is for those 266 people.
D. Jarvis: Just going back to that page again, I guess that except for five
[ Page 12689 ]
difference -- added them on to 1997's thing. There's a difference of about 271. So is that 266 the contract employees?
[1655]
Hon. D. Lovick: If I understand the member's question correctly, Mr. Chairman, the answer is that we had contract employees two years ago as well. The difference in the higher number of contract employees is because we have a number of safety programs newly introduced. To get those things up and running, we therefore got shorter-term contract employees rather than full-time employees. That, I think, accounts for the difference in numbers.
D. Jarvis: Basically, that's what I was referring to. When you add the '97 and '98 employees that you show here, which comes out to 984, and then you take the additional employees that you had come in from the motor vehicle branch -- which is 1,255 for those last two years -- there's a difference of 271. I am just wondering how that would relate. Is that where these contracts are?
Mr. Chair, it's not a major problem, so let's not waste time on adding up some
employees. But I wish that
Interjection.
D. Jarvis: Mr. Chairman, I would like it if they could find out what those
contract employees
Hon. D. Lovick: I'm just checking, Mr. Chairman -- before I say, "Oh yeah, consider it done" -- just how big a job it is to do. I'm advised by the comptroller that it's not that difficult, so we will certainly get that information.
It's worth noting, though, that the increase in employees is largely attributable to that six-point program, the safety initiatives which I think the member is familiar with, as well as those shorter-term jobs like the information technology things.
D. Jarvis: I'd like to ask the minister some questions around
[1700]
Hon. D. Lovick: I appreciate the member's question; I'm learning something here. I
understand that part of the predicament and the reason for the complexity is that
different jurisdictions report their statistics quite differently. The proverbial apples
are being compared with the proverbial oranges. For example, in some jurisdictions you
can't report a death unless they die within the first 30 days or something, whereas others
say it has to be X number of days after an accident to qualify as a death -- that kind of
stuff. What ICBC did was report 402 death claims. That was the statistic, and that is the
statistic that is the lowest. That isn't the same as saying how many people might have
been killed, because that could be
I understand -- my information is -- that looking at Transport Canada's breakdown by road user class, there is little difference in fatalities for 1997 and 1998 for motor vehicle drivers, passengers and motorcyclists. The 5.4 percent increase in B.C. fatalities was derived solely from increases in pedestrian and cyclist fatalities.
D. Jarvis: We had 1,500 fewer injuries in 1997 than we did in 1996, but I see
from the chart here
Hon. D. Lovick: You're doing fine.
D. Jarvis: Well, I'm sure I am.
Interjection.
D. Jarvis: Well, at times. But he's busy too; we're all busy. I was just saying that because the last time I asked you a question, it was on page 29 right in front of me, so I should have known that. But now that we're on fatalities, I want to know about the injury aspect, if you could tell me that, please.
Hon. D. Lovick: Having been in opposition, I know what it's like to deal without this resource -- absolutely true.
The particular information the member is asking for is as follows: claims costs were $110 million lower than in 1997, and that represents 5 percent. Injury claims were 520 fewer than in 1997; in raw numbers, if the member wishes, that's 50,213 versus 50,733.
D. Jarvis: I would like to ask a couple more questions in regards to
Interjection.
D. Jarvis: Well, it's a rumour. They were going to an outfit called Compaq to see if they could re-establish the system they were trying to provide, and start over again. The last one was almost impossible, so I was just wondering what the proposal is now.
[ Page 12690 ]
[1705]
Hon. D. Lovick: I'm not sure if it's de rigueur to quote what people say to you when they say: "We don't know what he's talking about" -- which is the reference to Compaq more specifically. That's what I'm making that point about.
The point I want to make, however -- we're talking about that NGIS project -- is that
it is old news. I think it's been canvassed extensively in this chamber on a couple of
occasions. I think the important point to note is what the corporation has said, I'm
advised, throughout: that is, although it obviously didn't turn out as they wished, they
are going to put to good use the information that they did derive from that contract. They
hope that that will prove to be a significant payback for the expenditure, and that
D. Jarvis: I was wondering if the minister could provide me with information with regards to the communications department that they have at ICBC. What's the size, and what kind of budget are they running at, at this time?
Hon. D. Lovick: Some things never change. I know that this question was posed last year as well, and I think the answer is probably going to be essentially the same: public affairs and media relations, five persons; stakeholder relations, public info and external communications, ten persons.
D. Jarvis: Was there a budget?
Hon. D. Lovick: I don't have a specific cost figure in answer to that question, but I can give the member a guesstimate of about $60,000 or $70,000 -- somewhere in there, I'm advised.
D. Jarvis: I was wondering if the minister could give me some information in regard to what the new data capture system is all about.
Hon. D. Lovick: I'm not sure if the member is speaking in code, but we on this side don't know what the data capture system is. So perhaps the member could define and explain it. Perhaps we're using different terminology.
D. Jarvis: It's a system which ICBC is using, I guess, through their agents -- through their computer system -- to gather information on the insured. I'm wondering if it's really not going to the point of extreme, in some sense, in the information they are gathering and what they are really going to use it for. I'm always suspect when people ask me too much information and all of a sudden I start getting more junk mail in the house.
[1710]
Hon. D. Lovick: I understand it isn't a new system. Rather, it's called Autoplan data capture, and it has been around for a while. The problem got complicated, I gather, with the merger. You had in effect two databases put together and they discovered, frankly, that their data was not very good. You had difficulty ensuring that you were talking about the same person, because it was recorded differently in each of the data banks. Accordingly, then, they're attempting to try and clean the data or whatever. Cleanse the data, I think, is the computer terminology. Anyway, that's what's going on, and they have asked the brokers -- those 900 people who work with the corporation -- to assist them in that and to verify that these are indeed the appropriate names, etc., to ensure that they have in fact got the right people.
D. Jarvis: So it is ostensibly just information for ICBC alone, in order to
collect their outstanding debts. I'm wondering
Hon. D. Lovick: I'm advised that we are working to ensure that brokers can only access the information necessary to do this work and that we're obviously governed by privacy constraints and are therefore ensuring that we protect people's privacy to the maximum extent possible. Let me repeat it, in case it wasn't clear. It is to ensure that brokers can access only the information necessary to do the work -- not beyond.
D. Jarvis: That was one of the problems that was bothering me. What I was trying to say is that it may sound as though I'm speaking disparagingly about brokers. I even have friends that are brokers.
Interjection.
D. Jarvis: Some of the best are; they really are.
If they have all this
Hon. D. Lovick: I appreciate the member's concern. I think it's a legitimate one. The last thing one wants to do is to discover somebody has more information about you than, frankly, any of us would be comfortable with. We, as I say, are guided by principles of privacy and will endeavour to do all we can to ensure that only that information that's required to verify the accuracy of database will be printed. As well, I am advised that the corporation will ensure that any individual who is concerned that more information about that individual is available than she or he wants to be shared can indeed find out from the corporation exactly what is there, in order to ensure that their own privacy is protected.
[1715]
D. Jarvis: Just an addendum to that question: has the corporation had any more experiences where they have lost a lot of their public records and they've suddenly turned up in alleys? There's been, I think, two cases in the last couple of years.
[ Page 12691 ]
Hon. D. Lovick: The answer is no.
I. Chong: I have some questions, as well, on the Insurance Corporation of B.C. -- mostly financial. In 1997, I raised some questions to the then minister, the member for Saanich South. In particular, they had to do with the software development costs, which have come up. At that time, I had only the 1995 financial statements. We were enquiring as to why software development costs, which were previously capitalized and then amortized over the term of their life, were suddenly changed to be written off onto financials, thereby reducing the net income showing up on the financial statements and also making it more difficult, for comparative purposes, to find out how profitable the Crown corporation was.
Regardless of whether or not we agreed on why the change in accounting policy took place, at that time the minister had confirmed that the costs to date were some $37 million -- which is why we raised it. It was an alarming amount. I asked him the question of whether or not there were further costs. As I understood, $35 million had been the projected costs of what would be spent, and $37 million had been spent to date. So I asked what other costs would arise. I believe he indicated that another $7 million was going to be allocated for 1997. Again, not having the financial statements, I couldn't follow that.
Recently I was able to receive copies of the '97 financial statements, before the '98
ones were tabled. I see that the software development costs were in fact $18 million. It's
a little alarming, when we were told that for the 1997 year up to September it would be $7
million, and then we see that in finalizing those costs for the year it's $18 million. So
some $11 million in costs crept in there for the last three months. That's where I would
like some clarification -- why those additional costs were
Hon. D. Lovick: I have a number of points to make -- discrete points, okay? I'm sure the member will have other questions.
First of all, I'm advised that the amount was not written off. Rather, on the basis of
advice from accountants, it was expensed. The member knows more about the terminology than
I do, but that's what I'm told. Second, I understand that the public record made very
clear some time ago that the total expenditure was some $55.1 million. The two figures the
member referred to -- the $37.6 million and the $18.03 million
To her last question, I understand that in 1998 the expenses are very minimal indeed. They are essentially clean-up -- wrapping up -- and the amount, I am advised, is about half a million dollars.
[1720]
I. Chong: It is a question, I suppose, of understanding terminology. Whether you want to say it's written off or expensed, it amounts to the same thing: it disappears and it doesn't end up on your balance sheet where you're amortizing over a year. So it does affect the bottom line, whether you write it off or you expense it, in that sense. It's irrelevant at this point. I do understand that $55 million was spent and has been allocated. I can see that from the financials, but my understanding from the minister responsible for ICBC at that time, in 1997, was that there was only another $7 million. I was surprised to see $18 million show up. Perhaps at that time, again, he was not able to provide full information.
I'd like to move on to the 1998 financials, then. I see that in the notes to the
financial statement, note 3 in particular, where there's a change in accounting policy
My concern is: if this is the policy that's been taken -- and I'm not going to question that at this time -- and $7 million was increased in the expense for 1998 and therefore $12 million was also removed from the asset class, we're talking some $20 million of desktop computers being removed. Where would the inventory list of these computers be made? Twenty million dollars is a lot of asset to be considered expensed with no tracking of it. We're not talking about garbage cans or pencils or things like that. These are computers. Yes, they are of limited value because of technological changes, but they still have value -- whether they be salvaged for scrap value or whatever -- to the people who use them. So $20 million appears to have disappeared from the ability of this corporation to monitor those and to inventory them. Again, I won't, at this time, challenge the policy change. But what security or accountability measures are in place to ensure that we don't replicate those costs in a future year?
Hon. D. Lovick: The member, in the last part of her question, made the first point I would make -- namely, I understand that because of the nature of the technology, it has a limited life span. Therefore the common practice, apparently, in the corporate world is essentially to treat it as they do, as she described, rather than as a fixed asset or something of that kind. Conservative accounting effectively demands that this is in fact commonly the practice, I'm told. However, I understand that virtually all of those computers are now in use. It isn't the case that they've all been shipped out or sold or thrown out or whatever. They are being used, perhaps in somewhat different ways -- but they're being used. Moreover, there is a policy in place to ensure that nobody can walk out the door with one or something like that. So we don't have to worry about particular employees taking advantage of an asset that the corporation paid for.
[1725]
I. Chong: That somewhat clarifies the situation. I guess I want to confirm for the record that what the minister has said, in clear terms, is that all of those computers, which have been
[ Page 12692 ]
expensed through on the financial statements, have been identified and recorded on some master list somewhere prior to them being expensed. They are still in use, and there is an opportunity whenever they are sold or scrapped for recovery value to be brought back in the corporation's financial statements as other income or other revenue or sales or whatever. If that's the case and the minister confirms that that's the case, that's fine.
I also want to make the point that even though assets are in fact considered of limited
use
My concern is the fact that we are in a computer world. We're all going to get
computers, whether they be laptops, desktops -- whatever kind. Given the dollar value
Hon. D. Lovick: I think the member makes an excellent point. Certainly she's
absolutely right. The last thing one wants to do is to run a corporation, especially with
expenditures of that magnitude that magically disappear or something
I. Chong: That was going to be my last question, but the minister's answer
actually confused me. He said that it hasn't disappeared; it has been embraced. If you
take a look at page 28, which is what I have flagged for discussion, it refers to note 6,
"Property and Equipment." "Furniture and Equipment" refers to note 3,
wherein it describes the change in accounting policy and also states that the retained
earnings on property and equipment assets decreased by this $12,476,000, which implies
Again I say to the minister that the concern of assets disappearing off the books
because they have, for accounting purposes, limited usefulness
Hon. D. Lovick: Again, Mr. Chairman, after what the member said in her last comment -- that she was finished until I answered -- I'm reluctant to answer again. But I will, and I'll just say, to give her comfort, that they have not disappeared off the books. What we're looking at here is the annual report, rather than the books. In the more detailed presentation, they are clearly identified there.
[1730]
D. Jarvis: I see that the chairman has removed himself from the room for the moment, so maybe I can ask a couple of questions that could have brought him into a conflict.
First of all, do the executives of ICBC receive bonuses?
Hon. D. Lovick: I heard a begrudging no.
D. Jarvis: Fine. That's interesting, and it's very good.
Interjection.
D. Jarvis: Well, no, there was an addendum that was going to come up following
that in regard to other Crown corporations that do give bonuses. I understand that those
bonuses apply directly to the pension plans and therefore no
Interjection.
D. Jarvis: Yeah. Well, I thought that the Chair, being an old Hydro man, might have brought it over.
In any event, what I want to also ask is
Hon. D. Lovick: I thought that I dealt with this in another forum the other day so that the matter would be clear. I was simply saying that at the moment what we're functioning under is an understanding that anybody who says, "I want my money back," even if it is a relatively small amount -- like under $5 -- will get it. That's what the policy is, as of today. We're looking, however, at perhaps finding a better way to solve the problem, because it is expensive in some instances, of course, to mail out cheques that are worth 50 cents or something like that. What is worth noting, too -- and I didn't know this, by the way, until quite recently -- is that it wasn't many years ago that the corporation was attacked for sending out cheques, because they were so small. People said: "Well, why are you going to all this expenditure of sending out these cheques?" It's a judgment call obviously, and I don't know whether you could ever come up with a policy that would
[ Page 12693 ]
make everybody entirely happy. We certainly endeavour to ensure that anybody who would suffer any kind of hardship, or who would perceive themselves to suffer hardship, would do so as a result of an ironclad policy on the part of the corporation.
D. Jarvis: In answer to the minister, he's so right. It does cost money, and that's why I was suggesting that maybe there would be an automatic deduction on the next year's premium -- whatever was owed to them -- or the option, anyway, to have it deducted from the next year's premium. At the same time, that's what you get when you're a government monopoly. You can't win either way, especially when you have an opposition as good as they have now that's on top of everything.
Mr. Chair, I also want to bring up a subject that, talking about government monopolies
and the largesse and everything of ICBC
[1735]
Hon. D. Lovick: I have to say that I'm a little concerned that this member, who I think is a responsible and sensible person, would engage in suggestions like that as part of a public debate. To take a rumour -- an absolutely unsubstantiated, unattributed statement -- that everybody's going to have an office the size of a condo and that everybody will have a private bath and a shower or something is irresponsible, with all due deference to my friend. I hope he was joking; I hope he was.
I'm not sure the joke is in the best taste, frankly, because we live in an environment where people believe that everybody who's in government is probably crooked or probably lazy or probably not doing a good job, and every public servant is somehow getting away with murder and not performing adequate service. I think that we in this chamber have an obligation to be damn careful about how we talk about what in fact happens in government.
The short answer to the question is that they're moving to cheaper space than what they had. It's considered to be an efficiency move. Granville Square is not plush office space. It's an older building. They had to do significant renovations, which obviously pushed up the cost. Everything that I have seen listed, in terms of what the actual costs are, tells me that it's certainly well below the going rate in terms of corporate offices and furnishings.
It's expensive to fit an office. We all know that. The member opposite will remember that as the former Speaker of the House, I had to look at what it cost to renovate their offices as opposition, and it would have been a good story, I suppose, if somebody had said: "Liberal opposition comes in and demands plush office space." That would have about the same validity as arguing that what's happened to ICBC is that they're getting plush office space. They're just not.
I hope I'm not being unkind or unfair to the member. I do, as I say, take umbrage when the suggestion is left hanging out there that somehow we're dealing with a bunch of irresponsible people who are, in effect, ripping off the public. I think that is not a legitimate or responsible thing to say.
D. Jarvis: Well, if that's the premise that the minister wants to take, that's fine. But he has contributed, by the fact that he's left it out in the open again and in the sense that he hasn't answered the question. The question was: will they have nice, plush offices for the 45 new executives going in there, and will they include showers? A simple question.
Hon. D. Lovick: There aren't 45 executives, Mr. Chairman, and the answer is no, they will not have showers.
K. Krueger: Just, perhaps, to take a step back from the emotion of that exchange, what is ICBC's rationale in moving its executive across the water from the people they're supposed to be working with?
Hon. D. Lovick: First of all, I think it's worth noting -- and the member will appreciate it -- that they tried for a year to find appropriate space in North Vancouver adjacent to where they were. They weren't able to. Obviously they had a problem with space; they simply needed more. The decision, though, was also strategic in part. The corporation decided, as part of their regionalization strategy and various other initiatives, that the executive would have a new mandate, in fact, and would move over to that side of the water to fulfil that mandate -- separate and distinct from the ongoing operation in the North Van shop, mostly to do with strategic planning and so forth.
[1740]
In addition, it's worth remembering that ICBC
The management theory -- and this is what the member for Kamloops-North Thompson began
by talking about
The argument presented here, however, by ICBC -- and the one that they were persuaded by -- is the experience of British Airways. They decided a few years ago that they were, in their terms, getting stagnant and stale and that what they needed then was a different environment in which management was separated from the mundane, the day-to-day activity, and rather could concentrate on the forward-looking strategic planning dimensions. They found that that was a better management model for them. It apparently had huge payback. That's the model that ICBC obviously bought into. We could probably debate forever in terms of whether it was a good decision or bad, but that was essentially the rationale.
Interjections.
[ Page 12694 ]
K. Krueger: I'm hearing comments from the benches around me like "red herrings" and "beached whales." But what the minister just said about the British Airways experience sounded to me like blue-sky thinking. It's all very well for executives to withdraw and do a little of that, but to isolate themselves as a matter of their ongoing routine for the indefinite future is, I think, unwise. Certainly the minister has the power to tell ICBC that he thinks it's a bad idea -- if he does. I do. Some other department could be located on that side of the water, perhaps the customer service department or a component of it. There are a lot more customers on that side of the water than on the North Shore side.
I wonder if the minister would consider
Another point I had put to the minister earlier was that if ICBC's head office is indeed overcrowded, what about taking some departments -- whole divisions if necessary -- and moving them out to the interior or moving them onto the Island? With the communications technology we have now, you could put an ICBC department in Gold River, and they wouldn't necessarily be that much worse off. Perhaps the minister would just comment about that -- the prospect of moving somebody else from the North Shore to these new offices, if it's necessary to locate people there, and the concept of regionalization right out of the lower mainland. I think it could be done with hundreds of jobs.
Hon. D. Lovick: First of all, let me correct the record. It was British Petroleum, apparently, not British Airways. All right? British Petroleum's case, I gather, is now a standard example case in management textbooks talking about, you know, that particular theory and why it works, or something.
A little background which I've just discovered
[1745]
To the larger question and, I think, the more important question, frankly, about regionalizing, that is a mandate; that is a process that is being examined. As the member will note, there is indeed a small separate section in the annual report that talks about the regionalizing initiative. It is conceivable, I suppose, that there could be some movement out to particular communities.
The difficulty and the factor, I suppose, that interferes with that happening in any widespread kind of way -- unlike something like the Lottery Corporation, say, that ended up in Kamloops -- is just that most of the crashes and most of the traffic that ICBC deals with in volume terms happen in the lower mainland. Therefore, so the argument goes, that's where the bulk of the people would be.
I don't know enough about the day-to-day operation of the office to know whether in fact there may well be some compelling arguments for bits and pieces to move into the regions. But the concept of a decentralized, regionalized model is one that I obviously have sympathy for, given that I don't live in the lower mainland and don't live in Victoria. I would like to see, as the member alluded to earlier, more in the way of economic stimulus to those communities that, frankly, could use something like that.
K. Krueger: With respect to everybody present, I know that people give the answers they believe in. But I think the initial response that the minister gave -- that some of these people want to get away from the mundane and be off on their own -- has a lot more of the ring of truth to it than any notion that this is a self-sacrificing move on the part of people who took this office space because nobody else wanted to take it or nobody else wanted to leave head office. I just urge the minister to probe that more deeply and not buy that, frankly.
This answer that most of the volume is in the lower mainland
Besides, they've obviously got lots if head office is bursting at the seams, as the minister has apparently been told. I know that ICBC will have absorbed some additional workers to head office from the motor vehicle branch change. But my understanding is that a majority of those people stayed in the offices they were in. Perhaps the minister could clarify that question. How many new positions had to be located in the head office of ICBC because of the motor vehicle branch change?
The second half of this question is
Hon. D. Lovick: To the member's last point first -- about the structure of that building and whether in fact one could simply fill out the corners -- apparently that was the original intention. It has been subsequently examined, and it has been concluded after that examination that that would not be cost-effective.
I'm a little disturbed at the
[ Page 12695 ]
day his comment would look to be casting some aspersions on those people that work in the North Vancouver office, as if they aren't really doing anything -- not talking to customers but rather sitting, on the phone or something like that. I hope that he didn't mean anything like that.
[1750]
Interjection.
Hon. D. Lovick: Okay.
How are we doing for time? Shall we
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, was granted leave to sit again.
Hon. D. Lovick: With that, I would wish all members a happy and safe weekend, and move that the House at its rising stand adjourned until 2 p.m. on Tuesday.
Hon. D. Lovick moved adjournment of the House.
Motion approved.
The House adjourned at 5:53 p.m.
The House in Committee of Supply A; E. Walsh in the chair.
The committee met at 2:43 p.m.
ESTIMATES: MINISTRY OF MUNICIPAL AFFAIRS
On vote 40: ministry operations, $46,529,000.
Hon. J. Kwan: I am pleased to present to this committee the estimates of the Ministry of Municipal Affairs for the 1999-2000 fiscal year.
First, I'd like to introduce a number of the members of the executive of the Ministry of Municipal Affairs, who are here with me today: Suzanne Veit, my deputy; Leta Hodge, the executive coordinator for the deputy minister's office; Ken MacLeod, assistant deputy minister of local government; Lori Wanamaker, assistant deputy minister of corporate services; Gary Harkness, assistant deputy for safety and standards. These are some of the people who have provided -- and continue to provide -- top-notch services to our cities, towns, villages and districts. They make up the best staff within the province of British Columbia, in my very humble opinion. We will have other ministry staff available during the course of the estimates debate.
The past year has been an eventful and also somewhat challenging year, with several ups and downs over the past 12 months. But overall, we have made substantial progress towards each of the ministry's four key strategic objectives: (1) modernizing the legislative and financial relationship between the province and local governments; (2) leading the development and coordination of the province's housing policy; (3) supporting the implementation of regional growth strategies; (4) reforming the province's safety system to meet changing service demands and to respond to technical changes.
[1445]
Essentially, all of these objectives are designed to improve the quality of life for our residents and to create vibrant and sustainable communities. I look forward to the debate with the critic and other members opposite as to the best way to achieve these goals, which I think we all share. Two major ministry initiatives are aimed at modernizing our legislative and financial relationship with local government: Municipal Act reform and the "Financing Local Government" review.
On the legislative side, 1998 was a breakthrough year in the relationship, with the introduction of reforms to the Municipal Act that recognize local government as an independent, responsible and accountable order of government within its jurisdiction for the first time in Canadian history. We also provided greater corporate powers to municipalities and regional districts to allow for more opportunities for public-private partnerships. In 1999 we built on these accomplishments by giving more autonomy to local governments in a number of key areas, balanced with stronger accountability provisions to ensure that the values of openness and transparency are preserved.
On the financial side, there is no question that the reductions in unconditional grants to local governments caused tension in the relationship with the UBCM. While the disagreement over the unconditional grants remains, we have been able to restore the relationship by focusing on areas of agreement. Over the past few months president John Ranta and I have made significant progress in the following areas.
First, for the first time, revenues from traffic fines will flow to local governments, beginning in October of this year. I'm pleased that we were able to respond to this longstanding request of local government. In April, President Ranta and I announced that grants for communities with less than 5,000 people will be protected for the next two years. This provides certainty for vulnerable communities as we emerge from the current economic downturn. We have announced over $10 million in grants under a new three-year infrastructure grant program -- a $150 million community infrastructure program for our local communities, which is based on a 50-50 cost-share with local government. We have established a joint process to review local government financing and to prepare options for discussion at the September UBCM convention in Vancouver. While there's still more work to be done, I am confident that we're on the right track towards finding a solution that will meet the needs of both levels of government.
Another area where we work in partnership with local government is housing. Providing affordable housing is essential to fighting poverty, raising health standards and
[ Page 12696 ]
keeping our streets safe. We're working with other ministries to coordinate this policy, which is a priority for me and the government as a whole, as we saw in the recent provincial budget. In addition, I've taken steps to restore confidence in residential construction through implementing key recommendations in the Barrett commission report.
The homeowner protection office opened in October of 1998 and has approved over $10 million in no-interest loans to 526 British Columbia families who are faced with financial hardships and emotional strain as a result of the leaky condo crisis. Mandatory new home warranties and licensing of builders will take effect in July of this year. The homeowner protection office and the Condominium Home Owners Association have launched an information campaign to encourage new homebuyers to shop around and demand the strongest warranty protection in Canada. I know that the member for Fort Langley-Aldergrove has a particular interest in housing issues. I look forward to our discussions during the estimates debates.
Affordable housing options are essential to building sustainable communities, which is a growing public concern throughout the province. People want the benefits of the growth, but they also want safe streets, clean air and parks for their children to play in. That requires long-range planning on a regional level -- which we call regional growth strategies. This year all communities in the greater Vancouver regional district will have demonstrated that their official community plans are consistent with the Livable Region strategy. I know that we all celebrate that milestone in regional planning for British Columbia. Other regional districts, from Nanaimo to the central Okanagan, have taken significant steps toward developing and implementing regional growth strategies.
And 1999 will be an important year for our safety services, as I intend to introduce a new safety standards act which will consolidate our existing safety acts and modernize our safety system. This legislation will build on the recommendations of the "The Next Horizon" report, arising out of the safety systems review process. My priority is to maintain and enhance our high safety standards while reducing costs, streamlining regulations and cutting excessive red tape. I want to pay tribute to all our safety inspectors, our staff, and other partners in the private sector for their dedication and commitment to public safety.
[1450]
I've outlined the key objectives, but there are many other important programs and policies in our ministry that I hope we will have time to discuss. For example, our library services branch manages grants and programs to the best library system in Canada. The B.C. Assessment Authority has streamlined its operations in order to provide better customer service, and ministry staff continue to provide advice and support to local government officials across the province. As a former city councillor and community activist, it is both an honour and a privilege to serve as Minister of Municipal Affairs. I look forward to working with all members of the House to strengthen our system of local government over the coming years. I look forward to our estimates debates.
T. Nebbeling: I too would like to reflect a little about what has happened in the past year in relationship to municipal affairs and some of the initiatives that we have seen being introduced in the House and some of the consequences of these initiatives. I do value the point that the minister focuses on: the issue of empowerment of communities and how that empowerment will be brought to fruition through consultation.
As the minister is no doubt aware, since 1994 we on this side of the House have committed to communities throughout British Columbia to introduce a community charter that truly will reflect the empowerment of communities in every aspect, on issues that communities have to deal with. We are still very much committed to indeed giving communities, once elected government, that power. That power has to be very effective. During the process of the estimates we will certainly come back to that element and go into more detail on how Bill 31 is either indeed going towards achieving that goal of empowerment of communities, or if there are still elements that turn out to be less than productive for communities today -- productive in the sense of the empowerment element, but also the opportunities that Bill 31 is supposed to create.
One of the things that I think is essential when we talk about creating a new community
charter -- a new document that will set the tone in the next year and the next millennium
for how municipalities and provincial governments relate to each other
My first criticism, of course, is that the Ministry of Municipal Affairs, or the minister, in the past year -- through action and lack of action -- often has given the impression to the people that were supposed to be consulted that that consultation process was really not in place to the effect that was expected. That lack of comfort with the process by other officials -- especially the municipal officials -- led ultimately to a breakdown in the relationship between the provincial government and the UBCM, representing all municipalities and regional districts in this province.
That breakdown did not just happen. It had a bit of a history. I do not have to go into detail here, but later on in the process I may come back to that part. Suffice it to say that discontent with the lack of being involved was really the reason that these parties ultimately walked away from the joint council table. What became clear was that many decisions were made by the ministry without proper consultation, but were more put on the table as: "Well, this is how things are going to happen." Of course, the worst part of that breakdown was illustrated through the additional off-loading onto municipalities of municipal grants -- the last $40 million.
[1455]
It's really sad that that happened. What we saw was that a document that was endorsed
by municipalities, regional districts and the provincial government -- a memorandum of
understanding that was signed in Penticton
[ Page 12697 ]
pal charter -- as the minister foresees it happening -- that that role is indeed going to be fundamentally strengthened so that nobody feels that lip service is really the modus operandi, rather than what we say has value.
I quickly mentioned the last round of off-loading onto municipalities. I will definitely, during the estimates process, come back to that. I think that although it is a fait accompli -- and the minister has made it very clear that there will be no changes and that there is no consideration of reinstating that type of funding -- we really have to look at what the impact is on communities and how that impact on communities weighs against some of the other initiatives that the government is taking and some of the other values that the government is promoting to represent or reflect.
Just as an example, the minister's statement about how communities in this province
have the desire to have safe streets -- an objective that I think we all can agree with
I know there is a study on its way, or there has been a study done. The first report was, I think, released a while ago on the financing of municipal authorities. Again, when we talk about the grants and the grant reduction that we have seen, I will, at that time, also marry to that discussion with the minister an analysis of the first report that we have read and some of the objectives in that report and some of the -- I believe -- contradicting positions that government takes in relation to these objectives. I'd like to hear how, when I illustrate this further, this can get explained.
There are so many areas that we can focus on when it comes to empowerment, when it comes to giving communities that sense of being in control of their own destiny. There are certain agencies that the minister represents. I take the Islands Trust as one. I think we're going to spend a little bit of time on the Islands Trust and how that is operating -- and if the Islands Trust today has not become a monster that really is no longer focused on the objective of the Islands Trust: to protect and serve. It's more a body that is more focused, I think, on how it itself is surviving rather than on the values that the Islands Trust is supposed to reflect. I have some concerns that I would like to address, as well, when we get to that point.
[1500]
One of the major initiatives taken by this government in the last year is certainly the
creation of the homeowner protection office. I think we will spend considerable time on
going through not only the agenda, the creation of it, the bill that dictates the action
-- Bill 46, 1998 -- and some of the problems that have arisen recently, be it related to
the warranty providers, be it related to the warranty underwriters
I'd also like the minister to be ready to deal with the financial management of the homeowner protection office, and with not only how the homeowner protection office disperses the funds that they will under their programs but also how that money is getting into the operation. I will, during that section of discussion, also focus on some of the points coming out of Bill 46 that clearly are not doing anybody any good. It's hampering the building industry; it is discouraging investment in the industry. I think that at the end of the line, because of some of these conditions or sections in Bill 46, we are actually losing more jobs than in a healthy environment where the building industry could thrive again. I forewarn the minister that I will again spend a fair amount of time on that.
The leaky-condo issue, of course, was the issue that brought it all to a head. I didn't
go back to 1996 to see what actually was done or promoted or suggested by committees in
1996 on how to deal with the leaky-condominium process. I went back to 1993, because one
of the things I've had problems with is that, without declaring the building industry
snow-white, I think much has been said to discredit and to focus the blame on the building
industry. After having gone all the way to 1993, where the first committee was created
between the industry and the government to look at the problem, I have some issues that
That is the focus of where I'm going to go during the estimates: accountability, empowerment -- just to see how we are going forward. So far, I have spoken about what has been introduced in the past. I'm very much interested, during the estimates process, to hear how we move forward with the empowerment of communities and also how we incorporate more of the accountability issues that the minister has identified to be a priority during the five accountability forums that were held in the province.
[1505]
Having said that, I'd like to conclude my opening remarks. I'm looking forward to some enlightening dialogue. I would be remiss not to say thank you to staff. Unfortunately, we were not able to meet early to really have an analysis of how the estimates were going to proceed and what I thought I still needed in backup documentation. So the whole process, because of the lack of dialogue between the ministry and myself, may lead to a lengthening of the process. But I assure everybody here that I'm not going to just keep it long for the sake of keeping it long. That is not my intent. I'd like to thank staff, however, because they were available. I'd also like to thank the staff on my side that have been doing research and trying to find out facts that would help me formulate and articulate my questions. Like the minister, I'm looking forward to a positive discussion in a good frame of mind, rather than confrontation. So that is my statement on that.
I presume, Madam Speaker, I can go on and go into the first part of the estimates process. I would like to start with talking a bit about Bill 31. I think it is recognized that Bill 31 -- and Bill 46, but Bill 31 for communities throughout British Columbia -- is an extremely important document. If properly presented and written, it is a document that will be a good start for the objective of ultimately, over a three-year process,
[ Page 12698 ]
giving municipalities the ability to control their destinies and to deal with issues that are of importance to them in a way that decisions are made that will benefit that community -- obviously without undermining the objectives and the good of communities that are surrounding that particular area.
First of all, I would like to ask the minister if
[R. Kasper in the chair.]
The Chair: Member -- if you could take your seat -- our standing orders say that legislation is not a proper subject for Committee of Supply.
T. Nebbeling: That's new legislation. This is existing legislation.
The Chair: I'm talking about discussion relating to legislation, so
T. Nebbeling: Okay, fine.
The Chair: We're here to talk about Committee of Supply. Perhaps you could frame
your questions
T. Nebbeling: Oh, I will.
The Chair:
T. Nebbeling: I will. Don't worry.
The Chair: Okay.
T. Nebbeling: Thank you, Mr. Chair. I will certainly follow your instructions.
The intent of most of the sections in the bill is based on the recognition
Hon. J. Kwan: Corporate powers essentially means the operations the local government operates within their institutions. As an example, corporate powers would involve things like services or public authorities relating to local government. Providing assistance to benefit the community would fall into the corporate powers area. Disposing of land or property would fall under corporate powers. Delegating powers to members, officers, employees, committees or local government bodies -- those are some examples of corporate powers.
T. Nebbeling: Municipalities are now to a certain extent -- because we've only seen part of the restructuring of the Municipal Act -- given these corporate powers, which the minister has described as the strongest recognition of municipal empowerment. On what basis has the minister concluded this, or has she made any comparisons with other jurisdictions -- in particular, with the jurisdiction of Alberta?
[1510]
Hon. J. Kwan: The reference with respect to the strongest powers of recognition to local government recognizes the fact that in Bill 31 we have actually recognized in legislation that local government is an independent, accountable and responsible order of government within their jurisdiction. That is something that no other jurisdiction has done. We're the first jurisdiction to have done that.
T. Nebbeling: When the minister spoke at the last UBCM conference, much was said about the empowerment of communities. At the same conference there was a speaker from Alberta. I'm trying to see the name of the gentleman; I have it somewhere. It's a Mr. John McGowan; I'm sure the minister has the speech there as well.
Mr. John McGowan, strangely enough, made the same claim about what the revision of the Municipal Act that Alberta has been involved in has done for Alberta -- that it gives the strongest recognition of power to any municipality anywhere in Canada. The difference between what happened in Alberta and what we are seeing now as part of doing the Municipal Act is the recognition that what the Alberta municipal infrastructure has been given is the power of a person. Can the minister explain what the power of a person would do if the Municipal Act of British Columbia were changed to that level of power? Why was that not chosen as a mechanism?
Hon. J. Kwan: We took a different approach than that of Alberta, as a different model, striving to achieve the goals and objectives that we have set for ourselves within British Columbia. We chose not to go with the natural person's power, if you will, within the legalistic sense, but rather, chose to list out what the powers and authorities are for local government in the various different forms that exist in British Columbia, through our amendments in Bill 31.
T. Nebbeling: I still didn't get an answer to my question. I know that the minister, in a three-year rewrite of the Municipal Act, chose corporate powers. With that choice, the minister recognized that as being the strongest form of empowerment of municipalities. I'm asking the minister -- and she hasn't answered that question -- why would corporate power be chosen, or why would it be strengthening municipal entities more than a person's power? My personal belief, and the advice given to me, is that a person's power is stronger and legally an advantage to municipalities.
[1515]
Hon. J. Kwan: The way in which we have chosen and the model that we have adopted was indeed in consultation with UBCM. The former president, Mayor Steve Wallace, endorsed Bill 31 and the way in which we've moved forward and the amendments that had been put forward during that time. As well, I would also say that the powers which have been identified in this process, if you will, are clear powers; they're explicit powers. In many instances, they are equivalent to a natural person's powers.
T. Nebbeling: We're going to have a bit of a different opinion about what power
has more meaning for a municipality: corporate or person power. But just in response to
what the minister said, can the minister give me, then, a definition of what she sees as
person power over
Hon. J. Kwan: I would suggest that the legal definition of a natural person's power would best be given by a lawyer,
[ Page 12699 ]
and if the hon. member wished to obtain that, I can certainly have the legal staff provide that. I am certainly not going to put myself in the position of trying to give a legal opinion on what a natural person's powers means.
T. Nebbeling: When the minister was discussing the options of personal and corporate power, was there at any time consideration given to the fact that a person's power would be stronger and would, in a sense, undermine the power of the minister over the corporate power? The minister ultimately still has a say on any issue where the municipality has a choice to make a decision, but if the minister does not feel that it complies with other objectives, you can overrule it. Is that the reason that a person's power was not considered as part of the rewrite of the Municipal Act?
Hon. J. Kwan: The model which we adopted for Bill 31 -- and not just for Bill 31 -- is a model that was made in consultation with the UBCM and was agreed to with the UBCM. Consequently, that is the model that we have adopted.
T. Nebbeling: In the speech that the minister made at the convention in
Penticton, she raised the issue. "Recognizing that local government is an
independent, responsible and accountable order of government within its jurisdiction, the
purposes of this act are
[1520]
Hon. J. Kwan: As we all know and see in our own communities, communities are changing every day in terms of the changing economy, our changing way of thinking and thoughts and the different partnerships that people are anticipating and requiring. As an example, one of the changing needs is the public-private partnership request, which was a strong request at the municipal-level side -- not just from municipal government but from the public as well, in terms of their expectation of how governments operate. So those are just some of the common changing needs, and they are changing needs that continue every single day within our different communities.
T. Nebbeling: I hope the minister understands that I am asking these questions for one reason only. That is that this government claims that we have given -- the government as "we" -- the strongest recognition to local government because of the changes to the Municipal Act. They are, then, in the form of corporate powers. So to achieve these changing needs, what does the definition of corporation offer that the definition of person would not?
Hon. J. Kwan: The hon. member puts forward a hypothetical question, in terms of what some of the differences might be between a natural person's powers versus corporate powers, etc. Those are hypothetical questions which I am not able to answer.
T. Nebbeling: The minister is aware that her ministry has made some changes to the existing Municipal Act, and many more changes are in the process of being made. The changes that have been created up to now will impact on the empowerment of communities, as that was the intent of the changes. I'm asking the minister if the impact of these changes is different under the conditions of corporate power than they would be under the conditions of a person's power.
Hon. J. Kwan: I think the key point would be -- under the natural-person's-power system versus the existing system -- to see whether or not the objectives that had been set out are being met. When we engaged in the discussions with the UBCM, it was agreed that this model is one that we would adopt. To date, I have not heard or received comments from the UBCM indicating that this model is not working.
T. Nebbeling: Now, that could make me have a hypothetical question, but I won't do that.
I think we'll move on. My personal feeling is that if indeed this province dares to
empower communities in many broad ways, the empowerment has to be total, and I do believe,
from discussions that I've had with various parties, that there is clearly a desire for
further strengthening of that empowerment. There is clearly, as I have been told, a
difference between corporate power
[1525]
In the past, municipal councils -- or municipalities -- have always been subject to
what I always called the label
At the same time, the claims that have been made that the changes that have been
incorporated into the existing Municipal Act so far have achieved bringing a balance
between how municipalities and provincial governments work together, as far as empowerment
is concerned
I would like to ask the minister, at this point: what is it, in the changes that have been made to the Municipal Act, that should give municipalities, villages, towns and regional districts -- no, keep regional districts out of it -- that sense that indeed they can overrule provincial government in certain instances -- or all the time if the empowerment is total?
Hon. J. Kwan: At no time were there suggestions to say that any changes to the Municipal Act were meant for a level of government to overrule the provincial government. I think that by suggesting that, it necessarily creates the notion that there has to be conflict in order to achieve objectives.
I think it's important to also note that Bill 31 was phase 1 of a multi-year process with respect to Municipal Act reform. That's one part of the changes that were put forward under Bill 31. There's more to be done, this year and next year.
[ Page 12700 ]
Notwithstanding the work that's been done in terms of changes within the act, utilization and how to utilize the tools within the act -- given the changes -- is also an important process that local governments would need to take time to learn.
T. Nebbeling: Hon. Chair, not to entice you into focusing on the fact that we
were talking about legislation for a moment there again
The Chair: Well, as long as you're speaking administratively
T. Nebbeling: Oh, totally -- would I do anything else?
I think we have covered that aspect. I've no doubt that in the future, changes to the Municipal Act will, hopefully, reflect some of the points that I raised.
It's a good point that the minister made earlier on and repeated a few times: even the municipalities or the UBCM representing municipalities have indicated that they are content with the level of power given to them under the changes to the Municipal Act and that they do not desire to see or look at other forms of empowerment that may actually strengthen that self-control. If that is the UBCM's position, then who am I to argue with it? I think, however, that other voices may come up in the future. There are changes to the board of the UBCM. Other voices come up. They may well seek the opportunity to strengthen that empowerment. At that time, I hope that the minister will have an open mind. That's a hypothetical statement, not a question. I don't expect a response to that.
What I would like to do, then, is move on to the relationship between municipal authorities and the provincial government, particularly through the joint council -- the role of the UBCM. I've been a member -- or I was a member -- of the UBCM for many, many years. I know from experience that in the past it was always extremely frustrating to get government to understand what was happening at the municipal level. The hindrances by the Ministry of Municipal Affairs were well intended, I'm sure, but nevertheless often frustrating.
When the memorandum of understanding was signed in Penticton between the government and
the UBCM on behalf of the municipalities
[1530]
Hon. J. Kwan: Just for the purposes of clarification and to make sure that there is
no confusion, when I talked about the UBCM in terms of the model of agreement
With respect to joint council consultation, the joint council is certainly one mechanism of the consultation in which we have engaged. It was not a joint decision-making mechanism. I think there needs to be a distinction around that. The whole purpose of the joint council is to encourage dialogue and to allow for not only my ministry to engage in discussions with local government but also other ministries as well. The purpose of the notion of the joint council is essentially to facilitate consultation.
T. Nebbeling: Well, you say at the end, Madam Minister -- through the Chair -- that it was to accommodate consultation. Consultation means dialogue. Dialogue means issues on the table, and let's beat it around the bush for a while and see if we can come up with something that will benefit all parties. At the same time, you say that it was certainly not a joint decision-making tool. That, to me, is a bit of a conflict. That is maybe one of the reasons that we have seen the joint council and the minister coming to a head at a meeting. As a consequence, the minister left the room -- or was asked to leave the room.
Quite frankly, considering the quality of the people on the UBCM board, who I believe
the meeting was with -- Mayor Ranta, Corinne Lonsdale from Squamish
Is there any discussion going on at this point about what was instigated because of the incident that happened between the board of the UBCM and the minister, where the minister was asked to leave the room? Is there any discussion going on right now that would try to circumvent this kind of thing from happening in the future, by the memorandum of understanding being much clearer in what the real role of the joint council is?
I'm saying this because, having spoken with a number of the members, there is clearly a conception of the role of the joint council that is in conflict with what the minister's position is -- or her vision of that council. There are so many other important issues that still have to be discussed by the UBCM and through the joint council that unless there is clarification of how indeed that process takes place, I think we will be constantly on a sliding slope and we constantly are going to have these confrontations, which will not benefit anybody, including the minister.
[1535]
So my question is: is there anything being considered, either by the minister or by the joint council or together with the UBCM board, that would eliminate future confrontations like those we have seen? They were quite disgraceful for this province, to be frank.
[B. Goodacre in the chair.]
Hon. J. Kwan: Just to clarify for the member opposite with respect to the joint
council and the ultimate decision of the UBCM to suspend further meetings with the UBCM
[ Page 12701 ]
meeting -- after the meeting had concluded, and there was another forum in which the
UBCM had made the decision that they would suspend further joint council meetings, I was
not asked to leave the meeting at any time. So just to be clear in terms of the process
around that
With respect to the joint council, prior to the grant-cut issue in fact, there were discussions around changes that perhaps need to be made in the joint council process. We had agreed that we would appoint both my staff and the UBCM staff to look at possible ways of restructuring the joint council to make it perhaps more effective and to meet the needs of both sides. That process was agreed to prior to any discussion with respect to the grant item.
Since that time, I've had meetings with the president. We agreed that that work would resume. Staff are working at looking on how the joint council process needs to be restructured, and they will bring back suggestions for consideration.
T. Nebbeling: I'm happy to hear that some attempt has been made to heal the wounds that have been created because of, well, certain decisions by the minister that the joint council felt totally kept out of. Of course, I'm talking about the grant reduction of $40 million, which I really think triggered it.
It was a very sensitive time. There were major announcements made about budget cuts to communities or income tax reductions for citizens of British Columbia. Commercial tax reductions were made at the time -- or announcements were made. You know, we added up the cuts that the government introduced.
Then at the same time, through another ministry, you saw the same people who were going to get these little benefits being taken back to the cleaners, in a sense. That's how people feel in the communities today; they're being taken to the cleaners when it comes to municipal taxation. To see another ministry undoing the little benefit that the income tax reduction was creating has created a lot of anger.
I know that the minister is having dialogues again, first of all with the president of the UBCM, Mr. Ranta. But I also know that in February, when the forum on municipal accountability was held at the Four Seasons Hotel in Vancouver, there were some very heated discussions going on amongst the mayors and the councillors in the morning session, prior to the minister arriving. You know, one thing I am really proud of saying is that with all the anger that was in the room -- I think there were 300 people, primarily elected officials -- about how they felt they were treated by this government and by the Ministry of Municipal Affairs, at the end of the day they were still able to say: "Yes, we are angry; we are not going to take it any longer. Everything that was done to us is just taking away every opportunity to focus on quality of life in our communities and the issues that will be important for quality of life, be it policing, public safety, social programs or libraries" -- I can go on and on and on. "But when the minister comes in this room we're going to treat her with respect."
[1540]
I just hope that the minister was not blinded by the respect that was shown by the members there. People in the communities were angry, and they're still angry. I think it's very important that we're going to see the government making some gestures towards these elected officials to take that anger out of the way we look at each other right now. I speak with some knowledge, because I do travel a fair amount in the province, and it is still the sore point that is being brought to my attention when I go somewhere. People just do not feel that what they've been told is really going to happen, because of what happened with the joint council and the Ministry of Municipal Affairs after the $40 million grant reduction.
I am not going to go on about that one. There are some other elements that I was going to discuss, but I think that it is better that we move on.
I still want to stick with the joint council, of course. Is the joint council meeting right now? Is that relationship between the UBCM and the ministry on the level again, or healed enough to have a dialogue going on right now on further changes that we foresee to the Municipal Act?
Hon. J. Kwan: As I mentioned earlier with respect to the joint council, both the UBCM and I agreed that what we would do is direct our staff to review the process and come up with suggestions as to how we would make changes to the operation of the joint council. That work is being undertaken right now. We anticipate that staff will bring back their suggestions for our consideration. With respect to the symposium in February, that was indeed a symposium on Municipal Act reform; many local government representatives, as well as their staff, showed up to engage in that process. I was glad to see that there was maturity, if you will, in dealing with disagreements.
The fact of the matter is that local governments -- in terms of the UBCM -- and our government disagree on the grant issue. That is something that both John Ranta and I recognize: there is disagreement. We also recognize that there is disagreement with respect to the process. The fact of the matter on the grant issue is that it was brought to the joint council; it was the first time any minister brought the intentions of government with respect to the grant process and what was on the table for discussion prior to cabinet approval. That was actually brought to the joint council, and we had a discussion around that. Subsequent to the joint council meeting, I had a series of conversations with Mayor John Ranta. Ultimately we were not able to come to agreement in terms of the different issues, and that's the history of that process there.
I also want to say that our government has recognized the priorities of health care and education as the number one priorities within the government. For that end, we've had to make cuts in some places, and municipal grant cuts was one place. But I would say that while $40 million was cut out of the unconditional side, we also put back into the system $150 million of conditional dollars over three years for infrastructure building, which local governments tell me are critical components to building their communities as well. We have significant applications coming in for a first year's approval process, which is $50 million. We have received over 600 applications totalling $623 million, and that's an illustration of the needs of local government in this area. We are committed to providing as many dollars as we can. As well, I should also add that there are other components that we have put to the table -- the traffic-fine revenue sharing, which actually came out of the joint council process, from which there was agreement with respect to how to move forward on traffic-fine revenue sharing. Those are just some examples in terms of agreements and disagreements within the joint council process.
[1545]
T. Nebbeling: There's just one point for clarification and correction. The minister made a point of taking credit for
[ Page 12702 ]
being the first minister who ever brought a grant reduction to the joint council, before she actually had cabinet approve this. That's very easy to say, because the year prior to the minister becoming the minister, there was another Minister of Municipal Affairs who also was informed that there were some serious grant reductions contemplated, and this minister actually came back early from his holiday to go back to cabinet and say: "No way." So that year, we didn't see any grant reductions.
That was the first year after the joint council was created, which was a consequence of the Penticton agreement. This was the first time a minister came to the joint council to announce that grant reductions were taking place since the joint council was formed. The only other time there was a discussion about grants and substantial grant reductions, the minister then responsible for municipal affairs told cabinet: "No way." For that reason, he never had to come to the joint council to make the announcement.
Having said that, the ongoing discussion on changes to the Municipal Act
Hon. J. Kwan: In terms of work being done since the introduction of Bill 31, there has been much work that has been done, which includes an internal ministry committee that was established. We also have a resource book, which summarizes the key features of the reformed Municipal Act -- a manual that was distributed to local government in mid-March of 1999. As new legislation has passed, additional information will, of course, be issued to reflect the current status of the reform of the Municipal Act. The publication, for the member's information, is also on the web site, and I can give to the member the web address if he's interested.
We have also produced a guide for local governments with respect to the public-private partnership component, which describes the characteristics of public-private partnerships in the various forms it takes, and of course, it covers a variety of topics. The guide is close to being printed and will be ready, probably on the web site, within the next two weeks or so. We have also proposed a best-practices guide, which includes business regulation, licensing, financing, taxation, broad service powers. That was presented at the 1999 symposium this year, in February. As part of the implementation of Bill 31, the Municipal Officers Association web site also shows a model bylaw, which includes the authority delegation bylaw and the officers and employees bylaw. Two of the other model bylaws will be added at a later time: requests for proposals and agreements.
What the ministry web site does not show is the consultations that have been taking place between ministry staff and the UBCM area association meetings, the Municipal Officers Association of B.C. chapter meetings, the annual UBCM convention and the Municipal Officers Association conference in 1998 and upcoming in 1999. We will of course continue to consult with the UBCM on year 2000 legislation this summer. At the upcoming September convention, even if the joint council does not meet, I think it's important to make this point. The UBCM has continually been meeting with my staff on a range of topics. Some of those groups actually came out of the joint council as working groups, if you will, or subcommittees. Irrespective of whether the joint council is meeting or not, the work in those subcommittees or, if you will, with ministry staff and the UBCM have continued and will continue -- even when the UBCM joint council had been suspended.
[1550]
T. Nebbeling: First of all, was the joint council suspended, or was it just that they refused to come to the table? Suspended would be an order by the minister. The UBCM not willing to come to the table is not being suspended, I hope.
Hon. J. Kwan: I would just simply say that the joint council stopped spontaneously, if you will.
T. Nebbeling: Can the minister elaborate a little more about what the minister just introduced as a topic, and that is subcommissions that are derived from the action of the joint council? I was not aware that there were actually official subcommissions dealing with issues that the joint council doesn't deal with.
Hon. J. Kwan: They're not commissions in a formal sense, but rather they are
groups of people that have memberships out of the UBCM and my staff and who have
identified issues that we would work on. Take as an example Municipal Act reform. It's
something that I report to the joint council, and we have engaged in discussions around
that. But aside from that table of the joint council, there have been a number of
different subgroups, if you will, that have membership in the joint council, and my staff,
who continue to work on these items
T. Nebbeling: The only reason I'm asking these questions is that considering the conflict that has been arising between the ministry and the UBCM, I just want to make sure -- I think I'm okay, but I just want to make sure -- that as a consequence of the joint council not being willing to meet with the ministry, somehow another little subcommittee was formed. So the dialogue was still going on, not necessarily with the members of the joint council or the board of the UBCM in general being supportive of that. I'm not saying that was the intent. I just want to make sure that that was not happening.
Hon. J. Kwan: The joint council work
[ Page 12703 ]
said to the UBCM that irrespective of this disagreement that we have, it is important that we move forward and that we continue to do work around this front. Otherwise, we would not be able to meet the legislative window for Municipal Act reform. One year's disruption in this area, I think, would be detrimental for local governments with respect to the work that is needed there. So ultimately, the work really continued. I would almost say that 99 percent of the work relating to the ministry and the UBCM continued, and business just carried on from that perspective.
I should also clarify that on the committees or working groups -- whatever you want to
call them -- that continue to work on various issues relating to the ministry and local
government
[1555]
T. Nebbeling: Okay. So these subcommittees are done completely with the understanding that the UBCM is in full support of the subcommittees and the membership on these subcommittees.
Hon. J. Kwan: The UBCM had representatives on these -- I don't know what to call them -- committees, subcommittees, working groups, whatever. They had representatives there.
T. Nebbeling: I'm asking this because I know that the minister, when she spoke
in Penticton the last time, recognized that the memorandum of understanding had some
shortcomings and that she was committed to deal with these shortcomings and that she would
look for ways to make the process more effective, especially in the discussions on the
contemplated changes to the Municipal Act. Are these subcommittees a consequence of that
commitment that the minister made, or were they already in place prior to the UBCM
Hon. J. Kwan: With respect to changes, what I made reference to at the Penticton UBCM convention was recognizing that there were concerns identified on both sides and that we had committed that we would allocate staff to review that process and to put forward recommendations for our consideration -- just to be totally clear in terms of what my comments were at the UBCM convention, as far as I can recollect.
T. Nebbeling: Another point that the minister raised during the UBCM speech was
the announcement -- or her joy over the fact -- that in the past year the Peace River Fair
Share agreement was raised. Now, I know that it is not Municipal Affairs, but as the
minister made the announcement at the UBCM, there must have been Municipal Affairs
involvement in reaching that agreement. First of all, I would like to ask the minister:
what exactly are the components of that agreement? And in what areas does the Ministry of
Municipal Affairs
Hon. J. Kwan: If the member would like to have the details of the Fair Share agreement, we can certainly provide them to the member so that he can have that in writing. As well, the important role that my staff actually played in the Fair Share agreement was essentially bringing together the groups and negotiating with all the parties in bringing the agreement to the table and having the agreement signed off. I must recognize at this point the enormous contributions of my staff in bringing that agreement together. I know that all parties would agree that my staff played a significant role in bringing that agreement forward.
T. Nebbeling: There must have been, within the agreement, some components that have impact on municipal governments. There must have been some agreements that would be to the benefit of municipalities affected by this agreement. Can the minister identify what these benefits are, be it on governance or be it municipal or community benefit?
[1600]
Hon. J. Kwan: The Fair Share deal is essentially a cash agreement, if you will. The
agreement was to provide $113.5 million over ten years. The formula that was utilized was
essentially one that the regional district had provided and agreed to, and it was accepted
by the district. Therefore the municipalities that were impacted, as well as the regional
district on the whole in terms of how the fund itself should be distributed based on the
formula that they had put forward
T. Nebbeling: So there were no pieces of policy that were put in place to give Municipal Affairs, somehow, authority over how these dollars would be distributed? Or did Municipal Affairs have a role in monitoring how these dollars were going to be distributed on the projects that are directed by Municipal Affairs -- be it sewer, water treatment, bridges, roads and all of that stuff?
Hon. J. Kwan: The Fair Share dollars that we have signed off on
T. Nebbeling: Does that formula that has been agreed on include a monitoring role or a directive role for the Minister of Municipal Affairs?
Hon. J. Kwan: There is no role for the ministry with respect to the distribution of the Fair Share moneys in that way.
T. Nebbeling: What I'm looking for is
If they choose to spend it on an leisure park, then there is nothing that the government would do to stop that. If they choose to put it in the bank and let it accrue interest and let that interest then become capital on an annual basis so that it
[ Page 12704 ]
becomes like a heritage fund, there is nothing that the government has in place today on paper that says: "No, no, there are certain conditions on how that money must be spent, and what you're doing now, you cannot do." I just gave two examples, and I could come up with many more, of course. So it is totally unfettered.
Hon. J. Kwan: There are no conditions over and above what is lawfully required of local governments for spending the dollars. There are no conditions attached. If the member would like to get a copy of the agreement between the various parties, we can certainly make that available to him so that he could see for himself that the conditions -- which I think he fears, perhaps, or suspects -- simply do not exist.
[1605]
T. Nebbeling: I think I am moving on a little, although I will come back still with some of the issues that have been expressed to me in relationship to the changes made to the Municipal Act. In the opinion of some council members that I will quote later on, it is just not reflecting what truly has happened in British Columbia in the sense of where the population concentrations are now -- how the shift over the years has happened, from rural to urban, and how the changes to the Municipal Act do not reflect the consequences of that shift.
Where I would like to go now is still related to the changes in the Municipal Act. It
has to do with the empowerment of communities. One of the areas, I think, the Ministry of
Municipal Affairs is proud of
There is another area, of course, and that is the area where municipal councils will have to borrow for capital projects. There is today a counter-petition system in place that gives citizens an opportunity to either oppose the proposed capital project or make changes to it -- well, I don't know if you can make changes to it. I think they'd have the right to call for a referendum with the counter-petition. Then the referendum has to reflect the project for approval -- yes or no.
Can the minister tell me why the counter-petition that has to be produced in response to a capital expenditure by a municipality only requires one-twentieth of the people that are on the voters list to sign a petition?
Hon. J. Kwan: The 5 percent is a historical level that has been adopted for counter-petitions, and we simply continued on with that.
I should also note, though
So I'm prepared to examine that to make sure that if there need to be changes
T. Nebbeling: So much is made of empowerment of municipal councils and municipal jurisdictions; so much has been made of empowerment of the regional boards. Further discussions are taking place on how that empowerment and the self-management of projects can be enhanced.
I think the minister is aware that from time to time I have criticized the magnitude of the empowerment, as reflected in the changes that we have seen to the Municipal Act up to now. I think this is a very good example, Madam Minister -- through the Chair -- to illustrate why Bill 31 is truly not an empowerment tool for municipal jurisdictions.
The minister has heard of one community where 5 percent of the population indeed created a counter-petition opposing a project. I'm pretty sure that in general, communities that look at an enhancement of their health facilities or public safety facilities will go along with that. I do not see communities opposing that. But I do know there are communities that are opposing projects that are of a different nature, and I just cannot see how the 5 percent clause can be seen as a responsible level of garnishing the voice of the community on a project that an elected body has deemed to be necessary.
[1610]
I would suggest to the minister that if she truly talked about empowerment of communities, the concept of a counter-petition is totally acceptable. But to arbitrarily set a level of signatures required on a counter-petition to stop a project, to me, is undermining the powers of a municipal council. I would suggest that if a counter-petition is in place, it is up to a council to set, at the beginning of its term -- and if future councils feel comfortable with the level -- the level of signatures needed on a counter-petition, the level of signatures representing a percentage of the voting public in that community. That, to me, is empowerment of a community.
What we have seen with this particular change to the Municipal Act
So I hope the minister can recognize that failure of the empowerment of the community. I would like to ask the minister if she shares my concerns and, if so, what -- concretely -- she will contemplate. The minister has said that she is willing to consider maybe some entertaining of looking at that particular clause because of the Revelstoke experience, but I don't think that is enough. I think it has to be stronger. It has to be something that the government must realize is not empowerment of communities. It's not empowerment of councils. It's the empowerment of a very small minority, who can then use that empowerment to preach a false message and
[ Page 12705 ]
can succeed in opposing things that normally, in any other community, would have been approved under the old rules.
The old Municipal Act actually gave municipal councils more power, in that sense. Has the minister had any further thoughts on that kind of reasoning -- why that percentage should not be considered for change, but should be changed?
Hon. J. Kwan: Just to clarify with respect to the 5 percent counter-petition process, if any one community is successful in collecting the required number of names to yield the necessary 5 percent, that would trigger the need to go to a referendum. It does not automatically stop the project -- just so that we are clear on that. The petition process gives another tool to local government. They still have the authority to decide whether or not they want to use a petitioning process or the referendum process. They ultimately still have the authority to decide which one they want to use.
[1615]
With respect to the percentage question
T. Nebbeling: Can the minister, then, clarify that these changes will be part of the next round of changes to the Municipal Act?
The Chair: That's future policy, I believe.
Hon. J. Kwan: Stay tuned. We'll see.
T. Nebbeling: I think it is a serious problem. Contrary to what the minister thinks, as far as the impediment of the project going ahead, the moment 5 percent of the signatures have been collected for the counter-petition, the process stops. At that time, councils -- because of the negative reasons for signing the petition that people often give -- may get cold feet. It becomes a political issue rather than an issue that is a benefit to the community. I think this is a very serious issue. I'm happy to hear that the minister at least recognizes that this merits a very serious reconsideration, and I just hope that it is not going to be too long.
It has an impact on another element that was heralded as being one of the cornerstones
of the empowerment of communities; that is, that they could go into partnerships --
public-private partnerships. I think that many municipalities, in order to achieve the
need for infrastructure or services that they have to provide for their community
One of the first hindrances I have been notified of is that in a number of communities, including the lower mainland, projects were being considered. The counter-petition got started, councils had to sit back, and the private partner basically disappeared. They were not willing to just sit back. They were not willing to be part of a negative item. It has happened with some municipal arenas that were contemplated. Again, I think that the power of the minority given by this minister through this particular change in the Municipal Act is really undermining many good things -- and I'm not talking about the Victoria arena, by the way -- and what municipal councils should have, and that is the opportunity to find partners and find the infrastructure that is needed for a healthy community.
Hon. J. Kwan: There wasn't a question attached to that dialogue, but I guess the point is that with respect to public-private partnerships, it is an important component in terms of tools to local government, and that is what is in place. We have made changes to allow for the utilization of this tool and recognize that there may be some issues, and we can certainly review that as those issues evolve. We recognize also, though, that the counter-petition process, as I said earlier, is one mechanism to allow for the community to speak on a particular venture that local governments have entered into. Even if they were successful in bringing forward the 5 percent counter-petition of names, it does not stop the project automatically. Council still has the authority to go to a referendum, which will ultimately seek the opinion of the majority of the people.
[1620]
T. Nebbeling: The minister said before that even if a 5 percent counter-petition
has been signed, the council still has the opportunity to go through a referendum. I know
that. But I can tell the minister that if I were a private investor and I was interested
in joining in a project with a municipality -- be it an arena, a sewage treatment plant,
whatever -- wherever a capital expenditure was required
Hon. J. Kwan: With the Municipal Act reform process, consultation is extensive in this area and continues to be in other areas as well. The UBCM was at the table, of course, but there were others, including businesses and other stakeholders.
T. Nebbeling: Could I have the other stakeholders, then, as well? We have identified the UBCM, we have identified the government, and we have identified business. Who were the other stakeholders?
Hon. J. Kwan: Labour was at the table; B.C. Bar Association representatives were at the table; municipally elected
[ Page 12706 ]
officials were at the table; municipal staff were also at the table. As I said earlier, there were business representatives along with provincial representatives.
T. Nebbeling: And this issue was discussed by that stakeholders group, then, and clearly was endorsed with the percentage in mind. The UBCM agreed to the 5 percent; the business sector agreed to the 5 percent. Is that what the minister is saying?
Hon. J. Kwan: No one disagreed with the 5 percent. It was accepted as a total package that was put forward.
T. Nebbeling: I'm surprised, because I have a letter here representing business. It is a letter to Mr. Gunton talking about the changes to the Municipal Act, specifically on the public-private partnerships. These people that are represented in this letter have always been supportive of that concept. But they have analyzed the Municipal Act changes, notified Mr. Gunton of the economic consequences and clearly warned and urged Mr. Gunton -- and I don't know why it was Mr. Gunton -- to not go with this 5 percent and to undo the damage that's been done. So can the minister explain first of all why Mr. Gunton was the person who had to deal with this issue and, secondly, why the voices of business and industry that would normally qualify to be partners in the public-private partnership spoke strenuously against it and were ignored?
[1625]
Hon. J. Kwan: I should simply clarify for the member that there was a working group, as we often have on these issues. The various different stakeholders were at the table, they reviewed the package and then, at the end of the day, comments were forwarded, etc. We consulted with them.
With this particular package on public-private partnerships, the working group actually
agreed with it. So therefore we moved forward on it as it was agreed upon. It is not
surprising, though, after you've brought in legislation and once things are in place, that
people would have different opinions afterwards. The UBCM itself
T. Nebbeling: The group that agreed with this public-private partnership -- did they discuss the 5 percent, or was it just never even mentioned to those who were part of the discussion?
Hon. J. Kwan: The counter-petition process was discussed. The 5 percent, as far as my staff can recollect, was discussed. In terms of how much time and how much energy was spent discussing it, they don't recollect at this table. My deputy and my staff recollect that there was discussion around this issue.
T. Nebbeling: When the minister just spoke and I asked about the 5 percent
Hon. J. Kwan: When my staff shrugged, the shrugging was with reference to "I can't remember how long we talked about for the 5 percent thing." We did talk about the issue, and there was not a lot of fuss around the issue, so consequently there was no great impression on staff that there was disagreement on it. Usually, what leaves people with impressions in their memory bank is when there are disagreements. When there aren't, people kind of go: "Okay, everybody agrees. Moving along to the next item."
T. Nebbeling: That means these discussions will just disappear into oblivion?
Hon. J. Kwan: No. They just don't get put into legislation.
T. Nebbeling: I was talking about estimates -- our discussions.
Coming back to a statement that the minister made earlier on and that the minister just made again, we are talking about empowerment of communities -- empowerment of community-based councils. The minister has introduced, in the changes that have been made to the Municipal Act, sections that were supposed to empower communities. We're talking about the same, including counter-petition. We now know that the 5 percent clause, which has led to a number of good projects that elected councils had chosen for their communities to go ahead with, had been undermined and put away because the private partner either was not interested in spending more money or was not willing to go through a controversial process.
[1630]
The point I'm trying to make is that now the minister says: "I am willing to consider or reconsider that 5 percent when it comes to health facilities or safety facilities." Where is the empowerment of the community? There are all kinds of public facilities that could be built under this new partnership, as indicated in the changes. Why would you allow, when it comes to health and public safety, the 5 percent to be reconsidered? But when it comes to an arena or an aquatic centre or any other facility that will benefit the community, the minister is excluding that by her statement. I don't understand that. Either it's empowerment of the community or it is still dictatorial down-messaging by the government.
Hon. J. Kwan: Empowerment of communities can be defined in a number of ways. One is to define it with respect to local council and elected officials, in terms of that kind of empowerment. The other kind of empowerment, of course, the one that I'm more familiar with, is the one where you actually empower the community and allow the community to have a voice.
Part of the counter-petition process with the 5 percent limitation is to allow the community to have that voice. When people are not comfortable or are not content with a decision
[ Page 12707 ]
or suggestion of their local council, they can utilize that as a tool to voice their
opinions with respect to that. What that triggers is to say to council that there is 5
percent of the population that is dissatisfied with the course on which local government
is embarking, which will ultimately
So I guess there are different ways to talk about empowerment -- and empowerment in what sense. I suppose that is a balance between democracy and decisions that are made by government or city council, local government, etc.
But it is important to recognize, though
T. Nebbeling: Well, the minister's directing this discussion in a whole
different direction, away from the intent of the changes to the Municipal Act. We are now
going into a direction of
I'm talking about the presentation and the intent that is presented to the public in British Columbia -- that this government believes in empowerment of the municipal authorities. That's what the Minister of Municipal Affairs talks about when she speaks about empowerment, when she speaks to the UBCM. That's what she talks about when she meets with the UBCM board. So what the minister just stated in here, on the record, is a whole different philosophy and a whole different approach to how democracy in British Columbia is represented. I still believe that has never, ever been part of the discussions between the members of the UBCM -- should the minority overrule the will of the majority. That's what the minister is talking about here.
[1635]
First of all, we have an elected council or an elected authority that is elected by a majority vote -- not by a percentage, but by a majority. Then the decisions of this elected body can be overruled by a minuscule 5 percent of the population, overruling the will of 95 percent of the population that did not sign the counter-petition. I think it's fundamentally wrong, and I think the minister should really go back on this one and revisit it, because this is not empowering communities. This is not part of what the minister made the UBCM believe about how the relationship between municipalities and the provincial government will take place in the future.
I'm not going to go any further. The other appalling thing I hear the minister saying is: "Oh, that 5 percent stands; I believe in empowering the people in a community rather than just a council, but if it is a health facility or a public safety facility I will overrule that 5 percent. Then it is okay to look at a higher margin." You know, it's one rule for all. You can't just pick and choose what your pet projects are and where you would like to enforce your personal ideology over the democratic good of the community at large.
The Chair: Through the Chair, member.
T. Nebbeling: I am talking through the Chair. Does the minister really believe
that in certain instances the Municipal Affairs minister will empower and in other
instances she will dictate? Because that's what the ministry is doing with this particular
clause, and based on the statement that the minister made to this side
Hon. J. Kwan: I will simply say that the comments just made by the member opposite are a mischaracterization of what I just said. What is important to recognize, though, is that when we work towards reforming the Municipal Act and making changes, it is a balance. It is empowering local government, but at the same time there is also a level of accountability that one must take into consideration. That is part of my job as well -- to bring those two things forward.
I repeat again -- for I don't know how many times now, but I'll repeat for the last
time for the record -- that with respect to the counter-petition process, the
counter-petition process is one that could be triggered by the community. Once it's been
triggered -- and if they do reach the 5 percent requirement -- it does not stop a project
from proceeding. Council still has the authority to choose whether or not they want to go
to a referendum process, which would require the majority of the people, in terms of their
voices, to hear what the public says, and so opinions are
T. Nebbeling: Before I go on -- and it's still on public-private partnerships,
but there's a new element I want to bring into it
Hon. J. Kwan: It is council's choice at that juncture to decide whether or not it wants to hold a referendum or discontinue, and it is their choice to decide which vehicle and option they want to choose.
T. Nebbeling: I would suggest that the minister read the Hansard and see that that is exactly the problem that I've identified as the killer of many public-private projects. The council has a choice to go to a referendum, based on a lot of negative statements by the people that have created the 5 percent petition. The private partner is going to say: "No, thank you very much. I'm not going to invest in projects where 5 percent of the community can say, 'No. We are not interested,' overruling maybe the desire of 95 percent of the community."
The minister has really confirmed what I was concerned about. Right from the beginning she made it clear that indeed if the council is not going to a referendum, the project is dead. And that's a shame, because these are all projects that were intended for the benefit of communities. That's what the minister has done.
Can the minister once again speak a little bit on the best performance guide that was promised last year as being avail-
[ Page 12708 ]
able in the very near future -- setting the terms of best performance under this program?
[1640]
Hon. J. Kwan: Earlier I talked about the guide. I mentioned that the guide would probably be ready to go to print in two weeks and that it would also be on the web site. If the member looks back in the records, in terms of Hansard, he will see the reference there. We also have the table of contents, if you will, for the guide in terms of some of the areas that would be covered in the guide to provide assistance to local government with respect to public-private partnership developments.
T. Nebbeling: Was this guide prepared by staff, or was it prepared by the task force that looked at the public-private partnership and actually recommended that this guide be produced? Did that task force have an input into the contents? Why did it take so long -- maybe two weeks from now -- to get it on the web site?
Hon. J. Kwan: The guide was produced by ministry staff, in consultation with various people and their input. As to the timeline question, it's mostly because there are many priorities within the Ministry of Municipal Affairs. One of the most important, of course, is bringing legislation to the floor for this legislative calendar. It's the demand on resources.
T. Nebbeling: I'm going to hand this over to my colleague now, who's going to have a little different approach to his questions. But then I would like to come back to the public-private part.
P. Nettleton: My colleague suggested that I have a somewhat different approach.
I don't know what that might be
A Voice: We're going to find out.
P. Nettleton: I don't know. We'll see. Maybe there's something wrong with my approach.
In any event, I've got a couple of straightforward questions. They're not contentious issues, by any means. Certainly they are important issues, though, from the point of view of the communities that I've been talking to. Initially I had attempted to find an issue that was of particular importance to northern communities. This particular issue extends beyond northern communities to include a number of other communities. If the minister would bear with me, I have something of a lengthy preamble. I'll try to keep it short.
I think it was back in 1996 that a subcommittee of the UBCM was struck, entitled
"the common front." It was created by airport communities, which was certainly
before your time, but it may be an issue and a committee that you're familiar with. It
included a number of communities: places like Abbotsford, Castlegar, Cranbrook, Dawson
Creek
Interjection.
P. Nettleton: Yeah, absolutely. Smithers was and continues to be one of the communities affected, as the minister knows.
In any event, the "common front" committee was established to ensure that local government concerns would be addressed in the airport transfer agreements -- which were at that time initially in stages in terms of messaging from the feds that there would be a transfer -- negotiations with the feds and the provincial government. The committee was struck to work out a framework for dealing with common issues -- issues that are common to the airport communities affected -- with the transfer of all airport operations management to local authorities. Some of the common issues that these communities shared, and continue to share, involve the safety rules, employee transfers, taxation policy and land use matters.
[1645]
One of the three goals of the committee when struck initially -- I guess I'm sort of jumping ahead here, but I understand that there's some possibility that this committee may be re-struck -- was that they would allow local airports to be managed on a businesslike basis, which I think is reasonably straightforward and reasonable. The second goal was to provide the flexibility to operate local airports without the need for local taxpayer subsidies in respect to airport operations and civil liabilities. Clearly I think that's a concern that the minister would understand, with reference to the limited moneys available to most of these communities. The third goal was to provide protection against unilaterally imposed federal regulations that might establish unwarranted operational requirements on local airports.
I think there was a statement by Mayor Steve Thorlakson, who at that time was the chair
of the committee, that expanded on some of the concerns with reference to this whole
question of the transfer by the feds to the municipalities. He made the comment that the
trip to Victoria for some MLAs will be much longer than they expected if their parties and
their leaders don't show a real commitment to preserving the local airports. For those of
us
He went on to talk about the federal government's off-loading of responsibility to almost all airports in B.C. at that time. He went on further to talk about how important it was -- that it was essential in fact -- to maintain a provincial system, which I think is how it ties into the estimates here today. It ties into the responsibilities of the minister who was at that time not the minister, but nevertheless, it remains an issue for these communities. It's an issue which these communities are looking to this minister and this ministry for some assistance on. He went on to say that it's unacceptable for the province to have one major airport and a few regional airports. He talked about the need to maintain the system that we have now.
He outlined three points -- if I may, quickly -- that are important with reference to maintaining the existing system. He talked about health care. He talked about how our health care system is regionally based, with large tertiary care facilities in Vancouver. It is essential that patients and their families have the ability to access these facilities easily from their local airport. Certainly health care, for those of us who live in northern or rural British Columbia, is a huge issue, which again ties into the whole question of transportation and certainly into the airports and the airport systems in the communities affected. He talked about how they don't need to drive
[ Page 12709 ]
any further than they do today to get airport access, and in case of emergencies the Medivac planes must be able to get in and out. He underscores that by talking about the lives that are at stake and maintaining the provincial airport systems. So clearly it's a very important issue for communities from the point of health care.
He also went on to talk about how the present system is tied to continued economic growth throughout British Columbia. Again, for those of us that live in northern and rural British Columbia, we understand how it is that transportation is such a huge issue for northern communities -- suffering, as we have as of late, with the downturn in the resource sector in particular. The present airport system is a very important to the economic viability and growth of northern and rural British Columbia.
The last point that he underscores is maintaining access for all British Columbians to the rest of the nation and beyond. Certainly that ties into tourism, which again is an issue with which member communities of the UBCM are involved. The minister, I'm sure, is tied in some form, as well, to the whole question of tourism and access to these communities and the various regions throughout the province.
[1650]
One of the criticisms that Mayor Thorlakson made at this time -- and certainly from my discussions with the communities involved and the community leaders involved -- is that this handful of B.C. communities are attempting to hold the provincial system together. Provincial airport policy is virtually nonexistent. So perhaps that's a question that I should put to the minister at some point: has there been any change since '96 with reference to the whole question of the provincial airport policy?
Mayor Thorlakson also went on to talk about the federal decision to no longer operate or fund airport operations and about the potential impact in terms of funds flowing to these communities. He talked about the potential of a $2 million loss in federal grants-in-lieu payments and a further loss of $10 million in airport transportation subsidies. Clearly the aim of the federal government in all of this was to save money, and it seems very clear that in fact that is why they have made the move that they have made. They expected to save more than $1 billion in costs over the next 25 years. These communities are concerned, of course, that these costs are not to be downloaded, in turn, onto local communities.
The position, as I understand it -- with reference to these airport communities vis-�-vis the provincial government -- is that they don't expect the provincial government to pick up the tab so much as they expect the involvement of the provincial government at every level in terms of the transfer. That is something that they have yet to see, and many of these communities have, in a very real sense, been very much on their own. Certainly in terms of the ability of these communities to negotiate effectively on behalf of their communities with the feds, it's been something of a mismatch, as one can imagine.
That certainly is one area of concern with reference to this ongoing issue, and I think that's one of the concerns as these communities look to re-establish or restart the common front committee to lobby the minister. I know the minister has been in contact with some of these communities' leaders with reference to this whole question and the questions that flow from this transfer. I know there are a number of areas that are of concern.
Finally, with reference to the statement by Mayor Tholakson, he makes the comment that local governments will need greater powers to operate airports and will require full provincial participation and cooperation in order to ensure that they have the authorities they need, that the province is meeting its responsibilities in establishing provincial air transport policy and that the government supports negotiations with the federal government.
He goes on to point to a sustainable capital and operating loss fund which will have to be created to give airports the opportunity to develop their business plans. He talks about how the airports are important, again, to economic growth -- essential transportation links to many communities throughout the province.
[1655]
The development of a fair transfer process will ensure the long-term viability of airport operations, generate new economic opportunities and determine the future direction of airport policy in British Columbia. Having spoken for some time in a rather lengthy fashion, perhaps I should give the minister some opportunity, then, to comment on this issue.
[E. Walsh in the chair.]
Hon. J. Kwan: The member actually raises a very important issue with respect to airport devolution from the federal government. I have been having discussions with various representatives from different communities around this issue. They are indeed very concerned around the devolution process and the plight that they're faced with. Many of them have said to me that the fact is that the federal government will simply abandon them and close up the airport if they do not agree to take over the transference of it, thereby impacting their community significantly, especially on the financial front. This becomes a concern for them not only by way of access issues but in terms of economic opportunities for their community as well. I know that the member opposite can well appreciate these concerns.
What we have been doing with my ministry
More recently, when I met with the mayor from Smithers, who brought up the issue around
the federal government's latest requirements with respect to fire services
I should also say that the fact of the matter is this: we at the provincial level cannot afford to pick up the tab every time
[ Page 12710 ]
the federal government devolves something onto us or the local government. We have done that in the area of health care; we have done that in the area of education; we have also done that in the area of social assistance. We simply cannot continue to do so. We engage in debates around our deficit question. The fact of the matter is that this off-loading simply has to stop. We cannot continue to absorb that kind of off-loading from the federal government; we simply can't do it.
P. Nettleton: Yes, with respect to the off-loading, again I think that the communities understand the constraints in these difficult times, particularly in the communities that I and other members from northern and rural British Columbia represent. We understand the very real constraints in terms of government's ability to expand in terms of its commitment to those communities.
But I think the criticism that's directed towards the provincial government and this ministry in particular is in reference not so much to the unwillingness or inability of the provincial government to step forward and step into the place of the feds with reference to the moneys that flowed to these airport communities. Rather, they felt very much abandoned in this whole process, in that the province has not stepped in and provided the leadership, the coordinating role. It's adopted in fact very much a hands-off approach with reference to this whole question.
Again, in talking to leaders from the airport communities, the experience has been varied in terms of negotiations, which in some cases are ongoing and in other cases have been concluded to some extent. Their experience has been similar in that they felt, as I indicated earlier, that it was very much a mismatch in terms of their ability to negotiate with the feds on this critical issue -- critical to airport communities scattered throughout the province. My question to the minister, I guess, would be: why is it that the province has not been more proactive, has not provided the leadership, has not provided a coordinating role with reference to the negotiations in this whole question?
[1700]
Hon. J. Kwan: Insofar as the Ministry of Municipal Affairs is concerned, we have done, and will continue to do, what we can. I highlighted some of the areas in terms of assisting local governments in forming community airport corporations, service areas, addressing the issue of property taxes, technical support and advice, etc. So insofar as we can, the Ministry of Municipal Affairs will continue to provide that kind of assistance. But I think that what's critical here, and what has been identified and recognized, is the impact on local communities with respect to economic development, as well as the transportation access question. Those, of course, fall under the Ministries of Employment and Investment and Transportation and Highways, and I'll endeavour to bring these points to my colleagues' attention and to ensure that they are aware of the situation.
P. Nettleton: The minister raised the experience of Smithers, and I know that as the minister mentioned, she had been visited by a delegation from Smithers. I had the opportunity to discuss with them some of their immediate concerns with reference to this issue -- that is, the issue in and around the transfer by the feds to airport communities. I'm quite certain that I'm not telling the minister anything she doesn't know, but I'd just like some clarification with reference to this question, this issue. The federal Minister of Transport may require class B airports throughout the province to have fire protection at airports. The position of the feds is that this is a question of safety, and thus they're apparently insisting that this is the way it will be.
But the practical effect on communities like Smithers, of course, is that the increase in cost that one would expect to be associated with the imposition of this new rule or regulation would be in the range of $300,000 to $475,000. Smithers is clearly not in a position to sustain that kind of impact -- neither the initial impact nor on an ongoing annual basis. The mayor of Smithers, in my brief discussions with him, has approached the minister, I believe, and what he has asked is that the minister act as an advocate for his community with respect to this problem. I'm just wondering how the minister intends, then, to respond to the concerns not only of the mayor of Smithers, in this instance, but of other leaders of communities who will find themselves in the same position.
Hon. J. Kwan: I will certainly work on this issue. I have already, since our meeting with the mayor of Smithers, asked my fire commissioner to review the package that was sent to us, which we received last week, with respect to the federal government's requirements and to review it and report back to me on it. It is interesting to note that the federal government, quite frankly, wants it both ways. Prior to the transfer or the devolution of the airport to local governments, they did not require of themselves the onerous safety requirements. After the fact, he said that he had been double-crossed, to use the word of the mayor of Smithers, because it was after the devolution was completed that these requirements came forward. Of course, during that process there was no mention of the subsidies or the dollars that need to accompany those responsibilities.
[1705]
I certainly am aware of these issues, as we have been engaged in discussions with various local governments around that. My commissioner will be reporting back to me on it, and we will determine what the next steps are.
P. Nettleton: Yes, the experience of Smithers -- with reference to this question in and around fire protection -- underscores the importance of the province assuming more of a proactive role in terms of a coordinating role. Again, I think it points to the inequality in terms of the match-up of many of these rural, remote, smaller airport communities against a federal government that has all the cards in terms of how it negotiates with these communities.
I would ask the minister: what is this minister and this government prepared to do in terms of becoming involved? Certainly much damage has been done in terms of negotiations which have been concluded between many of these airport communities and the federal government. Nevertheless, there are a number of communities which are presently involved in negotiations and are looking to this minister -- although, in fairness to the minister, there are certainly other ministries involved in this whole question, in this whole issue. Nevertheless, they are looking to this government for some assistance in terms of assuming a more dominant role in coordinating the negotiations, becoming involved in the negotiations, so that we don't have the kinds of problems which the mayor of Smithers has pointed to -- and rightly so -- as
[ Page 12711 ]
an example of the difficulties associated with these kinds of negotiations.
I guess my question to the minister is: certainly some damage has been done, but where do we go from here in terms of assisting these communities?
Hon. J. Kwan: Certainly I think that the Ministry of Municipal Affairs can play a coordinating role in bringing together the relevant ministries and levels of government to facilitate discussion. I don't believe that we'll engage in active negotiations per se, because the deal, if you will, that has been struck would be between local government and the federal government in terms of their agreements. However, we can certainly play a role to facilitate dialogue and discussion among the different parties.
One key component to that -- which I actually intend to do since our meeting last week -- is to engage in the discussion with the UBCM, to talk with them to see what role we can play to facilitate those discussions. I also think it would be critical to link up with the FCM as well and to utilize the FCM authority in connecting up with the federal government in this respect.
P. Nettleton: I want to put the minister on the spot just for a moment, if I
may, with respect to this committee, which appears to be moving towards re-forming in some
form. The committee statement that I referred to -- the common front committee
Hon. J. Kwan: I certainly would meet with the committee if the committee wishes me to do so. Aside from that, I will initiate discussions with the UBCM and, as I said, perhaps with other groups or colleagues of mine and levels of government to facilitate the process for discussion.
[1710]
P. Nettleton: There are a couple of final questions, if I may, with reference to
this issue. Could the minister comment, please, on the technical advice that is available
to communities on this issue? Or technical support, perhaps, is
Hon. J. Kwan: The technical advice that my ministry had provided -- assistance to local government in this area -- included the municipal financial services branch, in terms of taxation issues; the approval process -- we provide assistance there; and the fire commissioner's office, in terms of fire safety issues. Those are just some examples of technical advice.
P. Nettleton: I guess it's not clear to me how it is that this advice -- this
support -- is extended to communities, and to what extent. How is it that they
Hon. J. Kwan: Generally what happens is that people phone us. Then my staff responds to the questions and inquiries -- information that they're looking for -- and then we provide not just advice but perhaps suggestions as to how some of those matters might be dealt with. In the instance of taxation exemption, that's something that we brought in through the OIC process. So, consequently, my staff would prepare the OIC, etc., for my consideration and then for cabinet's consideration.
P. Nettleton: Presumably, then, communities would, in and of themselves, contact your ministry -- whether it's for technical support or some other form of support -- with reference to this question. I'm just wondering, from the point of view of the ministry itself, is there any sense -- is there any structure -- in which your response to requests for support from the various communities is coordinated? Is there any kind of a coordinating role, in terms of the function of the ministry itself?
Hon. J. Kwan: Generally speaking, we actually don't need a specific team identified to deal with these ranges of questions. Our office is relatively small. The local government and their staff know my staff well. They know how to sort of connect. When they don't, in fact what happens is that the mayor or whoever will actually either contact my deputy or myself, and then we'll steer them into the right direction. But generally speaking, they are very familiar with our staff, and our staff, I know, are very helpful in providing whatever assistance they can with respect to any issue -- not just this issue, but all kinds of issues -- that local governments are faced with.
T. Nebbeling: When I had to leave for 15 minutes, I was still talking about public-private partnerships and some of the problems that I have seen develop over time. The minister pointed out that there was a stakeholders group involved in discussing this whole matter, and then the terms of this private partnership were established. Once the terms are established, can the minister tell me if there were any other government agencies, Crown corporations or ministries that got involved in formulating the final wording of these sections that were changed in the Municipal Act?
Hon. J. Kwan: For any piece of legislation, there is a range of involvement in terms of various committees -- legislative committees, etc. -- who get involved, and of course this process is no different.
T. Nebbeling: In this particular instance, can the minister tell me which agencies, Crown corporations or ministries were involved in not only formulating but also endorsing the inclusion of these sections pertaining to the P3 in the changes to the Municipal Act?
[1715]
Hon. J. Kwan: I can provide for the member a document -- or a memo, if you will -- that lists the procedures in terms of the involvement in the crafting of this piece of legislation.
T. Nebbeling: I'm interested in getting a list of procedures, but that doesn't answer my question. My question is: which agencies, which Crown corporations and which ministries were involved in creating these procedures?
Hon. J. Kwan: Specifically with respect to ministries, my staff's recollection is the Ministry of Attorney General and our ministry, generally speaking. But with respect to the process of drafting and crafting legislation, there's a lengthy process that
[ Page 12712 ]
involves all kinds of people. If the member is interested in that, we can provide that information.
T. Nebbeling: No, I will learn the process in the near future. I'm really involved in trying to get the participants identified. Just a question: was the Ministry of Highways involved in the P3, in looking at these clauses?
Hon. J. Kwan: Yes, in some ways the Ministry of Transportation and Highways was involved -- as are all members of the House, by the way, because the legislation was brought to the House and was endorsed by the House, in which we voted on and debated this matter. But there is also, preceding that, a process in which legislation is brought to various different committees and deputies' committees and to cabinet, etc. At some point in time, everybody who sits at these different tables had the opportunity to provide their input.
T. Nebbeling: I understand that, ultimately, through the legislative process we do all get involved, but that's obviously not where I was going to go. You worked with a stakeholders group. We earlier on identified the members. They made certain recommendations that you as the Minister of Municipal Affairs then took to the next level. Now the next level was obviously not the legislature. It was something in between. That's the group that I tried to identify. I gave as an example the Ministry of Transportation and Highways. Was the Crown corporations secretariat involved, for example? I would like to hear that.
Hon. J. Kwan: Generally speaking, the Minister of Municipal Affairs is the lead minister on this issue. As I said earlier, we consulted with the Attorney General's office. We can provide you with a list of the stakeholders, because at various different stages different people got involved. So that list is very extensive, but we can certainly provide it to you.
T. Nebbeling: I would appreciate it. But still I would like to know if
Hon. J. Kwan: I am advised by my staff that no, they were not involved.
T. Nebbeling: Earlier on I indicated that I had a letter from the B.C. Road Builders Association which was addressed to Mr. Tom Gunton. The letter was focused on the whole P3 approach as part of the new way that provincial and municipal authorities will work together in the future, especially when it comes to these partnerships.
My first question is: why was the letter addressed to Mr. Gunton and cc'd to the minister, rather than to the minister and maybe cc'd to Mr. Gunton?
[1720]
Hon. J. Kwan: I would suggest to the member opposite that he would have to ask the writer of the letter.
The Chair: And I'll remind the member that we are on the vote and to keep his questions relevant to the vote.
T. Nebbeling: Madam Chair, every question that I will be asking the minister,
and what I'll be pursuing, is related to changes to the Municipal Act that have been
incorporated over the last year. The questions I'm asking are very pertinent. The letter
was addressed to Mr. Gunton. That's not an unfair answer to give: ask Mr. Gunton. But can
the minister then tell
Hon. J. Kwan: The writer of the letter.
The Chair: Order, members.
T. Nebbeling: That is a fair point. It is the writer of the letter, but what I
would like to know is: is the minister aware
Hon. J. Kwan: Generally speaking, I would endeavour to say that Mr. Gunton is involved with the general business community, and perhaps that might be one reason why.
T. Nebbeling: Was Mr. Gunton involved in any other aspect of the changes to the Municipal Act that we have seen introduced over the last year?
Hon. J. Kwan: Not to my staff's knowledge and not to my knowledge.
T. Nebbeling: In the letter to Mr. Gunton that the minister was copied with -- I don't know if the minister recalls this particular letter -- the B.C. Road Builders Association basically makes a case for why the Municipal Act is hurting public-private partnership objectives. The writer makes a case that, with the changes to the Municipal Act as incorporated under Bill 31, the Municipal Act today no longer reflects the opportunities that in the past were in place for the private sector to participate in projects such as are now contemplated under the new guidelines, under the new Municipal Act.
The writer of the letter makes a case wherein he uses Nova Scotia, which has a very effective P3 program. One of the fundamental differences is that the Nova Scotia scenario allows the private partner to take on so many of the liabilities that are traditionally associated with a partnership that other authorities can no longer -- or will not -- oppose the P3 approach toward the development of infrastructure. Has the minister at any time during the preparation of these new sections for the Municipal Act considered what has happened in Nova Scotia?
Hon. J. Kwan: Through the process, with the different individuals working on this issue, certainly other jurisdictions and different models were looked at. Ultimately, through the various discussions and so on, the model which we have adopted was the one that was agreed upon.
T. Nebbeling: As the minister stated that other models were being looked at, can the minister tell me -- or the staff can inform the minister, and then the minister can inform me -- if what happened in Nova Scotia was looked at -- in particular, about the tenure of the partnership when developing a piece of infrastructure for a community?
[ Page 12713 ]
[1725]
Hon. J. Kwan: My staff actually don't remember specifically on that issue -- whether or not, on that particular issue, they looked at the Nova Scotia model specifically. But they would be happy to include, in our follow-up to you, who was participating in this process and different jurisdictions that were reviewed.
T. Nebbeling: Maybe the minister should provide ginkgo biloba to staff so that the memory juices flow a little bit better, because I hear too often today that staff doesn't remember. I think these are very fundamental issues about which I would expect staff either to have the briefing book ready to look at or to remember what kinds of areas were looked at. There are only ten provinces, for God's sake. So if Nova Scotia was part of the deliberation, you may not remember the details, but I would expect that staff knows: "Yes, we did look at Nova Scotia. We did look at New Brunswick."
One of the problems that
Hon. J. Kwan: The act does not stipulate specifically what kind of tenure one enters into negotiations on. It is up to the parties to work that out through their negotiations.
T. Nebbeling: Is the minister saying that if a financial partnership is created between the public entity and the private company, then the partnership could have a lease life of, say, 25 years -- or a management contract, associated with that deal, of 25 years?
Hon. J. Kwan: Hon. Chair, I'd like to seek advice from you with respect to the question that has been posed and the line of questioning that we have embarked on -- whether or not that fits within the purview of the estimates of the Ministry of Municipal Affairs. If it doesn't, then I'd prefer not to sort of list what is clearly stipulated in Bill 31 around the area of interest that the member has identified.
T. Nebbeling: Well, it's up to you. I think my question is totally correct.
The Chair: Shall the vote pass?
T. Nebbeling: What nonsense!
The Chair: I recognize the member for West Vancouver-Garibaldi.
T. Nebbeling: I think the Chair is totally out of order.
Can the minister, through the Chair, explain how the change in the Municipal Act related to public-private projects has been accommodated to allow long-term leases to be incorporated in these projects? That has not been the case up to now, except in one or two instances where the Minister of Municipal Affairs actually had, through a statute amendment, allowed a project -- but not a broad approach.
Hon. J. Kwan: Prior to Bill 31 there was no framework that allowed for public-private partnerships. Subsequent to that, there is now the framework in place with respect to public-private partnerships. I'm reluctant to read off the stipulations around that, but it is provided here. I can make a copy of it available to the member for his perusal.
[1730]
T. Nebbeling: First of all, I do not agree that there has never been any accommodation of a public-private partnership allowed under the Municipal Act. There has -- and I will come back to you. But I would like to have read into the record the stipulations that the minister has identified should be of interest to me.
Hon. J. Kwan: What I said was that there was no framework within the Municipal Act guiding public-private partnerships prior to the introduction of Bill 31. Clearly, local governments can and have entered into public-private partnerships prior to that, albeit through a very cumbersome process. And we were working towards making changes around that.
So, with respect to reading into the record the special provisions for public-private partnerships, let me just start by saying this. In the broader and more flexible corporate powers to make agreements and dispose of property, the act adds some special provisions for P3s: it authorizes granting assistance to a business under a partnering agreement -- section 183; it authorizes a permissive tax exemption from municipal or regional district property taxes for land or improvements used for a public purpose under a partnering agreement -- sections 344.1 and 845.3; under section 329, it allows partnering agreements to take advantage of these special provisions and the new corporate powers as of July 30, 1998, the date of the royal assent to the act; under section 289, it retroactively validates prescribed partnering agreements that were made before June 4, 1994, the date of first reading of the act.
While not limited to P3s, more flexible authority for local governments to incur liabilities under agreements is provided to assist in partnering agreements -- sections 451 and 828. Where such agreements are longer than five years, electors must be provided with an opportunity to petition against the agreement. Agreements to loan authorization bylaw provisions also require counter-petition opportunity rather than electors' assent to such bylaws -- sections 458 and 831.
The Chair: I'd like to caution both members on the debate that previous legislation already debated in the House is not to be debated in committee. I would ask the member to please respect the rules of the House.
T. Nebbeling: I'm not talking about Bill 31; the minister is. I'm talking about the Municipal Act, and I believe the Municipal Act is debatable and so are changes to the Municipal Act. For that reason, I asked the questions the way I did ask them.
The Chair: Again, I will repeat that previous legislation that has been debated in the House, by the rules of the House is not to be debated again in committee.
T. Nebbeling: In the township of Langley there was a project proposed by the council that consisted of a community facility. The community facility was to be built by a joint partnership of the council and a private partnership. That
[ Page 12714 ]
project went sideways. It went sideways for a number of reasons. First of all, the opportunity for 5 percent of the community to demand a referendum on the project -- where the wishes of 95 percent were not being considered, as a consequence -- scared off the developer. The developer was scared off because he had to make the investment proactively -- do the planning, do the negotiations, spend the time. The second reason that this developer was not willing to continue was that he felt that under the given legislation, there was another hindrance. That hindrance was that the tenure that this private developer needed to make the project viable from a financing perspective, from an operating perspective and, no doubt, from a profit perspective led him to feel that the 25 years would just not be available. Can the minister say if the interpretation by this developer was correct? Was the developer indeed correct in the assessment of the situation and justified in walking?
[1735]
Hon. J. Kwan: I would assume that the person or the company -- the developer that the member referenced -- would have sought the advice of their lawyer, and that would be the most appropriate forum for them.
T. Nebbeling: It's not up to me to decide what this developer has done, just as it was not up to the minister to answer a letter addressed to Mr. Gunton. I know this situation arose, and as a consequence of the uncertainty that this developer felt and the requirement to invest in that project considerable amounts of money and time, he walked away.
Can the minister tell me: in the future, when another developer looks at a project like that, would there be in place guidelines that stipulate that indeed he can have a 25-year lease to operate the facility, that the financing that he has to amortize over 25 years can also be handled? And if that's not the case, then I ask the minister: based on what?
Hon. J. Kwan: With respect to negotiations in terms of what kind of terms one would engage in, it would be between the two parties who engage in their negotiations.
T. Nebbeling: Is the minister saying that because of the changes to the Municipal Act, municipalities now have the power to negotiate opportunities with the private sector to the benefit of the community, where capital borrowing is involved, without having to have the consent of the Ministry of Municipal Affairs, and would also not violate any acts or pieces of legislation that have been passed by this House?
Hon. J. Kwan: What would be required for the ministry is if there is a loan authorization process involved.
T. Nebbeling: What does the minister mean by a loan authorization? Authorization by whom? To whom? In what form?
Hon. J. Kwan: I thought the member was talking about capital borrowing. In that instance, there would have to be a loan authorization bylaw in place. The local government would have to approve it, and then they would have to bring it forward to the Ministry of Municipal Affairs for approval.
T. Nebbeling: Indeed, the concept of controlling the municipality's own destiny,
clearly, is not in place when it comes to the P3 issue. When borrowing is required, as the
minister just explained, municipalities will have to pass bylaws. I believe these bylaws
will be subject to the counter-petition clause -- so that, again, 5 percent of the
population can stop a project like that. If indeed the municipality gets past that process
by going through a referendum, I take it -- because without a referendum, the bylaw is
dead
Hon. J. Kwan: With respect to capital borrowing, there is the issue of managing risks, which involves the Municipal Finance Authority, which falls under the ministry's jurisdiction. Because of that, we are intrinsically linked in that process and therefore have the duty and the responsibility to ensure that the risk issues are dealt with.
T. Nebbeling: Could the minister explain: when this kind of Municipal Finance Authority request comes forward, what kind of criteria are being used?
[1740]
Hon. J. Kwan: The main test by which staff evaluate is to ensure that the municipality has the borrowing authority within their powers -- to ensure that they do have that capacity. But I should also say that not all public-private partnerships require capital borrowing. In those instances, there are no approval procedures that would be required for them to come to local government.
T. Nebbeling: The last statement of the minister is that no capital borrowing will be required with certain projects. Somewhere something will have to be financed. If the municipality doesn't have to borrow and the private partner puts up all the capital, (a) is the minister saying that the municipal jurisdiction does not have to come back to Municipal Affairs, and (b) does the municipal jurisdiction have the authority to set the terms under which this borrowing is being handled, including the lengths of time that the amortization of the borrowing will require to make the project viable?
Hon. J. Kwan: If the borrowing is done by the private partner, then they don't need approval from us. But if the borrowing is done by the municipality, then there is that responsibility in which we have the onus to check on it.
Hon. Chair, noting the time, I move that Committee A rise, report progress and ask leave to sit again.
Motion approved.
The committee rose at 5:43 p.m.
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