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.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

THURSDAY, JUNE 10, 1999

Volume 15, Number 25

[ Page 13505 ]

The House met at 2:08 p.m.

Hon. D. Streifel: Am I the only one up? That's pretty good. Thank you.

Interjections.

Hon. D. Streifel: It never fails. I stand up, and the opposition starts to heckle and use up their own time.

Hon. Speaker, it's my pleasure today to welcome to the precincts 26 grade 6 and 7 students and five adults from Fraserview Elementary School in Mission. They're accompanied by their teacher, Ms. A. Titford. I bid the House make them welcome.

G. Plant: I notice in the gallery a constituent and a friend from Richmond, John Berkyto. I hope that members will please make him welcome.

W. Hartley: In the galleries, we have. . . . Well, there are actually three groups -- three parties from the same group, I believe -- coming from Wellington Elementary School in Woodinville, Washington. There are some 30 grade 6 students, several adults and. . . . It looks like their teachers are Ms. Jackson and Mr. Boyd. So would members please welcome them.

[1410]

The second set of introductions is. . . . There are two sets of couples from my riding: Ray and Phyllis Hatch and Darwin and Susan Birg from Yale. They're here to talk to the Minister of Small Business, Tourism and Culture and myself about starting up a new venture, and also to see the functioning of the Legislature. So would the House please make my constituents welcome.

Hon. D. Lovick: I just noticed in the gallery somebody well known to you, hon. Speaker, as well as to me -- namely, Prof. Terry Morley from the University of Victoria. I'd ask my colleagues to please join me in making him welcome.

Hon. U. Dosanjh: Present in the gallery is a good friend and a constituent of mine, Edgar Orellano. Accompanying him is José Antonio Movil and spouse Lidia Movil. José is a member of the Guatemalan parliament. Would the House please make both of them welcome.

The Speaker: And now, hon. members, I would like to make an introduction from the Chair. In the gallery are two new friends of mine, Larry Beaudet and his son Asahel; Asahel is at South Park Elementary School. They were here to have lunch with me today and also to learn about parliament and the Legislature and the role of the Speaker. Would the House please make them both welcome.

Oral Questions

COST OF GOVERNMENT LOTTERY LAWSUITS

Interjections.

The Speaker: Members, come to order.

G. Campbell: . . .have been spent by the government trying to force gambling on communities in British Columbia. According to documents obtained by the official opposition, in the last 18 months the Lottery Corporation alone has spent over $400,000 related to fighting losing court cases. My question to the minister responsible for the B.C. Lottery Corporation is: at a time when the children's advocate is saying that there is. . .

Interjections.

The Speaker: Order!

G. Campbell: . . .not enough money -- the government's not providing enough money -- to care for children at risk, how can he justify spending $400,000 defending the government's illegal actions?

[1415]

The Speaker: Order, members.

Hon. M. Farnworth: I suppose we could start with the million-dollar mailer that the opposition mailed out -- that was stolen. I suppose we could talk about the other transgressions of the opposition. . .

Interjections.

The Speaker: Order!

Hon. M. Farnworth: . . .and the money they've received from the gaming industry over the years. We could talk about the fact that the money made by the Lottery Corporation goes to provide health care and education in this province. We could talk about how we're trying to work with communities throughout this province to put gaming on the sound legal foundation that's required in this province. That's why we went out and got a White Paper, and that's why we're consulting with communities around the province.

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

G. Campbell: The government has spent 400,000 taxpayers' dollars trying to defend its own illegal activities, hon.

[ Page 13506 ]

Hon. M. Farnworth: It's a little rich, listening to this opposition, whose economic plan is to cut billions out of this budget -- billions that go to health care and education, billions that go to children and families, billions that go to provide social services in this province. That's their economic plan.

We are working with communities in this province to put in place a stable gaming regime that is legal -- in a context of legislation -- and a White Paper is out there and has been developed. We've been working cooperatively with communities. That's why we've had support from places like Kelowna, who think the White Paper and the recommendations and the direction that we're moving in with gaming are the right way to go. That's why the mayor of Kamloops said that the direction that we've been taking is the right way to go. The issues that they laid on the table, we've been addressing.

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

G. Campbell: Well, the B.C. Lottery Corporation at least has admitted and confessed that they've wasted $400,000 on these losing court battles. But you know, hon. Speaker, we know that the really big bucks aren't spent by the Lottery Corporation; they're spent by the Attorney General's department, trying to defend this government. Unfortunately, the Attorney General has been stonewalling the taxpayers of British Columbia and has not told them how much money was spent in fighting these six losing court battles. So my question to the Attorney General today is: will he tell the House exactly how much money his ministry spent defending this government's illegal activities?

Hon. U. Dosanjh: This is absolutely shameful conduct on the part of this opposition -- absolutely shameful. This issue was canvassed during the estimates of the Attorney General -- fully canvassed -- and full explanations were made that the Attorney General cannot release that information, because there is a solicitor-client privilege. If we want to violate all of the fundamental principles of justice that have gone on for centuries in this province and this country, then we should do that. That's absolutely shameless.

Interjections.

The Speaker: Order, members.

G. Plant: Solicitor-client privilege is an interesting concept. Here it's the Attorney General who is the client. It's the Attorney General and the government that have within their means of knowledge the amount of money spent by the Attorney General to defend these lawsuits and to prosecute these lawsuits -- and have it within their power to disclose that amount. So let's. . . .

Interjections.

The Speaker: Members, order. The recognized member has the floor.

G. Plant: This is taxpayer money. The people of British Columbia have the right to know how much the government's Ministry of Attorney General -- not the Lottery Corporation -- is spending on defending its illegal and indefensible gambling policies in the courts of British Columbia. So I give the Attorney General another chance: will he tell us how much has been spent?

Interjections.

The Speaker: Members, come to order.

Hon. U. Dosanjh: It's a novel concept that this hon. member is promoting in this House. The chief legal adviser of government simply has been turned upside down to make a client out of him; that's a novel concept. The hon. member just finished saying that the Attorney General is the client. The Attorney General is the chief legal adviser and the lawyer of the government. The Attorney General is not the client, and that's one of the fundamental principles that the hon. member fails to understand.

The hon. member and I had a thorough discussion on this issue. This was canvassed during the debate on estimates, and that's the end of the matter. There are moneys mentioned in those estimates that have gone for legal purposes. But for the Attorney General to start releasing individual information with respect to lawyers and the amounts with respect to those lawyers and with respect to particular matters would be an absolute breach of that confidentiality on which this system of justice is based.

[1420]

Interjections.

The Speaker: Order, members.

G. Plant: This isn't about the hourly rate of some lawyer contracted by the Ministry of Attorney General. The minister stands on behalf of the government. He spends money on behalf of the government. The government defends the indefensible in the courts of British Columbia, pursuing gambling policies that are opposed by the vast majority of British Columbians. Taxpayers want to know the answer to one simple question: added all together, how much did it cost? How much have the taxpayers spent pursuing this government's indefensible gambling policies?

Interjections.

The Speaker: Order, members. The member for Richmond-Steveston and the Minister of Energy and Mines, will come to order.

Interjections.

The Speaker: The Attorney General has been recognized and has the floor.

[ Page 13507 ]

The Speaker: Minister!

Interjections.

The Speaker: Members, I'm in your hands. The Attorney General has been recognized. Until there is order in this chamber, we will not proceed.

Hon. U. Dosanjh: Hon. Speaker, the critic for the Attorney General just mentioned a certain figure; the hon. Leader of the Opposition mentioned a certain figure. They have obviously received those figures pursuant to the Freedom of Information Act. That is obviously the maximum amount of information that can be released under the law, under the freedom-of-information and privacy legislation.

In addition to that, there is what I have said, a fundamental principle on which our system of justice is based, and that's called the solicitor-client privilege. The Attorney General ministry, for however many years it has existed, has functioned, is based on that principle. That principle was canvassed during the estimates debate. All of these questions were canvassed. If the hon. members opposite want to have an estimates debate again, I'd be happy to oblige; I don't have any problems whatsoever. But let this House understand, let the people of British Columbia understand that for the sake. . .

Interjections.

The Speaker: Members. . . .

Hon. U. Dosanjh: . . .of politicizing each and every issue in this province, they are now prepared to forgo all of the fundamental principles of justice on which this system has been based.

MAMMOGRAPHY SERVICE IN FORT NELSON

Will the Health minister tell us why she thinks it is acceptable to have women in Fort Nelson travel a total of ten hours to access this vital service?

Hon. P. Priddy: The member has raised this issue and the specifics of it with me, and he knows that the ministry is trying to find a solution to that. He's been assured of that.

Access to mammography is extremely important. We screened the one-millionth woman in British Columbia last year. We know that women are surviving longer in British Columbia than anywhere in the country as a result of our good mammography program. That's the reason that we're providing 38,000 more mammographies -- a 20 percent increase -- this year. Ten hours is too long, and we are trying to resolve that problem for the member.

The Speaker: First supplementary, the member for Peace River North.

R. Neufeld: A mobile unit costs about $100,000. This service ended early in the year, around the same time that Mr. Gunton was spending thousands of taxpayers' dollars on his bunker. I guess it's no wonder that the women in my constituency, specifically Fort Nelson, wonder where the minister's priorities are. I have been asking this minister for over a month to get some resolution to this issue, and today I'm going to take her up on her challenge. She said in the House that it is very important to this government. If it is important to this government, then I suggest that we get on with starting to fund that unit so that women in Fort Nelson and up the Alaska Highway can have equal access to this important service.

[1425]

TESTING OF GENETICALLY MODIFIED FOOD

In view of this growing public concern, will the minister commit today to urge Health Canada to become more proactive in their evaluation of GMOs in order to give all Canadians a better assurance that the food we consume is indeed safe?

Hon. C. Evans: I'm aware that this is a very important issue to the member -- and not just to this member. I think that over 1,000 people have written to me, and probably to the opposition critic, on the subject of genetically modified foods. The Women's Institute in every constituency in the province has made it a priority of theirs this year.

The hon. member will remember the rBST argument, in milk. Ours was the only province in Canada, I think, that spoke out against the federal government making this additive okay in milk, and happily, they decided not to. I have written to the federal minister, asking him to take steps to make sure that testing is done that gives all Canadians a feeling of safety and security in our food supply. Also, we will in future be introducing legislation that makes it possible for people to label foods in terms of what's not in them as well as what's in them. I hope that the hon. member gets some security from all those steps.

Ministerial Statement

CALL FOR FEDERAL BULK WATER EXPORT BAN

[ Page 13508 ]

Today I'm calling on the federal government to legislate a ban on all bulk water exports across Canada. We know the federal government is also concerned about this issue. They've said, as recently as February, that they would enact federal legislation. I want to applaud them for making that commitment. The federal Environment minister, Christine Stewart, stated explicitly: "We have to have some legislation in place that specifically secures our fresh water resources." Ottawa recognizes that British Columbia has put in place the strongest and highest environmental standards in the country to protect our vital fresh water. We believe that similar standards should be in place right across the country.

Members may be aware that Ottawa has looked at options to protect Canada's fresh water. However, the option they've chosen is a voluntary federal-interprovincial accord. On the surface, that might seem as if it's an acceptable approach, but we have serious concerns. Because it is voluntary, this accord will not truly protect Canada's waters. What we need to complement B.C.'s strong legislative action is federal legislation within its jurisdiction that is equally unequivocal in protecting Canada's water resource.

[1430]

M. Coell: I'm pleased to hear the minister clarify for us the government's position on the export of bulk water. I was concerned earlier in the year when Powerex was discussing the export of bulk water for Sumas thermal generation. But the government is no longer pursuing that. . .

Interjections.

The Speaker: Order, members.

M. Coell: . . .and the minister has clarified that for us. I'm very pleased.

On this side of the House, we have not supported the. . .

Interjections.

The Speaker: Order, members.

M. Coell: . . .export of bulk water for many, many years -- from the time when the member for Powell River-Sunshine Coast sat on this side of the House, and that's so many years ago.

The province of B.C. is the only province in Canada that does not have groundwater legislation. I look forward to the minister tabling groundwater legislation in the House later this session. Maybe she could throw in a biologists act to help out in that area as well. But I can say on this side of the House that we do not support bulk water exports, and we will support the government in their effort to convince the federal government to do the same.

NATIONAL TRANSPORTATION WEEK

Without question, safe, reliable and efficient transportation is important to the people of this province. In recognition of this fact, this government continues to improve our provincial transportation network. In addition to making major investments in urban transit and ferries, we have committed $490 million for highway capital improvements this year.

Interjections.

The Speaker: Members, come to order. The minister has the floor.

Interjections.

The Speaker: Members. . . .

Hon. H. Lali: We are also improving northern roads in British Columbia, building a new Kootenay Lake ferry in Nelson and expanding SkyTrain on the lower mainland to ensure the future prosperity of this province. But provincial transportation investments need federal support as well. I believe that every province should be able to negotiate federal funding for highways and other transportation infrastructure such as urban transit or border crossings.

Interjection.

Hon. H. Lali: Therefore, since last year -- and I think the member for Vancouver-Little Mountain might pay a little bit more attention, since he lives in the lower mainland -- I've been working to raise awareness of the need for the federal government to increase its transportation investments across the country.

[1435]

[ Page 13509 ]

Efficient transportation links have helped build British Columbia, and we intend to keep B.C. strong by continuing to improve both our provincial and our national transportation network.

D. Symons: It's my pleasure to rise and respond to the ministerial statement on National Transportation Week. We on this side of the House of course agree with the government. In fact, I think nobody would disagree on the importance of transportation to the economy of our province and our country. It's interesting that this follows on the proclamation of a truckers appreciation day, because the two fit together very nicely. But transportation of course includes not only our highways but the air, rail, ferries and, more increasingly, I suppose, we might even talk about the electronic highways, as well, as being a form of transportation in the province. We support transportation every bit as much as the government does. We might disagree with them on some of the projects that they have done, but nevertheless transportation is important, and we would support all efforts to improve the transportation of the province.

I was somewhat surprised to hear the minister mention ferries. He didn't mention fast ferries per se, but certainly there have been some, let's say, mistakes made by the government in the area of transportation. We also look for federal support for transportation. Indeed, we strongly support a national transportation strategy and a federal participation in financial investment in transportation. And I have reminded the minister a few times that there is a motion on the order paper -- Motion 41 -- that asks precisely that: that the federal government would do it. It's just unfortunate that that motion has not come forward so the whole House here could endorse the motion that we on this side of the House have had on that order paper for some six years.

So I'm hoping, in support of National Transportation Week, that the government side will allow that motion to come forward. We will all vote for it in support of transportation.

Tabling Documents

The Speaker: The Chair also has the honour to present a report: the annual report of the British Columbia Legislative Library for the year 1998.

Orders of the Day

PENSION BENEFITS STANDARDS AMENDMENT ACT, 1999
(continued)

[1440]

Hon. D. Lovick: I thought perhaps it would be appropriate to begin our deliberations this afternoon by answering the question that we ended with. In response to the particular question the member raised this morning -- namely, day labourers working on projects covered by the HCL agreement -- I offer the following information to the member. I can advise him that the HCL collective agreement provides that HCL make pension contributions on behalf of all workers on projects, including day labourers. This is a matter covered by the collective agreement, and all I can do for the moment at least is simply advise the member that I will advise the minister responsible -- namely, the Minister of Transportation and Highways -- of the concerns that he raised. I think that's the appropriate course of action.

With respect to this particular amendment -- the one that we were basing this discussion on -- its purpose is to avoid the need for multi-employer plans to track, virtually forever, very small amounts of money contributed on behalf of workers who worked for a very short time for an employer who contributes to a multi-employer plan. The administrative costs associated with tracking the money and the former worker can be predictably exorbitant. This amendment is an attempt to avoid that red tape and administrative overload, unless the worker will actually derive some benefit from the pension funds that have indeed been accrued. I hope that answers the member's question.

[1445]

The issue that the minister raised relating to the difficulty of tracking small amounts of moneys for employees that are working short periods of time. . . . I can agree with the minister on that. When you have a large turnover like that, it's quite possible that many of these people sort of disappear off the map, in a sense, yet you have the problem of dealing with hundreds or maybe a thousand dollars in a pension plan -- following that for the life of that individual until he's eventually able to collect on the pension.

I did mention before that there are alternatives to having that happen which would still benefit that employee. One of them is to make this contribution going in. . . . We were told in the Ministry of Transportation and Highways. . . . We brought up what I consider to be the problem of the HCL

[ Page 13510 ]

In a sense, the money earned hourly by these individuals is sort of earmarked for them, because they are the persons who would be recipients of the benefit of that money. It was part of the collective agreement that they would be recipients in that way. Therefore, if that money is to go to the employee, we could find some way that that will happen -- rather than that for 350 days or less the money doesn't go to the employee -- either by making the money that's contributed during that period portable, so they can transfer it to some other plan if they are able to be employed in some other activity that has a plan -- or it can go into an RSP of some sort, which again would be some sort of pensionable arrangement for that employee.

The way it is now, if they don't manage to fit the criteria of this particular section -- 350 days or more of work in each of two consecutive years -- then that money is of no value to them at all, although it has been collected on their behalf. That's my concern. Let's see that everybody who has worked on the project that's covered by a multi-employer plan will profit by those moneys that have gone into that plan on their behalf, under their name.

Hon. D. Lovick: I thank the member for his comments. I would simply point out to him that I've already given him the only assurance I can give him. The matter that he addresses is, of course, covered by a particular collective agreement. I'm powerless to change that agreement here -- as he is, and as this Legislature indeed is at the moment. It certainly falls outside the purview of this bill. But I think the point the member makes bears consideration and some close scrutiny. As I say, I've undertaken to ensure that the points he raises are indeed brought to the attention of my colleague, the Minister of Transportation and Highways, who is responsible for the HCL agreement, and I will do that.

D. Symons: I think the minister has missed the point. I'm not arguing HCL here. It's just one example of an employment arrangement that this act -- and I'm arguing the conditions and statements in section 1(k) of this act -- put some limitations on the availability of those moneys that go into a pension plan accruing back to the employee who earned those benefits in a pension plan.

There are people who do fall through the cracks. One of the cracks is this 350 hours of employment in each of two successive years. So I'm suggesting that we might amend this portion of it so that we can avoid those cracks that people fall through and we can see that the employee who has earned the benefits will profit by them. It's this act, not the HCL act, that I'm raising questions on right now.

[1450]

So I don't, as I say, think we can do much about that. We believe that this act has indeed, on the basis of the recommendations from all the trustees. . . . The groups represented at the council have said that this is, as I say, a significant improvement over what was there. Who knows, five years from now we may talk about improving it more, but I think this is as far as everybody is prepared to go at this point, and this is the product of consultation, discussion, negotiation and compromise.

D. Symons: Just one comment, because misinformation possibly came out then relating to individual pension plans, one of which I belong to. In that particular plan, if somewhere along the line before you became vested. . .you were able to withdraw your employee contributions from that plan. In this case here we don't have an employee contribution, because as I was told by the Minister of Transportation when we were discussing this very issue, that was in lieu of the employee having a higher salary. So they were saying that in this case, then, the employee in effect allows $3 per hour of his wage -- which is a pretty high contribution, actually; you know, $3 an hour works out to about somewhere in the neighbourhood of 20 percent of the earnings of that person -- to go into a pension plan. That's a pretty rich one.

The disadvantage, of course -- it sounds good; this is a fantastic pension plan they belong to -- is that many people in these multi-employer-type jobs don't work 365 days a year for 25 years up to their pensionable age. They don't have a chance to accumulate a large pension, because they're not working full years, due to the very nature of their jobs. And that gets us down to the problem we're going to come into with section 48 later on -- the pension they are likely to receive isn't all that great -- but that's for another day's discussion, I'm sure.

The fact that a person doesn't get vested doesn't always mean that that money disappears into a black hole, from the employee's viewpoint. Very often they are able to access it -- either to roll that money into an RSP or to actually withdraw the money and then pay income tax on it at that time. I am simply suggesting we might arrange something where we can do the former -- roll any moneys into an RSP if they don't meet the vesting requirements.

K. Krueger: I appreciate the commitments the minister made about looking into the HCL situation. I want to flesh some facts out a little, though. Earlier we discussed the consultant's report which had suggested that at least 45 percent of HCL workers would never get to vest, would never get to draw money out of the HCL pension plan. The minister indicated that he didn't believe that; his words were that the "preponderant majority" of HCL workers do vest.

So would the minister tell us. . . ? We know that the government has the numbers. Obviously the government writes the paycheques. And there's tight control of this, we assume, because there's a special hiring hall set up for it. Indeed, HCL has taken over, as I understand it, the full former offices of the Thompson-Nicola regional district in Kamloops as the expansion has gone into the interior. There's a lot of infrastructure there and a lot of employees -- surely keeping track of these things.

[ Page 13511 ]

[1455]

K. Krueger: Seated beside the minister is the superintendent of pensions for British Columbia, and I'm sure she is concerned about that. If HCL doesn't have those records, there is something drastically wrong. Those records ought to be there. I wonder if we could have the minister's commitment that we will be provided with those numbers next week and that if we choose to come back and deal with these questions further, we will be able to.

Hon. D. Lovick: Mr. Chairman, I believe I already gave the member that assurance, and will do so again.

K. Krueger: Would the minister agree that this section -- section 1(k) -- working in partnership with, hinging on, section 14, which we'll get to later. . . ? Unfortunately, I have to talk about it a bit now, since it's relevant. Section 14 repeals section 26(2) with regard to HCL employees who have not attained 350 hours in each of the past two years. These sections, working in concert, will disentitle those HCL workers from any pension benefits, as things stand right now.

Hon. D. Lovick: The member's question is, unfortunately, confusing, insofar as section 26 introduces a different definition which no longer obtains. The only thing we are talking about now is section 1(k). That's the new definition. So talking about section 26 is, frankly, irrelevant.

K. Krueger: Perhaps my question just wasn't clear. Presumably, either late today or sometime next week, we will deal with section 14 of this act, which does repeal section 26(2). I'm well aware of that. What I am asking the minister is: does he agree that when that happens -- when section 14 becomes law and repeals the old section 26(2) -- then this definition, definition (k) under section 1, will serve to disentitle HCL workers of any hope they had of drawing any of these pension benefits if they didn't get at least 350 hours in each of the previous two years -- that this section will operate to ensure that they don't vest?

Hon. D. Lovick: I simply have to again make the point that we can't connect section 26 to section 1(k). The two aren't connected. Section 26 referred to years of continuous employment, and the new section refers to years of continuous plan membership, as I recall. There isn't a comparison between those two. They're separate and distinct.

K. Krueger: But there's obviously a reason for the new definition. I say that the reason is that it makes it clear that employees who don't get over those thresholds in multi-employer plans -- I'm asking specifically about HCL workers right now -- will no longer have a hope of vesting, where they did before, and will be unable to vest because of this new definition in section 1(k). Is that true?

[1500]

The new definition in section 1(k), "years of continuous plan membership," came into effect, in fact, when the rules changed in January of 1998, with the new rules for vesting. That's when that new language came to be. All that's happening in section 1(k) of the Pension Benefits Standards Amendment Act is that we're simply catching up to that legislation so that we will consistent with that legislation.

K. Krueger: Perhaps our streams are converging, then, because what I'm saying, that being the case, is that this section will remove any doubt that those HCL workers who failed to get over the threshold of 350 hours in each of the past two years will vest. There was doubt before, at least in some people's minds. The minister said that there's no doubt in the superintendent's mind. But there has been doubt in other people's minds. These amendments in this act will serve to clarify that, and those employees will not vest. Is that correct?

Hon. D. Lovick: That is correct.

K. Krueger: Well, our streams did indeed converge. That's not good news for those HCL workers. I believe there are many of them. The minister has committed to giving us those numbers next week. To those members, I think, this is kind of a hopeless, fraudulent, continuing treadmill. They're seeing $3.05 an hour paid into pension funds on their behalf. They are now, through this act of the Legislature, losing any entitlement to it.

There was this dispute that we discussed earlier, between the consultant and. . . . I'm going to put his name on the record, because it's obviously well known anyway. We're referring to letters exchanged by the consultant and the superintendent. His name is Mr. Greg Hurst; he was operating as Shasta Consulting at the time. There was a sharp disagreement between them, apparently. The minister went so far, before the lunch break, as to say that the superintendent repudiated, discredited and denied the report.

Well, the superintendent could be wrong. I have respect for the superintendent, but she could be wrong. Mr. Hurst definitely feels she is wrong. I'm going to briefly explain why. In many of the plans, employees don't get vested, because they don't have enough covered hours in multi-employer plans. They could be vested if they were in a union to start with and they worked for HCL, or if they stayed union post-project -- although that isn't very likely for a lot of them. It's not likely that many HCL workers in the interior are going to get over 350 hours in two consecutive years.

Interjection.

The Chair: Member. . . .

[ Page 13512 ]

K. Krueger: The minister has just conceded -- finally, after a lot of shuckin' and jivin' -- that our paths did converge, that this section does serve to resolve the question once and for all, apparently, of HCL workers' entitlement. So it's only fair that I be allowed to finish up this line of questioning. I'm not going to carry on all day with it. But I have some things that have to be resolved, because there is a conflict in some of the things we've been told today.

[1505]

The consultant, Mr. Hurst, messaged me, after watching the debate this morning, and said that at the time, the superintendent refuted his report on the basis of immediate vesting in multi-employer pension plans, arguing as follows. First, under a multi-employer plan, a member could not be terminated until after two years had passed -- which was in the definition of termination of membership. Second, after two years the member would have had two years of continuous plan membership. Third, ergo everyone is vested, regardless of number of hours worked.

If those were the arguments at the time, if that was the resolution, and there having been no definition then to determine what constituted a year of continuous plan membership, then Bill 58 now introduces this definition, sets the threshold of hours worked -- which the 1997 report by Mr. Hurst fully anticipated -- and, in effect, disentitles workers to something that Mr. Hurst says, the superintendent argued, they were entitled to in 1997. Does the minister agree?

The Chair: Minister, before I recognize you, I would like to remind the member that if he wants to make the point briefly, he's allowed to do so. But I remind him not to be tedious, as tediousness will not be permitted.

Hon. D. Lovick: I will try to ensure that I abide by the same rules.

Briefly, even under the new rules and the Hurst report's assumptions, most people who worked for HCL on the Vancouver Island Highway project would be vested. That's point one.

Secondly, as I have said -- ad nauseam, it seems to me -- we are investigating the real statistics. We will report back to the member on that.

K. Krueger: We're about to move along. There's a tie-in to the most important section of this bill, section 48, which we'll be discussing later. We need to resolve some issues around that at this time. Those issues are. . . . For the HCL employees whose entitlements have failed to vest up until now and those who will fail to vest under the terms of this amendment, the opposition would like to know where the money goes.

Hon. D. Lovick: At the moment, it certainly goes into the union pension plan.

K. Krueger: When the minister says that it goes into the pension plan, some of it flows through to the building trades union pension plans. Is that correct?

Hon. D. Lovick: I think that's all of it, I believe.

K. Krueger: The building trades union pension plans have been managed with varying degrees of expertise. The labourers' pension plan in 1997, I'm told, had an unfunded liability of just under $37 million; the bricklayers, just under $1 million; the carpentry workers, $2.25 million; the electricians, almost $10 million; the operating engineers, $43 million; the pile drivers, $1 million; and the sheet metal workers, almost $9 million.

What we've just deduced, then, is that this money which HCL workers have been disentitled to through subsection 1(k) is flowing through to all of the building trades union funds. The minister just told us that all of the money is flowing through to them. A whole bunch of them are in serious deficit situations. The workers for whom the money was paid into the funds are never going to get it in a number of instances -- I say many. The minister will get us the real numbers next week, he says.

[1510]

Hon. D. Lovick: I don't think one can say that at all. All multi-employer plans currently meet funding tests in the public Pension Benefits Standards Act. Two-thirds of those plans have surpluses. The rest, except for the one plan, the labourers' plan, are still adequately funded. The assets-to-liabilities ratio is in the range of 86 percent to 99 percent. The plans, by the rules, have 15 years to pay off any funding deficiencies. The labourers' plan has significantly improved, and is now meeting the test. I think that probably covers most of it.

Indeed, it's harmful, I think, to suggest that the union pension plans are in trouble, as has been suggested earlier. And it's also worth noting that multi-employer pension plans are funded more conservatively than are single-employer pen-

[ Page 13513 ]

K. Krueger: The numbers I quoted were from, I believe, 1997. It's no wonder the building trades unions funds are improving, with the pipe flowing HCL money into building trades unions pension funds. And just for the record, I make the point that taxpayers working for $7.15 an hour are seeing $3.05 per hour of taxpayers' money, for every hour HCL workers put in, flowing into these funds. All of it, the minister said a couple of answers back -- all of it. So there they are out there working at minimum-wage jobs, seeing people with $30-an-hour jobs having an additional $3.05 per hour flow into these funds that certainly were in trouble. I submit that a number of them still are in trouble. In our technical briefing, the superintendent of pensions conceded that there are three of them that are still considered to be in trouble.

The labourers' plan was bankrupt, was put into trusteeship, as I understand it, and the pensioners have had their benefits cut in half. The worst performance I've got on this table is for the operating engineers, which, curiously enough, is one that the member for Burnaby-Edmonds is pensioned off from. And he made the famous rocking chair comment in the media recently -- that pensioners should stay in their rocking chairs rather than go back to work somewhere. Or at least that's how he's quoted. Perhaps he'll get on the record during this debate and say what he meant.

These building trades unions have a very high contribution rate and very low pay-out to their members. Of course, we're going to have to deal with that mainly in section 48, but it's nowhere near the $20,000 to $30,000 a year that I heard the minister personally say in the media.

Another interesting point is the bankruptcy of the Ford Theatre, owned by Livent, which I gather was funded by union pension funds. I'm told that the large debt on the theatre is owed to mortgage fund No. 1 and that the major shareholders in that entity are -- guess what -- the Carpenters Union pension fund and the Electrical Workers pension plan. If that's true, these deficits are probably mushrooming. Can the minister confirm whether that's true?

Hon. D. Lovick: I don't know whether that is true or not, nor does the superintendent. She says we'll have to look into it.

K. Krueger: Could we have the minister's commitment that he and the superintendent will find out and report back to this House next week? This information is obviously germane to the bill that's before the House.

Hon. D. Lovick: I don't believe it is germane, frankly, but I will undertake to review this record and discover all that and indeed respond to all the points the member makes. I will get as much information as I can, working with the superintendent.

[1515]

We're about to move on. It's true, I believe, that this government is exploring every way it can to help the building trades unions resolve their unfunded liability problems. Is that true?

Hon. D. Lovick: The government is doing no such thing. The superintendent of pensions meets regularly with the trustees of pension plans to ensure that they are in compliance. Indeed, the problems that have been referred to, of multi-employer pension plans here in British Columbia, are quite commonplace across the country. That's one of the impacts of a significant decline in interest rates, let alone what's happened in the real estate market. So every pension administrator across the country is working with pension plan trustees in order to make sure that they are indeed in compliance, so they can handle the vagaries of the marketplace.

K. Krueger: But this government in particular has a very friendly relationship with the building trades unions. Section 1(k). . . . We've worked through the process and determined that indeed it resolves the question of the HCL workers vesting. Obviously, from the subsequent answers, it resolves it in a very satisfactory way for the building trades unions. It supports, flows right through -- all of it, the minister said -- to the building trades unions.

I believe that section 48 is another attempt by this government to shore up its friends in the building trades unions. The clawback of benefits that I mentioned moments ago is another way. I believe that this bill, and this government by other means, are setting out to relax the solvency requirements, also to assist the building trades unions' pension funds. Is that correct?

Hon. D. Lovick: That is simply not true. Indeed, there is a national committee at the moment looking at the problem of interest rates across the country and finding out what they need to do to ensure that plans are in compliance. To insinuate -- as the member opposite, alas, seems to be doing -- that this is some kind of sweetheart deal and that the pension authorities are working hand in glove to protect their friends or something is, quite frankly, ludicrous -- let alone offensive.

K. Krueger: Well, for the record, as I wrap up my remarks on section 1(k), that's certainly the way it looks to me. It looks like the NDP government has once again delivered on its longstanding drive to prop up the building trades unions in all their difficulties. They've got into them themselves with their jurisdictional disputes, with their management of pension funds and with their real estate speculation. They're in trouble. This government is bending over backwards -- clearly, from the answers today -- and just as we've always believed, are funneling or slushing, to use the common terms, HCL funds over into building trades unions' unfunded liabilities.

[1520]

K. Krueger: Yes, I will.

The Chair: I think your line of questioning is not relevant to this particular section of the bill. I would advise you to stick to the bill as it's in the books.

[ Page 13514 ]

YEAS -- 53
Evans	Zirnhelt	McGregor
Kwan	G. Wilson	Hammell
Boone	Streifel	Pullinger
Lali	Orcherton	Stevenson
Walsh	Randall	Gillespie
Robertson	Cashore	Conroy
Giesbrecht	Doyle	Kasper
Bowbrick	Sawicki	Smallwood
Hartley	Waddell	Farnworth
Ramsey	Lovick	Sihota
MacPhail	Dosanjh	G. Clark
Miller	Petter	Priddy
Whittred	C. Clark	Campbell
Farrell-Collins	de Jong	Coell
Chong	Jarvis	Anderson
Weisbeck	Nebbeling	Hawkins
Symons	McKinnon	Janssen
Goodacre		Hansen

[1525]

Section 2 approved.

On section 3.

K. Krueger: My colleague from Okanagan-Penticton earlier began to deal with the issue of consultation and the notional business lens that this government has discussed. My questions on section 3 are not many, but they do bear on the issue of consultation. So I would like to deal with some of those questions now. The minister's nodding, and I appreciate that. I don't want to have a running battle as to where we deal with it.

I got a message, again, from someone watching the debate before lunch, quoting the minister's answers to the member for Okanagan-Penticton, when the minister said that there was indeed extensive consultation on this bill and that the Pension Benefits Standards Advisory Council is a representative body representing expertise in the industry. As well, the profession of actuaries in the province were certainly directly involved in this. An actuary is named here. He mentions that he has participated on the committee of actuaries who provided advice to the superintendent of pensions and that he had never seen Bill 58 until very late last week when he accessed it himself via the Internet.

This whole issue of whether the Pension Benefits Standards Advisory Council, as constituted and appointed by this same government, is actually representative of the pension industry stakeholders across the province, including the pensioners themselves, is a question that we have to resolve. I don't think it is, frankly. They may be some of the best people in the world. They may be eminently well qualified, but I don't think -- and I said why in my second reading remarks -- that they are representative of a cross-section.

[1530]

[W. Hartley in the chair.]

Hon. D. Lovick: Do I understand that this question is coming from this morning, rather than attempting to connect it to section 3 of the bill? Is that the case?

Interjection.

Hon. D. Lovick: I'm going to ask the member to explain what this is coming under. I'm prepared to answer the questions, but I want to know where they fit.

K. Krueger: Section 3 deals with the responsibilities of administrators and other persons. The minister has said that extensive consultations took place. That's the part I quoted from this morning, although he didn't wish to deal with those questions any longer in the definitions section, section 1. The minister has referred to these extensive consultations. The people of British Columbia deserve to know more detail. Who was consulted outside the ministry itself and the Pension Benefits Standards Advisory Council? If the minister would like to give us a list, it would accelerate the process.

Hon. D. Lovick: I want to first make the point that the section we are now dealing with is completely consistent with comparable legislation across the country. Indeed, with the common law there is no surprise here; there is nothing new or different here.

Re the specifics in terms of consultation, as I have said before on various occasions, all the amendments here were developed by the council, which by definition tends to represent the industry. In the pension plan community, most of the amendments have indeed been well discussed by the superintendent. For example, the superintendent has discussed the amendments in talks and papers presented to the following bodies: the British Columbia Bar Association pension section; the conferences on pension trustees' responsibilities held by the Pacific Business and Law Institute; the British Columbia trades council annual meeting; the Lexium conference on pensions; the Vancouver Actuaries Club; and the Actuarial Advisory Committee.

The Actuarial Advisory Committee was addressed on the very general principles of the bill rather than the language of the bill itself, which is perhaps what the member was referring to earlier when he talked about a particular actuary who had not seen the bill until quite recently. So I hope that explains that.

K. Krueger: Could the minister explain why the government didn't follow the exposure bill-White Paper format that I'm told is common practice Canada-wide when pension benefits legislation is amended in this country?

Hon. D. Lovick: It's for the reasons that I think I gave a moment ago -- namely, that we didn't believe there were any surprises here. We were following the lead of other jurisdictions across the country as well as the common law. Therefore there was nothing radical or revolutionary or anything of that sort.

[ Page 13515 ]

We have a provision in this bill that's unknown in Canada, as I understand it. It's a provision that the senior civil servant sitting next to the minister went to court over or was armed with. She went to court armed with the provisions that made this illegal. Now it's going to happen if this amendment act proceeds.

So this is not some housekeeping bill. This is not some bland thing that nobody would be interested in. In fact, there's been really sharp reaction from around the province. It seems to be growing with the bad news of what's contained in this bill. It's not a housekeeping bill. Is the minister saying, then, that he didn't realize that people wouldn't agree with him -- that this is just a housekeeping matter -- and that's why he didn't think it was necessary or appropriate or he wouldn't bother doing an exposure bill or a White Paper?

[1535]

It's worth noting, however, that when Bill 44 was tabled, there were no comments received by the minister or by the superintendent of pensions on the matter of pensions. Nobody thought it was a big issue at the time. All of which is simply by way of saying that that's why I made the point in second reading the other day, or the other evening -- whenever it was -- that quite frankly I had clearly misjudged the House. I had no idea that people would be so exercised and concerned about what I think is, frankly, a relatively straightforward and simple matter. I think the reason that there is indeed the kind of interest the member talks about is because some hysteria has been whipped up, largely by statements that are made that are simply not true.

For example, we had all kinds of people who were scared -- understandably -- and worried sick about their pensions, because they were told that 1,000 pension plans would be affected in this province. They were also deliberately told in this chamber by the member -- who issued a press release after the fact -- saying, moreover, that people would never be allowed to work. They couldn't work. Once they were collecting their pension, they couldn't go into business for themselves. They'd never be able to work.

The same people on the opposite side also whipped up hysteria by talking about the fact that the superintendent of pensions had argued against the measure that was brought forward to the House -- again, absolutely not true. So if the member wants to wonder why people are concerned -- including his friend, Phil Hochstein, who is now publishing paid advertisements to try and keep the campaign against this thing going -- I would suggest that the reason is in large measure to be found by him if he were to look in the mirror.

The Chair: Members, on section 3, please.

K. Krueger: Hon. Chair, I take that as your forewarning that you're not going to necessarily allow me to respond to the minister. I hope you'll allow me to a little bit, because he got all his points made.

The fact is that when you open a door that's never been opened before, then people have every right to assume and expect that it may well be opened wider. I don't believe there's a single pension in this province that is safe from the ideology that led to section 48 of this bill. Time will tell. Certainly I think this government tried to sneak this bill through the Legislature and was astonished that people realized what they were up to. I don't think the people of British Columbia have any trust whatsoever that all of their pensions aren't under threat from the kind of activity. . .

The Chair: Member, on section 3.

K. Krueger:. . .that we're dealing with here.

We'll go back to this question of consultation, because it is normal practice in this country -- with governments that aren't trying to sneak something through or hide what's going on in their pension legislation -- to put it out to the experts. There might not be very many of them, but they're highly qualified and specialized people. They focus on these things night and day. The minister knows that a single word in pension legislation can end up having a dramatic effect in people's lives years down the road, and they don't even know what's being done to them.

It's very, very serious when a country or a province deals with pension legislation. There is a format that's accepted as standard practice. The minister is talking about standard practice. I'm told that the standard practice is that an exposure bill is written, and a White Paper is put out. It's the government's draft of what the legislation is going to look like. It's put out for a reasonable length of time, perhaps six months. It's not one civil servant sent around to talk to clubs and so on, catch-as-catch-can -- so maybe people are there and maybe they aren't; maybe they're listening; maybe they aren't.

You don't get the same sort of attention -- on a bill, on a White Paper, an exposure bill -- over lunch as you do when you sit down at your desk and apply your expertise in a time of concentration. I find that these people are tremendously focused. I've talked to a number of them -- and interestingly enough, not the same people that the minister seems to think have generated a concern. I can tell the minister that there's wide concern. I think the minister saw a letter that went throughout the province yesterday from one of the associations -- very concerned, the ACPM -- about what this government is up to with this bill and the fact that they never had any opportunity to have any input to it.

[1540]

Hon. D. Lovick: I'm happy to do that. But I have to say at the same time that I'm not happy carrying on with this discus-

[ Page 13516 ]

K. Krueger: Hon. Chair, I know that those were intended to be instructions to the Chair, and I'm sure that you won't accept them. We had an agreement that we would talk about what sort of consultation went into the drafting of this act.

I thank the minister, though, for his commitment that he will give those minutes to us. Perhaps we could have them over the weekend so that we could read them before we get back into debate next week.

I ask the minister whether the matters discussed by the Pension Benefit Standards Advisory Council with regard to this act were discussed by the entire council or by a subcommittee? Who, exactly, on the PBSAC participated in formulating the amendments that are contained in Bill 58? What are their technical qualifications?

Hon. D. Lovick: Every council member participated; every section of the bill was debated by all the members of the council.

K. Krueger: I'm advised that some members of the Pension Benefits Standards Advisory Council put up a fight over section 48. The minister has said that there was consensus. Sometimes consensus is achieved by various means. Will the minister confirm whether there were parts of this bill that had disagreements amongst the Pension Benefits Standards Advisory Council?

Hon. D. Lovick: Every single section was by consensus. There were no fights at all.

K. Krueger: The Association of Canadian. . . .

Interjections.

K. Krueger: The minister says I can go ahead now. He's done heckling.

. . .Pension Management yesterday wrote a letter to the minister. It says:

"Re: Pension Benefits Standards Amendment Act, 1999.

"The Association of Canadian Pension Management (ACPM) is the national voice of the pension plan sponsor community. Members of the ACPM come from all across Canada, including B.C., and represent more than 500 pension plans, which have aggregate assets in excess of $225 billion. In addition, members are drawn from Canada's major actuarial consulting firms, financial institutions, law firms and investment counsellors that provide advice to the pension industry. ACPM's mission is to advocate the growth and health of the retirement system in Canada.

"It has come to our attention that Bill 58 has just received second reading in the B.C. Legislature this week. We are very concerned about the lack of consultation in this important piece of legislation and the impact it will have on pension plans registered in B.C.

"We would appreciate an opportunity to have a full briefing on this legislation and its implications before it is finally passed."

[1545]

Well, a little bit of poison will kill you just as dead as a lot of poison. People are very concerned that this bill is going to kill their futures, that it's going to put them in jeopardy, and that it's going to turn their worlds upside down. I feel really bad for a lot of them. They tell me -- and the experts tell me -- that there hasn't been due consultation on this bill.

So if the minister has a copy of this letter now, great. If he doesn't, we could recess for a moment while he reads my copy, and I'd like him to respond to the Association of Canadian Pension Management, to the actuaries I've spoken with that are very concerned and to everyone around this province who feels as though this was a sneak attack -- an attack on pensioners, an attack on pensions in this province, a sneak attack. It's upset people; it's caused tremendous concern and upset throughout the province.

Interjection.

K. Krueger: Obviously I would like the minister to withdraw the bill and certainly to give an account of himself and of why these people were not consulted. I didn't write these letters, hon. Chair -- through you to the minister, who keeps making out that somehow I'm making these things up. I'm sure anyone who wants to can phone the director for advocacy and government relations within the ACPM and the director of pension and benefits policy of CIBC. Her name is Gretchen Van Riesen; her phone number is 416-964-1260, and she will welcome your call.

That's the sort of thing that needs to be done. These bills are simply not brought down in the legislatures of Canada without having been subjected to the proper scrutiny of the experts who specialize in these things. So will the minister commit to do that?

Hon. D. Lovick: The experts have indeed scrutinized this. The member is quite wrong when he says it is standard practice to have a White Paper. It has been done on a couple of occasions, but that does not make it standard practice. Indeed, some of those White Papers were talking about precisely the

[ Page 13517 ]

It's worth noting that the organization he refers to -- the letter from which he quotes -- is famous and remarkable for essentially one thing: namely, that it believes in a policy of complete harmonization and believes that all pension plans everywhere across this country ought to be the same. Indeed, it has drafted model laws and by-laws for pensions. And when it doesn't get those, it's convinced that something is wrong.

What we are saying is that we are indeed in harmony with and consistent with measures that essentially define pension plans across this country. We think we've gone a long way in that direction -- certainly sufficient. I have no intention of standing down this legislation. It seems to me that we have consulted with the appropriate people and with the experts. It might also interest the member to know that this particular association may have written its letter because it was written to by the consultant that he's already quoted two or three times, who I believe was working for the Liberal opposition on this bill.

K. Krueger: Well, one of the points that I made in second reading -- which the minister couldn't respond to as precisely as he can at the committee stage, I suppose -- was with regard to the makeup of the Pension Benefits Standards Advisory Council, which, as I understand it, includes five union representatives and four employer representatives, but only one of them is a non-government employer. So now you have five union representatives, three government representatives thoroughly familiar with unions, and five representatives of advisory and service providers -- of which three are lawyers, one is an actuary and one is a trust company employee. In reality the pension industry participants include a lot of actuaries and a lot of pension consultants -- much more than the number of lawyers and trust company executives. Certainly the pension industry includes the insurance companies that fund approximately 90 percent, as I understand it, of the defined contribution plans.

[1550]

Interjections.

The Chair: Order, members.

Member, before you continue, I want to again stress that we are on section 3. These questions that you're asking probably would have been suitable for section 1, but I find it difficult to see how they apply to section 3. Perhaps the member could try to direct his questions where they apply.

K. Krueger: I'll take that advice; I'll do it later. We tried to do it in section 1; the minister didn't think it was appropriate there. So I will raise these issues later. The minister said that the definitions section was not the area where he wanted to deal with the issue of consultation, the business lens and so on. He was speaking with the member for Okanagan-Penticton at the time. He appears to have forgotten that.

Let's have a look at the specifics of section 3 and, in particular, subsection. . . .

Interjections.

K. Krueger: The minister is saying that what is being said off-mike is irrelevant, because once again, he's saying crude, insulting and hurtful things, as he did when he told the pensioners of this province that they were greedy if they went back to work when they were on pension benefits.

Interjections.

The Chair: Members, please. Take your seat, please, member.

Members, first of all, if you have concerns about anything that occurs in these chambers and you are at your seat, you can get up on a point of order and make the proper submission to the Chair. Secondly, there is some use of language going on, on both sides -- most recently by the minister -- that is not parliamentary. I would ask all members to please use parliamentary language, or I will be asking you to withdraw those comments.

K. Krueger: I'll try again. Referring, then, to section 3 of the legislation, specifically to subsection (b), section 3 of Bill 58 expands upon the standards of conduct that must be applied to the administration of pension plans, as I understand it. The addition of subsection (8) to section 8 of the act clearly imposes a very high standard upon agents and employees of the plan administrator who participates in the administration of a pension plan. This standard may be very difficult for some of the current participants in the pension industry to meet, particularly those participating in the distribution of the defined contribution pension services of insurance companies and other financial institutions.

Proactive education and dissemination of information to the pension industry and plan sponsors will be critical in order to ensure overall compliance with this provision. This, again, appears to be an instance where an exposure draft or White Paper would have been a productive process. Certainly we'll be asking the minister to make sure that the draft regulations pursuant to this act are put out as an exposure bill or a White Paper, so people will have a chance to deal with those. We are profoundly concerned about them; so are people across this province.

[1555]

[ Page 13518 ]

Hon. D. Lovick: In 3(b), the provision sets out the accountability of administrators when they employ an agent, such as a paid pension plan staff member. This accountability is not currently enunciated in the Pension Benefits Standards Act; that's what we do here. The provision is intended to help protect members.

What it also does is essentially make what we do here consonant with the common law. The common law indeed requires this kind of competence, this kind of obligation and these standards, even though many people who are presently charged with pension plan administration may not be aware of that. What the amendments will do, then, is simply make the fiduciary obligations clearer to all involved.

K. Krueger: But on the specific point of whether agents and administrators are placed somewhat in a conflict-of-interest situation because they've been retained by a party -- for example, the example I just gave, an employer that is seeking savings and that wants to strip out surplus. . . . But they feel that the new legislation -- the amendments -- is placing upon them fiduciary duty to the beneficiaries as well.

So there's a potential conflict, and they are tremendously concerned about it. They say they have a considerable problem with this section of the legislation. Can the minister give them his assurance that they will not be in conflict in such circumstances -- and why not?

Hon. D. Lovick: We're confident that there indeed isn't a conflict there. It's important to note, I think, that the agent carries out responsibilities, but under the responsibility of the administrator. It's the administrator who has the fiduciary obligation. The obligation carries with it, then, some awareness of what the agent is doing and whether the agent is indeed qualified or is indeed carrying out the duties in a way that doesn't put him or her into a conflict-of-interest situation.

K. Krueger: So if the agent, as retained by the administrator, then, finds herself or himself in a situation where they feel they're acting for the employer but giving advice which the beneficiaries of the plan may later argue was negative to their interests, is the administrator in a conflict situation and the agent free and clear of it? Are they both in a conflict-of-interest situation? Or is neither in a conflict-of-interest situation?

Hon. D. Lovick: The answer I'm given is that case law would probably say both of those people in those positions have an obligation to the members of the plan.

K. Krueger: Can the minister agree that. . . ? Without meaning to flog this issue to death, this seems to be a classic example, from this piece of legislation, of why an exposure bill or a White Paper would help resolve these problems. It is frightening for people, knowing that they're putting their practices, their professions, their integrity, their reputations, their whole lives on the line -- people may accuse them of having been in a conflict situation -- that they never got a chance to point out these concerns to the minister and the superintendent of pensions and the people who make these decisions, in advance of suddenly seeing this legislation on the Internet and hearing that several MLAs are upset with each other in the faraway Legislature in Victoria.

[1600]

K. Krueger: I was about to move on to section 4, but I guess we have to take a vote first.

Section 3 approved.

On section 4.

K. Krueger: In subsection (a) of section 4, section 9 of the present act is being amended of course. Once again, the word "adequate" and the word "generally" before "accepted actuarial principles" are being struck out. Without meaning to be repetitious, I expressed concerns earlier. I want to register those same concerns now. The minister has had some time to reflect on the concerns and his answers. It does seem to me that in a bill that says that it sets out to protect the interests of pensioners, it doesn't protect them at all to take out the word "adequate." I have a much better feeling about "generally accepted actuarial principles" than I have with the term "accepted actuarial principles." Of course, the question naturally flows: accepted by whom? "Generally accepted" is a lot larger onus, it seems to me, than just "accepted." So I wonder if the minister, having had some time to reflect on that, could comment further, please.

Hon. D. Lovick: I would give substantially the same answer as I did earlier. This section brings the wording into line with the current terminology used by the Institute of Actuaries. The actuaries' body is a professional organization subject to a code of conduct and very high standards of performance. This again makes us consistent with other jurisdictions, and everybody knows precisely what that means. These are the accepted practices and standards of the Institute, and I gather that's the lingua franca for the industry across the country.

K. Krueger: I'll move on to subsection (b) of section 4. These proposed amendments to section 9 of the Pension Benefits Standards Act require that the plan prepare audited financial statements if the assets exceed a prescribed amount or if the superintendent requires such. This may, depending upon the level to be set in the regulations, impose an additional financial obligation on small pension plans on which audits are not now conducted. This may be a good thing. What I'm concerned about is that nobody outside the ministry, presumably, has seen the draft regulations. I certainly haven't. There may be a significant expense for small pension plans and a new and large financial obligation. Could the minister offer us some reassurance on what he thinks is coming down the pipe in that regard?

[ Page 13519 ]

K. Krueger: This seems to be a section where, once again, a business lens approach, as contemplated and advertised by other ministers in this cabinet, would have been very helpful. When we asked the minister's senior people, in our technical briefing, whether the business lens approach had been applied, they agreed that it hadn't but said that they felt that three years of due diligence had been done. Wouldn't it capture these concerns and deal with them nicely if the business lens approach was applied to this section, and throughout this legislation, to remove the types of concerns being expressed to me as outlined in the previous question?

[1605]

I think it would be a little bit strange -- I can't think of any other word that seems appropriate at the moment -- to say: "Well, you've done all that. We believe we've got consistency. We believe it works well with other jurisdictions, but now, for the sake of the fact that we have a new idea, we're going to make you go back to square one and start over again and go through the business lens." I don't mean to trivialize the importance of a business lens; I think it's an important concept. But it seems to me we have captured the objectives already in this particular section and indeed with all of these amendments.

Section 4 approved.

On section 5.

K. Krueger: Section 5 sets out to actually repeal section 10(4)(d), (e) and (f). It sets out to repeal those. I thought it might be a good idea to read into the record, for the many people who are concerned about what's happening here to pension legislation, what exactly is being repealed. These subsections -- (d), (e) and (f) -- read as follows. . . .

Perhaps I should go back to the preamble of subsection (4) in the Pension Benefits Standards Act, which says: "Within 10 working days after receipt of a written request and without charge, the administrator must permit a person entitled to a benefit, or the spouse or a designated beneficiary or agent of the person entitled to a benefit, to examine the following. . . ." It lists (a), (b) and (c), which aren't being repealed.

Now, we'll just read (d), (e) and (f), which are being repealed by this amendment. These are the things that the administrator was required to provide to people if they asked for them because they, in some way, are going to be a beneficiary of the subject's pension plan. The first one, (d), was: ". . .any agreement relating to the investment of the pension fund of the plan." The next one, (e), was: ". . .the most recent return filed under section 9(3)(a)." The third one, (f), was: ". . .the most recent cost certificate filed under section 9(3)(b)."

Agreement relating to the investment of the pension fund of the plan is a pretty significant document to people who are concerned about things like unfunded liabilities developing in pension plans, pension plans that go bankrupt, pension trustees that occasionally go to jail and funds that aren't always there for people when they've depended all their lives on the prospect of retiring on those funds. So it's a shocking thing for people to see that the government is amending its own pension legislation and taking these things away -- in particular this access to the agreement relating to the investment -- how people's pension funds are being handled. That's pretty significant.

We wonder how this could possibly be good. How could this possibly meet the minister's statements in first reading and second reading? Indeed, today I think that he means for this legislation to accrue to the benefit of pensioners. He means for it to protect the interests of pensioners. We don't believe that it does, and we've said so. The minister's been a little irate from time to time about that. We believe that this act is an attack on pensioners, and here's one example. Why in the world would we want to cut off pensioners' access to those agreements that tell them how their pension fund is being invested? Why would we limit that access? Who are the NDP protecting with this measure?

[1610]

I want to start by giving him this assurance: this amendment is indeed intended to provide greater disclosure to members. I don't think he heard me, so I am going to say it again: this is intended to provide greater disclosure to members -- not less, but greater. Let me explain that.

This section increases member access to actuarial valuation reports, to annual information returns and investment policies prepared by the plan. It replaces the previous wording, which provided access to "investment agreements." That was part of the problem -- namely, plans have many documents that could be and were captured by that particular phrase, none of which, however -- those documents -- is necessarily of much use to the members. The old wording was seldom used and, indeed, I gather, could prove to be potentially very, very costly for plans, if it were utilized, and also, frankly, of very little benefit to members. The member will appreciate this: it was, in most instances, unnecessary red tape. It meant producing materials that, quite frankly, were not of any use to the members who got the materials given to them.

The intention here is to provide information that is more useful. Access to the statement of investment policies and procedures will be more useful, will be more informative. This information, together with the financial statements available to members, does provide a complete picture of how the assets are being invested. The member might like to note that in the legislation it says "the 3 most recent returns filed with the superintendent" and also "the 2 most recent actuarial valuation reports filed with the superintendent." The latter of those refers to the complete document, whereas in the past

[ Page 13520 ]

Finally, to give the member some comfort, I hope, the superintendent can also request any document on behalf of the member, if the member has a concern and makes that concern known to the superintendent. I hope I have allayed the member's fears.

B. Penner: I can't speak for the member for Kamloops-North Thompson, but my fears are not quite allayed yet. I want to pursue this matter a bit further.

When I read the description of what the section is intended to do. . . . That description next to section 5 starts by saying that the amendment will limit access to agreements related to the investment of pension funds and then goes on to say ". . .and improves disclosure requirements to plan members." I can imagine a scenario where you can technically say that you're improving disclosure while still limiting or terminating certain types of information that had previously been flowing to plan members.

I wonder if the minister can share with us what type of legal interpretations or advice his ministry has received in putting together this provision in section 5. If in fact the minister is aware of that information, is he prepared to share it with all members of the House so that we can have the same level of comfort that he purports to have with respect to section 5?

Hon. D. Lovick: The old legislation, I'm advised, didn't have the kind of requirement that we are now talking about. What we have provided here -- namely, (d) "the statement of investment policies and procedures," (e) "the 3 most recent returns filed," and (f) "the 2 most recent actuarial valuation reports" -- is, I understand, the standard practice across the country now in terms of pension plans. So we are again being consistent with others, and that is perceived to be more helpful, more useful information.

[1615]

In my mind, the various things that I've just mentioned are not necessarily synonymous. I think you can have an investment agreement that is not caught by the usual definition of investment policies. It's not clear in my mind that investment policies are necessarily the same thing as actual investment agreements that are effectively a contract between the pension fund and whoever is investing those moneys on behalf of the plan members. I'm not sure if those two things are synonymous. If the minister is sure that they're synonymous, is he relying on legal advice or a legal interpretation to support that view?

Hon. D. Lovick: The plans are reviewed to ensure that they are indeed compliant in legal terms. More to the point, though, is what I referred to earlier about investment agreements. The problem is that investment agreements cover a range of different things, some of which are, quite frankly, of no help whatsoever to plan members. They don't provide useful information.

What's important to note is that the statement of investment policies and procedures will give -- has an obligation to give -- everything that would be contained in an investment agreement in any event. So it isn't a case that by not using that term, you're suddenly taking away people's opportunity to see things that would otherwise be helpful to them. That is still covered off in what we have in its place, but it also protects us against having an obligation to provide material that nobody wants or needs or can make use of.

The agreements have to be consistent with policy. That's my point of reference to that last bit, when I said that access to the statement of investment policies and procedures -- whatever investment agreements may be in place -- must be consistent with and conform to the statement of policy. So there can be no surprise, then, that we suddenly discover there's an investment agreement that doesn't seem in any way consonant with or compatible with the investment policy that the plan is supposed to be governed by.

B. Penner: A point of clarification. When you refer to policies, you're referring to the pension plan's policies -- not the government's policies with respect to pensions, but the individual pension plan's policies -- in terms of what? How they handle the money? How they're going to invest it? Or do you mean to use "policy" in the sense of the individual pension plan policy held by an employee?

I know that in the insurance industry, for example, it's referred to. . . . If I walk in the door of an insurance office, they say: "How is your policy, Mr. Penner? Do you want us to update it? Should we review your policy with you?" That term is used almost in the sense of referring to a contract that I have with the insurance broker that I'm dealing with, if I'm buying insurance for my house or my car: "Should we review your policy?" The trouble we're facing here is the English language. The word "policy" can have several different meanings, depending on the context.

Hon. D. Lovick: There is indeed, I think, the danger of a semantic difference here. When we're talking about policies, we're not talking about something like an insurance policy. We're talking, rather, about the rules governing the operation of a plan.

To the member's question: the policies that must be abided by -- God, that's an awkward phrase, but in any event. . . . The policies that must be conformed to or acted in conformity with are both government and the plan policies, whatever they have to say on the particular plan.

B. Penner: Thank you for that clarification. Prior to my previous question, the minister was saying that any investment agreement would necessarily have to be consistent with a pension plan's policies. Now, because of his explanation, it's policy as it relates to how the pension funds are to be managed. Is that correct?

Hon. D. Lovick: I'm delighted to say this: the member is quite correct.

[1620]

[ Page 13521 ]

B. Penner: We'll see how much longer he says that, hon. Chair. Then I would assert that the minister is distinguishing between an investment agreement and a pension plan policy governing a pension plan. He's using those two terms separately to relate two different things. Again, it's my concern that when it comes time to interpret this legislation, a court may, by applying the rules of statutory interpretation, read significance into the fact that the Legislature has chosen, if we pass this section, to remove an express reference to investment agreements in place of investment policies. And a court may read into that some significance that the minister -- or even I -- doesn't anticipate. That's a hazard I would like to prevent and preclude, if possible. So that's why I'm pursuing this matter -- in the event that there is some confusion in the courts on this issue.

Hon. D. Lovick: I am advised, Mr. Chairman, that this matter is not problematic. Indeed, it has been vetted and discussed -- and other jurisdictions, as well, examined.

B. Penner: I don't have too many more questions on this, but just want to state again that I do have some concern that "investment agreement" sounds like a very specific document. Again, I'm not well-versed in the issues of pensions or pension policies, but in my mind it seems to conjure up an investment agreement as something akin to an RSP plan that you may put your money into. I know that there's a difference between pensions and RSPs, but that's my only familiarity with investing in, for example, equities or in the stock market. You put your money into a particular form of equity fund, and you're given a copy of an investment agreement between you and whatever agency you're dealing with that's handling the money for you. I want to make it very clear -- and put it on the record, in case it ever comes time to seek clarification in the courts on this matter -- that the minister contemplates that "investment policies" will include investment agreements, so that pension plan holders will be entitled to get a copy of the actual investment agreements governing the investment of their pension plan funds.

Hon. D. Lovick: When we talk about a statement of investment policies and procedures, what we're talking about broadly is what governs the contract with the fund managers, the managers of pension funds -- their contracts, what they must do and must not do. All of those contracts, I understand, are available to the superintendent, who has responsibility to ensure that they conform with the letter of the law and the regulation.

B. Penner: And individual plan members are entitled to access those agreements through the person sitting to your left, hon. minister?

Hon. D. Lovick: I want you to know that you just scared the ADM terribly, because it's really the person on my right. But yes indeed, you can.

R. Coleman: I have a couple of questions relative to section 5 as it applies to some correspondence I've received from the British Columbia Provincial Council of Carpenters. As we know, section 5 deals with access to some agreements and investment funds and improves disclosure requirements to plan members -- there's going to be a statement of investments and policies.

[1625]

They outline two frustrations, which I found interesting. One is that they're saying that some of these changes mean the carving up of the administration of the Carpenters Union in British Columbia, the appointment by the international portion of the union of all officers and representatives, including the directors of the trust and pension plans, and the removal of the right of the members to vote on many matters, including the right to hold elections. The concern here is obvious. The union, including our retired members, is very concerned about the parent union taking control of the Carpenters Union in British Columbia and of the pension plan.

My question to the minister is: it's obvious that there is some sort of autocratic process going on here that is affecting this particular union. They're saying that this is going on, and as it goes onward, it could affect 600,000 B.C. citizens who are members of trade unions. Obviously the control of a pension plan moving south of the border, totally out of the control of the union in British Columbia, is of grave concern -- obviously to those union members and to the people who want to collect their pension in the future.

I'm just wondering if the minister could respond and give me some insight as to how section 5 of this act is going to help the carpenters or what is going to be done to deal with this issue of the carpenters. They simply feel that this is a non-partisan issue that doesn't belong to being tied to political beliefs or affiliation. The issue simply is the right of citizens who are members of a trade union to have their democratic right to vote protected and the protection of their pension rights. It's obviously a grave concern to this union, because this is the president of the British Columbia Provincial Council of Carpenters that has written me. I wonder if the minister could respond.

Hon. D. Lovick: The short answer to the member's question is that I don't think that section 5 speaks to the issue that he refers to. However, I do believe that other parts of the act do. Just the other night, as a matter of fact, I met with Len Embry, president -- if that's the person who wrote the letter, he is president of the B.C. Provincial Council of Carpenters -- and with another of the senior executives. I've been familiar with this issue for a while. There was a recent issue of the carpenters' paper, called On The Level, which was featuring their battles with international. This has been going on for well over a year, by the way.

Indeed, my deputy in labour relations, Mr. Don Cott, met with the carpenters well over a year ago to see about working something out. It was Mr. Cott's suggestion that a mediator

[ Page 13522 ]

Interjection.

Hon. D. Lovick: Yeah. Well, as I say, I'm not even sure it fits in this section, but it's a fair question. Obviously you're concerned about it, and so am I. So if members want, I'm prepared to elaborate a little bit.

The matter of what the Carpenters Union -- the international union headquartered in Washington, D.C., I believe -- is attempting to do has been of concern to the Canadian locals for some time, most notably the B.C. section. It's about what the Americans refer to as rationalizing. They want to try and have a different structure of control. They want to get rid of smaller locals and make it, rather, into larger bodies "responsible for," etc., etc. They're absolutely resolved to do that. The debate and the discussion that was going on in British Columbia, I gather, ended essentially by the American delegation from the international saying: "Well, we're going to do it anyway, and we have the power to do it." That ended the discussion. So it's problematic, no question.

[1630]

We think that the carpenters are indeed protected against that. Their protection against what appears to be, frankly, a somewhat authoritarian and predatory practice on the part of the international is not so clear. That gets us into the realm of the law and who has jurisdiction, etc. Most union constitutions that are affiliated with an international body effectively divest their power and give it to the national or international president. Accordingly, then, the carpenters in British Columbia have been looking for comfort in some kind of legislative change. I don't know whether the member's familiar with that, but they have indeed proposed some ideas. Whether that would be acceptable to other unions who might be in the same predicament at some point is, again, still to be determined.

But I can tell the member this: obviously I am concerned about the integrity of that particular union and its ability to carry out what it does in this province. I understand that there's one other jurisdiction in Canada that is making cause with the British Columbia Council of Carpenters, and that's Ontario. There are some nine locals in Ontario that are presently fighting in front of the Labour Relations Board to try and prevent the international from doing what it wants to do. Beyond that, the international has had pretty good success at getting its way, quite frankly, in other jurisdictions across the country.

So that's background for the member. As I say, I don't think section 5 is germane. Moreover I don't think the matter of the integrity of the pension is in question, as nearly as I can make out from my reading of the material so far.

R. Coleman: I guess the integrity of the pension, in this case, will depend on who's got control of the strings of the pension from the management perspective. If the management is in the United States, because of the devolution of this power, I'm not so sure. . . . Maybe the minister can tell me, but I'm not so sure what restrictions we have on how those moneys are invested. I'm not even sure that a pension plan is restricted like an RSP as to the amount that can be foreign- invested, similar to an RSP. If it isn't, then obviously. . . . You know, the minister snapped his fingers and said it can't move that quickly, but it can move, if the decisions on investment are done over a period of months or years, into other investments.

I guess my big concern here -- and reading this section, obviously, with investment policies and procedures respecting plans. . . . You know, what are the investment policies and procedures respecting plans? I mean, there might be better investments offshore than there are here for those pension plans. The question is the transparency and who has control and whether those investments are being made on behalf of the individuals that are in the plan in British Columbia or whether those investments can actually get swallowed up somewhere else, and they wake up one morning and find out they don't have enough money to pay the pensions at the level they thought they would.

We've had that happen. There's some concern in some of the other building trades about that transparency and bad investments that have been made in some pension plans. I'm wondering if the minister would be aware of how the investment policies and procedures respecting plans today are working for these groups, relative to their transparency back to their members.

I get a lot of calls from union members -- as I'm sure everybody else does -- that tell me they have great concerns about their pension, because they keep hearing rumours that it's not doing well; they keep hearing rumours that it's been cut back. I'm wondering if the minister has any sense of how the status and value and integrity of these plans in the unions are going to be affected by this legislation.

[1635]

Regarding the other question, I'll just give a very brief response to the other question about the relative health of pension plans. The member is quite right that part of the

[ Page 13523 ]

Let me just briefly say what I said earlier to the member's colleague -- namely, that there has been a national committee struck to examine the difficulty that pension plans across the country are having, largely because of the falling value of the dollar. What happened has happened in terms of real estate market fluctuations and interest rates, primarily; actually, that's the major thing. What has occurred accordingly, then, is that those pan-Canadian bodies have been meeting to put together plans to make sure that all pension plans across the country are indeed compliant and that they are all in good health.

I understand that we have no plan at the moment in B.C. that is in any way threatened. I suspect that there will still be rumours abounding, but my information is that all of them are now well on the road to being absolutely in compliance. I think there's only one that still has some distance to go. But the superintendent assures me she's confident that, in relatively short order, everybody will be in a comfortable and perfectly appropriate fiscally responsible position.

R. Coleman: Since the minister mentioned them, maybe he can just sort of give me a brief outline to reassure me of what those restrictions are on investment of those funds, which will protect them from moving from a jurisdiction if an international body gains control of the board and the pension fund.

Hon. D. Lovick: I understand that there's a whole list of restrictions -- I would be more than happy to provide that to the member -- governing, among other things, what percentage of the portfolio could be, for example, in real estate. I think the figure is 25 percent, though I understand that no pension plan even begins to approach 25 percent. But that is nevertheless the guiding feature. There are similar restrictions on how much can be invested offshore -- I think that's 20 percent -- and a number of other things, as well, to protect, if you like, against any kind of wild fluctuations.

R. Coleman: I would very much like that information if you could provide it. I'm sure I could probably look it up too. But if you have it in a capsulized form, it would make it easier for me, and I would appreciate that.

I have only one more question, then, on this section, and that is: has part of the calculation relative to this piece of legislation and the clawback of pensions in any way been brought in actuarially to stabilize these pension funds? Is this clawback, which takes place if somebody goes to work in another trade, to stabilize the pension funds? Is that one of the underlying reasons, I guess, relative to the stability of these plans -- that we need to do this because the plans are expecting not enough participants to take care of the actuarial pay-outs to the people that are in the plan today? Is there a financial reason attached to that portion of this bill relative to the pension plans?

Hon. D. Lovick: The answer is no.

[1640]

In any event, the minister's earlier answers to the member for Chilliwack's questions with regard to not providing access to investment documents as a result of this amendment included the statement that it was questionable whether some of that material was of benefit to those pension plan members. I think the minister said it was bulky and onerous and not necessarily of value. I think, and I want to put it on the record, that that's up to the members to decide and that we don't want to be paternalistic with people. They're very interested in the future of their pension funds, and I don't think it's a good idea to delete the provision for members being able to readily access the details of investment agreements. There have been sad histories of people going to jail in this province over the way they didn't manage pension funds properly. Pension plan members have every right to be concerned and every reason, and they ought to have full access. I know the minister said that upon application to the superintendent they can get access. It sounds to me as though that might be a slower process and also add a lot of work for the superintendent, and I'm not sure why we'd want to create a bottleneck that does add work for her.

There have been situations where union pension funds invested in real estate and real estate development, and they've been very costly -- those investments, those decisions -- to the interests of the pension plan members. So we don't like to see any restriction on investment detail disclosure to the affected members of the pension plans. I believe that we'll vote against this section specifically because of that, but I wonder if the minister would care to offer any further explanatory comment.

Hon. D. Lovick: I'm listening to the member's comment saying that they propose to vote against this section of the agreement despite the fact that I have spelled out -- in fairly clear detail, I thought -- why this is an improvement in terms of what pension plan members get. The intention is entirely to make the information more useful, more accessible, more available to members of a pension plan. I'm again, as I say, just a little bit surprised to discover that members think that somehow, despite my explanation of what the intention is and why we're doing this, it isn't indeed an improvement and that the material that, as I said, in the past has proven to be of no value, is somehow of value.

Does the member want to suggest some kind of amendment? Does he think that we should leave in the reference to the statement that investment agreements still should appear to be stated in the legislation? Is that the preference? Because if so, if he wants to offer that, perhaps we could entertain that.

K. Krueger: Yes, if the minister is agreeable. I haven't written out an amendment, but if the minister is agreeable to not deleting subsection (4)(d) -- that is, not to repeal that section -- then the official opposition would be willing to vote for this section.

[ Page 13524 ]

[1645]

K. Krueger: That's excellent. I was about to, in my enthusiasm, then suggest that we move on to section 7, but I'll sit down so that we can have a vote on section 6 first.

The Chair: I understand that, by agreement, we are standing down section 5.

Section 6 approved.

On section 7.

K. Krueger: Our concerns with regard to section 7 arise out of clause (c) and sub-subsection (4). This is the section that provides for the superintendent to sever an amendment from a plan. Now, I can understand where this may be necessary in some circumstances, but there are issues around this particular wording that we think could be very problematic. Perhaps the minister could just give us the benefit of an explanation of the section before I get into that.

Hon. D. Lovick: The intention of this particular section is, again, simply to reduce red tape. The provision will allow the superintendent to reject a portion of a plan amendment and permit the administrator to continue to administer non-offending portions. This change, then, will prevent an acceptable part or parts of an amendment from being held up because of an unacceptable part. Obviously the predicament at the moment is that if you amend a part, that puts the whole thing into question. We're talking, rather, about: let's simply deal with the part that is in question, requiring amendment, rather than the whole section.

K. Krueger: We accept that that's very well-meaning, and that's what we anticipated. But problems certainly could arise if the superintendent severed a section which the proponents felt would be of benefit to them, but did not sever a downside which they had also proposed in the same amendment, for example. It would create a problem for them.

Where an application to register an amendment to a plan is made under subsection (4), the superintendent has the power to sever from a plan a portion of the amendment that does not comply with this act and the regulations, and register that portion of the amendment that does comply, in accordance with subsection (3). The reason this could be problematic is that it might well be that the administrator might prefer to withdraw the acceptable portion of the amendments that he or she made if some other part is unacceptable, rather than have just the unacceptable part severed.

I understand the need for the amendment, but we have that concern. The employer might not want to do the rest if a particular aspect of their amendment is being disallowed. While acknowledging that the administrator, under proposed subsection (5), is obligated to ensure that an amendment does not contain any provision that the pension plan is prohibited by the act and the regulations from containing, and acknowledging that the certification signed by the administrator under section 15(1)(b) of the act when the amendment is filed. . .that the plan as amended complies with the act and the regulations, it may be that the amendment inadvertently does not so comply. It also may be that rather than having the offending provision severed, the plan administrator may instead wish to withdraw the entire amendment.

If the minister would consider what is an utterly friendly amendment. . . . I did draft this one, and I'll read it into the record. If the minister would like to take a very brief recess to have a look at it, that would be great. All it suggests, moved by myself in Committee of the Whole, is that in section 7(c)(4) the words "with the consent of the plan administrator who filed the plan amendment" be inserted immediately before the words "may sever." I'll just table that, if someone would assist me. I brought along some extra copies for members on the opposite side.

[1650]

Hon. D. Lovick: We sort of thought that the administrator had that power in any event. But accepting the good intention of the amendment, what I would suggest we do is indeed take up the member's suggestion and perhaps have a very brief recess. We'll look at it, and then we can come back and deal with it, perhaps right away. With that, Mr. Chairman, I would move -- what? -- a five-minute recess.

The Chair: We'll have a recess for five minutes.

The House recessed from 4:51 p.m. to 4:57 p.m.

[W. Hartley in the chair.]

J. Dalton: I ask leave to make an introduction.

Leave granted.

J. Dalton: On behalf of my colleague from Chilliwack, I would like to introduce -- and they're right up there -- a gang of grade 6's, if I may say, from Vedder Elementary in Chilliwack. I'm told by the hon. member that many of them live in his neighbourhood, and they might like to know that I buy apples from the senior Penner, so I know that territory quite well. I would like everyone to make them welcome.

On the amendment.

Hon. D. Lovick: I've had an opportunity to look at the proposed amendment to the bill under the name of the MLA for Kamloops-North Thompson, and it seems to me that the amendment is indeed acceptable.

Amendment approved.

Section 7 as amended approved.

Sections 8 to 13 inclusive approved.

[ Page 13525 ]

K. Krueger: I don't want to try anybody's patience, but now that we're actually dealing with the section that repeals section 26(2) -- we had to touch on it a number of times previously -- it's just to have the minister on the record explaining why it's no longer relevant. It's not as obvious to a lot of people as it is to the people that work full-time with these things. I had the comment that it was perceived that the old arrangement, at least on the face of it, seemed to allow for some latitude. Change is a little threatening to people. And, of course, there is the whole HCL matter that we discussed earlier, which I'm not going to go into again here. I'd just like the minister to provide that clarification now that we're at the specific section that does the deed.

Hon. D. Lovick: I'm pleased to do so. The one-word answer as to why this is happening is essentially: it is consequential. Let me explain. This amendment repeals the provision allowing multi-employer plans to apply to have the definition of continuous years of employment, which applies to all plans except multi-employer plans, apply to them instead of a definition that applies to MEPs for vesting purposes. This is being done, then, because the new vesting rule makes section 26(2) of the Pension Benefits Standards Act no longer necessary.

[1700]

On section 18.

K. Krueger: Just a quick explanation, please, of section 29.1 (2). Would the minister please explain?

Hon. D. Lovick: I'm glad that was clarified, Mr. Chairman. I was about to give the explanation for section 29.1(1), and that would obviously be a horror. Section 29.1(2) allows plans to require members to forfeit any unused optional ancillary contributions, which is an Income Tax Act requirement for flex plans.

Section 18 approved.

On section 19.

K. Krueger: The section that I'd like to inquire about is clause (c) of section 19 and both of the subsections under clause (c). So starting with subsection (11), this section amends section 30 of the act. The addition of section 30(11), as I understand it, will allow persons aged 65 and older to commute or withdraw in cash a significant lump sum. If the total of all their locked-in entitlements is less than a "prescribed amount," the pension standards branch has advised that the figure under discussion for such prescribed amount is 40 percent of the year's maximum pensionable earnings under the Canada Pension Plan for the year in which the commutation is determined, which is $14,960 in 1999.

People are concerned about this provision. They are concerned that it may become abused, from their point of view, by individuals to avoid lock-in requirements. For example, it would be a relatively simple matter to spread $100,000 over seven financial institutions and subsequently withdraw amounts under this provision. The people who are concerned believe that some individuals may feel undeterred by any requirement to certify that the withdrawal represents all of their locked-in assets. I gather that there's a concern that you can't really buy an annuity for less than $15,000, and yet many people have other assets -- like RRSPs and other vehicles -- besides their locked-in assets.

This is an industry concern that was voiced to me. I personally believe in personal autonomy. I'm a little reluctant to question people's right to withdraw what they want to, but since the industry expresses that concern, and they have their reasons -- their responsibilities to pension funds and so on -- perhaps the minister would advise whether this has been considered and what the answer is.

Hon. D. Lovick: I'm advised that they would be required to certify that the amount of money stipulated was the total amount of all their assets.

K. Krueger: The people in the industry suggest that there are people who wouldn't be particularly deterred by the requirement to certify. It would be pretty easy to slip past the system. Again, I'm not sure I really have a problem with that, in that the money belongs to the people anyway. It seems to me that, respectfully, this is one more area where it would have helped to have an exposure draft or a White Paper. Perhaps the experts in the industry could have recommended safeguards against that occurring. As far as bringing forward an amendment, I frankly don't know how to do that. I think you have to be a person who's immersed in these things to answer that sort of question. Would the minister respond to that?

Hon. D. Lovick: First of all, the member may take some comfort from the fact that what we're doing here is apparently consistent with the changes that were just made in Alberta's legislation. So it has been tried out. Moreover, I understand it's been discussed nationally. The larger question, though, about whether we need to be more specific and nail things down absolutely tightly. . . . The short answer to that is simply that what we were talking about there is, in fact, fraud. People are obviously subject to the full rigour of the law if they committed that.

[1705]

K. Krueger: Well, I'm pretty susceptible to red-tape arguments, so we'll let that one go. Although, when we talk about pension administration in Alberta. . . . Well, Alberta's got video lottery terminals. I'm not crazy about those, so it's not necessarily the right precedent to quote.

In any event, looking at subsection (12) of section 19(c) then, which deals with permitting people to pull out apparently all their pension funds if they say that they're not going to be residents of Canada anymore and they've been gone for two years. . . . The question that arises is: what if they later return? What if they pull all that money out and spend it on

[ Page 13526 ]

As I understand it, under this amendment persons who have left Canada for two years or more may take the commuted value of their pension funds entirely out of the pension plans. It might seem advantageous to members that plan to leave the country, but it seems to defeat one of the purposes of pension plans, which is to provide income after retirement so that people aren't dependent upon the state. So what does happen after they return to Canada, after the lock-in has been lifted, the money paid out and perhaps spent? It seems there are several pillars of our social safety net, and they include private sector plans, public sector plans and the old age pension -- Canada Pension Plan provisions.

I'm sure this is something that was thought through carefully. Once again, I'm a believer in allowing people their personal autonomy. I don't know that it would be right not to allow this. I don't intend to vote against it, nor does my caucus, but we would like to know if that concern was explored and what the ministry's answer is.

Hon. D. Lovick: I understand the criteria are spelled out in the Income Tax Act. One of the things that figures in their calculus is the question of whether the move is permanent or not -- you know, whether indeed it was intended to be a permanent move -- and then perhaps some other intervening circumstances. For instance, did they sell their house, etc.? The matter, of course, of people who go and deplete their assets and then come back without those assets. . . . If they had been allowed to remove their assets with them. . . . The member will recall that this was a great debate in England -- wasn't it? -- a few years ago. People were concerned about not being able to take their pensions with them when they emigrated from the country and all of that.

What would happen, conceivably. . . . I'm out of my depth on this one, believe me, but I would guess that if a person, for whatever reasons, depleted his or her assets in terms of pension income and then came back as a Canadian citizen, they would obviously have the ability to access some of the social safety net provisions. But they would clearly be in reduced circumstances from what they would have if they had been able to collect that other pension as well. I'm not sure if that's a technical answer, but I think that's the commonsense one.

Sections 19 and 20 approved.

On section 21.

K. Krueger: This section amends section 32 of the existing act. My question is with regard to subsection (a). It seems to me that the addition of subsections (2.1) and (3.1) in subsection (a) clarifies where the 50 percent rule is intended to apply. Specifically, it applies to conversion from a defined-benefit plan to defined-benefit contributions, but it does not apply to purchase of benefits related to past service and where the improvement is provided entirely from the member's optional defined-benefit contributions.

[1710]

I'd like the minister to explain this section to the House. It focuses on applying to all service, and it mentions conversion for all members. Is this the result of some specific problem that's been encountered? I'm just wondering: what is the mischief? Has this been a problem? Were people getting burned on their conversion to defined-contribution plans? Perhaps the minister could just give us background.

Hon. D. Lovick: The member is quite correct, Mr. Chairman. There is at least a potential problem with conversion. Again, what we are doing here is following the Alberta model. They went through this and obviously struggled, and we think they did the right thing.

Section 21 approved.

On section 22.

K. Krueger: With regard to 22(a) and 22(e). . . . Perhaps we can get through this quickly. These provisions remove portability restrictions, I think, that may have been applied against members of a defined-contribution plan who have attained age 55, but still provide for portability restrictions possibly being imposed upon defined-benefit plan members who have attained age 55. Is this correct?

Hon. D. Lovick: That is correct.

K. Krueger: We had a bit of a tiff earlier about trying to come back to a section that we'd bypassed already, and I don't want to risk that here. But with the minister's agreement that I can come back if I want to, I think we might be able to move right on to subsection (e)(8) on the next page of section 22. Is that all right? Thanks, hon. minister.

As I understand it, the proposed amendment clarifies that transfers of the commuted value of benefits in respect of plan membership before the act came into effect on January 1, '93, can be made either to the member or to an RRSP on a locked-in or non-locked-in basis, as determined by the plan.

The addition of subsection (e)(8) imposes a 60-day limit to complete the transfer of commuted value. This may impose an administrative burden on an administrated pension plan. It seems to me it's likely being done as a result of delays in transfers. Was input requested, I'm wondering, from administrators and consultants as to whether 60 days is reasonable?

Hon. D. Lovick: This particular provision is indeed a national initiative, an attempt to harmonize across all the provinces.

K. Krueger: I take it, then, that the ministry is moving to comply with what it sees as standardization across the country. It seems to some people that the payment of interest on delayed transfers is sufficient compensation for a bit of a delay. I don't know, frankly, whether 60 days is reasonable or not. It sounds as though the ministry believes it is because other jurisdictions use it.

[ Page 13527 ]

Hon. D. Lovick: That matter was apparently discussed at the council and also, I'm advised, at CAPSA -- the Canadian Association of Pension Supervisory Authorities.

[1715]

On section 27.

K. Krueger: Section 27 sets out to amend section 40 of the Pension Benefits Standards Act. Subsection (a) says that "A pension plan may provide" are the words that will be struck out of the existing act, and they will be replaced by "A pension plan must allow." So it was optional; now it's mandatory. I don't necessarily have a problem with that. I just wonder why it was necessary, and that's my question.

Hon. D. Lovick: The amendment makes it more clear that a pension plan must provide the option to commute, but whether or not the pension is actually commuted remains, or is, the member's decision.

K. Krueger: Moving on to subsection (b) of section 27, it's a brief section, but it may have substantial impact. The explanatory notes say that this measure "prevents mental illness, including threatened suicide, from being used as grounds for unlocking pension money."

My first question to the minister is: why does the government want to do this? What is the perceived evil that the government is trying to address?

Hon. D. Lovick: The differentiation is between people with a mental illness and those with a life-shortening illness. People with a mental illness will conceivably need their pension for as long as they possibly can, because their physical health is not in jeopardy. And it's simply to protect against those pension plans being cashed out, because people perhaps are not entirely capable of managing their own affairs, and it's simply to protect them from becoming without funds.

K. Krueger: I appreciate the answer, but it seems a little incomplete, because this business of threatened suicide is included in the discussion in the explanatory comments. Again, obviously we wonder what sort of incidence and what frequency of them gave rise to the need for this change.

Hon. D. Lovick: I don't know if we have chapter and verse citation, but I do know that there was a case in Alberta in which the individual said: "I am going to commit suicide in all probability, and therefore I have a reduced life expectancy" -- and thus this provision.

K. Krueger: Apparently about four or five years ago, before I ever had to bog myself down in these sorts of questions, disability plans faced a new requirement to add mental illness. They may think that this is a precedent whereby they can argue that they ought to be able to drop mental illness also. Is that something that the government considered in making this amendment?

Hon. D. Lovick: The issue is not whether one has a disability or not; it's rather whether one's life expectancy is shortened.

K. Krueger: Apparently some other jurisdictions -- and I'm told Alberta is one of them. . . . Although I struggle enough with the B.C. version before me, I haven't read the Alberta model. But I'm told that perhaps Alberta -- and certainly others -- has taken out both mental and physical references in their similar provisions. The question is: what's the rationale in section 27(b) for removing only mental illness?

[1720]

K. Krueger: We're not quarrelling about the reasons or the rationale, but there may be issues with regard to human rights that would arise out of this. There may be employers who could be sued because there are different treatments for mental illness than for physical illness. The question that was put to me from the pension industry, again, is: has the government given any thought to those potential human rights issues and the problems that might arise for employers?

Hon. D. Lovick: Our view is that it doesn't discriminate, and therefore we don't need to worry about charges of. . . . Again, I would emphasize that it isn't to do with a mental disability; it rather has to do with the prospect of living a long life or not. At that point the doctor's certificate is requisite in any event, I gather, to demonstrate that one is not expected to live a long life.

K. Krueger: Well-intentioned as everyone may be, this could be a situation where employers will end up wearing an expense by being sued, because the legislation specifically removes the reference to mental illness, doesn't remove the one to physical illness and may leave them in a catch-22 situation, where they are sued by people who feel discriminated against under human rights arguments. The government's obviously comfortable with the situation and doesn't think that will happen. I wonder if the minister can concede that this is a situation where industry would have much more confidence in the legislation if the exposure-draft or White Paper approach had been used.

Hon. D. Lovick: No, I don't share the member's conclusion, primarily because I think we need to clarify here that employers don't have any legal obligation to do this.

Sections 27 to 29 inclusive approved.

On section 30.

K. Krueger: People feel that this is quite a significant section. It's referred to by people in industry as a whistle-blower section. It's a significant amendment and, again, one that they would have liked to have some input on prior to it being debated in this House.

[ Page 13528 ]

Thirty days seems to some folks in the industry to be a bit of a short time frame. This is not necessarily a bad thing, I don't think, but I wonder if the minister and his advisers could tell us what industry said about this so-called whistle-blower section.

Hon. D. Lovick: I was just asking the superintendent if the phrase "whistle-blower" resonated with her, and she said no -- and me too. When I read it, I don't see it in quite the same terms. So I just start with that point.

[1725]

K. Krueger: I wasn't familiar with the term either, but as I rapidly expanded my network, trying to find out what this bill was all about, I ran into it pretty quickly. Even though they have a reputation for being dry fellows, actuaries can be fun. I'd encourage the minister and his deputies, in any future amendments considered, to do a White Paper. I'll sally out with the minister if he'd like, and we'll listen to the actuaries and hear their jokes and find out about terms like "whistle-blower sections" and get such a nice act that we don't even have to talk about it, hopefully, next time.

In any event, I can't think of a question. I think that with those comments, I'm going to let the section pass.

Section 30 approved.

On section 31.

K. Krueger: This section deals with the issue of deemed trust. Perhaps we could just start with the question as to whether the thrust of this section is -- it seems to me to be -- the protection of pension funds in the event of insolvencies. Is that the general direction?

Hon. D. Lovick: That is true, Mr. Chairman, but other eventualities besides insolvency, ultimately meaning that they don't have the capacity, then, to pay for their obligations.

K. Krueger: The industry feels that this is quite a significant change. The addition of section 43.1(1) creates an obligation on an employer to maintain a separate account -- presumably a bank, a trust company, a credit union, etc. -- to hold all contributions to the pension plan. The money is then deemed to be held in trust for the benefit of members, former members and other persons entitled to benefits, refunds and so on. The amendment does not require that the moneys be in a trust account or an account designated for the plan; it merely says that the moneys have to be separate and apart from the employer's own assets.

Perhaps the amendment in section 43.1(2), together with the creation of a lien and charge, would have gone far enough to protect these funds. I understand that the Ontario act deems the contributions -- employer and employee -- to be held in trust, does not require that the funds be held separately and gives the administrator a lien and charge on the assets of the employer in an amount equal to the amount deemed held in trust.

I wonder why we couldn't have followed suit. It seems that the protection from this amendment -- the protection it intends to give pension funds -- may be illusory, because section 43.1(3)(d) excludes a proceeding under the Bankruptcy and Insolvency Act, should the employer go bankrupt and the funds, subject to the deemed trust, are subject to the Bankruptcy and Insolvency Act. Also, no priority is given to beneficiaries over secured creditors, so they would rank behind secured creditors in a bankruptcy. Sections 43.1(3)(a) and (3)(b) refer to federal statutes, so there may be a constitutional issue as to the effectiveness of 43.1(3). Could the minister comment on that, please?

[1730]

I understand that by agreement we are going to adjourn a little bit early. If that is indeed agreeable, I would then move that the committee rise, report progress and ask leave to sit again.

Motion approved.

The House resumed; the Speaker in the chair.

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

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

Hon. D. Lovick: With that, hon. Speaker, I would wish all members a pleasant time away from the House and move adjournment of the House.

Hon. D. Lovick moved adjournment of the House.

Motion approved.

The House adjourned at 5:32 p.m.

[ Page 13529 ]

PROCEEDINGS IN THE DOUGLAS FIR ROOM

The committee met at 2:44 p.m.

ESTIMATES: MINISTRY FOR CHILDREN AND FAMILIES
(continued)

R. Coleman: I'm going to go back to some of my discussions from this morning. I will advise the minister that I have sought counsel over the last two hours relative to this particular file and what I can or cannot state or disclose relative to names or information. I am allowed in the Legislature, incidentally, to state a name, but the medical information could have been determined to be privileged, therefore that's why it was struck from the record.

[1445]

I also have a concern that there's a duty here, and that duty goes back to the act itself. Within the act -- under section 14 of the act -- there's a duty to report a need for protection. As I go through this file, I have to muse with myself whether the law demands that I, as an MLA, have a duty to report a child in a ministry's care that I feel is in need of protection or whether, if I make this information available to this Legislature, any one of the staff in this room or the minister herself has a duty to report and request an investigation with regard to a child in the care of the ministry.

There's a number of definitions around this. The question one would have to ask oneself is whether the child, when it went into the care of the ministry, got sicker or better immediately. The child got sicker. There would have to be a question of whether the separation from a long-time parent has an emotional effect on a child that is severely disabled and severely handicapped and therefore that the well-being of that child is at risk, and whether there should be some contact with the parent during periods of an investigation or during periods of a hearing.

I would submit that we are all bound here today to have another look at this file. I feel that there have been some things that have been missed, some people that were on in the hospital who did not give evidence, that there's some information that was improperly handled, that there were some suppositions made and that there were some reports that were ignored in making the decision to apprehend the child.

So I don't know. First of all, I'd like to ask the minister two things. Is it her wish that I put the name of the child on the record, or do she and I agree that we both know the file that I'm talking about? Does she agree with the fiduciary duty or the duty that we all have to children under the act?

Hon. L. Boone: We all have an obligation to protect children, yes, but I do want to remind the member that this issue is before the courts. The ministry has now been advised that there has been leave to appeal to the Supreme Court of Canada, and a decision is not expected for several months. Therefore I would suggest that it is inappropriate to discuss this particular case in this forum.

R. Coleman: I have been advised that the matter would be under appeal to the Supreme Court had the ministry consented to the appeal, which the ministry did not, so there is a matter of discussion as to whether it is or is indeed not presently before the courts. What I would request of the minister is this -- two choices: one, that she request her ministry to do a review of this file and to involve myself so that I can see that the actions taken are satisfactory, and that I am privy to the information that will allow me to make a decision that we are okay with this file; or to ask the ministry to either have herself or a member of her staff make a formal complaint to the ministry so that we can reinvestigate this file.

I am very concerned that something slips through the cracks here. I don't know what the process is, but I do want some assurances that we are going to revisit this file, because I think it's important that we do.

The minister didn't answer the first part of my question about the name of child, and I would like to have that clarified by the minister -- whether she would like me to put the name of the child on record, so when I'm asking for a review of the file she knows exactly the file I'm asking about, or whether she will accept the fact that the file is the one we're talking about.

Hon. L. Boone: I would suggest that the child's name not be mentioned. I don't think it is ever in the best interests of the child to have their name mentioned in public.

I would also advise the member that this particular individual is appealing the continuing custody order to the B.C. Court of Appeal; no date has been set on that yet. Therefore this issue should not be discussed in this forum at all.

[1450]

Frankly, I'm very disappointed in the ministry in their communication on this file; I'm very disappointed with the handling of the investigation. I would like to see in the future -- and I hope that we're going to have some investigative training for the people in the field making these decisions -- that when they put it all together, the investigations are complete, and the information is provided so decisions can be made in a proper manner.

I will not second-guess the decision of the courts or whatever may be under appeal, but I would ask the minister to have her staff meet the requirements under the act.

[ Page 13530 ]

J. van Dongen: In our constituency office we do try to have a good working relationship with our regional office of the Ministry for Children and Families, and I think generally we do. I do want to raise two or three issues of provincial import within the ministry in these estimates debates, the first one being the Fraser Valley Child Development Centre and the funding of that centre. This is a regional centre that provides language and speech therapy for children in the Chilliwack, Abbotsford, Mission and Langley area. It happens to be situated in my constituency in Abbotsford.

This service or agency, I gather, is funded by the provincial government but also does its own fundraising activities to supplement those funds. But it is facing very severe funding pressures and wait-list pressures and a lack of sufficient professional staff. I have written to the minister about it and received a fairly general response. But there is just a very significant ongoing concern about the funding of this agency in our region.

So I'm wondering if I could ask the minister first of all, in terms of how that agency is funded: is it funded as part of an overall funding envelope for the region and then the funds dispersed to this organization -- those decisions are made within the region -- or is it funded directly out of Victoria?

Hon. L. Boone: Yes, the contracts that we inherited in the region there we inherited from the Ministry of Health. But all those funds are allocated to the regions and are distributed through the regions.

J. van Dongen: How many agencies like the Fraser Valley Child Development Centre are there in British Columbia? Does the minister have any idea of that? It does serve children from a fairly broad base, as I understand it.

Hon. L. Boone: We're not quite sure how many CDCs, per se, there are. Most regions have something similar to a CDC where we do provide services, and around $15 million is designated to provide those services throughout the province.

[1455]

Hon. L. Boone: We do have the wait-lists that we're looking at in different areas throughout the province, particularly the upper Fraser Valley region. We are, as you know, doing a review through the special needs policy framework to try and figure out how we can coordinate programs better to. . . . We went through this earlier. When we were in the estimates, we sort of went through the huge array of programs -- how they fit in, if there's overlap and gaps, and the criteria that apply. We're trying to review all of these various programs to see if we can find a way to deliver them better and meet some of the needs in all of the areas.

J. van Dongen: There are a couple of issues that I see here. One is the tremendous population growth that we've had in Abbotsford and in the Fraser Valley generally. If you look at a ten-year period, we've had at least a 50 percent increase in population. As I understand it, this organization has seen no increase in funding in something like 20 years. In addition to that, I understand that sometimes children are moved into this facility from other regions. They tend to get bumped onto the list somewhere along the line ahead of an existing list. There's earlier discharge now from hospitals of children that need the kind of care and therapy this organization provides. I'm not going to go through all of the issues that impact on this organization. I've given the minister a set of notes on it and some related material.

I would like to ask the minister for two things. One is for a review of the funding for the whole region. This is an issue that we have seen not just in the Ministry for Children and Families. We've seen it in the Ministry of Attorney General and the Ministry of Health. The funding formula, whatever it is, is not keeping up with rapid population growth. Particularly with respect to the Ministry for Children and Families, we have a large number of foster homes -- probably a higher percentage of foster homes than many other regions in British Columbia -- looking after children that need this kind of care.

I would ask the minister to review the overall funding for me and whether or not the apportionment of existing funds is fair and reasonable and balanced for the population of children that we're trying to serve in this region. Certainly my perception. . . . As I said, we do a lot of work with the ministry through our office. Our office and staff are overrun. I think this particular organization is in serious trouble. We're in a situation where the waiting lists just about don't move anymore when you have children coming in, sometimes from other regions, and bumping into the list. If the minister could give me an undertaking to do that review, I would like to have the opportunity to sit down with a senior member of staff and go over some of those funding numbers, both at the regional level. . . .

The second request I have of the minister is with respect to the Fraser Valley Child Development Centre itself. I would like the opportunity to sit down with an appropriate staff person and go over the funding level there compared to similar agencies in other regions of British Columbia, because I think there is a very significant and growing disparity in terms of the apportionment of funds -- scarce funds, obviously -- throughout British Columbia. So I would like the minister to comment on those two requests.

[1500]

J. van Dongen: There's one other issue that I want to raise with the minister. That is the issue of the use of satellite agencies in placing children in foster homes. It's my general understanding that there's a review going on. I'm not clear whether it's in the region or in the province. I wonder if the minister could expand on that for us.

[ Page 13531 ]

I was concerned about the accountability of those agencies, because we weren't directly involved with them. I was also concerned about the additional costs that we had in working through another agency, because when you always have a middle person involved, that costs more. So from our perspective, I've asked for this to happen. In many cases, there are some group homes there. So we are trying to find a way to reduce those group homes, to bring back those services so that foster parents are directly connected to the ministry rather than through an intermediary. That's what's happening.

J. van Dongen: In terms of quality control -- or, say, auditing the quality of the work that's being done -- is there a similar audit program for internal placement programs, as there is for satellite agencies?

Hon. L. Boone: We always have an internal audit program for our own foster homes; we do the studies. But in fact, we weren't actually involved in the home studies for the foster homes that children were being placed into, because they were being hired by a satellite -- by another agency. That is why I felt it important that we become more involved there, that we were in fact applying the same standards and that we were applying the same cost, because there is a difference. The cost per bed was significantly higher than in the ministry foster parent home -- for example, a $4,300-per-bed-per-month average versus $2,400 for a level 3 Ministry for Children and Families foster home. So we were actually paying more because we had an intermediary involved there. From my perspective, I think it's more important that we take those dollars, pay everybody the same rate according to what level of home they're at and have more money available for services.

J. van Dongen: I have one further comment and question. I do have an interest in this issue, and certainly some of the casework that we've done. . . . I have some views that sometimes the quality of a specialized service provider -- the quality of their service or specialized skill or knowledge -- is useful to the ministry. I'm not sure that a model that goes to the extreme of one or the other is the right model.

[1505]

Hon. L. Boone: We're always happy to talk to you, but there is. . . . I'll give you an example, and I won't name any particular organization. There is a satellite home where we've done a review, and this organization has in fact had a $500,000 profit. I don't think that's what this was meant to do. I don't think that we were meant to put dollars into supporting children to give somebody a $500,000 profit. If that $500,000 profit can be turned into providing services or other facilities, then that's what I think it should be going into.

I. Chong: Today I would just like to ask a few quick follow-up questions to some that I asked the minister a few days ago. I'm sorry I had to wait until now to return to this; I've been busy on other matters. So I hope that she's able to clarify for me. . . .

I respect that she stated that she would give me a list of those 20 targeted pilot programs that I had questioned her on, on Tuesday. I'd like to ask about those Building Blocks programs and ask at this time whether the minister can identify at least some of those programs that can now be judged as successful. The list that she will provide perhaps may be more extensive. But for the record, could we get an idea of some of those programs that have been successful? I know the ministry has been working on those programs for three years, and I feel that there might be some where if they have been targeted in areas or for specific groups, if they are successful, whether they will be implemented throughout the province and perhaps a time line on that process. . . .

Hon. L. Boone: I can give you the list of some of the sites here. There's Thompson, with one community site in Kamloops. In South Fraser there's one community site in Surrey. In the Simon Fraser area there are two community sites -- one is the Cameray Centre -- in New Westminster. In central Vancouver Island there are nine community sites: Parksville, Qualicum Bay, Bowser, Duncan, Lake Cowichan, Shawnigan Lake, Nanaimo, Ladysmith and Port Alberni. Those are four projects there. In the North Island there's one community site in Port Hardy, and that serves that town and surrounding communities. In the Cariboo there are two community sites: 100 Mile House and Bella Coola. In the northwest there are five community sites: Terrace, Kitimat, Hazelton, with outreach to Dease Lake and Good Hope Lake -- three providers. In Peace-Liard there's one community site in Dawson Creek -- two providers. In the northern interior there are four community sites: Burns Lake, Woyenne, Tachet and Grassy Plains. In Vancouver there are two community sites: Grandview-Woodland and Wall Street corridor -- two providers.

We are seeing some successes. Those all started up at different times, because they very much came from the grass roots. As the communities became able to open and decide what they wanted to address, they started at various times throughout the year. So some have only just started up. Others started. . . . I think I was at one last fall. We are looking at an evaluative process. But we are seeing that some of the successes include some supportive services delivery within communities -- creative expansion of training, specific attention to aboriginal needs including aboriginal leadership and active involvement in these communities.

[1510]

[ Page 13532 ]

I. Chong: I thank the minister for that. I hope she can appreciate that the reason why I'm requesting follow-up is to get those statistics and information on the record to recognize that those programs that were initiated some years ago, in fact, are being proceeded with and that they are distributed equitably throughout the province. Oftentimes we ask questions at estimates, and sometimes we don't get the answer or the list almost until the following year, when we're back here. By then, sometimes it's too late to really do a good, thorough follow-up. So with that noted in Hansard, that will be easier to monitor. I will again thank the minister when that full and comprehensive list is provided.

I have one last item I just want to ask the minister about, and if the critic has already done this in the past, I apologize, as I wasn't here. It has to do with the computer tracking system for foster children and child care subsidies. If this has already been dealt with, I'll accept the minister's nod, but she hasn't. . . . So very quickly, I'll just ask the minister. I know there are a number of recommendations in various reports that relate to the tracking of children in care as they move between homes and cities and various care providers. It was as a result of the Matthew Vaudreuil case and the Gove report that it was identified that there had to be a good tracking system. I know that this ministry has had several years to solve the problem, and yet I've heard that there are still holes or signs that the system has still not been fully corrected. I just wonder if the minister could advise us of the progress of this ministry in completing a computer system that actually provides accurate and timely records to social workers.

Hon. L. Boone: The Gove recommendations have been implemented. We currently do track foster children throughout the province, and we're able to do so within our ministry. We do recognize that there are a couple of areas where. . . . And we're still working on it. One is how we can communicate better with Health and also with our service providers. That is an area that we are working on and trying to figure out how to make that work better for us. But all the Gove recommendations have been implemented.

I. Chong: I'll leave the minister with a last comment and perhaps allow her staff to look into this, because I think it will require a bit more comprehensive answer. The concerns I have relate to the question of a computer system that can be used for the tracking not only of clients of children in care but also of ministry funds. This is the accountability difficulty, and I know it would require a more comprehensive answer.

The ministry, within its own regulations, requires that a day care, in the licence-not-required sector of care for no more than two children that are not their own -- that's another sector. . . . It's important to ensure that your computer system can provide for accurate data, so if there are too many day care subsidy cheques being sent to one address, there is a flag or some sign that the ministry can take a look at to ensure that they can track the ministry funds.

[1515]

As I say, I will just leave that for the minister to consider. If she would provide that in a more detailed response to me by way of letter, that would suffice for me, and I would appreciate that when she's able to do it.

Hon. L. Boone: Thank you. I'd be happy to do that.

B. Penner: I'll attempt to be very brief, and I think I'll accomplish that goal. In early May a social worker in Chilliwack was suspended without pay for the stated sin of talking to a reporter at the Vancouver Sun. Eventually he was off the job for almost three weeks. During this period of time the ministry did not provide a replacement worker, and the 40 or so files that that social worker -- Paul Jenkinson -- was responsible for were not attended to. I know that, because I received calls from some of his clients. I know that there was a supervisor who was supposed to intervene in the event of an emergency, but there was nobody handling those files on a day-to-day basis.

My question to the minister is: does the minister think that's an appropriate priority -- to place the punishment of a social worker over the interests of children and families?

Hon. L. Boone: I will answer the question with regard to substitution, but normally, when people are away for a short period of time -- for five days -- we do not provide a replacement. However, this is a personnel issue, and I'm sure the member recognizes that I can't be commenting on a personnel issue.

B. Penner: It's actually a policy issue, hon. Chair. The policy in question is: do you think it's appropriate to place disciplinary actions over the interests of the children involved, in Chilliwack? For three weeks this person was off the job -- actually, I believe it was a total of 14 days that he was suspended. During that period of time there was no worker brought in to replace that individual. My question to the minister is: does she believe that it's appropriate to put the issue of discipline ahead of the importance of safety of children and families?

Hon. L. Boone: I have to be very careful here. This is not an issue that I want to talk about a great deal, because of the personnel side of it. I think the member must recognize that if you follow that to the extreme, then nobody would ever be disciplined, because we wouldn't be replacing them. Our policy is that we do not replace people on a short-term basis, whether it be for a holiday or compassionate leave or sick leave. Those are issues that we deal with on a case-by-case basis. As I said, I am not going to discuss the actual personnel issue here.

[1520]

The committee recessed from 3:21 p.m. to 3:30 p.m.

[E. Walsh in the chair.]

B. McKinnon: I'd like now to discuss youth violence and the justice system. I'd like to ask the minister: are the problems

[ Page 13533 ]

Hon. L. Boone: Well, I think society is concerned. We are all concerned about that. Certainly the Minister of Education, the Attorney General and ourselves -- we've all been working hard to try and address this situation. The Ministry of Education has an anti-bullying program that's going on in schools. But this is not something that a ministry or government can solve; this is a societal problem, something that we all have to address. We are doing what we can to try and put some of the programs, as I said earlier, into some of the supports for youth so that we can provide counselling, provide parenting courses and assist families if they have a problem youth. But this is something we all have to work together on, and we will do that.

I ask leave to make an introduction.

Leave granted.

Hon. L. Boone: This is not a personal. . . . I'm not going to name them, but I just want to acknowledge that we also have in our gallery here today policy analysts from child protection, working on guardianship policy as well. They're here to observe what takes place in this chamber and the questions that are asked, to find out how they can serve the public better.

B. McKinnon: Well, how does the ministry address the serious problems of managing violent youth that have been convicted and are presently in custody in our secure facilities? Does the ministry have any vision or plan to deal with the chronic offenders?

Hon. L. Boone: Your specific question was about those that are in detention centres. For those, we've expanded some of the services there -- with mental health workers at the Victoria Youth Custody Centre here and for the replacement of the youth custody centre. Also, on the beds that we announced earlier, we will be having some of those as dual diagnosis beds. So we will be trying to treat some of these kids before they actually end up in the correctional centre. The goal of all of us is that we not have our kids in those centres.

B. McKinnon: Well, it's my understanding that British Columbia does not have a fully developed treatment rehabilitation program for highly violent youth offenders or any provincewide treatment to approach this. I'm really talking about the highly violent youth.

Hon. L. Boone: We do have a new program that started out at Boulder Creek, and that is a new program to deal with violent youth offenders. There are forensic treatment centres available throughout the province. But we do have a new program that started at Boulder Creek.

[1535]

Hon. L. Boone: I'm sure it would probably be easier if I just got that information to you. I'd be more than happy to do that or provide a briefing for you at some point in time.

B. McKinnon: Would this project at Boulder Bay be the one that the minister was going to invest $250,000 in, and that $250,000 was stalled? It was a youth forensic psychiatric service for violent youth in British Columbia. It's my understanding that there was a project that the provincial government was doing at Boulder Bay, and the project got stalled because the government didn't have $250,000 to invest in it. Does the minister know anything about that program?

Hon. L. Boone: No, there was no program that was due to be started and didn't start. This is something that started just this year, so it's a new program. There was not anything that didn't start that was supposed to.

B. McKinnon: I understand, on this particular program -- and I'm sorry I don't have the name of it -- that extensive groundwork has already been done, and it has been completed for the program. It is a treatment program that would assist young violent offenders -- or those at very high risk of committing violent crimes -- through every aspect of rehabilitation, from a lockup to a successful return into the community. I will try and find out more information about this and get back to the minister. I understand that this program would also train probation officers and others involved in the rehabilitation of youth in more effective ways of reducing the number of youth offending. Maybe we're talking about the same program, but I'm not sure.

Hon. L. Boone: There has been nothing the government has committed to that has not proceeded. You may be talking about a proposal that has been made to government, but it's nothing that we have committed to or that we have committed funds to. We have a program in place, a new program to deal with violent offenders.

B. McKinnon: It could be called the Boulder Bay violent offender program. Have you heard anything about that, or is it something. . . ? Have you got any information on that?

Hon. L. Boone: That is ours.

B. McKinnon: How much funding has gone into that program so far?

Hon. L. Boone: It's between $40,000 and $60,000 for additional psychological services, but that cost -- the $40,000 to $60,000 -- doesn't include staff costs or any of those things.

B. McKinnon: How many youth does that program serve?

Hon. L. Boone: Twelve.

[1540]

[ Page 13534 ]

B. McKinnon: I will leave that. If I need any further information, then I will contact your office to get it.

I would like to talk a little bit about the Burnaby Youth Secure Custody Centre, which was built over 40 years ago. I think it was built as a residence for nurses. Today it happens to be B.C.'s largest youth lockup, and from 100 to 150 12-to- 20-year-old inmates are there on any given day. This centre has long been seen as inadequate for the rehabilitation of our young offenders, with problems such as small cells with limited light, double and triple bunking with inmates, no access to natural grass for inmate recreation, etc. It goes on and on.

On April 19, 1999, the Ministry for Children and Families announced the approval of $15.7 million for the construction of a new Victoria youth custody facility. Although this new facility has long been seen as a necessity for the Island, the Burnaby facility is considered by far the most in need of an overhaul in British Columbia. I would like to ask the minister. . . . The 40-year-old Burnaby Youth Secure Custody Centre was. . . . I think that in 1985 the B.C. ombudsman said in a report to the Legislature that they had found Willingdon, as it was known at the time, to be woefully inadequate. In the last 15 years there has been much talk about improving these facilities, and no action has happened since then. Is there anything happening to that detention centre?

Hon. L. Boone: I've been to both, and I would say that there is no comparison. The Victoria one is in fact far worse than the Willingdon one. But the Willingdon one is bad. If you want to compare badness, they are bad. There's no doubt about that. I'm not going to stand here and say that it shouldn't be replaced. We're currently in discussions with the Ministry of Finance with regard to the scope, the size, one building versus two, where it should be and all of those various things. We are committed to replacing that facility and will do so just as soon as we can get the various approvals through.

B. McKinnon: I'm pleased to hear that the minister is looking at trying to fix it up. There are many emotionally and psychologically disturbed youth locked up in these places, and they are not places that they should be in. If it's in our power to do something, I think that we should do it.

I have tried to keep my questions very short, knowing that everybody is pressed to go. I have one final question. I don't know if the minister is aware of it or not, but in the headlines of the Penticton Herald. . . . I will show them to you. An inquiry has been called for on the Victoria Creek Youth Ranch. I would just like to add my support for having a select standing committee set up to look into this. I'd be willing to sit on it. When there are doubts, I think it's only fair that we should try and make sure that what we are doing is right, and I just hope that the minister will reconsider. With that, I thank the staff members and the minister for all the time they've spent here.

D. Jarvis: Just one question to the minister. Several days ago I asked a question with regard to the discrepancy in your May 31 press release about the number of beds that were out there. I wonder if you have the correct figures at this stage.

[1545]

D. Jarvis: Okay. When? Now?

Hon. L. Boone: Sure. When we're finished.

D. Jarvis: Okay. Call the vote.

Vote 21 approved.

The Chair: The committee will recess for approximately ten minutes until about 4 o'clock, until the next ministry can come into committee for their estimates.

The committee recessed from 3:46 p.m. to 3:49 p.m.

[E. Walsh in the chair.]

The Chair: I would like to call the committee to order. The Chair has a request of members in committee at this moment. When we recessed prior to this minister coming, we recessed until 4 o'clock. If the committee is agreeable, then we will begin the estimates for the Ministry of Employment and Investment now instead of at 4 o'clock. Is the committee agreeable?

Interjection.

The Chair: Then we will continue.

ESTIMATES: MINISTRY OF EMPLOYMENT AND INVESTMENT AND
MINISTRY RESPONSIBLE FOR HOUSING

Hon. M. Farnworth: It's a pleasure to be in the estimates debate once again and to welcome my critic for her first year in this ministry, and some familiar faces as well. I look forward to the coming hours that we spend here discussing the ministry and its operations.

I'll introduce a couple of my staff with me: Chris Nelson and Doug Callbeck. I think we've established the order in which we want to go. What I'd like to do at this time is just give a brief outline of the ministry and some of the things we're doing. I'll be brief, and then we can get right into the areas that the members opposite wish to discuss.

[1550]

What I'll do is just go through some highlights of some of the different sectors that we've been working on over the last year. For example, in the aerospace industry we now employ

[ Page 13535 ]

We are also very much involved in regional development and in the summits, of which there have been several now -- in the central interior in Kamloops and Williams Lake, Castlegar in the Kootenays. There will be others, probably on Vancouver Island, and there has also been one up north in Prince George. There the focus is to identify regional priorities, whether they are local or on a regional level -- and to either remove obstacles or put in place infrastructure -- or whether it's legislative changes that are required to address regional issues and regional economies in areas of the province so that we can start to see them stimulated. That has taken a great deal of effort, but I think, by and large, that they've been very successful, and that's why we're going to continue them over the coming year. I think we can talk further about them in the next little while.

We're also responsible for the Infrastructure Works program, of which there have been two now. I think that both of them have been successful. We are trying to get a third one underway, working in cooperation with the federal government and local governments. They are also in the purview of this ministry. While there's nothing definitive yet on a third program, there are a number of ideas that I'm prepared to go into on how I think a third program could be structured to ensure that it can meet the objectives of the federal government, local government and the province.

We're also involved in a number of job creation and investment projects. For example, the Vancouver Trade and Convention Centre is under the purview of this ministry. That is also receiving a great deal of attention and has tremendous opportunity in terms of the tourism industry in this province and in ensuring that the cruise ship industry, for example, stays centred here in British Columbia so that we can have a world-class convention centre facility that is in partnership with the existing facility and that enhances our ability to attract the larger international conventions for which Vancouver is uniquely positioned but which, at the present, we don't get because we lack the facilities. So we have that as well.

[1555]

As well, we are dealing with the internal trade issues in relation to the rest of Canada, which take place within the ministry. There's a number of areas around there where we're starting to make some progress.

Finally, we also have gaming and the Lottery Corporation. There are a number of issues around there. For example, there is the White Paper that is out. We have received a great deal of feedback on that, and we will be making decisions on that in the near future. That also takes up a fair amount of my time as minister.

Then we've got Housing. We are the only province, apart from Quebec, that still does social housing in this country, for example. There is a very strong program that we've had over the last number of years, and we're trying to enhance that and work in partnership with local government to deliver more units than we would otherwise be able to if it was just ourselves. A lot of innovation has taken place over the last couple of years, and that's a sector that I think deserves more attention.

Finally, there's B.C. Hydro. We can deal with B.C. Hydro and some of the challenges that Hydro faces as we are seeing North America move towards a more market-oriented system. But at the same time, I think the pace which that was taking has slowed down considerably as to where it was two years ago, as jurisdictions in the United States -- which were initially pushing for us to move into a more market-based system -- have sort of had the brakes applied to them by power-producing states south of the border, which are saying: "Wait a second. We have interests that aren't necessarily being served by the power-consuming states." They're now trying to slow things down. So we're in the unique position of being able to just sort of watch as developments happen and to respond accordingly in the best interests of B.C. Hydro and the province.

So those, I'd say, in a nutshell are some of the activities of the ministry. I think we can get into more detail and more depth as soon as and whenever the member likes. So with that, I will sit down and await the member's remarks.

S. Hawkins: First of all, thanks to the minister and his staff for providing some briefings over the last few weeks. The minister knows that I'm still awaiting some. Unfortunately, we've started estimates without those briefings, so I'll try and struggle through the best I can. I did speak to his deputy, and we did sort of run through a plan of how we were going to address these estimates.

Hopefully, we will get through some of the business plan, perhaps do Trade. We move then over to Economic Development. We will do Housing on Monday, because I know that the minister has to bring staff over, so we will try and get that then.

We do want to canvass the issue areas that the minister mentioned with respect to the Vancouver Trade and Convention Centre, Skeena Cellulose, the natural resource fund, the industrial development fund. We will also be raising the Four Corners community bank and certainly Hydro's Powerex which we would also like to canvass. I am having a briefing tomorrow morning with Hydro. I haven't heard yet if Powerex is going to be available tomorrow morning. We certainly will be canvassing gaming and the Job Protection Commission, and members from this side will have an opportunity to raise some constituency issues as well.

[ Page 13536 ]

[1600]

The mining industry has been decimated. In 1990 the mining industry spent $142 million on exploration development, and I understand that in 1996 the mining industry spent only $38 million. That is a 73 percent drop. What are the reasons? I'm sure we'll canvass some of those in estimates as well.

The NDP introduced in their 1998 budget -- the government's budget last year -- a three-year economic plan. It was meant to -- and this is straight from the budget speech of last year -- stimulate the economy, make B.C. more competitive, attract investment and create jobs. After leading B.C. in economic growth in the early 1990s, we've seen our economy in the province slide into a recession in 1998, with an expected contraction of nearly minus 0.5 percent. The forecasters are telling us that this next year doesn't look much better, and they -- Scotiabank is one of them -- are predicting a negative growth approaching minus 0.6 percent. Real per-capita GDP has fallen in three of the past six years, and it is again expected to decrease in 1998 and then in 1999.

[B. Goodacre in the chair.]

Our employment rate in the province doesn't seem to be much better. We had a growth rate in 1998 of 1.2 percent, but employment growth across Canada was two times greater, at around 2.8 percent. When we look at other provinces, we see that Alberta's employment growth rate hit 4 percent; Ontario's growth, 3.7 percent. If we take a closer look at B.C.'s job numbers, 53,000 jobs were created, accounting for a 5.7 percent increase in self-employed positions and an 11.6 percent increase in public sector employment. So the number of private sector jobs was, essentially, unchanged, with just a very meagre growth of 0.3 percent. B.C. has experienced virtually no growth in paid private sector employment since mid-1995, and that's a problem. I know that the minister knows -- and I've heard the Finance minister affirm it, and I've heard the Small Business minister affirm it -- that small business is the engine that drives the economy. Small business is usually in the private sector, and they're the ones that provide a lot of new jobs in the economy. It doesn't seem to be happening.

Youth employment is a huge concern. I travel around the province. We are getting into that period of time now, into the summer, when youth are looking for summer jobs again. There are very few -- and far between -- to be found. Certainly the Premier is the Minister Responsible for Youth, and under his tenure, youth unemployment in B.C. grew by 31.7 percent in April of 1998. We used to have jobs for our youth in the summer. I know -- I grew up in Saskatchewan. I always had a summer job, and that was Saskatchewan. We actually see our youth moving to Alberta and Saskatchewan and Ontario, looking for jobs for the summer. There aren't any here. We have the second-highest youth unemployment rate in Canada, second only to Newfoundland. I don't think that is something we can be very proud of. We have to find ways to change that.

[1605]

The retail sector doesn't look much better. Retail sales declined by 1.5 percent in 1998, to $33.2 billion. B.C. was the only province to record weaker retail sales in 1998 than in the previous year, while Canadian retail sales rose by 4.3 percent. We certainly saw that Ontario was the leader at 8 percent, with Alberta at 4.8 percent. We continued to decline in 1999. Retail sales are sort of a confidence measure of the economy -- how people have confidence in spending. We're just not seeing that here.

Our exports -- and I know the minister has put out press releases saying that they're improving -- reached $25.8 billion in 1998. That was down by 3.5 percent from a total of $26.8 billion in 1997. That marks the second time since 1995 that they have fallen. And certainly forest product exports fell by 9.2 percent in 1998.

Housing starts. When we talk about different sectors of the economy suffering. . . . I come from an area in the province where we are a rapidly growing, expanding community, and we are experiencing quite a decline in housing starts, comparing to year-over-year analyses. For the province, there were 19,931 housing starts in 1998 -- just an astonishing drop of 32 percent, from 29,351 starts in 1997. The minister knows as well as I do that this decrease means a loss of jobs, and for this number, it means a loss of over 26,376 construction-related jobs. And B.C. was the only province west of Quebec to experience a decrease in 1998. Compare it to another western province. If we take Alberta, which is right beside us, they gained 3,065 starts in 1998, for a 13.5 percent increase.

When we look at business confidence, again, in the province, in 1997-98, we know. . . . Our research has kept

[ Page 13537 ]

I know that the minister has mentioned investments that the government has made, but again, that's not private sector investment. That's a government making investment to try and retain jobs here. Hopefully, before the end of these estimates, we will get the message through that it's private sector investment that we want to attract to this province. We don't want to keep squeezing the taxpayer for that money and investing public dollars to try and retain jobs here. We want to attract private sector investment and try and build and grow our economy here.

New business incorporations. Between 1994 and 1998, the number of new business incorporations in B.C. dropped by 5,015. There were 25,774 incorporations in 1994 and only 20,759 incorporations in 1998 -- a 20 percent decrease. Between 1994 and 1998, new business incorporations in Alberta actually increased by 6 percent, while incorporations in both Manitoba and Saskatchewan increased by 11 percent. I'm just trying to show some of the differences between what's happening in other provinces and what's happening in ours.

[1610]

It makes regular people take notice when they start seeing headlines. I'm just going to read a couple of headlines that appeared in the paper just in the last week: "Business Raps NDP Strategies" -- I'm sure the minister doesn't like reading headlines like that -- "Taxes Outpace Income" and "Report Sees Income Drop As Sign of B.C.'s Economic Woes." This was in response to a business summit report card that was unveiled this week. I'm just going to read from the story in the Vancouver Sun of June 8. The story reads:

"For the first time in decades, British Columbia's after-tax income has dropped below the national average, according to a new report from the B.C. Business Summit. The report released Monday points to a steep decline in private sector investment, an increase in business bankruptcies and weak housing starts as signs of a continued economic malaise in B.C.

" 'But it is the deterioration of the standard of living in B.C. compared to the rest of Canada, that really drives home the need for tax cuts,' economist Jock Finlayson of the B.C. Business Council said Monday. Between 1990 and 1998 real after-tax income in B.C. dropped by 1.1 percent each year, while the Canadian average declined by 0.6 percent. As a result, after-tax income in B.C., adjusted for inflation (stated in 1992 dollars) dropped to $16,500 per person, just below the Canadian average of $16,600. The statistics are based on a Scotiabank economic report.

" 'This is the economic statistic that matters most to people', Finlayson told reporters at a news conference, 'and it is B.C.'s worst performance since the Depression.' "

I don't think I have to tell the minister that the business summit did not give the government very high marks. In fact, they got F's, D's and C's, which I don't think I'd be very proud of in school. I know that the minister and the government hate looking at Alberta or Ontario as models. It's just absolutely unheard of. But one thing the business community did say was: "The government did accomplish something. They accomplished something very successfully, and that was to unite the business community." The business community has come together. The business community has suggested that the government take a page from Alberta's Premier Klein. One thing he did, to try to turn his economy around when he took power, was to bring groups together to have roundtables. Perhaps the minister will stand up and tell me that is what his government is doing. But it doesn't come through when we see report cards like this and we see messages like this coming from the business community. You know, we can't do without them; we have to work with them. That's the way our economy's going to grow.

I found a letter interesting just the day before the business summit released their report card giving the government an F. It was also in the Vancouver Sun on June 7. It's from a Peter Moore in Surrey. I'd like to read from it, because I find it kind of interesting that there's someone who moved here from Ontario and is planning to move back. He says:

"I have enjoyed living in beautiful B.C. for the past year. Nevertheless, I have decided to return to Ontario, as B.C. is too rich for my blood. Before moving from Ontario, I was told that B.C. was a very expensive place to live, but after two visits, I decided I would love to settle here. I was employed as a social services worker in Ontario for 23 years and felt that I would love to semi-retire in B.C., not realizing the economic recession.

"Since settling here, I have applied for several jobs, not just in social services, and was informed that for every one job advertised, there are at least 100 applications. I still have plenty of energy, experience and knowledge to offer an employer, but after a year of pounding the pavement, banging on doors and sending out several résumés and letters of application, I must face the facts. In all realistic terms, the economy appears to be getting worse rather than improving. No matter what government is in power, it is going to take a long, long time for the B.C. economy to rebound, and I haven't got that much time to wait.

[1615]

"When I purchased my automobile insurance, I was shocked to find that the rates here are almost double what I paid in Ontario. As my insurance agent commented: 'You are paying dearly to look at the beautiful mountains; they come with a price tag.' Another resident told me that B.C. stands for Bring Cash, referring to the higher costs here on most items.

"I came to B.C. with an optimistic and positive attitude, but like many other B.C. residents who are leaving this beautiful province in order to survive, I must do likewise. I have always been one of those individuals who would take lemons and make lemonade, but my lemonade is turning sour. In order to return the sweetness, I must, with some regret and sadness, leave."

[ Page 13538 ]

The minister is aware of those stories, and I know that he is concerned about the situation. I know he is. I want to know -- against the backdrop of the information that I have given the minister -- where the Ministry of Investment and Employment is on some of these figures. What is the ministry doing?

Perhaps we'll start by canvassing the business plan. I must say, I have two sheets of your business plan, and I know it's bigger than this. I have pages 1 and 2, and I seem to be missing pages 3 to 150, or whatever it is. It's nice to see that the ministry is developing a business plan, and I'm just wondering if perhaps there is more of the business plan that I can get. We'll start with whether the minister can tell me where they are with the business plan and what the ministry is planning to do this year.

Hon. M. Farnworth: I'll respond to the member's comments, because I think she does raise some issues. Some of the points she outlines. . . . In some part the difference is in philosophy, and in some part the difference is the approach between the government side and the opposition side.

There's no doubt right now that British Columbia's economy is facing challenges, and we have been suffering through restrictive growth, particularly in the past year. The member, I know, has made comments around that. But I would also say that there are reasons for that which are different from what is happening in Alberta, Ontario, Quebec, Manitoba and Saskatchewan, and that is the nature of British Columbia's relationship with our trading partners -- the fact that we trade more with Asia than we trade with all the other provinces combined. The fact is that that area of the world has been undergoing some significant structural changes that have seen a decline not only in their currencies but in their economies and the amount of materials that they import, and not only from British Columbia but from other jurisdictions around the world. That has a tremendous impact on this province. It doesn't have the same impact on Alberta or Ontario, which is more dependent on the United States.

We have, for example, two economies in this province: the lower mainland and southern Vancouver Island, which is a much more diversified economy; and the economy in the rest of the province, which is primarily commodity-based and in single-industry towns, in many cases. They're facing challenges and we know that. They're in part directly related to what is happening outside the borders of British Columbia. At the same time, they are experiencing job losses, and we know that. We're trying to put in place -- whether it's through the Ministry of Forests, the Ministry of Energy, Mines and Northern Development or this ministry -- policies that can start to deal with some of those issues and lay the groundwork to diversify B.C.'s economy in those areas so that we smooth out the bumps, so to speak.

[1620]

Interjection.

Hon. M. Farnworth: I hear my former critic. If he wishes to be the critic again, perhaps he should talk to the actual critic.

The issue around housing starts is that there are forecasts, and then there are actual figures. The actual figures are that the last two months, particularly this past month, have seen an increase in the number of housing starts, as well as a firming up of house prices and an increase in sales as the market -- particularly in the lower mainland -- is starting to rise again. That's a good thing. It's a symbol that the economy is starting to turn around.

We're starting to see a firming up in some commodity prices. That's good news for British Columbia, because it means we're starting to recover. What we want to do is ensure that our plan enables British Columbia to take full advantage of that. We're starting to see, for example, growth in Japan. The first-quarter statistics were just released, and their economy grew 7.9 percent in the first quarter. We hope that will start to translate in two ways: you'll start to see commodity prices coming up -- which is what's required, in large measure, in the smaller towns in British Columbia -- which will start to stimulate the demand for British Columbia products again. That's a key indicator.

We are starting to see activity, as I said earlier, in the lower mainland. We're working in partnership with companies to make strategic investments in strategic sectors of the economy. There is considerable private sector investment and job creation taking place. There's a partnership taking place. The member likes to quote Scotiabank: the economy will decline by 0.06 percent. That particular forecast was released a number of months ago. The Conference Board of Canada released their projections for the coming year just this past week. They're predicting growth in British Columbia of about 1.6 percent. That's starting to show that the economy is starting to turn around. In fact, they are saying that our economy this year will grow faster than Alberta's. I think what that says is that British Columbia's economy is different from Alberta's; it's different from the rest of Canada. Our trading relationships with other nations are different, particularly with Asia.

The member wants to read clippings from newspapers. That's fine; I understand that. You can read the ones that say, "Oh, doom and gloom," but I can also pull up newspaper clippings that paint a different story and that say that there are things happening. I just happen to have one right here.

T. Nebbeling: That must be your MLA report.

Hon. M. Farnworth: You know, hon. Chair, it's really nice that my former critic is here, because he does give me some opportunities. It does remind me so much of last year when we had such a good time in these estimates.

Let me go to the Abbotsford News. The Abbotsford News says that Conair is moving ahead with their $50 million expansion and that this is a great thing.

T. Nebbeling: Thanks to a government cheque.

Hon. M. Farnworth: Thanks to a successful company that's creating 800 jobs here in British Columbia by investing in British Columbia in partnership with the government. . . . The Abbotsford News is saying that this is a good thing and that this is what the government should be doing. Why are the

[ Page 13539 ]

We are working in partnership with industries in a strategic sector to make that sector grow, to enable it to take advantage of the opportunities, whether through skills and training in terms of development of educational opportunities, and to see the creation of 800 jobs. We're working with companies throughout the province -- in the member's own riding. The Western Star Trucks announcement was received very positively in Kelowna.

[1625]

But to stand and say that somehow the challenges that B.C.'s economy has faced is the fault of the government is simply wrong. It refuses to take into account British Columbia's place in the global economy, who our trading partners are and the fact that when something impacts on them, it also impacts on us. We are in a period of transition as we move from a resource-based economy, which has traditionally been the backbone of this province, to a more diversified economy. That diversification is taking place, and those sectors of the economy that are, I think, the focus of that diversification are receiving a great deal of government attention, along with those traditional areas of the economy which, as I mentioned earlier, are facing challenges. The government has been taking steps to ensure that we deal with them. So we can engage in a discussion of newspaper headlines, but I think what would probably be more productive would be to discuss the issues as they are and recognize that there are a number of factors at play here.

Anyway, back to the business plan. What the member has is in fact the start of the draft we have. There's a draft business plan, which has yet to be finalized. It's currently being reviewed by the ADMs and the deputies. I will be more than happy, when it is complete, to let the hon. member have the final version.

S. Hawkins: My own feeling is that government's been in kind of a period of denial, rather than transition. What we're hearing over the last few years from groups and business people across the province is that we need some bold action to turn the economy around. I think government does play a role there. I have some difficulty with government playing an active role and actually getting involved in private business. I think most people would agree with me that government's role is to set policies and not necessarily be investing millions of dollars in companies that have to compete against each other.

I can tell you that in the case of Western Star Trucks in my community -- a fine corporate citizen, a great company, providing good jobs -- a poll that was done showed that 70 percent of the people felt that government shouldn't have given that money, and 28 percent felt that government should. Maybe that's a bit of an anomaly. It's a very free-enterprise valley. What people felt was that government was getting involved in private business and sticking its nose where it didn't belong. I would have been ecstatic, and I think my constituents and people in my valley would have been ecstatic, if it had been private investment that had helped out Western Star.

[1630]

When the minister stands up and says: "Well, hey, it's everybody else. It's the markets we trade in. It's other countries. It's their economy that's affecting ours. . . ." There are things we can do to provide better service to our communities to help them get going and help develop economies in their communities. A lot of times they feel that government's in the way and in their face, rather than helping them out.

The minister mentions two projects that government has invested in quite heavily. Frankly, the minister's right. It's a difference of philosophy. We don't believe in business subsidies. We believe in making the playing field even and fair and letting businesses compete on their own terms -- let the market decide. Once we fix the taxation, once we start working towards a debt reduction plan for this province and once we start fixing the problems of red tape, perhaps private investment will feel that this province is on its feet and going the right way, and will be welcomed back in this province.

Right now. . . . I think the business community has been sending a message to this government. For some reason, they are ignoring it or choose not to care about it. The business community is very concerned with the direction this government's taking. It is a difference in philosophy, but at the end of the day it's the business community that helps provide the jobs.

Jobs are not created by government. Government can pretend that they're creating jobs in this province, but they're not. We've seen numerous -- I can't even tell you -- press releases from this government. I think we tried to do a tally in the last year or so -- or the last two or three years. The government was going to create 150,000-odd jobs. Well, in the jobs and timber accord alone -- and I believe the anniversary is coming up in the next few days; it will be a two-year anniversary of the jobs and timber accord -- instead of the 40,000-odd jobs that were promised, what we've seen is 15,000 to 20,000 job losses in that sector. Putting up a press release and saying, "We're going to create these jobs. Government's going to create these jobs; government's going to do that," doesn't work.

[ Page 13540 ]

Unfortunately, it doesn't look like the government is going to move down the road to the kinds of economic reforms this province needs to get us back on our feet. Our job as opposition is to try and move the government in that direction. We will try and persuade the government that bolder action than what they're taking is necessary and is needed. Unfortunately, when we see the Finance minister and this minister stand up and say that it is a difference in philosophy and that the clippings I read from the business summit don't really matter, I find that concerning.

I do recall -- talking about news clippings -- an article from the Wall Street Journal last July when we were in the House. I found that really distressing. Here is a journal that speaks to world markets. In the Wall Street Journal they said that B.C. was not a good place to invest. They mentioned the consecutive deficit budgets this government has been posting -- never been able to balance the budget. They talked about the debt situation in this province. They talked about the anti-business climate. That's not the Liberal opposition out there on Wall Street talking. That is business people conversing with people in New York and with the Wall Street Journal. This government has to make peace and has to listen, I believe, to the business community and try and build some bridges there. I don't think I see that happening.

[1635]

Hon. M. Farnworth: I find the member's comments and some of the examples she uses interesting. I think that they point out, again, some of the differences in opinion but also the ways of looking at things. I mean, the member talks about subsidies to business. Well, the fact is that we are not. . . . The commercial arrangements that we made are at commercial interest rates, and we get a return on our investments. So it's not a grant to business.

We're not giving money, for example, to Western Star as a grant. There is an investment there. If we want to talk about grants around Western Star, we can go back to Western Star arriving in Kelowna in the first place. I'm sure the member appreciates the size of Western Star and its impact on the Kelowna economy. Western Star came to Kelowna in the first place when it was previously White Trucks and was given a grant by the federal Liberal government of the day to move there. We're not giving them a grant; we have made an investment for which we will see a return. Western Star is a company that has done extremely well and has been very successful in British Columbia. We've entered into a partnership with them, and it's a partnership that will be successful. It's good for Kelowna, and it's good for British Columbia.

We've been identifying areas of B.C.'s economy that are strategic and growing. The government is trying to encourage them to grow. And to enter into them on commercial loan rates, for example. They're not risky companies; they're successful companies. Again, I go back to Conair in Abbotsford. I mean, as the Mayor of Abbotsford said: "Well, if I was going to invest money, it would be in a successful company." That's what's needed to make the company grow. He welcomed the province's investment in Conair. It secures 800 jobs in Abbotsford; it cements that industry in this province; it contributes to the viability of that overall sector in the province; and it allows us to ensure and to put in place the infrastructure -- whether it's technical expertise or educational infrastructure that's required -- to supply the people that they need to grow the company further. It's the two working together. That's a successful partnership, and that's what we should be doing. It's not a question of going out and providing subsidies.

The other issue the member talks about is. . . . She says: "Oh, you're blaming everybody else." Well, we're not blaming everybody else. We're recognizing the realities that exist in the world today. This province trades more with Asia than all the other provinces combined. When they go into an economic downturn, that impacts on us. When commodity prices fall to levels that haven't been seen in decades, that impacts on us. I mean, we don't control the price of copper at 62 cents a pound. We don't control the price of lumber, though it's nice to see it on the way back up. That is a positive sign; it benefits the province's economy.

We know there are challenges within the province, and we're moving to change them. That's why we've introduced legislation, for example, around the mining sector and oil and gas to get permitting regulations streamlined. That's why we've gone out and worked with the small business community around liquor to streamline regulations in that area, and with the hotel and tourist industry to try and rationalize some of the regulations that have been in place for a long time. That's why there's the small business task force and the red tape task force that have been in place to identify regulations and to eliminate them. That's an ongoing process. Those are concrete steps that we can take in this province to address some of the concerns that business has around red tape, and they are legitimate.

[1640]

There are things that each government can do and the federal government can do. But to stand there and say, "Oh, well, no, the province doesn't recognize us, and basically it's all the province's fault" is just simply wrong. It just doesn't work that way.

[ Page 13541 ]

The challenges facing British Columbia are a combination of a number of things. To simply say: "Oh, just adopt the Alberta model, and just do what Alberta does. . . ." Hon. member, please. You stand up in the House on a weekly basis -- well, you don't, but the opposition does -- and say: "This is what's happening in Alberta. This is what we're doing in Alberta." You read in the paper -- and we're talking about headlines in the paper: "We like the Klein-Harris model. That's the approach we would take." Well, British Columbia is different from Alberta. We don't have the pool of oil that Alberta does. Alberta doesn't trade with Asia as much as we do.

T. Nebbeling: We have the forest industry.

Hon. M. Farnworth: The hon. member says: "The forest industry." Well, there we go again. When Japan is one of our largest consumers of the coastal forest products, and if they're not building houses and they're not buying lumber, that impacts on British Columbia. So we feel the impact.

Anyway, it is a broad complicated problem. We recognize that B.C.'s economy is facing challenges. We know that, and we're taking steps to deal with things, in terms of provincial jurisdictions, that can have an effect and are being implemented. But at the same time we are also subject to market forces from outside this province, and when they start to change we will start to feel the upturn of that. But you can't underestimate their impact on British Columbia.

In terms of investment there's been significant investment. I was at Richmond last year, as a Taiwanese developer was starting a $500 million industrial park. We've just seen the relocation of Telus from Alberta to British Columbia. I know it was interesting when the member says: "Well, we've got this record of companies leaving British Columbia." Do you keep a record of the companies moving into British Columbia? Or do you just focus on the negative? I find it interesting that a company from Alberta -- a big company -- is moving to British Columbia. This is the place to be.

[1645]

S. Hawkins: I think the minister is feeling a bit sensitive, and perhaps he should. I don't think the minister can have it both ways. He's telling me that world markets are bad, and the B.C. economy is bad, so it's the world market's fault. He tells me that Japan is improving, so we expect the B.C. economy to improve. I won't credit the government, then. I'll say that it must be because the world markets are improving. You can't say that, in good times, it's a credit to the government and in bad times, it's the world market's fault. I think the government has to take some responsibility here. When I talk about picking winners and losers in the market and the government investing in private business and private enterprise, I'd like to. . . . I know we're going to canvass this later in detail, but. . . . The minister thinks Skeena Cellulose was a great investment. When there were other pulp mills in the province that have failed, this government decided to pick one and infuse it with money.

When the Premier was Employment and Investment minister -- this was back, I believe, about four or five years ago -- he chose to invest in Livent. I believe it was a $3-5 million infusion, again, of provincial funds, in Livent. At that time, people thought it was a successful enterprise. If the minister recalls, last week we heard that Livent obviously went bankrupt. The assets are being sold, one of which is a theatre in Vancouver. I'm sure the province is on the hook for that money. The minister can tell me about that later, too, if he wants to investigate to see if the shareholders of this province are actually going to see the millions we invested in Livent.

The businesses might look very successful, and we might be tempted to give them money, but I don't think government should be in the business of picking winners and losers. It troubles me -- and frankly, as I said before, my colleagues and I would be ecstatic if private investment from around the world said: "B.C.'s a great place to invest. We're stepping up to the plate and we're putting $60 million into this company. We're putting $17 million into another, because we know we can get a return from it."

The minister knows as well as I know that private investment is portable. Private investment will go where they know they can get a return on their investment. Frankly, the minister talks about success in Richmond. I pointed him to a company last week that announced that they were leaving Richmond -- a high-tech company, a very successful company -- that is leaving for Ireland. We'll be losing 350 to 400 jobs there.

I understand that world markets are weak. I understand that. And I understand that B.C. is heavily dependent on some of those markets. But some of the economic woes we are facing in this province are because of government policy. I wonder if the minister can admit that. I think the government has, in some small part, admitted that, because they started working with the forest industry to reduce the red tape and taxes there. They have a red tape commission or group that they work with in the business community. They sort of have a business lens that their legislation's supposed to be going through, but when we investigate a little further, we find that a lot of the policies that the government is implementing don't always go through that business lens. But those are the kinds of measures that I think are positive steps -- if the government followed through with them -- in trying to get us back on our feet in the province. At the end of the day, it doesn't matter what the minister and I think; it matters what people think.

If people think they're making a living in this province, if people think they're collecting enough of a paycheque, and if people think they're able to provide a home for their families and food for their mouths and a little bit at the end of the day

[ Page 13542 ]

[1650]

I can tell you right now that when I see the Business Summit, which is a pretty powerful group in the province -- they're business leaders from across the province -- give a report card full of C's, D's and F's. . . . I can tell you what would have happened to me if I went home with a report card like that. My parents wouldn't have been very happy with me at all. In fact, I don't even know if I would have gone home.

Maybe the minister can tell me what he thought of that report card and what grades the government felt they should have deserved. I can tell you that the business community wasn't very flattering about the government's performance. And you know, people read that kind of stuff. When you say, "This member can stand up here and read that stuff," well, the average person is reading that as well and basing their opinions and their perceptions on the government's performance. Right now, it's not reflecting very well.

I can tell you: the investments that the government has made -- yes, they're successful companies. But I wonder why Western Star Trucks would want to leave this province. That was the fear -- that they were going to leave this province -- and the government infused the company with money. It's a great deal. It's a great deal for Kelowna; it's a great deal for the company. I can tell you that taxpayers. . . . As a taxpayer, people come to me. They don't know if it's a great deal for the taxpayer. They have a problem with that. They have a problem with the government helping private business, and rightly or wrongly, people consider that as a subsidy.

What people would like to see, especially in a valley like mine -- a very free-enterprise valley -- is business competing on a fair playing field. They want the market to decide whether businesses will succeed or fail. They don't want the government doing that. Again, when we go back in the record, certainly. . . . I'm sure government has invested in successful companies as well, but when we look at the record -- companies like Livent, companies like Skeena Cellulose -- people start wondering whether those are good investments. So you know, I point that out to the minister. There are still companies that come and see us -- this member and the members on the opposition's economy committee -- and they're not happy.

Frankly, many of them wonder when there's going to be an election, because they feel that some of the business confidence might be solved with a change of government. I'm not saying which government; I'm just saying a change of government, and the minister can think about which government they might have more confidence in. By the polling that's been done, I can tell him that it probably isn't his, for now. Many companies are hesitant to come here. Many are going to wait it out for a little while, and many have left. The minister knows that.

I'm sure he's going to come back and tell me: "Well, you know, Telus has put their head office in Vancouver." Well, yes, some of them have come here. A lot of them have left. A lot of head offices have left B.C., and a lot of high-tech companies. We can say we changed the employment standards law for high-tech companies, but we're still competing on a world stage there, and we still see a lot of high-tech companies that are planning moves either down south or to other countries. One of the main reasons that we hear about high-tech companies considering a move is taxes. That's a reality. That's not only a reality for high-tech companies, it's a reality for almost every worker in this province. We might have our differences on what we think needs to be done there, but I can tell the minister very clearly: those are three things that certainly concern people across the province when I meet with them -- the high taxes, the provincial debt and the lack of investment.

Oh, I know. The minister was talking about housing starts as well, and regulation. Sure there's regulation at the local level. I didn't say that. I hope I didn't say that all of the blame was resting on the government's feet. Maybe 95 percent of it, but not all of it -- okay?

[1655]

S. Hawkins: Much of it? Okay. My colleague says: "Much of it."

But the government does have a responsibility there. The government has a responsibility to set the policies that help to drive the economy. Over the past few years we have seen that the policies that the government has set haven't always been balanced, haven't always helped to grow the economy. In fact, they have in part helped to contract the economy's different sectors.

Certainly housing has been a challenge. Housing starts might be up in these last few months. It is the summertime, and we are getting into that weather, but they're still considerably down from where they have been the last few years. That's what the builders tell me in my area.

But anyway, if we can. . . . I'm sure the minister's going to get up and respond to some of the comments I've made. If he could just, at the end of his comments, talk about the business plan again, because I think we were sort of onto that. . . . If he could tell me if it's a multi-year plan or if it's just a single year plan.

Hon. M. Farnworth: To deal with the business plan first and then to get back onto the comments, right now it is a one-year business plan with a long-term vision. . . . It's a work in progress right now. As I said earlier, when we've got the final version, you'll get it.

S. Hawkins: When?

Hon. M. Farnworth: Well, soon.

Now, back to some of the member's comments. I find they are interesting comments. I mean, the member talks about. . . . It was nice to see the member recognize that yes, housing starts are up in the last couple of months. It's not to do with the weather. It may be sunny up in Kelowna, but we've had one of the coldest, wettest springs ever down in the lower mainland, and we are wondering if summer's ever going to get here.

[ Page 13543 ]

Interjections.

Hon. M. Farnworth: Well, no, actually that's true. You don't get to. . . . But the members of the opposition do like to blame the government for everything -- say that it's our fault. So when things start to turn around, you again can't have it both ways and say that it's in spite of the government. The fact of the matter is that B.C.'s economy is in a global marketplace. We are affected by outside forces, and there are things that we can do inside the province to help stimulate investor confidence and to ensure that the economy develops in a way that calls for everybody's benefit.

A Voice: Call an election.

Hon. M. Farnworth: The member says: "Call an election." Well, within the next two years there will be an election, and then we'll all be out on the hustings. But some of the key things we need to realize is that government has a very strong role to play. There is a great role for government to play: one, in working with key and emerging sectors. . . . The film industry in this province has grown up in part because of initiatives taken by the government.

A Voice: It's such a small part of the economy.

Hon. M. Farnworth: That's right. And ten years ago it was nowhere. This year we will do over $1 billion worth of activity.

Interjection.

Hon. M. Farnworth: The member says: "This many press releases for this much activity?" A billion dollars is not a lot of activity, hon. member? It's growing at an incredible rate, and it's employing a lot of people. It's starting to expand outside the lower mainland, providing opportunities for people -- stable opportunities, long-term opportunities -- and all kinds of spin-off industries.

[1700]

A Voice: Taxes.

Hon. M. Farnworth: No, they also closed down their same plants in San Diego -- two plants in San Diego, in the United States. And you guys are always saying: "That's our model. We should be more like that."

Interjection.

Hon. M. Farnworth: They didn't, and they closed a place down in Israel. It was a regionalization decision done on a global basis to move to a facility in Dublin where they offered things like free land. And guess what? The member talks about a level playing field. Well, I don't call offering free land making a level playing field. In the same case. . . .

S. Hawkins: We're just talking about B.C.

Hon. M. Farnworth: Does the member think, then, that in B.C., in terms of the level playing field, we should be offering free land? She says no, she doesn't.

S. Hawkins: But you shouldn't be offering subsidies to everybody.

Hon. M. Farnworth: We're not offering subsidies, hon. member. We make commercial investments, on commercial terms and on a commercial basis, that the province gets a return on and the province has security in. In the case of Western Star Trucks, there was due diligence done by RBC Dominion Securities, which said: "If you make this investment, here's the market price of the shares, here's the value and here's the expected return to the province over the next decade." In the case of Western Star, we're looking at jurisdictions that are prepared to give multi-year tax holidays and free land. That's not creating a level playing field.

We're going to work to ensure that B.C. industries and B.C. businesses can grow and prosper here in British Columbia. And you can do it. We do it through a number of ways. But we are not opposed. . . . We believe that a legitimate way of doing it is to work with companies and to enter into commercial arrangements on commercial rates; and there's nothing wrong with that. The member questions Livent. Well, had the member read the paper, she'd know that the province's investment in Livent is secure.

T. Nebbeling: Only if you bulldoze the theatre. That's what you said. Then we get the land value.

Hon. M. Farnworth: Oh God, hon. member -- here we go again. You entered into the debate once more. The fact of the matter is that I said the comment because the question was around the value of the asset. At book value, the asset is $31 million (U.S.), which is about $45 million (Canadian). The question was: "Look, can you get that for the theatre? Will you get your money out?" My comment was: it doesn't matter whether it's a theatre and you sell it as a theatre or you just bulldoze it and you have the value of the land. Within the value of the land, we'd still get our money out. No one is saying that we would bulldoze it down. No one has said we would bulldoze it. The value of B.C.'s loan is secured in terms of the building and the facility that is on the site, and it's secure in terms of just the bare land. So the taxpayers of British Columbia are fully secure on the money that was in Livent.

So there's not a subsidy; there are commercial rates involved. That's how we approach things. We look at things on a case-by-case basis.

The member talks about Skeena. It's really interesting. I understand her point of view. But Skeena is of critical impor

[ Page 13544 ]

S. Hawkins: You're not. . . . Respect the rules, now. Be nice.

Hon. M. Farnworth: I don't mean it in terms of criticizing him for. . . . But in terms of when he was up in Skeena himself, "If we were in government," he said, "we would have had to do the same thing."

T. Nebbeling: He never said that.

Hon. M. Farnworth: He did. The Liberal riding president up in Skeena wrote a letter saying: "The government has done the right thing by Skeena in northwestern British Columbia." Mike Scott, the federal Reform MP, said: "The government has done the right thing by Skeena, because they recognize the significance of that mill" -- it's in northwestern British Columbia -- "and the size of the timber supply that came with it and the roughly 9,000 jobs that are either directly or indirectly dependent on that mill in that part of the province."

[1705]

Hon. M. Farnworth: If the member wants to know the direct number, we can give him the direct number. But quite frankly, whether there are direct numbers or indirect numbers, indirect jobs depend on the people working at the mill. If you don't have the people working at the mill, then you don't have the people out spending their money. If the people in the mill aren't working, you don't have all the other industries in town, the suppliers and their people working. So to say that the direct number of jobs is somehow. . . . To give the impression that it somehow is not important is just plain wrong.

So I think we're having a good exchange of views here, and I'll just leave my comments at that. I'll probably get a response from the hon. member.

I. Chong: I've certainly enjoyed listening and watching the exchange. Watching, I have to say -- so that those who are reading Hansard understand -- that the minister has had a smile on his face the entire time. So I'm sure he's enjoying the debate as well.

I do have some questions on the business plan as well. But before I do, I would be remiss if I didn't comment on some of the things the minister stated. I want to just, first of all, give him a little background. I happen to have had the privilege of being interviewed on our radio station this morning -- out of Calgary. I don't know why they called me, but they did. It was quite a privilege. I got to speak on this radio station. The interviewer encouraged those people who had moved from British Columbia to Alberta to call in and also to make comment. Although there weren't a lot of calls, I have to admit those that did call in -- each and every one -- said they were disappointed they had to leave British Columbia. They were not prepared to go back until there were some definite changes that would allow them to improve their quality of life. Specifically, each and every one of them mentioned the high taxation and the fact that it was so difficult to find a job in British Columbia.

I want the minister to know that the average person, the average worker -- the one that packs their bags and moves and leaves the family behind -- who ends up in Calgary, not necessarily from their own personal decision, other than to meet their family obligations. . . . They've done so as a result of some of the government policies which -- as I stated earlier, and I concur with my colleague -- this government is much to blame for -- I won't say all, but certainly much to blame for.

I also want to make reference to some comments the minister made -- which I know we're going to have an opportunity to debate later as well -- in reference to the fact that Western Star. . . . The arrangement for that particular agreement is a commercial arrangement. I know the minister is aware that we did receive a briefing, which I appreciate the staff providing to us. But within that briefing we did determine that a part of the funding for this investment decision -- unless it's changed since we've had the briefing -- entails a grant, so it is a subsidy. It is a grant that is hoped, perhaps, if the business does well, will be returned to the government in full. In fact, I believe $25 million -- the amount given to us -- is looked upon as an employment grant, one that is still not determined as to its taxation status. So for the minister's benefit, when we do get to that, perhaps we'll get more clarification on it.

[1710]

The minister also mentioned the investment in Skeena. I would agree that Skeena is important for the northwest. We've never said it wasn't. But if you take that approach for your decision-making -- that you decide what's important to a certain area -- then you would have to look at all those other communities that have been devastated too.

The fish farming industry is important to the coastal communities, yet government has not moved to lift the moratorium. The oil and gas industry is important, as well, to the northwest sector, or the northern coastal sections. There has been slow movement there. So when government says, or attempts to justify, that the decision they make for a particular investment is because it's good for a certain area, then they better apply that on a much more equitable basis throughout the province and to those communities that have also suffered.

Also, in reference to Skeena: yes, the mill provides jobs there. But another industry that is important to that area, of course, is tourism. As a result of some unfortunate blockade that occurred a number of years ago, the tourism industry took a terrible hit in that area. What has been done to improve that?

If we want communities to survive -- if we want communities to have opportunities to not be one-industry towns but

[ Page 13545 ]

I just wanted to put some of those comments on the record as well.

The minister also mentioned the film industry. I would agree with him: the film industry has taken off and will be one of the salvations for this province in terms of economic recovery, I hope. However, it was not as a result of all the works that this government has done in the film industry.

I know the minister wanted to take some credit for it, but I want to give him an insight as to what happened here in Victoria in terms of the film industry. It was a result of some very hard-working individuals -- some community leaders -- that had to do some extensive lobbying, if you will, of this government to get them to open their eyes and see that the saturation point in Vancouver was occurring and that if we did not look to Victoria and to the Okanagan and other areas where the film industry was looking to diversify, then we would not have had the film industry growing to the extent it has.

I know that when I was critic for Small Business, I encouraged the minister to look at providing a stable form of funding -- whether it was to divvy up the pot that was already given out to the film industry or the B.C. Film Commission in Vancouver and to spread it around on a regional basis, or whether it was to increase it. Of course, I wasn't asking for an increase but for however was the most practical and the most value for money that could be gained from that pot of money, to ensure that we would maximize the film industry.

But that didn't happen. What happened was that we had the local community business leaders approach the federal government, who provided some seed money to allow a film commission to be started here in Victoria, for which there has now been a tremendous amount of activity, which the Small Business, Tourism and Culture minister loves to continually speak on. And so he should, because it is a wonderful industry. However, he should not be so quick -- nor should this minister be so quick -- to take that kind of credit, because had it not been for those community business leaders here in Victoria, I can tell you the film industry would not have grown in this area. We would have received whatever handouts Vancouver passed over, as opposed to having the initiation take place here, by our own hard-working individuals. So you know, I do want to inform the minister that we're very proud of that here but that it was not all done by the work of his ministry or the work of the Ministry of Small Business.

[1715]

Hon. M. Farnworth: I appreciate the member's comments and her questions. I would make the following comments in terms of the business plan, and maybe then I'll respond to some of your earlier comments. Competitiveness is important, and it implies a number of things. It implies those things around taxation; it implies things around red tape; it implies things around market access and markets, being able to access markets.

I'll give an example around softwood, for example -- ensuring that we have access to the Japanese market for our timber; ensuring that we have access to the American market for our products and our lumber there; ensuring that we try to develop new markets and address the challenges that face us in existing markets, whether it's Greenpeace trying to freeze out our forest products in Europe or in the United States. . . . It's those things. That's all part of the competitiveness issue.

It's things such as red tape. As I said earlier, we've put in place the red-tape committee, addressing red tape as it applies to particular sectors of the economy, whether it's changes that were made in terms of the oil and gas industry or changes that have been made in terms of the mining sector -- that was done through new legislation -- or making changes to the Forest Practices Code that recognize that after you've instituted a code. . . . We forget why that code was put in place, which was to meet some of those challenges: literally the hijacking, if you like, of organizations such as Greenpeace that use British Columbia more as the basis of a fundraising exercise, as opposed to getting the truth out in terms of the changes that have taken place in British Columbia's forests and the land that has been set aside in British Columbia. It's close to 12 percent, more than any other jurisdiction in this country; in fact, probably more than any other jurisdiction in North America.

Those types of issues are things that we're addressing, so the Forest Practices Code was brought into place. A few years later, we're now seeing how it's working. We recognize that changes have to be made, so we make the changes.

In terms of employment standards, we've talked about high-tech. It's a question of sitting down with the industry and the sector, identifying the issues of key concern and then making necessary changes, culminating, in this case, in the new employment standards that apply to the high-tech sector. All those things go into competitiveness.

It's addressing things in the small business sector and saying: "Okay. Let's make the province's small business tax rate the lowest in the country -- lower than Alberta." That's an example. Those issues are very much addressed through that.

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Tourism is still growing dramatically. We have seen a huge increase in U.S. tourists, and we have been working to market the province internationally, nationally and south of the border. There has been a lot of work taking place there.

In terms of the film sector, we have a strategy to try to ensure that the infrastructure is in place throughout the province. This province has been very aggressive, when it

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Hopefully, that answers some of your questions.

I. Chong: Certainly it answers some questions, and I thank the minister for that answer.

I just want to caution the minister, as well -- and I'm sure he's heard this caution, and I hope the Small Business minister was cautioned as well -- with regard to tourism and the film industry from which we derived most of that benefit from the United States. So long as our dollar is low, I think we will see that tourism and the film industry flourish. But I'm hopeful that there is within the Ministry of Employment and Investment as well as in the Small Business ministry, someone monitoring the possible impacts of what would happen should our Canadian dollar suddenly take a huge leap forward. I'd hate to suggest that we would be hit with a different kind of flu a few years from now and would say: "Gosh, none of us saw this coming."

I know that when I first came to this legislative precinct and was critic for Small Business, that was one of the first questions I asked the minister at that time, who was actually the Minister of Municipal Affairs and Minister of, I think, Employment and Investment. He wore three hats that year. He didn't want to address the thought of the U.S. dollar having an impact on tourism or on any of our other industries. But certainly the U.S. tourist dollars and the film industry, which is primarily from the States, are highly dependent on our currency. I'm hopeful that ministry staff will continue to monitor that, because it will be something that we will have to address.

In regard to the minister's reply as to what "competitiveness" implies, I'm glad he also affirmed that taxes and regulation were a part of that and that market access was another area that was implied in the definition. But the minister also made reference to the small business tax, and I didn't want to leave that before moving onto another area I want to canvass him on. The small business tax, albeit welcome to the small business corporations -- I had stressed this to the Minister of Finance and will continue to do that -- is only beneficial so long as there are small businesses that are incorporated that in fact have a profit. If a small business is not profitable, due to excessive government user fees, then this small business tax is essentially not really worth the paper it's written on. I just wanted to put those comments on the record as well.

The introduction of the business plan also states that the ministry is the lead agency for communicating the government's economic strategy. I'm wondering what is meant by "communicating the government's economic strategy" -- firstly, what the economic strategy would be for us to understand what would need to be communicated.

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I. Chong: London, England, or London, Ontario?

Hon. M. Farnworth: England. It's outside London. Anyway, I was working with the industry to promote the aerospace industry here in B.C.

Also, because we have the Aerospace North America Show here in British Columbia, we have been working very closely in the industry to make sure that that show is a success. It will showcase the B.C. companies and give us a tremendous opportunity to market ourselves on the world stage and within the aerospace industry in general. So that's an example. One of the problems you find is that you talk to companies outside Canada. . . . Quite often they say: "Oh, Canada. We want to do business with Canada." What do they say? They say Montreal and Toronto. They forget that there's the west, and you have to remind them: "Well, we do have an industry here in British Columbia. We have a major show, and this is an opportunity to showcase the industry." Right now, apart from the two shows that take place in Europe, for example, there is no major North American show. We can establish Vancouver as that facility or that location in North America to showcase aerospace, and we need to build on that. So that's an example of how we could go out and market and communicate about a sector of the economy; we work within Canada at the federal and local level to try and do that. So there's a number of ways that we take the lead in communicating. Hopefully that will answer one of the questions.

S. Hawkins: We would like to continue with the business plan. I understand that it might be forthcoming on Monday. Would that be a reasonable expectation? We're into the estimates process now. I'd hate to get it at the end of the week, when we're stepping down from estimates. I would just ask the minister to let me know when we might be expecting that. We would like to continue with the business plan on Monday and then move into Housing, if that's agreeable.

Hon. M. Farnworth: We can certainly give it a try. I mean, I cannot give you a concrete answer for Monday because, as I said, this is a draft. It is very much a work in progress. It's at the deputies' and ADMs' committee right now -- at their level. But we will do our best.

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

Interjections.

Hon. M. Farnworth: Okay, I move that the committee report progress and resolution and ask leave to sit again.

Motion approved.

The committee rose at 5:29 p.m.

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