Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

MONDAY, JUNE 14, 1999

Volume 16, Number 1

[ Page 13547 ]

The House met at 2:08 p.m.

Prayers.

P. Nettleton: I would ask that members please join me in welcoming my constituency assistant, who is visiting here today from Prince George, David Burkholder.

Hon. I. Waddell: At this time when we're embarked upon a big change in the liquor laws in British Columbia -- a modernization -- I'm pleased to announce that we have in our gallery here today Tony Rushworth, who's president of the B.C. Neighbourhood Pub Owners Association. Would the House please make Tony welcome.

[1410]

K. Whittred: In the gallery today is a very new friend of mine, Beris Gaal. Beris is from Bundaberg, Queensland, Australia. She is visiting and enjoying the wonders of our beautiful province. Please join me in making her welcome.

Hon. P. Ramsey: Last week I reported to the chamber that British Columbia had 27 medal winners at the recent fifth annual Canadian Skills Competition, which was held in Kitchener, Ontario. We're joined in the gallery today by five winners, representing those 27 winners. I'd like to introduce them to the House. They are Yvonne Lai and Kathleen Leung from Eric Hamber Secondary School, with their instructor in women's apparel design, Nina Ho. From Robert Bateman Secondary School are Eric Madill and Carey O'Brien, who competed in the field of computer animation; they are with their teacher, Bill Henderson, and the school principal, Steve Carlton. From Malaspina University College is a medal winner in ladies' hair styling, Brandy Taylor, and her teacher, Linda Phelan.

We also have with us two students who are training to attend the World Skills Competition to be held in Montreal this fall. Nathan Bye from Alberni District Secondary School, who will be competing in industrial electronics, is accompanied by his teacher, Grant McAuley, and the school principal, Greg Smyth. From Northern Lights College is Tyler Marion, who's going to be competing in carpentry. They're accompanied by the CEO of the Industry Training and Apprenticeship Commission, Mr. Kerry Jothen.

Hon. Speaker, the achievements of these students are a testimony to the excellence that's being promoted in our schools, in both K-to-12 and post-secondary. I'd like the House to make all these guests very welcome today.

K. Krueger: I note in the gallery today a well-known businessman from the Kamloops area, Mr. Michael Grenier, the proponent of the Six Mile Ranch development. I'd ask the House to please make him welcome.

Oral Questions

CONDITION OF FOREST SERVICE ROADS

Hon. D. Zirnhelt: It's no secret that there are pressures on all of our budgets to maintain the level of spending we have on education and health care. As a result, we have done a detailed examination of the situation with respect to roads. We will prioritize the roads, and we will take into account the community and other economic needs of the users of the roads.

The Speaker: First supplementary, the member for Shuswap.

G. Abbott: I'm glad the minister mentioned education, because according to this Ministry of Forests report, the government's failure to maintain Forest Service roads will impact 23 school bus routes. This impact will be that the "safety of children, on some routes, may become a serious concern." Will the Minister of Forests explain why he's prepared to let forest roads deteriorate to the point that children's safety is endangered?

[1415]

The Speaker: Second supplementary, the member for Shuswap.

G. Abbott: To the Minister of Education: does he know which 23 routes are called into question here? Has he advised the parents. . .

Interjections.

The Speaker: Order, members. Let's hear the question.

G. Abbott: . . .of children on those routes that their route has been cut?

Interjections.

The Speaker: Order, members.

Hon. P. Ramsey: Here we are in June, and the opposition finally gets around to asking a question about education. It

[ Page 13548 ]

Interjections.

The Speaker: Order, members.

Hon. P. Ramsey: . . .the Ministry of Forests. We want to make sure that all children get to school safely, whether they go by bus or they walk.

R. Neufeld: The same Forests ministry report states that if Forest Service roads are not maintained, the public will lose access to hundreds of provincial parks, and thousands of ranchers, lodge owners, farmers and outdoor recreation users will have poor or minimal access to these parks. Will the Minister of Forests explain why he's raising fees on these campsites at the present time, when his ministry is planning to shut off access to the same sites?

Hon. D. Zirnhelt: The fees are there to help provide maintenance to the sites.

Interjections.

The Speaker: Members. . . .

Hon. D. Zirnhelt: In some cases, it might even be a small road to a site. We might have to make choices as to which campsites and which roads we keep open -- which have provided very good access for people in the past. . .

Interjections.

The Speaker: Members, order.

Hon. D. Zirnhelt: . . .at the expense of the budget of the Ministry of Forests. As I said, we will look at the condition of the roads leading to the various facilities, whether they're public or private, and make a careful and detailed assessment as to where we spend the dollars on maintaining those roads.

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

Interjections.

The Speaker: Order, members.

R. Neufeld: It's interesting to listen to the Minister of Education say that busing doesn't seem to be that important or is not very high on his list of priorities. This Forests engineering report also says: "About 1,715 residents on [Forest Service roads] will have either zero or low-quality access. Health and police officials will have difficulty reaching residents in case of emergencies." Has the Forests minister today told those 1,700 families that their health and safety are at risk because this government won't maintain the roads?

Hon. D. Zirnhelt: I think the very same question was asked a few weeks ago, when we were talking about the documents that we presented to the federal government to ask them to assist in, essentially, backing up the forest industry and communities and having a very aggressive infrastructure program, which they funded before. We invited them to participate, and we produced some information. What has happened since then -- since the federal government is not willing to take into account our needs here in British Columbia -- is that we will assess our budgets, and the expenditure of our budgets, based on the needs of people in local communities. We will inform people when we know what roads might have to be closed for safety or other reasons, and we will be consulting with them before we make any closure decisions.

COST OF NFO OFFICE MOVE

Interjections.

The Speaker: Order, members. The member for Matsqui has the floor.

M. de Jong: . . .it was reported on the weekend that New Forest Opportunities, which is funded by FRBC to do silviculture work, has moved its head office from downtown Nanaimo to the Nanaimo Indian reserve. The price tag for that was $1 million, because they didn't just lease office space; they bought and moved a two-storey portable unit onto the reserve lands. Can the Minister of Forests explain why New Forest Opportunities has wasted nearly $1 million moving a two-storey portable building onto the Nanaimo reserve?

[1420]

The Speaker: First supplementary, the member for Matsqui.

Interjections.

The Speaker: Order, members.

M. de Jong: How far off can a promotion to the Finance ministry be for this minister?

The problem is that Bob Beard, the president of New Forest Opportunities -- and the minister doesn't want to acknowledge this -- stated that the reason for the move to a reserve was to allow native workers to avoid paying provincial and federal income taxes. Will the Minister of Forests tell this House and British Columbians why $1 million of their dollars was spent moving a two-storey portable ten blocks down the street to the Nanaimo reserve, simply to allow a group of workers to avoid paying taxes?

Hon. D. Zirnhelt: Some 40 percent of the NFO employees are first nations. Before the move they were exempt from the federal tax, which has nothing to do with the provincial government. After the move, they're exempt from

[ Page 13549 ]

CONTROL OVER B.C. HYDRO PENSION PLAN

Interjections.

The Speaker: Order, members. It's very difficult to hear the question. All members. . . . The minister needs to hear the question, too.

G. Farrell-Collins: I have a copy of the government's draft legislation as it relates to B.C. Hydro. It says in section 5: ". . .other employees of the authority not represented by the trade unions may. . .be made subject to the agreement and, if so, the authority and the trade union representatives have the power to enter into the agreement on behalf of those employees, and the agreement is binding on those employees." Can the minister responsible for pensions tell us where he gets off, giving people control over the pensions of people who have no say in how it's going to be administered?

Interjections.

The Speaker: Order!

Hon. D. Miller: The moves are simply the creation of a trusteed plan. That is the common practice in the rest of Canada, and it is British Columbia catching up to what other Canadian jurisdictions have done. There will be full opportunity for all employees with respect to the decisions made by the trusteed plan. In fact, they're also governed by other relevant legislation.

The Speaker: First supplementary, the member for Vancouver-Little Mountain.

G. Farrell-Collins: I only wish this government spent as much time catching up to the rest of the country on the economy as they do paying off their union friends.

In addition to B.C. Hydro's 4,000 unionized employees, they have over 1,200 non-union management and professional staff. According to this legislation, they are going to be bound by the agreement that they have no input to. Can the minister responsible tell us why this government thinks it has the right to impose criteria on pension plans for those non-union management people and other people when they have not one word of input into how their pension is going to be managed?

[1425]

Interjections.

The Speaker: Order, members.

Hon. D. Miller: . . .are the norm.

Let me take another major industrial sector, one that I have some familiarity with. The pulp and paper sector has a trusteed plan. There are many non-union employees whose interests, I presume, are represented by management, since they have no organization of their own. Those plans are jointly trusteed, with an equal number of people from the management side and from the union side. They hire professional managers of the plan, and both sides have the opportunity, through the trusteed council, to make decisions regarding the plan. It's true to say. . .

Interjections.

The Speaker: Order. . . .

Hon. D. Miller: . . .that in that circumstance, non-union employees -- because they have no organization and therefore no representatives -- are traditionally, in those structures, represented by management.

The Speaker: Second supplementary, the member for Vancouver-Little Mountain.

G. Farrell-Collins: On behalf of the 1,200 non-union employees at B.C. Hydro, will this minister commit to making sure that he polls those people, talks to those people and asks them if they want the unions and the management of B.C. Hydro running their pension plan -- or if they'd rather have it run on their own?

Hon. D. Miller: I don't know how it is that the member opposite manages to start every Monday in high dudgeon, but he is certainly being consistent. I have explained that trusteed pension plans are the norm. They're the norm in every other Canadian province. We're simply doing what they do in other jurisdictions. In those trusteed plans, there is representation from management and there is representation from the unions. The plans are governed by other legislation. They have no opportunity to be irresponsible, and I wish that the opposition could display the same kind of responsibility that has been displayed routinely by trusteed plans throughout this province for the last 20 or 30 years.

Why they can't accept that that's the norm in B.C., why they have to try to inflame this, why they have to be misleading. . .

The Speaker: Thank you, minister.

Hon. D. Miller: . . .and why they hate unions so much, I'm not really certain. But that's the case. They should settle down and relax, and everything will work out just fine.

[ Page 13550 ]

Introduction of Bills

LAND RESERVE COMMISSION ACT

Hon. C. Evans: I move that the bill be introduced and read a first time now.

Motion approved.

Hon. C. Evans: This bill merges the Agricultural Land Commission and the Forest Land Commission into a single Land Reserve Commission. Currently the agricultural land reserve system is administered by the Agricultural Land Commission, which is established under the Agricultural Land Commission Act. The forest land reserve system is administered by the Forest Land Commission, which is established under the Forest Land Reserve Act. This bill will take the administrative provisions concerning the structure and operation of the commissions from the two reserve statutes and consolidate these provisions into a single commission statute. Provisions concerning the reserves themselves will remain in two separate statutes. The merged commission will be responsible for the administration of the agricultural land reserve and forest land reserve systems.

[1430]

Interjections.

The Speaker: Members, come to order. There's too much conversation. It makes it difficult to hear the minister's statement.

Hon. C. Evans: This proposal does just that. It's the first step towards better coordination of the agricultural and forest land reserve systems. It emphasizes that the reserves are working reserves and that they are key elements of British Columbia's regional economies. Merging the administration of the reserve systems into a single commission will increase efficiency and enable better consideration of how the two reserves can be administered in a complementary way. I move that the bill be placed on orders of the day for second reading at the next sitting of the House after today.

Bill 79 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Petitions

Orders of the Day

Motions on Notice

ELECTORAL BOUNDARIES COMMISSION REPORT

If I may just say a few comments before others join the debate, the Electoral Boundaries Commission, it's worth reminding ourselves, is an independent boundaries body -- a body that was appointed by the Speaker, in consultation with the chief electoral officer and both sides of the Legislature. I think all members of this House, if we pause to reflect on the history of electoral boundaries changes in this province, should be grateful indeed for the work done by this particular commission and by its predecessor. I have said on a number of occasions over the years that whatever my disagreements with Bill Vander Zalm might have been, his appointment of the Fisher commission was courageous and was the appropriate thing to do. Fisher gave us a map which I think everybody recognized was a fair and legitimate representation of the interests of the people of this province.

I think the recent commission has carried on in precisely that tradition. They have also done very good service. Their primary problem -- for those who don't know about the difficulty of establishing electoral boundaries -- is to reconcile two competing demands. One is the general concept of parity that roughly says there should be approximately the same representation for each constituency, based on population. However, with a population and a geography such as ours in this province, that is clearly impossible without effectively disenfranchising about the top one-third of the province.

Accordingly, then, there's another impulse that the commission has to satisfy. That is what is in the official terminology called "effective representation." They therefore need to balance parity on the one hand, and effective representation on the other. I think the commission and its recommendations have achieved that balance. It has achieved that reconciliation and has done very well indeed.

The report that we are presented with, I think -- recognizing that this is a supplemental report; this is the second kick at the can, as it were -- does an excellent job of balancing the needs of those fast-growing areas with the needs, on the other hand, of those remote and more outlying areas of the province. Again, I think the commission is to be commended for that. It's a delicate task. It's rather like Solomon trying to divide the baby, because inevitably there will be people who say: "You didn't treat us fairly. Why didn't you do X instead of Y?" -- and so forth. All things considered, however, it seems to me they have indeed done a superb job.

This, as I say, is the supplemental report. We had an earlier report. This one went back for some fine-tuning and

[ Page 13551 ]

The report, then, integrates the results of all those public hearings that were held. I think it does a good job of providing us, as I say, with a balance between parity -- proportionally accurate representation -- on the one hand, and the need for effective representation. So the people in the north aren't effectively disenfranchised, as they would be if we went on a straight population model. Obviously the hugely preponderant majority of seats would be in the southern part of the province, and the northern region would be left out, to all intents and purposes -- given just the demographic shift and the patterns there.

Balancing the two interests, however, balancing the two imperatives, I think the commission has done a superb job. I think the report is one that we can all be proud of. Nobody, it seems to me, would ever suggest that this report is anything other than scrupulously fair. It is the absolute antithesis of any kind of gerrymandering -- which, alas, is part of our history in this province. We have not always had fair electoral boundaries, or commissions that have done good and honourable service.

I am therefore pleased to move the motion on behalf of the government. I hope my colleagues across the way will agree with me that the commissioners have done excellent work and that the report is worthy of our support.

[1435]

I want to begin my remarks today by expressing my appreciation to the members of the Electoral Boundaries Commission and their staff for a lot of hard work, a lot of diligent work, and a lot of difficult work. The task they had before them was how to give expression to the right to vote -- that fundamental constitutional principle -- in the context of the large, relatively underpopulated province of British Columbia. Their attempt to balance the competing concerns gives us as legislators the reports that they have filed.

Having briefly introduced the principle of the right to vote, I also want to say that the way that principle is given meaning in a community and in a province like British Columbia is by the organization of the province into geographic territories which we call electoral districts. That results in the electoral system that all British Columbians are familiar with and live with. Of course, what happens at the end of that is we have elections, and we have members of this assembly elected in constituencies. They come to this House carrying the wishes, the hopes, the dreams, the aspirations, the policies and the principles of their constituents and try to give voice to them here in this chamber.

This leads me to another principle that I think is part of our democracy and ought to be an increasingly important part of our parliamentary democracy in British Columbia -- that is, the idea of free votes. "Free vote" is the term that we use to describe the situation where legislators in this chamber vote not on strict party lines but rather on the lines of what they think is the best way to give expression in this House to the wishes of their constituents, consistent with the principles that they hold important to themselves as legislators. I'm going to say a thing or two about free votes in due course.

[1440]

The Electoral Boundaries Commission reports that we now have before us are the first work of an electoral boundaries commission under the statute which came into force in 1989, as the minister alluded to earlier. The truth is that when it comes to fixing electoral boundaries, our political history is colourful, at times, and less than truly principled or fair or full of integrity, at times. The 1989 statute represented a significant change in approach to the way in which electoral boundaries are to be established, in an attempt to move beyond that checkered past and to ensure that electoral boundaries could be established in a way that was, to the greatest extent possible, free of partisan political interests. To that end, this statute, the Electoral Boundaries Commission Act, establishes a process for appointing commissioners which ensures -- again, to the greatest extent possible -- that the commissioners appointed are tasked to carry out their duties in a way that will be free of partisan interest and will be truly independent. But to say that the commission is independent is not even to begin to suggest that the task that they face is an easy one.

We are a geographically diverse province. The statute that we enacted in this Legislature ten years ago, the Electoral Boundaries Commission Act, requires that the commission regard as imperatives the things which the statute calls "geographical and demographic realities, the legacy of our history and the need to balance the community interests of the people of British Columbia." The statute goes on into even further detail in setting out a formula for ensuring that those principles can all be accommodated in a way that respects the basic constitutional requirement that all of us in this democracy have a meaningful, effective right of voting.

[ Page 13552 ]

[1445]

The challenge that I think faces all of us in this House when we are looking at the issue of the distribution of electoral boundaries is to come up with a set of principles consistent with the legislative principles, to come up with a set of benchmarks that we can offer to the commission to help them do their work, recognizing that when this commission began its work, it was the first time out, as it were. It had a statute, it had some jurisprudence, but it did not have a previous set of reports done by its predecessor to guide it.

It may be worth observing that as long ago as April 21, 1998, there was a submission made on behalf of our caucus, the official opposition, to the Electoral Boundaries Commission. The title of the submission is the basic point. It was: "Fair and Effective Representation for All British Columbians." My colleagues the member for Matsqui and the member for Peace River North were the two members of the B.C. Liberal caucus who presented that submission.

I certainly don't intend to repeat here all of the things that are contained in that submission, but I do want to talk for just a moment or two about the factors which we put forward as being factors which the commission could consider to be special circumstances -- the kinds of circumstances that legitimize a deviation from strict representation by population. Firstly, we talked about historical claims to representation. We talked about the need to respect historical claims to representation and argued that change should be based on compelling grounds. Secondly, we argued that communities -- whether they be geographic, industrial, municipal, ethnocultural or socioeconomic -- ought to be represented to the extent that this can reasonably be accomplished.

To speak just briefly for a moment on behalf of my constituency, the constituency I represent is one of three constituencies in the city of Richmond. The situation now is that there are three constituencies in Richmond. The boundaries -- the external boundaries, if you will -- for those three constituencies comprise the totality of the community of Richmond. The boundaries don't cross the Fraser River into Vancouver or Delta, and the boundaries respect the sense of community which exists in the city of Richmond. This, as it happens, is a principle that the commission, in its report -- the report we now have before us -- has respected. There will continue to be three members of this assembly from the city of Richmond, and the external boundaries of the constituencies will be those of the city of Richmond.

[1450]

We talked about the need for constituents to have ready and convenient access to their MLA as a vital factor in ensuring that there is fair and effective representation. It's not just about drawing lines on a map. It's also about such issues as: how long does it take to get in your car and go visit your MLA? What are the constraints that operate in terms of getting access to your MLA? And conversely, what constraints affect the ability of an MLA to have access to the communities of his or her constituents? Those are some of the principles that we put forward, principles which we thought would be helpful to the commission in applying the statutory requirements laid out for them in section 9 of the act.

I think the minister, in his opening remarks, may have used the phrase "balancing act." If he didn't, I'm sure that was the tenor of his remarks. Frankly that is what this is about. It is an attempt to try to balance all of these competing considerations. Any attempt at balancing, in this context, means that there is a whole lot of complicated line-drawing on maps, a whole lot of complicated attempts to identify where people live now, what their sense of community is, what their historical sense of identity is -- and also projecting into the future where people are likely to live in the years to come.

The process followed by the commission involved one set of hearings, which led to the first report, and then a second set of hearings, which has in due course resulted in the second report and the amendments. I commend the commission for having taken great pains to listen to British Columbians express their views on these issues in their communities. I commend the commission for having struggled, for the most part successfully, to reconcile all of these competing concerns and to strike a balance which is, I think, the right balance.

I have to say this: from the perspective of some of my colleagues, looking at this from the point of view of the interests of their constituents and of the communities they represent, the commission did not in all cases get it right enough. There are some communities in British Columbia that today feel their voices were not heard.

In one or two cases, I think it occurred because the commission went one way in its first report and then, in the process of thinking about a change to another direction, heard from those who wished the change, but perhaps did not hear from those who thought the first report was right, because those who thought the first report struck the right balance probably did not see the need to come before the commission to argue the merits at that point, during the second round of hearings.

[1455]

Lastly, by way of general concern, there is, I think, both here today and in the future going to be a challenge for any commission -- as there was for this commission -- in how to honour the principle of effective representation when it comes, in particular, to northern British Columbia.

Some of my colleagues will speak during the next little while to some specific instances that are the reason for those situations I've just outlined. That is, they will speak during the course of this debate on behalf of the communities they repre-

[ Page 13553 ]

Madam Speaker, some of my colleagues have given anxious consideration to those concerns, in light of the fact that the commission has a difficult task in striking a balance. But they have decided that in order to do their constituents justice, if you will, in the context of this debate, it will be necessary to vote against the motion which is before us.

That brings me back, for a moment, to the free vote issue. Speaking for myself, the proposed electoral boundaries are not perfect, but they were the result of a lengthy public process. My view is that we in British Columbia need new boundaries. On balance, looking at this report both as a whole and on behalf of the people I represent, I am prepared to support these recommendations. I believe that the majority of my colleagues are in that position.

But we also respect the voices of those in the communities who are affected adversely by this report. Consistent with the approach which the Leader of the Opposition has taken as a matter of principle and will continue to take -- the approach that respects the fact that there are times and places when we can disagree with each other in the context of a particular issue, and we can bring that disagreement to the floor of this House by voting freely, by voting not along party lines but rather voting in accordance with what we think are the best interests of our constituents in particular places -- there will be a free vote on this side of the House in respect of the motion that the minister has made. Frankly, that's what free votes are all about.

What I want to say by way of closing remarks is this. One of the challenges that I think is buried in the big challenge that the Electoral Boundaries Commission faces is a challenge that flows from the fact that our parliamentary system, as it is currently constituted, is based on the principle of one person, one vote -- the first-past-the-post system of electoral representation. We think, on this side of the House, that there are serious stresses and strains on that system. We hear the voices of those who advocate for electoral reform as voices of people who are concerned about protecting and enhancing democracy and who feel that the current electoral system does not give adequate weight to the real hopes and dreams of those who vote. It does not distribute electoral power in a way that ensures that governments are in fact representative, democratic and accountable.

[1500]

I can't foresee the outcome of that process. In fact, I think one of the most interesting aspects about the Leader of the Opposition's proposal is that he recognizes that all of us, as politicians, are suspect when we speak on the subject of electoral reform. The citizens who listen to us are hearing us not just on the basis of: "Well, is that a good idea or a bad idea?" Because the level of distrust is so high, they're hearing us from the perspective: "Well, if he's in favour of that idea, it must be good for him." I don't know what, if anything, we as members of this Assembly, sitting here now, can do to cure that problem. But one way we can make sure that the idea of electoral reform is examined free of those considerations is to take the politicians out of the process.

So that is the idea. It is, in fact, to give citizens control over the process of examining and considering the ways in which our electoral system can be changed. If they come up with a consensus -- if they reach a landing, as a group, on the way in which our system should be changed -- then we will put that proposal to the citizens of British Columbia in the form of a referendum, so that all British Columbians can decide whether or not they wish to support change in the electoral system.

That, of course, is for the future, but I think it deserves mentioning in this context. Frankly, when I look at the work of the Electoral Boundaries Commission, I look at it through the window of the requirements that exist for them. Those do not, of course, permit them to engage in interesting debate or discussion about whether a different electoral system might produce better democracy for British Columbia. Rather, they are required to work within the rules that exist now. I think, for what it's worth, that some of the challenges and some of the problems they have faced flow from the problems in our electoral system as much as they flow from the historical, geographic and social realities -- the cultural realities -- of British Columbia.

Having said that, I want to reiterate, both for myself and I think for the majority of my colleagues, that the commission had a tough job. I think they did a good job. I think that they took a host of competing considerations and, for the most part, that they struck the right balances. I certainly am glad that I was not having to sit in that room with the pen and the map. Having to draw those lines is a difficult task, and I commend the commission for the work they did. I will be supporting the motion that the minister has introduced for debate.

Hon. J. MacPhail: Hon. Speaker, by way of information to the House, I am about to introduce a bill, so I move adjournment of the debate until later today.

Motion approved.

Introduction of Bills

LIQUOR STATUTES AMENDMENT ACT, 1999

Hon. J. MacPhail: I move that the Liquor Statutes Amendment Act, 1999, be introduced and read a first time now.

Hon. Speaker, this bill follows through on the government's commitment to update British Columbia's liquor laws. It implements the recommendations of the liquor policy review that was recently completed.

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[ Page 13554 ]

This bill will streamline the regulation of liquor advertising, allow the establishment of clear and consistent penalties for licensees who breach liquor laws and provide the licensing of U-brew and U-vin establishments. This bill will also allow the government to implement, through regulation, many of the other recommendations of the liquor policy review, including reducing the number of licensing types and eliminating regulatory policies that serve no public health or safety purpose, such as regulations governing the number and size of televisions in bars and restaurants. It will simplify the licensing approval so that processing time will take six to 12 weeks instead of up to 18 months. It will allow wineries to serve wine and food without having to apply for multiple licences. It will allow credit card sales in government liquor stores and the opening of a limited number of these stores on Sundays.

These changes represent a balance between reducing red tape, bringing our province's liquor laws up to date and ensuring that there will continue to be appropriate controls on the service of alcohol. They are the result of consultation with industry, police, local governments, social service agencies and citizens at large.

Bill 80 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Hon. J. MacPhail: I call resumed debate on Motion 65.

Motions on Notice

ELECTORAL BOUNDARIES COMMISSION REPORT
(continued)

Madam Speaker, when I was elected in 1986, there were 69 members in this House in 52 constituencies, there being 17 dual-member ridings. Those were ridings represented by two MLAs -- not always two MLAs of the same party; not always by two MLAs who got along particularly well, even when they were in the same party. It was a most unsatisfactory and divisive function. The fact of the matter is that if a constituent didn't like the answer they got from one of their MLAs, they went and talked to the other one. Sometimes, being the independent individuals that we are, they got a different answer, and perhaps one they liked better. So we had a form of representation where, in 17 constituencies, two MLAs represented the constituency; and in the remaining constituencies, there was only one MLA.

[1510]

The new Electoral Boundaries Commission was given a greater degree of flexibility, because in the intervening decades, a number of cases had successfully challenged this notion of plus or minus 25 percent. Alberta has set aside four northern ridings in which the boundaries are fixed. These are large ridings with small populations. The government of Alberta has said simply: "Despite changes we might make in the rest of the province, we will maintain these four northern remote constituencies as they are currently structured, disregarding the fact that they may well fall -- and do fall -- well below the 25 percent variation in population."

Saskatchewan has said: "We will have a greater variation in population for rural ridings than we do for urban ridings." I believe that in Saskatchewan the rule is plus or minus 25 percent in urban ridings and plus or minus 50 percent in rural ridings: again, an attempt to balance the competing interests of equal representation -- i.e., one man, one woman, one vote -- and the very real challenge of effective representation. It's one thing to have equal representation; it's quite a second thing to ensure effective representation for all British Columbians. I believe that this is the central challenge for both the Fisher Commission and the current Electoral Boundaries Commission as well.

Let me say again that I believe that, under very difficult circumstances, Judge Wood and his commission have come up with a good, solid and balanced set of recommendations. They had the ability to recommend as many as six new electoral seats. They chose to recommend four seats and, in a number of northern ridings, to go beyond the plus or minus 25 percent variation which was available for them in special circumstances. I believe that the circumstances in areas like the Peace country and the northwest are indeed very special circumstances. The challenge for us, as MLAs, to represent our constituents in those regions. . .are very special circumstances.

I want to talk a little bit about the situation that I'm most familiar with. If you're an MLA who represents one of the Peace River ridings, you should expect to understand the complexities of prairie farming and western grain transportation. You should anticipate a good working knowledge of the

[ Page 13555 ]

[1515]

The challenge of representing constituents and giving constituents effective representation is a very real one. Both the member for Peace River North and I adopted 1-800 numbers early in our time in office. Long before the Legislature automatically covered them, we covered them out of our constituency allowances, recognizing that you couldn't always get to see constituents face to face and that telephone long-distance charges could be an unreasonable hardship to people who were having difficult times.

Having said that, we believe that these variations that have now been recognized are very much appropriate for the circumstances in northern British Columbia. When the new commission was struck and Judge Wood and his commission started hearings, those of us in northern British Columbia had two major concerns -- particularly those of us in northeastern British Columbia. One, we wanted to ensure that at the end of that process, there were still two MLAs representing two Peace River constituencies. We believed in the good of northern British Columbia and that the historical representation of ten MLAs in northern British Columbia should be maintained. On those two counts, this Electoral Boundaries Commission comes through with flying colours.

In the Fisher report recommendation prior to the 1991 election, the area in the Rocky Mountain Trench -- Mackenzie, Fort Ware, Tsay Keh Dene -- was added to Peace River South, in order to bring the population up to within 25 percent. That was not a good change for the people in the Rocky Mountain Trench. I encourage the current commission to change that -- to return that area of the province to the Prince George North constituency. The residents in Mackenzie and north have a great deal more in common -- a good deal more, both economically and socially -- in their relationship with Prince George than they do with the people in the Peace country.

I understand the dissatisfaction in the Peace -- of those people living in the North Peace region, who will see themselves voting in the Peace River South constituency, with the adoption of this report. I know that my colleague from Peace River North will speak on that. I'm not going to go any further than to say that when we had a chance to go back to the commission a second time around, we in the Peace were unanimous in urging that the Peace River remain as the boundary between the commission's north and south Peace constituencies. But I also believed at the time, and continue to believe today, that the primary interest is in maintaining those two ridings in the Peace country and the overall representation of ten in the north. I expect that the final recommendations made by the commission were done in the belief that that was the best way for them to protect the northern constituencies, and I commend them for doing it.

[1520]

R. Neufeld: I rise to speak to Motion 65, the adoption of the electoral boundaries report. I am one of those that the member for Richmond-Steveston talked about earlier that will be voting against this report, but not because I hold the commission in anything but an excellent position. I think they did an excellent job. It was difficult to try to meet everyone's needs, so I don't take umbrage with the time they spent and the issues they tried to deal with, regardless of where they went across British Columbia. I know that it would be tremendously difficult to try to deal with all the issues that each constituency brings forward.

I do want to elaborate on that process and say that in my constituency -- that being Peace River North -- the presentations made to the commission were consistent. They didn't change from the commencement -- from their first visit to the north -- to their second visit to the north, and they remain the same today. If there's any doubt about my respect for the commission. . . . I have all the respect in the world for Mr. Wood and the commission and for the work they did. But I will be voting against this report, simply because I think it's my responsibility as the member for Peace River North to do that. I've heard consistently from the people I represent that they're not happy with this, so I think it's incumbent on me to bring that forward. I don't think it's a travesty, as some may think it is. I think it is me representing my constituents' wishes, whether it was a commission that brought forward the report or not. I think that once we lose the ability to do that, we've lost a bit of our democracy. So with no disrespect to the commission, I will be voting against this motion.

I want to go back to July 1997, when the legislation was placed before this House to create the commission. At that time, the member for Peace River South and I discussed how we were going to deal with this issue. The member for Peace River South spoke, at that time, on behalf of both of us in regard to the issue of electoral commissions and what they should be charged with. We're all aware that the Electoral Boundaries Commission Act was introduced in 1989. It was a good act, and I think it still is.

At the time that the member for Peace River South stood up and spoke on behalf of both of us, he reminded everyone

[ Page 13556 ]

[1525]

The same has held true in Alberta, a neighbouring province that we speak about often in this House -- both sides of the House. The government of Alberta actually brought in legislation. . . . I want to read into the record part of what their legislation said: "Notwithstanding subsection (1), in the case of no more than 4 of the proposed electoral divisions, if the Commission is of the opinion that at least 3 of the following criteria exist in a proposed electoral division, the proposed electoral division may have a population that is as much as 50 percent below the average population of all the proposed electoral divisions."

Alberta dealt with this issue. In fact, as I understand from reading the Alberta papers, they are now in the process of reducing seats again and wondering how they're going to deal with this situation of minus 25 percent or one person, one vote. Obviously in Canada -- not just British Columbia -- we have some serious problems in our electoral districts. I come from an area of the province, in the north, where most people feel seriously alienated from the capital not simply because of the number of kilometres or the distance, but simply because most of the population is in the lower mainland, and most of the largesse of government happens in the lower mainland. Whether that's true or not. . . . In some cases, it is; in some cases, it isn't. But generally speaking, that's true; people see that on a constant basis. So they have some sense of alienation from the capital. As I say, it happens in Alberta, Saskatchewan, Manitoba, Ontario, Quebec. Even in the maritime provinces they're experiencing some of the same problems.

We spoke to that bill and had hoped that the government of the day, having some members in the north, would listen to that advice and actually amend their legislation, to put it forward so that those issues could be looked at in a greater sense, because there is some problem looming in the future. As the lower mainland grows, the rural and northern parts of British Columbia -- not just the northern parts, but the Kootenays and all those areas -- won't grow nearly as fast. They're going to find their constituencies getting larger and larger, as their population stays steady or increases by a normal percentage growth. Only in the lower mainland do we see this growth so huge.

[1530]

Secondly, the member for Matsqui and I made a presentation in April of 1998 to the Electoral Boundaries Commission right here in Victoria -- as many MLAs did -- and spoke about the need to start looking at the rural part of British Columbia in a different way. Something has to change in our system of electoral boundaries so that we don't beggar those rural regions of British Columbia and so that we don't get so far out of the allotted minus or plus 25 percent.

Something has to change. Something has to be done just a little bit different than what is done today, because I can tell you that if the lower mainland grows as fast as it has in the last ten years -- and I have no reason to believe that it won't -- and the rural part of British Columbia grows or actually decreases in population in some areas. . . . My area, by the way, grew by about 10 percent. That's a fairly steady growth. But it doesn't compete with 30 percent in the lower mainland. So we continue to see less representation from rural B.C.

We made those thoughts known to the commission. Although they didn't have it in their mandate to change around that much, they did have in their mandate the ability to look at special circumstances. Certainly they did. I'm thankful that they did -- that they did look at the special circumstances in a serious way.

The issue, I would say, is that it probably could happen, if I look at what we have now. I went from within the minus 25 percent, if you understand. . . . In the last electoral boundaries change, I was less than 25 percent. Today, with the changes and everything that is in place, I am now the largest. Peace River North and Peace River South are now at 34.2 and 34.4 percent.

I mean, if we see that continue to grow, if we see those numbers continue that way, at some point in time, contrary to what the member for Peace River South and I have asked for many times -- to maintain the two Peace River ridings -- you're going to see an amalgamation of those two ridings. You're going to see some removal of the constituency of Peace River North into Bulkley Valley-Stikine -- as unmanageable as that is -- if we stick with this 25 percent rule. That's obviously what's going to have to take place. The member for Bulkley Valley-Stikine, again, is 32 percent. That constituency is right behind the member for Peace River North and the member for Peace River South.

So when you start looking at that type of geography and taking into account that my constituency is 160,000 square kilometres. . . . To put that in perspective, the Muskwa-Kechika, which comes out of my constituency and is the size of Nova Scotia, is only one-third of it. It's the size of Nova Scotia, New Brunswick, Prince Edward Island and most of Vancouver Island all thrown into one land mass. It's huge. There are not a lot of people that live there, but let me tell you that it's difficult to represent. Again, just like the province of British Columbia, most of the population is at the lower end of the constituency.

[ Page 13557 ]

[1535]

When we got the December 3 report, it showed that what they were going to do was remove Mackenzie, as the member for Peace River South talked about, put it back with some of the Prince George riding and move the boundary of Peace River South -- and Peace River has historically, since 1956, been the boundary -- north onto the city outskirts of Fort St. John. It's not far in distance, but I can tell you there's a whole host of difference between Peace River North and Peace River South. There's no difference to the member for Peace River South, but he will recognize, with me, that there is a huge difference. When the people in Fort St. John found out that they were going to be voting for someone who would very likely live in Dawson Creek, they became very concerned.

So when the commission came back to hear again, after their initial report from the people in Fort St. John, almost the same number of people showed up, and they all brought forward some of the same issues. "We're thankful; we're glad that in your initial report you kept the two ridings, but we are concerned that you have brought the boundary across the Peace River and removed communities that are as close as five miles away." In fact, the line at that time was right along the city boundaries of Fort St. John. It just doesn't make sense for someone who has lived in Fort St. John all their life to think that if they wanted a meeting with their MLA, they would have to drive to Dawson Creek some 50 or 60 miles away to have a meeting.

That's part of what we take umbrage with in the report. But the greater reason that we have problems with the report is: what's going to happen in the future? What's going to happen in the next ten years, after the next census? Are we going to become one constituency instead of two? Many people, although the member for Peace River South said that he encouraged the commission to remove Mackenzie from his constituency and return it to Prince George, where I think that probably those people want it to be. . . .

I don't take umbrage with that. But to move population from the north to the south just to help constituencies around Prince George. . . . To remove that population from my community says something to me. Does that mean that the community interest between Mackenzie and Prince George is more important than the connection between Taylor and Fort St. John? I suggest that I'm not sure. I think Taylor and Fort St. John are much more linked. The people have every right to say that they are disturbed by those changes.

I know that the member for Peace River South will represent those people well -- or could represent those people well. He tells me he's not going to run again. But who knows? You never know what's going to happen in British Columbia politics. He may just do that. I don't take umbrage with that. The member is an excellent MLA and represents his people very well.

But people in Taylor, people in Baldonnel and people in Cecil Lake who access Fort St. John for just about all of their services. . . . I guess it's probably safe to say that the only time they drive through Dawson Creek is if they're visiting a relative or are on their way to Grande Prairie to do some shopping, because it's a bit cheaper in Alberta than it is in British Columbia. Their natural tie has always been with Fort St. John.

[1540]

We now split school districts. Part of the school district I represent that's in Fort St. John will now be in Peace River South. I think there's probably not as great a problem in funding for school districts as there is for health care, simply because you can count the number of students, and it's more or less funded in that fashion.

Electoral boundaries within the regional districts have followed the Peace River. Now we have the member who represents electoral area B, I think it is, living just a little way out of Fort St. John, who will now be in the Dawson Creek electoral area as far as an MLA. I don't know whether that will make a big difference, but to that person it certainly will, because of where she presently lives, where she will continue to do her business and continue to shop.

When I think about moving population from the northeasternmost riding in the province of British Columbia south to help Peace River South, and then taking population from Peace River South and moving it on down to Prince George -- which is a long way south of me -- to help the numbers down there, I don't think it's the right way to go. In fact, if we keep doing those kinds of things, we certainly will end up with some huge, huge problems. It's something we have to look at very seriously.

I take voting against the boundary commission's recommendations on these issues very seriously. In fact, when I was in Fort St. John this last weekend, I met with many of the same people that made representation to the commission twice in a row about these kinds of serious issues. These people are determined. In fact, they're very upset that very likely it will get adopted in this House. I certainly can't vote it down. I can vote against it -- and I have every intention to -- but at the end of the day, the government will probably put it through. This will happen at election time. If you think there's some angry people now, just wait until you start talking to the people in Baldonnel or Two Rivers, saying: "No, I'm sorry. You're voting for the member for Peace River South."

I don't think that will go over that well. That's why I recommended to the commission that they leave Mackenzie where it's at. It was already there in Peace River South. They wouldn't have had to make these changes. But obviously, I

[ Page 13558 ]

I have been told that the people from my constituency, Peace River North, and those who anticipate being in Peace River South feel strongly enough that they might take this to a court challenge. It's not unheard of to have that happen. They could certainly do that. And it's not unheard of that a court could overturn a recommendation made by a commission. In fact, it's happened before.

That's how strongly these people feel about having their boundaries shifted. Initially, the thought of losing an MLA was serious enough that they all came out. Then secondly, when the boundaries were moved from where they have historically been since the mid-fifties, these same people got concerned enough to come forward to me and make those positions known. They have written endless letters. People north of the river have sent numerous letters -- not petitions, because I don't think petitions work -- to the commission, asking them to re-evaluate, to rethink what they've done.

[1545]

As the member for Richmond-Steveston talked about earlier, the Leader of the Opposition has stated that to look at these issues as they relate to urban and rural. . . . And there is an issue there that regardless of who's in government, we have to deal with it. We can't continue down this same path forever, with 25 percent plus or minus, and continue to make exceptions. Soon you'll get to so many exceptions that the court will say: "What are you doing?" At some point in time, we have to look at that.

The Leader of the Opposition has said he would put forward a citizens assembly, which would be great, to hold hearings across the province and find out what we can do and whether there has to be a different formula for urban than there is for rural -- that may be an option -- or whether there should be a greater percentage of deviation in rural ridings than in urban ridings. That may be an option. I don't know.

But once you get out there, you will find out from people how they think some of these things could be changed. I think you can come up with something then that will be acceptable to both urban and rural residents of the province of British Columbia. I can only think that urban people actually support some of what I've said, because the member for Esquimalt-Metchosin, when he made a presentation to the commission, spoke about exactly some of the things I'm talking about -- that is, if we continue this way, there's going to be a huge problem in the province of British Columbia. We should be addressing it in some fashion, and the sooner the better.

With that, I want to put on the record again that I will be voting against the commission's report. I do that very respectfully of Mr. Wood and his commission members, who spent so much time putting this report together. But I'm doing it representing the constituents who elected me to this House, and I think I'm doing that very solemnly and with all reverence for the process. I want to thank you, hon. Speaker, for the time to speak to this motion.

R. Thorpe: I too rise to speak to this very, very serious issue -- an issue that is fundamental to being a British Columbian, fundamental to being a Canadian. That is the right for representation, the right to have a voice, the right to express this voice.

I got involved in political life in British Columbia because I felt that Victoria was not connected to British Columbians, especially not to the constituents that I have the pleasure to represent: Okanagan-Penticton. And my constituents remain concerned, for the most part. Some are pleased.

It's worth noting that I attended every meeting of the Electoral Boundaries Commission in the Okanagan -- the first round, the second round -- and I presented some recommendations in the Douglas Fir Room on March 24, which I'll talk about a little bit later. I wanted to hear my constituents. I was very vocal in the communities, encouraging constituents to get out, to participate, to express their views, to write letters, to do reports -- whatever. It's their province; we just have the privilege of representing them.

[1550]

So on the one hand, I'm happy for the citizens of Peachland. On the other hand, I must stand today to strongly relate the concerns of many of my constituents. It is the almost unanimous consensus among my constituents in and around Summerland and Penticton that the boundaries do not in any way reflect the wishes of my constituents. As I said, besides the electoral boundaries meetings, we held many public meetings throughout the riding, and numerous people -- individuals and groups -- came forward to express their views on the proposed boundary.

You know, I think that in some ways our area is unique, and hopefully, in other ways I think it should be the way British Columbia operates. When everything else fails in our area, people try to apply common sense. For Summerland, West Bench and Sage Mesa to be separated from Penticton makes absolutely no sense. It makes about as much sense as the residents of Keremeos looking toward Merritt, as opposed to Oliver and Osoyoos.

During the second round of hearings in Penticton, the commission heard from some 14 residents and local governments expressing their disappointment with the commission's report. The commission did hear some of the voices, because originally, in the proposed riding of Okanagan-Westside, West Bench, Sage Mesa and Summerland were going to be connected with Peachland, Westbank and all the way up to Fintry just south of Vernon on the west side of the lake -- a riding,

[ Page 13559 ]

The constituents of Westbank and Sage Mesa were successful in having their voices heard on their long historical ties to Penticton. I do appreciate the fact that the commission did recognize that. I think it's important for me to acknowledge that. But what did people say? Let me just very briefly. . . . The interesting thing to me in this whole process was that the municipal government, the regional government and every elected official, no matter what their backgrounds were, were all in agreement. How often does that happen in British Columbia today? It's a rarity. But again, what we try to do is apply common sense when everything else fails.

The city of Penticton, in its presentation of March 8. . . . I just want to make couple of comments. They quoted the commission's first guiding principle: "At first the commission should try to include different jurisdictions in a riding as long as they have a community of interests." The city of Penticton said that the commission's proposal to exclude Summerland, Westbank and Sage Mesa from Okanagan-Penticton, unfortunately, contradicts that very principle.

They went on to say: "Our communities are linked economically with Summerland and the rural area residents either working or operating businesses in Penticton." They went on to say: "Socially, the Penticton and Summerland areas share the same symphony, junior A hockey, festivals, golf courses, skiing facilities and many youth and adult leagues. Summerland is but a 15-minute drive from Penticton. The residents shop, play and work together and consequently maintain a very strong social network."

[1555]

On February 15 the city of Penticton passed a resolution at its council meeting requesting that the Okanagan-Penticton boundaries remain substantially the same. That's from the city of Penticton. Basically, the chamber of commerce in Penticton said the same thing, as did a number of individual citizens. The Summerland Chamber of Commerce made reference, too, to the recently amalgamated Okanagan-Skaha school district -- school district 67 -- just coming together. Now we're going to be split again, in part by having different ridings here. They went on to say: "Other government services provided in Penticton include the regional health centre, the Human Resources office, the Ministry of Transportation and Highways and the regional hospital for major medical procedures."

Another very, very key item for the Okanagan-Penticton area is the Penticton regional airport. It's a major communication link for many Summerland businesses. Of course, Summerland, now proposed to move to Okanagan West, feel that they will have less and less influence in that area.

With respect to the district of Summerland council, I'll just read a couple of quotes here from the mayor in his presentation of March 8: "At the outset let me say that I'm very concerned by your proposal that Summerland be removed from the Penticton-based riding and placed in a Westbank-based riding. For me and many of my constituents it makes no sense, other than the course to make numbers fit." One of the things that we're hearing -- or at least I'm hearing as I travel throughout the riding -- is: whatever happened to it being about people? Whatever happened to it being about families? Why is it just numbers? People are scratching their head and saying: "What is going on in Victoria? Why don't they listen to us?"

"The reality is that Summerland shares many administrative structures with Penticton: the present school board, the same courthouse, the hospital, the same regional district government." The mayor finishes: "I urge the commission to take another look at the Okanagan and put Summerland back with Penticton, its traditional district."

Just to show the unanimous approach. . . . Our federal member for Okanagan-Coquihalla, Jim Hart. . . . I quote from his letter of March 4: "Summerland, Sage Mesa and Westbank share common community and government service interests with Penticton as their focal point. The social, economic and educational ties are much closer to Penticton than that of Westbank to the north and should not be separated from the existing riding of Okanagan-Penticton."

On we go. The regional district is saying the same thing. I'm not going to go through it all, other than to say. . . . I quote from the chair's presentation to the regional district: "I must strongly state that placing the community of Summerland and West Bench of Penticton in the new Okanagan-Westside riding is wrong. The ties between Summerland and Penticton are very strong and historical."

Hon. Speaker, it just goes on and on. People in the riding are not believing that their voices are being heard -- at least, that's the case for the residents of Summerland.

When I had the opportunity to present at the March 8 and March 9 meetings. . . . It's interesting that we had 38 applicants out, I think, and 37 of them spoke in an unanimous voice about what they saw as the Okanagan -- only one dissenter, and that dissenter happened to agree with the Electoral Boundaries Commission.

[1600]

Interjections.

[ Page 13560 ]

This final report does not represent the views of my constituents, especially those located in Summerland. Therefore I will have to vote against this motion, and I'll do that proudly. I'm proud to be a member of a caucus whose leader is committed -- and the caucus is committed -- to reviewing electoral boundaries, reviewing the electoral process and having the citizens do it through a citizens' assembly. I'm proud to be a member of a caucus that's going to operate that way, and I am also very proud to be a member of a caucus that not only talks about free votes but actually has free votes.

So, hon. Speaker, I suppose later today I will vote against this motion on behalf of my constituents in Okanagan-Penticton, especially those in Summerland. I thank you very much for the opportunity to express their views to this House.

J. Cashore: Hon. Speaker, I seek leave to make an introduction.

Leave granted.

J. Cashore: We have with us in the gallery 56 grades 5 and 6 students from Roy Stibbs Elementary School in Coquitlam. They're with their principal, Laura Douthwaite, and their teacher, Stephen Mackenzie, and staff and volunteers. Would the House please join me in making them welcome.

J. Reid: Today we have before us a motion on the Electoral Boundaries Commission report. This report has caused a lot of concern in my constituency of Parksville-Qualicum and presents very real difficulties for that community. The community voiced their concerns quite strongly at the first round of hearings and then once again when the initial report was produced. It's my opportunity today to state those concerns and to bring those difficulties forward to the House.

Parksville-Qualicum is an area that has grown over the years. One of the concerns we have with this report is that the initial presentation before the commission and the report that came out of it suggest that the commission was not aware that Parksville-Qualicum actually operated as one community. They saw it as two separate and distinct communities, and therefore there wouldn't be a problem in drawing that boundary line between the two communities. By the time we were able to make our voices heard in the hearing at Qualicum Beach, the report had already been produced. Other ideas for realigning boundaries on Vancouver Island had already been discarded. All the work that the commission had done up to that point in time. . . . In order to change their decision on Parksville-Qualicum, they would have had to realign all the other boundaries. So as the consideration wasn't there initially, we have suffered because of that.

[1605]

[W. Hartley in the chair.]

In this area, there are also other boundaries that should have been taken into account, and that's the natural boundary of the telephone calling area, which binds Parksville and Qualicum together as one area, and the school district boundary, which also unifies the area. As well, there are the geographic similarities. Parksville-Qualicum is located on the east coast of Vancouver Island, so they're both coastal communities and fairly rural in character -- even for the growth of becoming. . . . Parksville is recognized as a city. But they still retain that rural character, that working together and that communication. The newspapers are shared, and we do have a radio station that is also shared in the communities. The area is known as a high retirement area, so the issues of the area are very similar. The focus of the area, as far as industry goes, has become more and more dependent on tourism, so the economic factors are also shared.

As the communities cooperate and volunteer in such a large number of projects, that community spirit deserves to be supported. Unfortunately, this commission report does not support the incredible feat that has been accomplished of unifying these two communities. The effect of this report is going to be felt in this community of Parksville-Qualicum.

The new boundary becomes Nanaimo-Parksville and Alberni-Qualicum. Effectively, Parksville is impacted less in a sense, because we already have Parksville, Qualicum and North Nanaimo as part of that constituency.

However, the town of Qualicum Beach will now be in with the west coast -- from Tofino, Ucluelet, Port Alberni and right through to Qualicum Beach. It's obvious to everyone that Qualicum Beach has very little in common with what lies on the other side of the mountains. The difficulties of visiting with the MLA, when you're considering a retirement community and a lack of efficient transportation that goes between Qualicum and Port Alberni. . . . We know that there are going to be difficulties for these people.

The other concern is that the larger communities could overshadow the Parksville community and the Qualicum community both, separately, and that the communities of Parksville-Qualicum are going to have to work much harder to make sure that their voice and their identity aren't lost in this boundary change.

[1610]

[ Page 13561 ]

We were asked many times by the Electoral Boundaries Commission what solution we would present. But unfortunately, as I stated earlier, the process had already gone too far to be able to back up and say: "Let's realign all the boundaries. Let's make communities a priority on Vancouver Island." Some communities were given that assurance. Certainly in the report it mentions that the commission didn't want to separate Courtenay from Comox. But the same consideration wasn't given to Parksville-Qualicum.

So it is with regret that I will not be able to support this motion, because I do understand the difficult job that the commission had, and I do uphold the principles that they were working on. But I fear that their initial information was not complete enough to be able to look at other solutions and find other ways of upholding the work that's been done in this community and keeping the community together. I know I represent the voices of my constituents in declaring that I will not be able to support this motion.

K. Krueger: I wish to be on record that, representing my own constituency of Kamloops-North Thompson, I have no quarrel whatsoever with the recommendations of the Electoral Boundaries Commission. I have, however, received requests from people in the communities of Ashcroft and Cache Creek, who have profound concerns about the changes which occurred between the first set of recommendations of the Electoral Boundaries Commission and the final set.

These people were not unhappy with the first set of recommendations. Consequently, they did not make representations to the commission at its second round of hearings. They were utterly astonished when they saw that the final recommendations had moved their two communities of Ashcroft and Cache Creek from the Yale-Lillooet constituency to the Cariboo South constituency, as a recommendation. It certainly feels to them as if they've been somewhat blindsided by the process.

It never occurred to them that they ought to go to the second round of hearings just to voice approval of the recommendations that they had seen written. One can see where people normally wouldn't think that it was a necessary course of action if they are happy with what they saw. They would not speak to the matter and would assume that it is the way things would turn out in the final report. As it turned out, Lillooet's status in the recommendations changed from the first to the final report. Apparently there were changes to compensate for that with regard to the two communities I've mentioned, Ashcroft and Cache Creek.

So I made a commitment to put these concerns on the record. There is considerable consternation in Ashcroft and Cache Creek. They feel much more involved with the former constituency of Yale-Lillooet and the other communities in that constituency. They are tremendously unhappy about having been cut off from it. I think I will conclude my remarks, having made that clear. I know that those people certainly feel left out of the final recommendations and are looking for redress of some kind.

B. Barisoff: I too will be one of the members voting against Motion 65. I must say, first of all, that I admire commissions or people that travel throughout the province and put themselves out to do the kind of work that they have to do in making these decisions. But in saying that, hon. Chair, I have to bring forward from my constituents. . . . In fact, almost the entire elected group of officials from my constituency of Okanagan-Boundary actually put forward recommendations against it.

[1615]

On the second round, every elected body in Okanagan-Boundary put forward comments. With that, I'd just like to start with the eastern section of Christina Lake, with the regional district of Kootenay-Boundary, Area C from Christina Lake, and this is addressed to the Electoral Boundaries Commission. I'll just take out parts of it. The reasons they cite. . . .

"Dear Commissioners:

"I would respectfully request that the commission not alter the boundaries of the present constituency. The reasons I cite are:

"(1) We are more connected with the Okanagan for many things than the West Kootenays.

"(2) We have many smaller centres with common interests and should remain linked to promote those interests. Linking us with larger centres where there are many voters in a block would mean they would get more attention and we less.

"(3) I believe with the new ridings we fall within the guidelines and if larger centres like Kelowna have a problem, please do not penalize us."

This goes on, from the regional district of Kootenay-Boundary again, from the Rock Creek area:

"As regional director for area E of the regional district of Kootenay-Boundary, which, by the way, takes in Big White to the north, the U.S. border to the south, the height of land above Osoyoos to the west and the Eholt to the east, I strongly suggest that you would use some common sense when deliberating this very important issue and leave our provincial electoral boundaries where they are."

As we move along, we find that we are at the city of Grand Forks -- the same kinds of letters. I want to read this one into the record, because I don't find their name mentioned in the electoral boundary book for some reason, but maybe I just overlooked it.

"On behalf of the council for the city of Grand Forks, I would like to thank you for the opportunity to make this brief presentation to the commission. Since the Electoral Boundaries Commission hearing in Grand Forks last August, the city council has had the opportunity to examine the Okanagan-Boundary riding and how Grand Forks fits into it. The city council has taken the position that the Okanagan-Boundary riding should remain intact and, more specifically, that Grand Forks should remain as part of that riding.

"There is a number of compelling reasons for Grand Forks to remain a part of the Okanagan-Boundary riding.

"(1) In 1992-93, 291 Grand Forks residents travelled to the Okanagan for medical services. By 1997-98, 1,066 Grand Forks residents had travelled to the Okanagan for medical services, an increase of over 300 percent in five years.

[ Page 13562 ]

(2) "Out-of-town shopping trends see the vast majority of Grand Forks residents travelling to the Okanagan rather than to the Castlegar, Nelson or Trail areas.

"(3) As you may be aware, last year Tourism B.C. created six superdistricts. The Boundary area had the opportunity to join the new eastern Rockies tourism district or join the western Thompson-Okanagan tourism district. The Boundary Chamber of Commerce and Grand Forks tourism group chose to join the Thompson-Okanagan tourism district, as it was agreed that the Boundary area had much more in common with our western neighbours than our neighbours to the east.

"(4) It is city council's understanding that our riding is underpopulated, that it exceeds the 25 percent threshold. However, the 1996 census exceeds this threshold by only 0.7 percent. In our opinion, this hardly represents a crisis situation that should result in the Boundary area being shifted to a new riding.

"Council for the city of Grand Forks urges you to allow the Boundary region to remain within the Okanagan-Boundary electoral district. We feel that the arguments we have presented to you fully justify our position to maintain the status quo. Thank you again for this opportunity to address the commission.

"Yours truly,
Brian Taylor, Mayor"

[1620]

This carries on to the next town in Okanagan-Boundary, which happens to be the city of Greenwood, which is -- by way of a plug for them -- the smallest city in all of Canada, I think. They too write the same kind of letter, saying that they would prefer to stay with Okanagan-Boundary and that they have more ties with the Okanagan.

This goes on, again, to the corporation of the village of Midway, which. . . . They actually said: "Whereas the Electoral Boundaries Commission has proposed changes to the boundaries of provincial electoral districts. . . ." They've actually made it in the form of a resolution before their council. I think that somewhere down the line, you know. . . . They thought full well that after the second go-round, they would have an opportunity to be heard. They've submitted a letter on their behalf too.

We move to the Okanagan, and we have the same kind of letter from the town of Osoyoos -- from the mayor of Osoyoos. I'll just read one line here. It says: ". . .our riding has had excellent representation firstly through our former MLA, Bill Barlee, the former Minister of Tourism and Culture, and presently through our MLA, Bill Barisoff."

I think that when you look at these things, all of these communities are under the size of 5,000. Then we move on to the town of Oliver. I've got more letters from the town of Oliver, which I'll deal with at a later time. They have also written a letter to the Electoral Boundaries Commission.

We move over into the other section of the community that was taken away, the village of Keremeos. They've actually written a letter to the Electoral Boundaries Commission also, asking for the same kind of indulgence in having something looked at. Then we get to the regional district of Okanagan-Similkameen, and that covers the rest of the entire elected body.

So when I look at the second go-round -- when the commission came through to look at a second go-round -- we've got every elected body in Okanagan-Boundary saying that they feel very strongly that Okanagan-Boundary should stay the same.

I don't think it's that they don't want to be with the other areas. I think it's more that they see it as the rural communities losing out. These are all smaller areas that, as I said, are under 5,000. The biggest community. . . . There are three of them. When you look at Grand Forks, Osoyoos and Oliver and then look at the smaller communities of Greenwood, Midway, Keremeos, Okanagan Falls and Kaleden, they all have something in common. They all have what they think is fair representation -- to be represented.

Again, I'm not saying that. . . . I know it's a difficult job that the Electoral Boundaries Commission does, because to do a balancing act for everybody is pretty difficult. But when I look at every elected body. . . . It's not often that something like that happens, where you get every elected body in a particular area saying that they think that something should stay the same. I think it's important, and that's the biggest reason that I'll be voting against it.

Some members will think: "Well, that's because your riding has been chopped up." Well, we still have the same number of ridings in the Okanagan. It hasn't changed from that perspective. If I look at it from a selfish standpoint, it actually makes it stronger. If I look at the areas where I lost votes or whatever, it's a more positive situation. When you're a member that wins by a mere 27 votes, you probably think of those things as a positive. But I don't look at it from that standpoint, because I think it's more important for the constituents of Okanagan-Boundary to be represented fairly in the overall scheme of things. When I think about all of the councils and regional districts coming forward, I just have to say to myself that somehow we have to look at these things and look at the process, to make sure that all the voices are heard, particularly in the rural areas.

I listened carefully when my colleague the member for Peace River North gave his presentation and the reasons why he would be voting against it. I think that holds true for almost all of the rural MLAs. I think that every rural MLA has to sit back and think to themselves about what is happening with these kinds of things. My colleague mentioned different places in Alberta and Saskatchewan where they're looking at changing the process. That's why I say that I think the Electoral Boundaries Commission did what they had to do within their mandate, but I think that somewhere down the line we have to look at the process of what takes place.

[1625]

There are other concerns that I have. One of them that really disturbed me was that after the Electoral Boundaries

[ Page 13563 ]

I have some concerns with that statement and with the fact that when the mayors of the areas realized that something had happened and that there was going to be a change, they got together and actually made submissions. What bothers me is that there wasn't anything in the electoral boundary book. I think that that's why, when I looked through, I didn't notice anything from the city of Grand Forks, which is probably a major player. That's why I read that letter into the record. It is some concern to me that maybe it was overlooked, because the city of Grand Forks actually is probably the hub of what would happen in the boundary country and where a decision might be made.

What disturbs me more than that -- just another quote here. . . . This is Mr. Gattrell, referring to the mayor: "She also does not know the mandate of the Electoral Boundaries Commission, or she would have kept her trap shut on this issue." When I read that, it gave me great concern. When you get something like that, you begin to wonder what's happening -- when somebody would tell somebody else, in a public fashion, to keep their trap shut. The mayor actually wrote a letter to the member for Vancouver-Hastings. It was addressed to her. I'd just like to read that letter into the record. It's to the Minister of Finance and Corporate Relations:

"Dear. . . .

"Attached is a letter to the editor that appeared in our local paper Wednesday, June 9, 1999.

"For local elected officials, criticisms by Mr. Gattrell generally ensures re-election and are not unwelcome. It is Mr. Gatrell's statement in his official capacity as president of the Okanagan-Boundary NDP constituency and as an executive member of the NDP for the central interior Okanagan that are a major concern to me.

[1630]

"The town of Oliver submitted one of 37 letters against changing electoral boundaries to the commission. Thirty-seven of the 38 submissions were against changes. Mr. Gattrell submitted the one letter supporting the changes. Despite the overwhelming opposition to changes, the commission has recommended that the changes be made. That alone would cause anyone to doubt the process. On top of that, we now have Mr. Gattrell, in his official party capacity, openly criticizing submission to a government commission.

"I think it appropriate that you personally look into this matter.

"Yours truly,
Linda Larson, Mayor"

There are some other concerns that happened, too, that I'm not prepared to bring up. I look at that, and I say to myself that we've got to figure out a process that looks at a lot of cases where I feel very strongly, as a rural representative, that we didn't see. . . . It's not that we didn't see, I guess; it's more a matter that the guidelines that the Electoral Boundaries Commission is governed by don't fit the bill very well for a lot of rural residents. When they get stuck into that box where they can't actually do something -- where they're not able to listen to an entire group of people, like what's happened in Okanagan-Boundary. . . . I think that there's cause for us to say to ourselves that somewhere down the line we've got to look at the process to make sure that electoral boundaries commissions in the future -- or, as we're proposing from this side of the House, a citizens' assembly -- goes around the province and makes sure that we do have equal representation for the entire province -- not necessarily representation by population but representation by the kinds of areas that are needed. I look at what could happen in the Peace River -- in Peace River North and South and Bulkley Valley-Stikine. I look at areas like Okanagan-Boundary and Yale-Lillooet and Rossland-Trail and some of the southern areas that are well underpopulated, as the areas from the north are.

With that, hon. Speaker, I guess there's not a lot that I can do, but I will be voting against this motion. I do feel very strongly that we've got to look at how we can make sure that rural representation in this province is better met. I am voting against it because I disagree with the fact that somehow, somewhere, all of these letters from every elected body in Okanagan-Boundary. . . . I think they were listened to, but somehow they weren't heard. Also, when I looked at it and I look at 38 submissions, 37 went against the recommendations.

I look at what's taken place in Okanagan-Penticton. I'm sure that Oliver and Osoyoos and OK Falls have been with the riding of Penticton before; I'm sure that that will probably work in the future. But I think that, ultimately, what took place when you took the town of Grand Forks and put it with the city of Trail, and you took Oliver and Osoyoos and put them with the city of Penticton. . . . Probably the worst one of all is when you took Lacoste and the Keremeos area -- Hedley, Olalla -- and you put them in with Yale-Lillooet, with Merritt. That's probably the farthest stretch that you could possibly get there, because those areas are actually tied more to the Okanagan.

[1635]

With that, hon. Speaker, I will be voting against it. I just would like to say that the reason I'm voting against it is not simply because I'm against the Electoral Boundaries Commission or what they've done. I admire those people and the jobs that they do, but I think that somehow, somewhere down the

[ Page 13564 ]

Deputy Speaker: Seeing no further speakers, we'll call the vote on the motion.

[The Speaker in the chair.]

Motion 65 approved on the following division:

[1640]

 

NAYS -- 7
Weisbeck	Hawkins	Thorpe
Barisoff	Dalton	J. Reid
	Neufeld

Hon. J. MacPhail: I call Committee of Supply in Committee A. For the information of the members, we'll be debating the estimates of the Ministry of Employment and Investment. In this chamber, I call Committee of the Whole to debate Bill 58.

[1645]

PENSION BENEFITS STANDARDS AMENDMENT ACT, 1999
(continued)

On section 5 (continued).

Hon. D. Lovick: I believe we're on section 31. Before we go to that, we stood down section 5 of the bill on Thursday. We talked about an amendment. Accordingly, I want to table an amendment. I'll give a copy to the Chair and a copy also to the member for Kamloops-North Thompson, if I may.

Perhaps, as I see the bill being delivered to my colleague, I will simply read into the record what it is. The amendment appears in my name.

[SECTION 5 is repealed and the following substituted:

5 Section 10(4)(e) and (f) is repealed and the following substituted:

(d.1) the statement of investment policies and procedures respecting the plan;

(e) the 3 most recent returns filed with the superintendent under section 9(3)(a);

(f) the 2 most recent actuarial valuation reports filed with the superintendent under section 9(3)(b);.]

K. Krueger: It seems to me that a mistake has been made. The amendment reads pretty much exactly. . . . Oh no, it doesn't. Subsection (d) has been deleted from the original wording, and that is indeed acceptable.

[1650]

Section 5 as amended approved.

On section 31 (continued.)

K. Krueger: We had just begun section 31 when we broke off at the end of last week. I had asked the minister for the reference to the Ontario act which, on this issue of deemed 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 British Columbia would not follow suit -- would not take the same approach as the province of Ontario.

Hon. D. Lovick: I'm a bit surprised by the member's question, because my information is that this is indeed consistent with the federal legislation as well as the Ontario legislation. In fact, apparently it is almost identical to the Ontario model, I understand.

K. Krueger: I'm informed differently by the industry. Certainly I'm not an expert on pensions, which is why I would like to have seen an exposure draft of this legislation and a White Paper so that the experts could apply their minds to the legislation. But people tell me that this amendment is something of a double whammy for employers, which may not be effective and may be problematic. It seems to mean that the employer must open a separate bank account. Perhaps the minister could clarify, if that's the case.

Hon. D. Lovick: That is indeed the case.

K. Krueger: Since that is the case, perhaps the minister could clarify why that isn't spelled out.

Hon. D. Lovick: I think it is, in effect, insofar as it requires employers to keep pension contributions separate

[ Page 13565 ]

Finally, as I suggested a moment ago, this section is indeed consistent with other jurisdictions and with recommendations from the pension industry. It's also worth noting -- I think my colleague across the way would appreciate knowing it -- that section 43.1 is the same wording that is recommended by the Association of Canadian Pension Management in their proposed national uniform pension benefits standards act, which the member referred to last Thursday.

K. Krueger: It seems to me, again, that this is a valid example of why it would have been good to apply the government's much-discussed business-lens approach to this legislation. We could have heard the concerns of business as to just how much of a hassle the changes will be for them and just how expensive it would be, and whether they could offer any compromise solutions that would give the government the assurances it's looking for and at the same time not incur unnecessary expense. What will happen as a result of failure to comply with this section? Will there be fines?

Hon. D. Lovick: Well, what would happen here, I suppose, is the same thing that happens in terms of any knowing failure to get in compliance with the act. What occurs first of all is simply that the person would be contacted and told that she or he ought to get in compliance with the act. Moreover, I would just add, while I'm on my feet, that we don't see any additional expense embedded in this particular requirement.

[1655]

Hon. D. Lovick: We don't have the regulations formally drafted. We do have some proposals, and I will certainly share those proposals with the member. I can probably give those to him fairly soon -- tomorrow certainly, if not tonight. I can give him this assurance, as well: those proposals will be a public document. Moreover, we would certainly share what the draft regulations are with everybody interested, as well, so people will have an opportunity to comment.

K. Krueger: I accept those assurances, and that'll be a big improvement on what happened with the introduction of Bill 58.

I think that there are several outstanding matters from our discussion in committee on Thursday. Rather than raise them during section 31, since it's already been quite broken up, I'm going to allow the amendment to pass, but then I will raise them in section 32.

Section 31 approved.

On section 32.

K. Krueger: The minister remarked last week, with reference to Mr. Greg Hurst, that he believed that the consultant -- and he was referring to Mr. Hurst -- was working for the Liberal opposition on this bill. He'd also said he thought that the consultant may have obliged the ACPM to write the letter that it wrote about Bill 58. Mr. Hurst has taken grave exception to that.

I want to put a few things on the record. Mr. Hurst did not write the ACPM, but did provide them with a copy of a briefing that he had provided both to the superintendent of pensions, who is advising the minister in this committee debate, and to the B.C. Liberal opposition. This gentleman is, as far as I've ever been able to ascertain, a pretty much non-political person who is very concerned about Bill 58 -- the lack of a White Paper, the lack of input from the industry. He's done yeoman's service. He has been frank in sharing his opinions with the superintendent and with me.

Everything's he's done for the B.C. Liberal opposition, the official opposition in this Legislature, has been on a pro bono basis -- as, I understand, has been the work that he's done for the superintendent. Mr. Hurst is a member in good standing of the ACPM and has worked with a member of the ACPM's advocacy and government relations committee, which Ms. Van Riesen chairs, on Bill 58. I want to make it very clear that he is not working for the Liberal opposition, while being very upfront about having provided information, advice and expertise both to us and to the superintendent. He adds that the superintendent requested professional advice from him on Friday, June 4, regarding the application of the Income Tax Act to the pension suspension issue, which he also freely provided on a pro bono basis. The minister may not have been aware of all that, and I'd like to give him the opportunity to respond on the record, because Mr. Hurst was quite offended by those comments.

Hon. D. Lovick: I appreciate the member's clarification, and I think that ends the matter.

K. Krueger: The minister also committed, as we were working through the definition section of the bill, to provide HCL statistics to the opposition, and I haven't seen them yet. I wonder if he could provide those now.

Hon. D. Lovick: I can't provide the information the member has requested for reasons that will be clear shortly, but I will indeed explain to him what I endeavoured to do.

[1700]

Clearly some workers will not accumulate -- and we made this point before -- the required 350 hours in each of two years. Indeed I think I stipulated, in answer to a question -- I think it was from the member for Richmond Centre -- that those on the day-labour contracts in all likelihood wouldn't. I give that thorough and, dare I say, fulsome an answer because I want to make it clear that I think the larger questions that the members were raising last time, albeit legiti-

[ Page 13566 ]

I think that what we have done in this bill is. . . . Essentially, the section that I think triggered the discussion had to do simply with the changing of the vesting requirements to make them compatible and consonant with the January 1998 changes -- namely, that individuals didn't vest automatically once they started working for a project. Rather, there was a two-year period -- and that, by the way, was changed from, at one point, a five-year period required. Now it's been refined more specifically, so it's 350 hours per year for two years continuously. In any event, I think I've answered that question. I hope that does indeed provide the explanation the member was searching for.

K. Krueger: Frankly, it doesn't. I don't think the minister or the government should accept for a moment that HCL isn't able to provide those numbers, because those are very key considerations. This is an elaborate union hiring-hall model that has cost a great deal of money to implement. We believe -- and I think it's pretty obvious -- that there's a substantial extra cost to British Columbians to have their infrastructure built through the HCL model. Certainly careful records ought to be kept, and I believe that they must be being kept.

HCL should be able to tell the minister or the opposition, any time we ask, exactly how many people on their projects will or will not get over the threshold for vesting provisions with regard to the pension moneys that are flowing in very large volume out of the public tax base and into the building trades unions' pension funds -- many of which have been reporting substantial unfunded liabilities. I'm going to leave that question open for the time being.

The minister did provide me -- as he had committed to -- with copies of the minutes of the Pension Benefits Standards Advisory Council, and I appreciate that. For the edification of the growing number of people who are very concerned about Bill 58 and its effects on their lives and on the lives of many British Columbians -- all British Columbians, I would argue -- I'm going to speak briefly about the Pension Benefits Standards Advisory Council.

The minister has established this council under section 3 of the Pension Benefits Standards Act. The minister is able to appoint members of the council for a term in office set by the minister. Council members who are not public service employees may be paid remuneration and have expenses reimbursed. Section 3(5) of the Pension Benefits Standards Act sets out the purposes of the council, which are "(a) to provide advice to the minister and the superintendent on the administration of this Act and legislative changes, or on other issues as the minister may require, and (b) to promote awareness of pensions and retirement income planning among employers and employees."

[1705]

Interjection.

K. Krueger: The minister is asking which section we are at. By agreement, we are proceeding with this on section 32, catching up on the things that we had left over from last week.

The makeup of the council is relevant to all of this act, in that the council is the only authority that the minister has consistently referred to as having blessed this act and given him advice. The current members of the council are as follows, as I understand it. There are five union representatives -- they are Harvey Arcand, a trustee with the IWA - forest industry pension plan; Leif Hansen, with the United Food and Commercial Workers; Paul Martin, a staff representative of the BCGEU; Ken Priddle, an administrator with the Teamsters Local 213 pension plan, who is retired, as I understand it; and Wayne Stone, an administrator from the carpentry workers' benefits plan.

The employer representatives are John Cook, who's the superannuation commissioner for the province of B.C.; Karen Harper, the assistant director of the B.C. Teachers Federation; Glen Nymark, manager of employee benefits for MacMillan Bloedel Ltd., who is retired; and Janet O'Connor, who is a compensation and pension adviser with B.C. Rail Ltd. As I pointed out before, only one of those employer representatives comes from a private sector employer. The others are all public sector employer-related and obviously heavily influenced by union considerations.

Finally, there is a group of five people known as industry advisory and service representatives. They are Murray Campbell, a lawyer with Lawson Lundell Lawson and McIntosh; Orla Cousineau, a lawyer who is a principal with William M. Mercer Ltd.; Peter Morse, an actuary who is a principal with Towers Perrin; Brad Spring, who is involved with direct client relations at Royal Trust; and Scott Sweatman, a senior manager for the pension services group and a lawyer with PricewaterhouseCoopers. Mr. Gary Martin, the assistant deputy minister, who's with us today, is an ex officio member.

Now, it's my understanding that only a few of those people were involved in the subcommittee which prepared for Bill 58. A couple more are involved in the subcommittee preparing regulation amendments. Would the minister confirm whether I have the listing correct and whether the facts that I just outlined with regard to a small number of those people being involved in preparing this legislation are accurate?

Hon. D. Lovick: I understand that the entire council was involved in debating the measures of the bill. Indeed, a subcommittee will be charged with developing regulations, but the regulations will then come back to the entire council for acceptance.

K. Krueger: Perhaps I didn't make myself clear. I was referring to the most controversial section of this bill, which we will be coming to shortly and which we've had to reference a number of times already. That is section 48(c). I understand that a relatively small subcommittee of the people whose names I just read off was involved in preparing for section 48.

Hon. D. Lovick: That is not correct. I understand that the entire committee was indeed involved in that section.

K. Krueger: In the minutes dated September 11, 1996, which the minister provided to my office, we see, I believe, the first mention of a definition of multi-employer plans as a high-priority item for amendment. There isn't a lot of discussion

[ Page 13567 ]

Hon. D. Lovick: I am advised that there is no connection with the item the member refers to in the September 11 minutes and the particular section of this bill. There isn't a connection.

K. Krueger: Many of these minutes simply contain updates of legislative progress, or lack thereof, on amendments. The minutes don't provide substantive reporting that would indicate any flavour of opinions or dissent on the key issues in this bill, and we've been unable to find references in the minutes discussing exposure of draft legislation to the industry. Can the minister tell us if there are other minutes, other records, or if he has knowledge of any dissent within the Pension Benefits Standards Advisory Council at any of its meetings, formal or informal, with regard to the provisions of Bill 58?

[1710]

K. Krueger: Would the minister advise whether the superintendent of pensions ever suggested to him that it would be normal practice to put out an exposure draft of this bill or a White Paper. And if so, did the superintendent of pensions or any other adviser to the minister recommend that he do that?

Hon. D. Lovick: There was no recommendation of that sort.

K. Krueger: Minutes of later meetings, after the 1996 meeting I referred to earlier, indicate a growing concern over solvency issues on the part of the Pension Benefits Standards Advisory Council, especially with respect with multi-employer plans. The June 10, 1998, minutes indicate, in item 4, that the branch is "cooperating with the office of the superintendent of financial institutions Canada, (OSFI) on a review of the operating engineers pension plan." The sheet metal workers' court decision is also reported in these minutes. The September 16, 1998, minutes note: "The examination of the operating engineers pension plan is complete, and the report is being drafted. Another examination will be done in November and a third in the spring of 1999."

I had mentioned the last figure that I had for the unfunded deficit of that particular plan in the debate last Thursday in committee. I wonder if the minister could tell us whether these concerns over solvency issues have given rise to the provisions of Bill 58.

Hon. D. Lovick: Absolutely not.

Mr. Chairman, I seek your guidance. I'm struggling mightily at the moment to see that this line of questioning is in any way connected to the particular sections. I have said nothing thus far, because the member quite correctly points out that we agreed that he would have some opportunity to raise some questions he felt he couldn't last week. But I think we're going down a road that seems, frankly, to have very little to do with the particular sections of the bill, especially when we're talking about committee stage of debate.

The Chair: Yes, members, the Chair's been having some problem trying to relate this to the section. Perhaps the member may want to put his questions to the relevant section when we get past section 44.

K. Krueger: That's what I'll do. I'll obviously reserve my right to continue to raise those questions, because I think the issues of who was consulted and just how true the consensus is amongst the Pension Benefits Standards Advisory Council are very valid concerns, and I'm not at all comforted by the answers received thus far in this debate.

Referring specifically to section 32, it's a section that will have quite an impact on many of the service providers, who got no input at all, as I understand it, into the drafting of Bill 58, nor any opportunity to review its many controversial provisions. The proposed amendment, which is an amendment to section 44 of the Pension Benefits Standards Act, expands the obligations of an administrator that are in connection with the investments of a pension plan that are set out in the regulations. Specifically, it includes a provision imposing the standard of care that a reasonable and prudent person would apply in respect to a portfolio of investments made on behalf of another person to whom there is owed a fiduciary duty. This appears to be a developing standard.

In addition, the amendments make it clear that a plan may provide that members may make investment decisions respecting optional ancillary contributions, all contributions to a defined contribution plan and members' additional voluntary contributions. If the plan allows for optional ancillary contributions, it must specify how they are to be invested. So the amendment permits investment direction by members, as I understand it.

[1715]

Hon. D. Lovick: The superintendent advises that she meets regularly with the insurance industry and that the insurance industry will certainly be involved in discussions when we're drafting regulation, more particularly in these particular sections that obviously may well have some special interest to the insurance industry.

Oh, and may I just say, colleague opposite, that I want to correct a point. The member suggested in his opening comment on this particular section that this expands the mandate or the obligations. It doesn't; rather, it clarifies, introduces consistency and so forth. It's not an expansion at all.

K. Krueger: There's an association known as the Canadian Life and Health Insurers Association, and perhaps this is one of the groups the superintendent does meet with regularly. Would the minister confirm that that association will be consulted about the regulations?

Hon. D. Lovick: Yes.

[ Page 13568 ]

Hon. D. Lovick: I'm pleased to do so.

Sections 32 to 34 inclusive approved.

On section 35.

K. Krueger: This section deals with situations where a member or a former member has died. It seems to me to be obvious that there are therefore linkages between this section of Bill 58 and the contemplated Unclaimed Money Act, which the government has been working on for some time, as we understand it. Would the minister please comment on that relationship?

Hon. D. Lovick: There is no connection to the -- I think the member's word -- "contemplated" -- Unclaimed Money Act. There is no relation.

K. Krueger: That's what the Finance ministry told me also, and I can't see how either they or the minister think not. Subsection 50(1)(d) requires notification to certain persons on the windup of a plan if a member or former member has died. The obligation is to give notice to the surviving spouse, designated beneficiary or personal representative of the estate of the deceased "as ascertainable by the administrator."

[1720]

Hon. D. Lovick: The superintendent advises me that it means reasonable effort has been made to determine who the surviving spouse is.

K. Krueger: Would it not be better to require the administrator to give notice to such a person, as is revealed by its records or, if none is revealed, to the last known address of the deceased, perhaps?

Hon. D. Lovick: That is the absolute least that they would do.

K. Krueger: I think it's comforting to people if these things are spelled out. I agree that the standard here should be quite high. Some people anticipate that in amending the Pension Benefits Standards Act, provisions could have been included to deal with unclaimed moneys and that the proposed amendments to the Unclaimed Money Act could be changed to exclude unclaimed funds under pension plans. This hasn't happened. At least these amendments do suggest that it will happen at this time. There are issues on payment out from a pension plan with respect to the lock-in and the fact that on payment out, the payment becomes taxable. Given those facts, would the minister care to reconsider his comment earlier that the two are not related?

Hon. D. Lovick: I'm assured, again, that there isn't a connection -- that the Unclaimed Money Act apparently contemplates dealing with persons who are over the age of 69. When efforts have been made and have been unsuccessful in locating those individuals over that particular age, then the Unclaimed Money Act kicks in, I understand.

K. Krueger: Well, here again, it's obvious to me -- and, hopefully, to the minister by now -- why it would have been beneficial to provide an exposure draft of this bill to the people who spend their lives working on these issues. I have a sense, in asking the minister these questions and in getting these answers, that we're in a situation where it's the blind leading the blind, to some extent.

It seems obvious to people I speak with in the industry that there is a relation between this section and the Unclaimed Money Act and any changes. Those things could have been identified. In our technical briefing, when I asked the senior advisers to the minister about the business lens and so on, I was told that three years of due diligence had been done. Yet in a recent Finance ministry briefing, when I spoke with the woman -- a highly competent person, according to my impressions -- who manages the unclaimed money fund, she seemed to be completely blindsided by my questions, and I don't think she even knew that this act was before the Legislature or that it had any relation to her. Of course, according to the minister, it doesn't, but according to the industry, it does.

I think, therefore, it would have been a very good idea, again, to put these changes before the industry before they were ever enacted. The minister could save himself a lot of time and grief. Perhaps the minister would care to comment on that; if not, we'll take the vote.

Section 35 approved.

On section 36.

K. Krueger: Once again, this section may be very significant. Employers already have obligations in this regard. Under the present act and regulations, where a pension plan with a solvency deficiency is terminated, the employer is only required to make contributions to the pension plan in an amount equal to those that the employer would have made up to the date of the termination of the plan, including the portion of the contributions that would have been made up to that date in respect of the solvency deficiency.

[1725]

This is another area where it would have been healthy to have had the debate in public prior to the legislation being tabled. It is unclear how the payment of the remaining sol-

[ Page 13569 ]

Hon. D. Lovick: I think the member is struggling mightily to try and create a couple of themes and is looking for evidence to support the conclusion he's begun with. I disagree with him. I don't think that the business lens, quite frankly, is germane in this section. Moreover, I don't think the idea of exposure to the bill is germane either.

It seems to me that the sections speak very well for themselves. They're very clear; they're consistent with other jurisdictions. In this instance, we're talking about the federal government; we're talking about the Alberta legislation; we're talking about the Association of Canadian Pension Management, among others. So to suggest that this is some kind of wild card that is falling outside the normal purview of pension legislation is just not the case at all.

K. Krueger: Is it the minister's position, then, that this amendment will not place any greater onus on B.C. employers than exists on employers in other provinces?

Hon. D. Lovick: That's true.

K. Krueger: Well, if it's true, then why would this government be reluctant to do its business in the broad, clear light of day? When acts of this importance come down and people haven't had input and there are provisions in them that are perhaps startling to employers and that give them concern, it has a negative effect on the economy of this province. It's a regrettable approach. I think, once again, that it shows a disrespect for the business community. I know that the minister has received letters from the B.C. Business Council and others over the past week, expressing their profound concerns about Bill 58. It is not yet too late for him to hoist this bill, put these provisions before business and the pension industry and have a look at their input before he presses on. I'd like to offer the minister the opportunity to comment on that proposal.

The Chair: Members, we're dealing with section 36 of the bill. Shall the section pass?

Section 36 approved.

On section 37.

K. Krueger: This is another of those sections which call into question whether this act is really about protecting pensioners, as the minister has repeatedly said. The explanatory notes state that this section "clarifies that there is no right on partial termination of a pension plan to share in surplus assets, but the plan may so provide." On the surface it may seem that this section is intended to correct the possibility that section 53 of the act -- to be renumbered 53(1) in this bill -- may be interpreted to suggest that partial termination of a plan does entitle members of the terminating portion to share in surplus assets. We're concerned that a new section 53(2) may inappropriately disentitle members to share in surplus assets, whereas a court, if not for the provision of this section, might make a determination otherwise. Determining whether "a plan may so provide" could in many cases be a contentious issue which will require resolution in the courts. I would suggest that the right to share in surplus assets should be subject to the arbitration provisions of section 62 of the act. I wonder what the minister's view of that is.

[1730]

Sections 37 to 39 inclusive approved.

On section 40.

K. Krueger: Would the minister please explain the reason for this section and these amendments?

Hon. D. Lovick: The purposes for this section are clarification and consistency. Specifically, this is to clarify that the section applies despite section 48(2) of the Pension Benefits Standards Act. It's being done to eliminate the current inconsistency between sections 48(2) and 58(1) of the Pension Benefits Standards Act.

Sections 40 to 42 inclusive approved.

On section 43.

K. Krueger: This is a very big amendment. The employers may well like this one; the legal community, however, is very split on it. The proposed amendment to this section, section 61 of the existing act, allows an employer -- with the approval of the superintendent, two-thirds of the members of the pension plan, two-thirds of the former members and other prescribed persons -- to propose to members the withdrawal of surplus assets if the employer's entitlement to those assets is not provided for in the plan already. The employer may no longer rely upon the Trust and Settlement Variation Act with respect to withdrawal of surplus assets and must satisfy the formula provided for in this section. This may make it more difficult for employers to withdraw surplus assets where the former employees cannot be located, but it should make it easier where there is a fair but not large number of persons who object.

It seems to me that a two-thirds vote is a reasonable threshold. But here again, it seems to me that people would have had a lot better opportunity to say whether or not they agreed with that if we had had an exposure draft or White Paper. Can the minister advise what consultations were done before this section was drafted and whether anyone beyond the Pension Benefits Standards Advisory Council was involved?

Hon. D. Lovick: I am advised that the measure offered and presented here is consistent with the federal legislation. When they did that major redrafting of federal legislation, there was a very elaborate consultation process that went throughout the community, across the country. Obviously the discussion occurred, in effect, at that point.

As well, the other body, the Association of Canadian Pension Management. . . . This is also part of their proposed uniform act. Their principal claim to fame is that they are indeed the great consultative body, and they are the ones who

[ Page 13570 ]

K. Krueger: Section 43, as we've said, provides new criteria under which employers might access a pension surplus. Pension surplus withdrawals have been one of the thorniest and most contentious issues in the pension industry for the past 15 years or so. Intense pressure can be and has been brought to bear upon plan members to approve a surplus withdrawal proposal. If an employee withholds consent, they may fear reprisal by an employer. This section requires employees to notify the employer of their consent or lack of consent. It seems to me that it would be far preferable, from a labour relations standpoint, for employees to notify an independent third party -- perhaps the superintendent of pensions herself -- on some basis that is blind to the employer. Would the minister comment on that?

[1735]

K. Krueger: Yet there is a problem with this lack of confidentiality for employees who are opposed to the employer gaining access to the funds. Accepting what the minister just said, would it not be better to provide a way to keep people's names confidential -- albeit we would have to have a very reliable go-between? That's why I named the superintendent.

Hon. D. Lovick: The superintendent does indeed have that power. If the superintendent determines that there are concerns -- some who perhaps would express the kind of opinion that the member alludes to -- then she may well say that she requires something like a secret ballot, or something of that sort, to protect those concerns that people express. That does remain the superintendent's call.

K. Krueger: Section 43 and section 48(d), which we'll be getting to shortly, may be related. Looking ahead to that section but still on this section, I wonder if the minister could comment on any relations between sections 43 and 48(d).

Hon. D. Lovick: The member's suggestion of a linkage is too subtle for me. I don't see any.

K. Krueger: Well, the addition of a provision under section 48(d) to permit the split of a pension plan into two or more successor plans could possibly be utilized by a plan sponsored to create a consenting group for surplus access purposes. Similar features of the Ontario pension benefits act allowed Eaton's, for example, to access about $250 million of pension surplus from their plans in 1997. Does the minister think that's a good idea?

Hon. D. Lovick: Again, I don't think there is a clear relationship. It's worth noting, though -- leaping ahead -- that section 48 doesn't give permission to split. It simply establishes what the rules of doing so are. That's an option that rests with the trustees of a plan if they should choose to do so. That's not in the legislation's purview.

Sections 43 and 44 approved.

On section 45.

K. Krueger: This section amends section 62 of the existing act. The proposed amendment to subsection 6 results in removing some statutory discretion from the arbitrator by removing the provision that he or she is not bound by a strict legal interpretation of the matters in dispute. It will be interesting to see what happens where plans include language saying that the arbitrator is not so bound in the plan. Does the removal of this subsection impact on the specific provision in the plan?

Hon. D. Lovick: No, it doesn't. The purpose of this is to lessen the uncertainty by encouraging arbitration as a means of settling disputes.

Sections 45 and 46 approved.

On section 47.

[1740]

Hon. D. Lovick: I think the best way to answer the member's question, given that he obviously wants to. . . . It may well be perfectly legitimate in his mind to hook it to and connect it with the business lens. I just point out this: previously the only action that was available to the superintendent in the event of non-compliance was termination of the plan. That's what this is for -- simply to provide another mechanism, so we can indeed enable the superintendent to issue a direction to a plan or a plan administrator if the plan isn't complying with the legislation. This is necessary and hugely important, obviously, and a considerable improvement over what was there.

Section 47 approved.

On section 48.

The Chair: Shall section 48 pass?

K. Krueger: Not likely, hon. Chair. This, of course, is the real battlefield of this whole act, Bill 58, and an astonishing one it is to many of us.

The armies are drawn up on opposite sides. In British Columbia's devastated economic landscape, pensioners and workers are peeking out from behind shattered trees and

[ Page 13571 ]

I've had people faxing and calling and writing me, who are tremendously concerned. Some people refer to this as claimant-cleansing -- that the NDP is actually cleansing the pension rolls of people they catch having committed the great offence of working to supplement their pensions.

The government has known for some time that the B.C. Liberals have identified the thrust of this section, and so has the public. There are threats to pensions and pension funds in this province. They don't include people who have retired under the contractual provisions of their pension fund and then go out to support those meagre incomes that they draw, in many cases, from those pension funds. They are not a threat.

There are larger threats than any that we've talked about since the debate on Bill 58 began. For example, I think British Columbians were startled recently to read that the projectionists in British Columbia were no longer being supported by their international union. There has been a flurry of correspondence from the United Brotherhood of Carpenters and Joiners of America to the minister -- and I've been copied on that -- saying things like this:

". . .I wish to inform you of a situation within our union that would have far-reaching implications not only to our structure but to democracy as well.

"Our parent union in Washington, D.C. has informed the membership in B.C. -- in excess of 10,000 members -- that a new set of bylaws will be imposed. Some of these new 'laws' will remove the rights for members to vote for ratification of contracts, business representatives, provincial executives, etc.

"Our local sends in excess of $21,000 to our head office in the U.S.A. and, in return, receives a 'glossy magazine' six times a year. That's it, no more. Now we are faced with a threat of 'appointed' trustees to our $200 million pension plan that is presently used to invest in B.C., as well as provide employment for our members by reinvesting in our communities. If they use the practice in the U.S., all pension funds are being handed over to a single administrator in the U.S. This would result in loss of local investment as well as a loss of control and direction of our pension funds to an American agency.

"What we are asking for is protection from an arbitrary takeover by an entity that insists on taking away our democratic rights, a foreign group of people who are dictating to Canadians how we should run our business. We appreciate your prompt attention to this matter before 'corporate America' takes another bite out of our sovereign rights."

[1745]

Section 48, of course, sets out to amend section 74(2) of the Pension Benefits Standards Act. If we were to add to the ability of cabinet to make the regulations in regard to the issues that are being raised by the carpenters, we may well allay their concerns and serve to protect pensioners and pension funds. So I'm going to propose an amendment to section 48(c) that all words after "substituting the following" be struck out and replaced by: "(g) respecting involuntary removal of any individual serving as a member of a board of trustees constituted in accordance with section 7(1)." I'll table that amendment and perhaps give the minister a moment to look at it. I'm not sure why the government wouldn't want to have a provision with respect to reviewing involuntary removal of trustees on boards constituted in accordance with section 7(1). Perhaps we could have the minister's comments.

M. de Jong: I seek leave to make an introduction.

Motion approved.

M. de Jong: I'm pleased that joining us in the gallery today is Ms. Tiffany Poirier, who is a former youth ambassador from my community in Abbotsford. She is now attending university and, for the summer, working here in Victoria. I hope members will make her welcome.

Hon. D. Lovick: I think the amendment is simply out of order. I think it is hardly consonant with what the legislation is doing. It removes a section of the bill in an effort to replace. . . . Sorry. Yes, you have indeed taken something out and replaced it with this, which is clearly a change in the intention and the purpose of our bill. That's beyond the purview of an allowed amendment. That's one point, the technical point.

The second point I would make is simply that the superintendent and indeed the minister have that kind of power right now, in terms of replacing people if they are demonstrably not doing what they should be or are violating the laws of the pension plan. In short, the amendment, as I say, is not acceptable.

[1750]

If the minister wants to reword the amendment, that's fine -- if he finds it out of order. Such a regulation would provide the tools for B.C. Carpenters Union locals and other unions that might be similarly threatened -- and they do feel threatened, obviously, in the correspondence that the minister is receiving -- to protect themselves in respect of their pension plans against the intrusions by parent unions as referenced by Mr. Heisterkamp's letter. So I wonder if the minister would like to rewrite the amendment or consider a different one and deal with those issues.

[ Page 13572 ]

K. Krueger: Well, I think the minister's passing up an opportunity to do something that we could have collaborated on. But let's plunge on into the battle, then. Would the minister explain to British Columbians. . . ?

Interjection.

K. Krueger: Actually, let's have a ruling by the Chair on the amendment.

The Chair: Members may wish to vote on the amendment.

On the amendment.

K. Krueger: I want to talk about the amendment and why it is a more preferable route to proceeding with section 48 -- particularly section 48(c), as the government has drafted and tabled it. This is seen as a vindictive provision, a vindictive amendment, by people all around this great province of ours who have a contract. A pension is a contract. They believed all their lives that they would be able to depend on those pension benefits when they start to receive them and that they'll be in place for the rest of their lives. That is the rule in Canada, and it has been the rule in British Columbia up until now.

Of all the governments to attack that security. . . . People probably thought of British Columbia last, if it even occurred to them that this might happen. But we have an NDP government that campaigned on the slogan: "We're on your side." They deliberately did that so that people would believe that they were talking to them. People were told by this government and the New Democratic Party that it is on their side.

Here we have an issue where a major pension fund, represented by a union that certainly regards itself as a friend of the government, is expressing difficulties, expressing concerns, expressing alarm about the influence of its massive international Big Brother. And the minister has an opportunity to do something about that, instead of attacking pensioners and the rights that they've had, and thought that they'd have all their lives, in British Columbia.

In the minds of many British Columbians, this legislation sets out to punish current workers for going non-union -- I think that's obvious -- and to punish pensioners and retirees. It's certainly not in the pensioners' interest for the cabinet to take this power unto themselves. It doesn't protect pensioners in any way. It is mean-spirited in the extreme. It is part of the piecemeal reintroduction of Bill 44 from the summer of 1997, from which the government abjectly retreated.

[1755]

Interjection.

K. Krueger: If the minister says that that isn't the case, then perhaps he would stand up and tell the House exactly who is driving the legislation that we're seeking to amend with this amendment. Exactly who is responsible for section 48 being drafted in the way that it was? Who are the driving forces?

Noting the time, hon. Chair, perhaps the minister would like to adjourn for the dinner break. I move that the committee rise, report progress and seek leave to meet 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, was granted leave to sit again.

Hon. D. Lovick: With that, I move that the House at its rising stand recessed until 6:35 p.m. and sit thereafter till adjournment.

Motion approved.

The House recessed from 5:59 p.m. to 6:38 p.m.

[The Speaker in the chair]

Hon. D. Lovick: In this House I call committee on Bill 58. And in the other House, I call Committee of Supply estimates of the Ministry of Employment and Investment.

PENSION BENEFITS STANDARDS AMENDMENT ACT, 1999
(continued)

[1840]

Hon. D. Lovick: I think it appropriate that I perhaps make a few comments about just what section 48 is, and I'm going to try to the best of my abilities to resist giving in to temptation and making a very long speech. Believe me, that appeals to me and a part of my nature at the moment. I say that simply because what we are dealing with when we look at section 48 of this particular bill, Bill 58, is an issue that has

[ Page 13573 ]

The short answer to the question is absolutely not. The difficulty -- and I've said this in the Legislature before, and so I say it again with some eagerness -- is that quite frankly, a number of people have been absolutely irresponsible -- indeed, dishonest -- in terms of stating what this bill is and does. Accordingly, we have had comments made that predictably will scare people, will worry them, will concern them about what the legislation does, but alas, the comments made bear little or no resemblance to the reality of the legislation. For instance, my colleagues across the way, when the bill was first introduced, issued a press release in which they said that some 1,000 pension plans would be affected and that everybody who was receiving a pension would be affected directly by this bill. Absolutely, completely not true. They knew it. They had been given a technical briefing by staff, but they nevertheless made that statement publicly. I find that reprehensible.

Similarly, they said that the superintendent of pensions had recommended against the measures presented in the legislation. Absolutely, entirely, totally, completely not true. They'd been briefed, they knew better, but they said so.

They similarly said that anybody who was receiving a pension was affected by this legislation and no individual receiving a retirement pension could ever go back to work or start his or her own business. Again, absolutely, entirely, completely not true. They knew better, they'd been briefed, but they nevertheless said so.

You will understand, then, if I begin my remarks by registering some concerns. It seems to me that what we have done is debase the currency of political debate in this province. We have in fact deliberately and systematically said that which is not true, knowing full well that we were not speaking the truth, and by we, I am referring to my colleagues across the way.

The Chair: I just caution the minister on vocabulary around the honesty and so on of a member.

Hon. D. Lovick: Thank you, Mr. Chairman. I am very mindful of my obligations. Of course if I violate the rules, I would welcome your intervention, because I would not do that.

As I say, the context, then, for my anger is essentially that we have been dealing with, I fear, a campaign that has been to encourage and to foment hysteria, concern, upset, anger and anguish in a number of individuals who are actually and truly believing that somehow this legislation takes away the right of pensioners to ever work and still collect their retirement pension -- that we have somehow done these terrible things to individuals. As I say, I am so offended because that is simply not the case.

Similarly, I am offended because a number of suggestions have been made in the course of the debate talking about the Pension Benefits Standards Advisory Council as if they are somehow a bunch of, frankly, not terribly reputable individuals -- a bunch of hacks working for the highest bidder who will do whatever they are told to do, etc.

[1845]

I am sorry, Mr. Chairman. I am asking the indulgence of the Chair, because I know that in committee stage we ought not, technically, to be talking about any of this. We ought, rather, to be talking about the very specific parts of this particular section of the bill, section 48, which is relatively short, and answering questions about it.

My colleague across the way, however, has already made his speech on the matter; I am making my speech -- my only speech on the matter. Having done that, having said for the record exactly what this section does and does not do, then I think we can restrict ourselves more appropriately to what we ought indeed to be discussing -- namely, the particulars of section 48 -- and answering questions on that.

I want, then, having said that, to simply put on record what this particular section does. I want to start by emphasizing that we are talking here about early retirement. We're not talking about people who have reached retirement age; we're talking about early retirement. We're talking largely about that group of people falling between the ages of maybe 55 and 60. We're not talking about large numbers of people; we're talking, rather, about relatively few.

We're also talking about subsidized retirement. We're talking about individuals who, when they take early retirement, do not qualify for the full entitlement of their pension plan, and therefore what happens is that the pension plan tops it up and improves their pension. In short, they are being subsidized by the pension plan because they take early retirement. It's not a matter of those individuals having somehow earned the right to every nickel of the pension they receive. Rather, it's a subsidized early retirement plan.

The next point to very clearly put on record is that this is about a multi-employer pension plan. There are some 33 plans in the province -- no more; 33 maximum. We believe that in fact only some 16 plans will be directly affected.

What the amendment does is it empowers the trustees of the plan, based on their analysis of the health of a given plan -- one of those 16 plans -- to say: "We have to protect the plan against people who are taking early retirement and who are being subsidized by those who pay into the plan and continue to pay into the plan. But those individuals who are taking the early retirement benefits then go back to work for employers who don't pay into the plan, doing the same work in the same trade." It's about protecting the integrity of the pension plan.

Just for the record, Mr. Chairman, it should be noted that the pension plan exists because the union fought for and got the pension. That's what they did: they negotiated that with the employer. The union, moreover, in this set of instances -- i.e., the 16 plans I'm referring to -- said: "What we will do is make it possible for people to take an early retirement so that we can keep our industry alive by bringing in new people. New individuals will come into our industry, become apprentices and learn the trade. We who are still working in the trade are prepared to subsidize those individuals who take early retirement so that they can in fact go out and take another job,

[ Page 13574 ]

[1850]

It is also the case that there are individuals who say: "Wait a minute. I need the money. I must go back to work; I have no other options. I can't make it." Those individuals have the right to appeal, under this legislation.

What we're looking at doing, in short, is providing an opportunity for the plan to protect itself. It's not about anybody other than those people between the ages of 55 and 60 who are part of those 16 plans at the moment, though conceivably it could be the 33 plans in total in the entire province. That's what the legislation is about. It doesn't take away anybody else's rights. Obviously I would be fighting passionately against it if it were to do so.

I have the unfortunate difficulty of being subjected now to all kinds of accusations about terrible things that are happening. Alas, I have only a voice in this chamber to state what is in fact happening. The Vancouver Sun has written editorials and has had various columnists speak on the subject. They demonstrably don't know what it's about. I have worked very hard. I have written an op-ed piece for the Vancouver Sun and have said: "Please, at least let me explain what it actually is." Thus far, they have refused to print the piece I have given them.

Similarly, my colleague the superintendent of pensions and her colleagues on the council have made an effort to talk to the editorial boards of the three major media outlets in the province. They have said: "We are prepared to meet with you and give you a detailed technical briefing so you will not in fact continue to state that which is not so." So far, each of those three newspapers has rejected the opportunity to have a technical briefing.

As I say, I am only a voice. I'm like the poet who said: "All I have is a voice to undo" -- what the poet referred to as the lie -- "the folded lie." That is a sad commentary. I think that ideally the Legislature ought to be a place where we are bound by a code of conduct. We are not able to say that which is not true; we must indeed say what is true and no more. To be sure, we all tend to hyperbolize; we all overstate the case. That's perhaps the nature of politics, but it seems to me that we ought to abide by our obligation to say that which is real and supportable, rather than make up comments and make up statements about what this legislation is and what it does.

The Chair: Minister, it is important at this point, I think, to inquire as to whether the minister is indeed stating that a member is lying.

Hon. D. Lovick: Mr. Chairman, I have made the point, and I have said so in this chamber, that people have systematically and deliberately misrepresented what the legislation is about. I have said that more than once; I continue to. But, Mr. Chairman, I would not offend against the rules of the chamber, and if I am being told that I do so, then of course I'm happy to withdraw.

The Chair: Thank you, minister.

Hon. D. Lovick: Mr. Chairman, let me summarize. The regulation that we are talking about in section 48 will ensure that multi-employer plans may suspend the benefits of a person who takes early retirement -- only an individual who takes early retirement, only a multi-employer pension plan and only if certain particular and specific conditions are met.

One, the suspension is before the member's normal retirement age. What that means is that the great story we all read in the press about the sheet metal worker. . . . The story that the newspaper headlines talked about was: "They're coming after Mr. So-and-so's pension." The reality is quite the opposite. That individual's pension was protected by this legislation because he was beyond normal retirement age.

C. Hansen: He is now.

Hon. D. Lovick: He was 62 or 63 years old. Indeed, the same is true. . . . The member for Vancouver-Quilchena said: "Yeah, that's now." But the same was true, believe it or not, when this issue came to a head, because he was beyond the normal retirement age, which in the case of that particular pension plan was 60. He was more than 60 at the time the pension trustees attempted to suspend his benefits. If this legislation were in place, they could not have done so. What an irony! This man who was presented as the victim of this legislation was in fact protected by the legislation. Isn't that disgusting? That this case was presented and was absolutely the opposite in terms of its truth value -- that's the shame.

[1855]

Let me just end with these comments. It's worth noting, I think, that prior to 1993 the trustees of the plan had the

[ Page 13575 ]

The reason we had this case regarding the sheet metal worker that went before the Sheet Metal Workers Union is because the member quite rightly said: "What is the legal warrant for suspending benefits?" What happened at that point -- and I'm now answering the member's particular question that he ended with -- is that the trustees and their agent for that particular building trades union in 1995, I think, went to the pension council and said: "Look, here is the argument. We are worried about this plan. We are worried about the integrity of our pension and whether we'll be able to provide services and benefits to our members if we don't take steps to protect ourselves." The council at that time was persuaded by the argument and accepted that yes indeed, they ought to change the legislation so that the trustees of a plan could have an opportunity to protect the integrity of the plan.

[1900]

I am arguing that most of us in this province, surely, would like to believe that workers ought to be given every opportunity to provide for their retirement and to create pension plans that will enable them to function and live a reasonably fulfilled and happy life without having to depend on the public purse and the welfare system. In short, I think the amendments are necessary and desirable. I have no difficulty at all in supporting section 48.

K. Krueger: Well, the red light's been on for a long time. The minister has wandered wherever he chose. I trust I'll be allowed the same latitude as the minister had, hon. Chair, and I thank you for your agreement.

The minister has a problem when he stands up and ki-yis that he's misunderstood and that he's alarmed people. The fact is that he has alarmed people, and they have good reason to be alarmed. Nobody believes him when he offers his assurances, for whatever he thinks they're worth. If this legislation was, as the minister has repeatedly said, all about protecting pensioners, then why was it handled in the way that it was? The minister started off committee debate much the way he started off second reading debate: by saying that this bill is largely technical, largely housekeeping, largely about streamlining and the like. That's what he's been saying throughout, and of course that is manifestly false.

The minister said in his answers in committee debate last week that this is just a little tiny section of the act. I think he said that it's about ten lines. And the minister has just spouted off all sorts of reassurances that aren't in this act. They're nowhere to be seen here. The minister is using all kinds of terms that are neither in the act nor in the act that this act is amending. The fact is that this NDP government is attacking pensioners, their pensions and workers -- anyone, as far as the official opposition and the public are concerned, who has ever thought they had a hope of enjoying pension benefits upon retirement.

When the minister denies that these provisions will be expanded to the 1,000 pension plans that his ministry is responsible for overseeing, I don't believe him, and I don't think anyone in this province believes him. If he would attack these pensioners, why wouldn't he attack all pensioners? We fully expect that that's what he contemplates doing. We fully expect that BCGEU members, for example, are looking over their shoulders right now and thinking: "If this minister will come after our colleagues in the multi-employer plans, maybe he'll redefine us."

The minister's fast and loose with his terms and his definitions. He used the term "normal retirement age" in his diatribe moments ago. I don't find that term in the act; I don't find it in Bill 58. He used the term "identical work." That isn't found in the section that we're debating; it isn't defined anywhere in the act that this bill sets out to amend. He used the term "subsidized." That term isn't found anywhere in the original act that I can see, and it isn't found anywhere in these amendments either. He used the term "greedy" in second reading debate. That's his rationale: he's attacking those greedy pensioners. That's a term he raised.

[1905]

K. Krueger: Hon. Chair, there were members all over this side of the House that heard him loud and clear. He used it several times, and he didn't debate it at the time.

Hon. D. Lovick: Point of order. I am saying that I never used that term. Indeed, if the member does his homework and reads what was said in second reading himself, he'll discover that's not what I said. He didn't even quote me as saying that.

K. Krueger: Hon. Chair. . . .

The Chair: One moment, member. Just a moment, please.

Member, in this House, we take the word of a member. Please continue.

K. Krueger: I'll continue, hon. Chair. Perhaps in this House we do, but everybody outside must wonder why we do.

This bill was snuck in like a thief in the night. This bill came in with reassurances from the minister that it was all about protecting pensions and pensioners -- never a mention of suspension; not one. This bill was never subjected to an exposure draft and was never put out as a White Paper, even though that is the precedent right across this country -- provincial governments, the federal government. When important changes to pension legislation are brought in, exposure bills are done. This government didn't want to subject its nasty little Bill 58 to any exposure bill or any scrutiny by the industry or pensioners.

[ Page 13576 ]

"Taking away the pension rights of an early retiree who finds work in a non-union environment is as fascist as a government can be. In 1959 my young wife and I went door to door in Downsview, Ontario, to help found the NDP. In 1945 her father had the dreaded miner's disease, silicosis of the lungs. It was not recognized as an industrial disease, and he did not qualify for sick pay. A widow's pension was the only contribution that could provide for his family. He drowned himself in the local pond.

"Today she would be distraught at the thought of the party that she had helped to create passing legislation to deprive a family of their pension because they are now employed by a non-union company. As an early retiree, I know the difficulty in finding a position that permits the meaningful completion of one's working career. Accepting only a union company's offer is not a luxury that one can afford. I am distraught that not more public outcry is being generated by this flagrant abuse of government power, and I will do everything I can to stop this action.

"Anthony Lloyd,
Richmond,
Ashamed to be an NDP founding member"

People all over this province are feeling the same way as him. This man clearly understands exactly what Bill 58 and section 48 are all about -- exactly. And there are none of the assurances that the minister was just offering us. I've asked for copies of the draft regulations. I haven't seen them yet. The industry hasn't seen an exposure draft of those regulations either.

The minister continues to sneak around. This bill was introduced for second reading on a Thursday, June 3 -- the minister hoping to avoid public scrutiny as much as possible by introducing it late in the week and hoping that media attention wouldn't be focused on what he was doing over the weekend. It was the same thing with committee debate last Thursday, June 10, but the minister hasn't fooled anybody.

When the minister talks about Suromitra Sanatani and Phil Hochstein and he talks about. . . . Well, he didn't talk about the B.C. Business Council, but I got a copy of their letter to him today, and they're saying the same things. When the minister is hearing the same outcry from everyone in this province, from all of those editorial boards that he's talking about, from all of these business groups and from pensioners and founding members of the NDP, then you would think that for once this minister would humble himself and not even begin to think that people are going to believe what he just said just because he said so.

The fact is that the anguish in this province is the creation of the New Democratic Party in British Columbia, both with regard to this bill and with regard to the shattered economy that leads pensioners to have to go out and subsidize their pathetic little pensions. Because they couldn't get enough work in their union jobs to maintain them, they took early retirement. The minister now disgusts them and disgraces himself by referring to their pensions as subsidized pensions. That term doesn't appear in the legislation either. It's just not there. What is a subsidized pension?

[1910]

Now, the minister says about the editorial boards, as he's said about the opposition: "We offered a technical briefing." Well, big deal. What does a technical briefing accomplish, other than give us more of the same kind of pap and twaddle that the minister just tried to serve up in the Legislature? The fact is that nobody's buying any of it. But the astonishing thing to me is that this appears to be a hill that the NDP are willing to die on in British Columbia. Because they are going to die on it. When they're hearing from people like Anthony Lloyd of Richmond, a founding member of the NDP, is that this time the NDP has gone too far. They should be sitting up and taking notice.

The bill does refer to the term "early retirement." The bill that Bill 58 is amending, the Pension Benefits Standards Act, never even needed to use that term. Why is that? Because nobody was attacking early retirement benefits until now. In fact, many of these people started work young. They may have started work at 17 or 18 and joined a union. They could have paid in for 30 years. Now along comes this minister and this NDP government, attacking their pensions. It is baloney to refer to their pensions as subsidized. They paid into them; it's a contract. They deserve to enjoy those benefits, and they don't deserve to be called greedy by anybody.

The minister referred to having to protect the plan against early retirees. What a colossal insult -- to tell retirees, pensioners, that the government seeks to protect their plans against them. I believe the minister also said that it'll be up to the trustees to determine who is a violator -- that's my term, hon. Chair -- a person that deserves to have his pension suspended. I don't find that anywhere in this amendment either. I certainly don't find it in the original act, because it isn't there. The minister is long on rhetoric but very, very short on detail. How can the minister possibly expect anybody to believe the kind of garbage that he just served up to us?

Section 48(c) of Bill 58 is intended to allow multi-employer pension plans to suspend early retirement pensions paid to workers who return to work or service in their preretirement trade or industry. This is a very significant departure from current law, which permits suspension of a pension only if the pensioner returns to employment under which benefits are accrued under the same plan. The minister should not pretend that this is not a dramatic departure from precedent. The latter provision that I discussed is well-established and is even a requirement of the Income Tax Act, to prevent a form of double-dipping.

Now, the minister has referred publicly to pensioners who go back to work and supplement their pensions as "double-dippers." It's an insulting term, and it's false, because they are doing no such thing -- not like former NDP MLAs and MPs who enjoy pensions and come back to look for

[ Page 13577 ]

Bill 58 is the second legislative attempt to bring in these provisions -- the provisions of section 48(c). The first was contained in Bill 44, introduced in 1997 -- section 15 of Bill 44. It's been reported to us that this item has been on a policy wish list of the union representatives to the Pension Benefits Standards Advisory Council for quite some time. Throughout the course of this debate, the minister has again and again specified that the Pension Benefits Standards Advisory Council approved of the measures of Bill 58 by consensus. But he appointed them, or his NDP predecessor appointed them. We have gone into detail has to how the Pension Benefits Standards Advisory Council is not representative of the industry and in fact is heavily weighted toward union representation.

[1915]

The fact is that this minister, through his ministry, has a responsibility to ensure that pension plans are sound. These pension plans should have been watched all along. The kind of rash investments that have been made in real estate and real estate development should have been challenged long ago. We know that multi-employer pensions are in financial trouble. I read statistics into the record last week. The minister and his officials have admitted that multi-employer building trades union pension plans continue to face financial difficulties.

A draft report was prepared by a prominent Vancouver actuary in 1996 regarding funding of the building trades unions' pension funds, on behalf of an industry association which had commissioned that report. The findings of the report were alarming. When placed into an appropriate context, over half of the 17 building trades pension plans were determined to be at some financial risk. Furthermore, these plans represented almost 75 percent of the defined benefit assets of all the 17 plans studied, and on a combined basis showed funding and solvency assets represented only 89 percent of the value of the benefits promised. I understand that one of those building trades unions' pension plans dipped as low as 35 percent of funding for its liability.

Since that draft report, the interest rates that must be applied to determine pension fund solvency have dropped by almost 3 percent. This can be expected to have a large upward impact on solvency deficiencies.

The government has been making the argument publicly that the multi-employer pension suspension provision of section 48(c) has some precedent. Their justification is that a similar provision exists under the U.S. Employee Retirement Income Security Act -- ERISA -- but it is, as I understand it, without precedent that a government would endorse this approach in Canada. Since when do we follow an American precedent in attacking the rights and security of pensioners and workers? Canadians and British Columbians seldom look to the U.S.A. for examples of how to address social issues. Indeed, we pride ourselves on our plans to support our citizens and our social programs. This is the government which normally decries American labour laws, and yet they bring this in. We regard Canada as a kinder and gentler land, and we want to keep it that way. We want people to know that they have security in their retirement planning and that governments will protect them from improper handling of their pensions on those days when they come to claim them and rely upon them.

The minister has, on alternate days, referred to 33 and 16 multi-employer plans -- referring, I believe, to the building trades unions' plans. Would the minister list for this House the multi-employer plans on which this amendment to legislation is targeted?

[1920]

The Chair: If you could take a seat just for a moment, member. The Chair actually has given a fair amount of leeway over the discussion in the past while. However, I'm sure it's understood that that is now complete, and we can deal with the amendment. The amendment that the member for Kamloops-North Thompson has put forward is actually out of order as it's not relevant to the portion of the section that it seeks to amend. The amendment deals with the removal of trustees rather than members' benefits. So we shall go back to section 48.

K. Krueger: Thank you, hon. Chair. Yes, speaking on the amendment, the amendment. . . .

The Chair: Sorry, member. I just ruled the amendment out of order. Speak on the section.

K. Krueger: All right, hon. Chair. That's what I'll do. I didn't catch that aspect of your comments.

Speaking to section 48, specifically section 48(c), I just asked the minister to list the multi-employer plans. Let us see if the rest of British Columbia is talking about the same 33 plans that the minister says he is. What are these plans?

Hon. D. Lovick: It's probably going to take me some time to do this. Would the member just like a copy, or does he want to use the time of committee for me to read this into the record? You really want me to read this?

Interjection.

Hon. D. Lovick: Oh, I see. This is terribly, terribly serious stuff -- right? Yes, he's looking for a smoking gun, I think, right here.

All right. Here we go, from the top -- and don't ask me why this order: Graphic Communications International Union Local 525-M-105B Pension Plan; Sheet Metal Workers (Local 280) Pension Plan; Marine and Shipbuilders' Pension Plan;

[ Page 13578 ]

K. Krueger: How many workers do those plans cover?

Hon. D. Lovick: My information is that there are 116,395 active members in those plans, and the total number of pensioners at the moment is 36,333.

[1925]

Hon. D. Lovick: I don't have a specific figure, but again I would simply point out that the figure we're capturing here is early retirement, and most pension plans say that the normal retirement age according to their rules is 60. Therefore we're talking about people roughly between the ages of 55 and 60.

K. Krueger: Short on actual numbers again. Can the minister tell us which superannuation plans are currently exempt from the definition of multi-employer plan?

Hon. D. Lovick: For purposes of this legislation, the multi-employer plans are the ones that I've listed -- some 33 in number.

K. Krueger: Well, that may be true for the time being, but let's get on the record whether these plans are going to remain exempt -- or if they are exempt, for that matter -- from the definition of multi-employer plan. The college, the municipal, the public service and the teachers' plans -- are they exempt from the definition of multi-employer plans? If so, will they remain so?

Hon. D. Lovick: Yes, they are exempt, and there is no intention at all of doing anything about those.

K. Krueger: Well, that may be true presently. But even if these plans are exempt and continue to be exempt for the time being, that exemption can be changed by the government without consulting the Legislature, can it not?

Hon. D. Lovick: Well, two points: of course the opposition -- if it were to become government -- could make those changes if it so wanted, and the mechanism could be by regulation. Theoretically, yes, one could change things by regulation.

An Hon. Member: The answer is yes.

K. Krueger: Then the answer, as my colleague said to the minister across the floor, is: yes, the government could remove any exemption and include all of those plans in its definition of multi-employer pension plan -- could it not?

Hon. D. Lovick: That is quite true theoretically, yes.

K. Krueger: If that happened, or when that happens -- if this government chooses to take away that exemption -- then section 48(c) of Bill 58 amending the Pension Benefits Standards Act would automatically apply to all of those pensioners, wouldn't it?

Hon. D. Lovick: We have no intention whatsoever of doing the kinds of things that the member is referring to in his questions.

G. Plant: I followed the last question and answer or two with interest. The question that is, in fact, of interest to me is the ambit of the law that is before us, not the minister's regulatory intentions. The minister's intention may be a matter of interest to him, but it is, in fact, entirely irrelevant to me.

The question that I ask is: what does the law that the minister and the government want us to pass permit the government to do? The minister may change his intentions tomorrow for any number of reasons. Or he may have one set of intentions and then lose the fight someday in the cabinet room. If the minister wants to stand up and say, "That is neither here nor there; I've told you what the government's intentions are and this is what they are," then the question that obviously raises itself is: why has the bill been drafted in a way that doesn't give effect to those intentions?

[1930]

Hon. D. Lovick: Two parts to the answer. Number one is that to all intents and purposes that power already resides with people. The L-G-in-C can do all of those sorts of things.

But second -- and perhaps this will give the member a little bit of comfort -- is that if he looks at the amendment 48(c)(ii), he will note that the particular reference is to a "member who has begun to receive an early retirement pension under a multi-employer plan and restarts work or service in British Columbia in a trade or industry covered by that plan." I think it makes fairly clear that what we're talking about there is a particular trade or industry, essentially, rather than the kinds of plans that were referred to.

[ Page 13579 ]

Hon. D. Lovick: I don't think so.

G. Plant: I understand the first part of the minister's answer. It is: "Don't worry; we already have this power." If the government already has this power, that sort of begs the question: why bring a bill in at all? In particular, why bring in a bill that doesn't seem to confine the power but rather leaves it very broad and open-ended. I'll deal with the second half of the minister's answer in a minute. But if the minister's real defence is, "Oh well, don't worry; we already have the power under regulation," then why is it necessary to have legislation?

Hon. D. Lovick: I think the member, with all due deference, jumped beyond my answer to extrapolate and make it apply to more than I intended it to. What I'm saying essentially is that this bill -- and I've given the reasons why we're introducing this particular section of the bill -- deals with particular kinds of plans and specifically the problem, as perceived by pension plan trustees, of people who take early retirement and then return to the same trade and the same kind of work. That's what the amendment -- this particular section -- is intended to capture. The other part of the member's question, I think, frankly, is more rhetorical than substantive.

G. Plant: I actually was in fact reading back to the minister virtually verbatim what he said. What he said was that the Lieutenant-Governor-in-Council already has the power. I don't think I was inflating the minister's words with rhetoric. I was surprised to hear the minister stand up and say. . . . When I say, "What is the legal ambit of these regulation-making powers?" he stands up and says: "Well, the superintendent already has the power to make the rules," or "The Lieutenant-Governor-in-Council already has the power to make the regulations."

To me, this is leading to the proposition that the power already exists, which makes the question, "Why then have the legislation?" a perfectly legitimate question. It sounds to me like the minister didn't mean to say -- if he did say -- that the power is already there. The minister's position is that it is only because of these amendments that the cabinet will get the power to make the regulations which will have the effects described in here. That surely is the government's position.

[1935]

C. Hansen: The minister kindly sent over a one-page sheet which outlines some of the restrictions that are proposed on the regulations that are put forward. But I think it's rather cold comfort, given that the legislation that is before us doesn't contain those kinds of restrictions. I'm wondering if the minister would agree -- given that it's unlikely that we would get past this section tonight -- to come back with an amendment to this section that would actually incorporate some of these limitations into the legislation that's before us, rather than leaving this blank cheque that is currently before us in the bill.

Hon. D. Lovick: Earlier -- and, I suspect, before the member for Vancouver-Quilchena was in the House, so understandably he may not have heard -- I gave an undertaking in terms of development of regulations that there would be a pretty elaborate consultation process. It seems to me that, having already committed to that, I don't know if one needs to do more. We have said that we would issue the statement of the principles that would guide us and then give people an opportunity for comment on those. Then we would go through the process of developing regulations, again giving people ample and thorough opportunity to respond to those.

So nobody has any desire to do anything that isn't absolutely open and transparent -- to use the current nomenclature. Obviously we aren't. The last thing we want to do is to do anything that may be perceived to be trying to hide something. Quite the contrary -- we want this to be as open and aboveboard as we can possibly make it.

C. Hansen: I just want to go through some of the things that the minister said in his remarks after we resumed after the dinner break. He was talking about the limitations that would be put on as a result of the regulations, which are contained in this one-page document that he sent across the House to us.

First of all, he talks about this: ". . .the suspension is before the member's normal retirement age." That's not what the legislation says. The legislation, the bill that is before us, says this individual "has begun to receive. . . ." Nothing talks about the suspension occurring before the normal retirement age. If you have somebody who is entitled to a normal pension at the age of 60, and they take early retirement at the age of 59, then they have "begun to receive" as is defined in the bill. For the minister to come back and say that this is going to get covered in regulation is cold comfort, I think, to those who are currently receiving early retirement benefits or perhaps are considering that option.

Secondly, when he talks about. . . . My colleague from Kamloops-North Thompson has talked about the provision for subsidized early retirement plans. Again, there's nothing in the bill that says that. So for the minister to stand up in this House and say, "Well, when it comes time to draft the regulations, we're not really going to do this; we're going to define it somewhere differently," is cold comfort. Under this section, he is asking this Legislature to give the minister the power to do whatever he bloody well feels like doing. It's not good enough for him to stand up and say: "Well, we're only going to use it in this narrow, focused area." That's not good enough. I think that the pensioners who are currently receiving benefits and who could be subject to this particular provision want some assurance, in legislation, that that's not going to happen to them.

He says that the work is identical to work covered by the plan. Again, that's not what this says. In fact, I think this one is particularly problematic, because the bill that is before us today talks about somebody returning to work in the trade or the industry. Now, why would you ever have put those words in the bill in the first place if your intention was to say that it was identical to work covered in the plan? That would have

[ Page 13580 ]

[1940]

Before we go on to some of these other areas here, for which I want to get some specific definitions before we leave this section, I would very much like to get the minister's response to this very specific question. He said earlier tonight that this would only apply to work that is identical to work covered by the plan. Why, then, have they worded this particular legislation to say: ". . .restarts work or service in British Columbia in a trade or industry covered by that plan"? Why wasn't the more restrictive language put into the bill in the first place?

[G. Robertson in the chair.]

Hon. D. Lovick: Let me start with the short answer. Trade, as defined in the pension plan, defines it as rigorously as you could want. If you are a pipefitters union and a plumbers union, it says that's what your trade is, and that's in the plan. There's nothing complicated about it. Why the member is desiring to make a speech rather than just ask the question boggles my mind, because it's pretty straightforward.

To his other question -- about early retirement pension -- if he looks at the part of the bill, it says very clearly that early retirement means a pension that is received before pensionable age. That's a definition of early retirement. It's not hidden. It's there, for God's sake. Similarly, in terms of "subsidized," the definition is clear. It says: ". . .has an actuarial present value which is greater than the minimum actuarial present value of a pension as required," etc. That's what defines subsidized, in effect. There's no secret. All the member has to do is read the thing rather than make a speech, and I'll answer his question.

G. Plant: I always like to take the minister up on his offers, although that last one wasn't directed at me. It was an offer along the lines of: "All you have to do is read the thing." So let's do that in respect of the first of the points that the minister made. I'm reading what will amount to subparagraph (g)(ii), which is the language that begins: ". . .the suspension of benefits of a former member who has begun to receive an early retirement pension. . .and restarts work or service in British Columbia in a trade or industry covered by that plan."

Now, the minister wants to read some words into that. The minister wants to read words that say that the member has restarted work or service in the trade which he or she participated in during the time that he or she was a contributing member.

I don't for a moment doubt the minister's desire to read those words into that language, but they're not there. The actual language of the subparagraph is kicked in or triggered by restarting "work or service in British Columbia in a trade or industry covered by that plan." That's any old trade or industry. That could be any trade or industry covered by the plan.

Hon. D. Lovick: By that plan.

G. Plant: It could well be -- absolutely -- by that plan. And if the plan. . . .

The Chair: Excuse me, member. Through the Chair, please.

[1945]

Doing the best I can to be objective about this, I have to say that that language narrows the ambit of the provision in this statute. It is that gap between what this statute opens up as possible and what the minister says his intentions are in terms of regulations which is, frankly, part of the problem. On our side of the House -- not, of course, having the advantage of being privy to the process that the minister will be privy to when he drafts regulations -- we are being asked to give legal authority circumscribed not by the language of the minister's intentions to make regulations but rather by the language of the bill itself.

The longer I look at it, the more I continue to be of the view that the language of the bill in this respect. . . . We could deal with the others seriatim, if that's the way it goes, but this strikes me as being as good a place as any to make the point. The language of the bill is broader than the intention, as I read it, contemplated by the third bullet in the list of proposed regulations.

Maybe I could put it to the minister that way. Does he see the proposed regulation as something that will in fact confine and limit the authority that is conferred by the provisions of subparagraph (g), which we have before us?

Hon. D. Lovick: Yes, the member is quite right. Indeed, that is my understanding, based on my not huge experience of what regulations do. The legislation gives the broad authority. It's almost like a funnel. The law gives us the broader authority, and then the regulations proceed to be more precise and to narrow the focus and make it more specific.

G. Plant: Well, that's not all that regulations do. Quite often, for example, regulations are about the process or the mechanism or the means by which a legislative enactment will be given effect. That is, we are accustomed to seeing regulations that say that someone who wants a licence must apply in

[ Page 13581 ]

Here we have a range of substantive authority created by the provisions that are in the bill. We have a range of potential substantive situations within which the Lieutenant-Governor-in-Council has regulation-making authority. The minister is saying: "Across that spectrum, however wide it may be. . . . It is my intention to choose a narrow band within that range and to regulate only in respect of that narrow band." The range of situations that he says he intends to ask cabinet to regulate, in respect of the kinds of things which a person who is potentially going to be caught in this trap of having taken early retirement and wondering what sorts of employment they can engage in. . . . The minister says: "I'm only going to create rules that will apply to you if the work you propose to do is identical to the work" -- as opposed to perhaps something a bit broader.

[1950]

[T. Stevenson in the chair.]

Hon. D. Lovick: The member's questions are always sufficiently complex that one is reluctant to say yes or no.

I think we are indeed establishing common ground here, in terms of what my vision of the legislation is, what it allows and what the regulatory authority does. I'm very tempted to ask a question of the member -- namely, what is the kind of scenario that he sees will be problematic? It seems to me that what we do here is we say: suspension of benefits if a member goes and does particular work in a particular trade or craft or industry, if you will, covered by that plan. That seems to me -- given the nature of the plan and, moreover, the definition of the trades and those specialized building trades -- to already narrow things quite significantly.

Then what we attempt to do here -- and we've made it a matter of public record -- is to say that these are the kinds of guidelines, if you like, that we bring to that already admittedly rather narrow spectrum to show what it is we have in mind. In other words, the intention, above all, is to say: "These are the very clear rules that will govern the trustees of a plan if they want to try and invoke this particular measure." So there won't be any surprises. Everybody will in fact know what the rules are.

Again, I would come back to the broader, more generic point here. That's essentially what the regulatory authority granted to the L-G-in-C as a matter of course. The member and I could share a number of individual anecdotal experiences looking at particular regulations and what the legislation confers on the Lieutenant-Governor-in-Council in terms of regulatory abilities. Generally speaking, I would venture to say that they're much broader than we have specified in this legislation.

C. Hansen: I'd like to give the minister an opportunity to demonstrate his sincerity on this issue. He's certainly put on the record his interpretation, his limitations as to how this clause will ever be used -- not just while he's minister, but the interpretation that confines the focus, the scope. The one that I think probably best demonstrates the point we on this side of the House are trying to make is this provision that says: ". . .restarts work or service in British Columbia in a trade or industry covered by that plan." The minister has said very clearly throughout this evening and in this document he circulated to us that the regulations will ensure that multi-employer plans may only suspend benefits if. . . . You come down to the third bullet, and it says: ". . .the work is identical to work covered by the plan."

Well, I would like to propose an amendment which I think captures the point the minister is making, in a very small way. Maybe it's a step in that direction. I must say that even if the minister were to agree to this amendment, it doesn't correct the section. The section, I think, still has enormous problems. Certainly it would allow the minister an opportunity to show that his words are sincere. The motion I would like to put is to delete the words "or industry," so that what we'll wind up with is:

[the suspension of benefits of a former member who has begun to receive an early retirement pension under a multi-employer plan and restarts work or service in British Columbia in a trade covered by that plan. . . .]

[1955]

Hon. D. Lovick: I would like to be able to. In the interest of showing that we are all indeed wanting to achieve the same answer and that nobody has any secrets or surprises, I'd love to be able to say yes, indeed. Unfortunately, the amendment that the member presents is, I think, rather more complicated than it might appear at first blush.

I'll see if I can give an example. An individual, for example, who is a member of plumbers and pipefitters union and has a plan that governs their work. . . . If they restrict it to trade -- the plumbing and pipefitting trade -- I'm not sure that will capture what is intended here. The plan may well refer to a number of jobs done by persons in that trade that might be in an industry broader than captured just by using the term "trade." I'm sorry, I'm not sure I'm explaining that very well. But it will make my point, I think, that this is indeed more complicated. . . .

Interjection.

Hon. D. Lovick: No, I'm not sure that is the case. What we're attempting to do. . . . The stated intention of this par-

[ Page 13582 ]

It's a complicated thing, and it's a balancing act. For me to suddenly say that I'm going to change this broad, enabling part of the section. . . . I don't think I can do that. I would have to look much more carefully at the implications. It would seem to me that the member can indeed go on record and achieve the same goal by talking about whether this is my intention in regulation and pinning me down, if you will, to say what the intention is in regulation, without asking me to modify the legislation in a way that, quite frankly, I'm reluctant to -- simply because I'm not sure just what the commitments are that might be made in doing so.

G. Plant: In fact, I want to thank the minister for the sincerity, if you will, of his response. I think he has put the problem on the table. What he has said confirms my belief that the statutory provision is wrong, is problematic. But let me explain now how I get there.

I was taking point 3 on this list of proposed regulations, the words "the work is identical to work covered by the plan. . . ." I was looking at that word "identical." I was trying to give it the force and the effect which, frankly, the minister himself gave it when he was making his introductory remarks after dinner. He spoke very powerfully about that being the intention of these provisions. It may have been my mistake, but I thought that he was, in a sense, saying that notwithstanding the fairly broad language in the statutory provision, the intention of the regulations will be to be more targeted, more specific and more defined, because we're only going to try and capture the very precise work that the member was doing.

[2000]

As I understand my colleague's amendment, it is to amend the statute in a way which corresponds as closely as possible with our reading -- my reading -- of what the minister says he wants to do in the regulations. In effect, it's the opposition saying: "Well, if what you want to do in the regulations is what you say in that point, then you should just have the language 'in a trade covered by that plan,' because that will give the government all that it needs." When the minister stands up and says, "I can't narrow the scope of the statutory provision in the way contemplated by the amendment," I think he's saying that the regulation will not look like what he says it will look like. The regulation will not in fact limit the authority to suspend benefits in the way that's contemplated by this document that we were given. The regulation at the end of the day will be broad, it will be open-ended, and it will in fact encompass work undertaken by a member of the plan anywhere in the trade or the industry -- however broad that may be -- covered by the plan.

In that case, we're back to the drawing board. We understand the provision properly, we've achieved some clarity on what that means. We understand that the proposed regulation is really not going to do what we were originally led to believe that it was going to do, and we need to take the statute as it is, on its terms. If I'm wrong -- if the minister, by this regulation proposal, really does intend to limit the operation of the statutory provision -- then I think the amendment does that. It does that without in any way compromising what the minister says is the intention behind the provision in the bill. I urge the minister to take those comments into consideration and to consider either accepting the amendment now or. . . . If the minister wants to give the matter some thought, we would be happy to stand down the debate on the amendment.

Hon. D. Lovick: Mr. Chairman, I'm going to suggest that perhaps we do indeed stand down that particular amendment and maybe have a very brief recess so that we can chat outside these confines a little bit. The deputy, I think, would like to join that debate. If my colleagues are agreeable, I would suggest maybe a five- or seven-minute recess, and we could perhaps explore that a little bit ex cathedra. If that's agreeable, I move that we recess for a few minutes.

The Chair: We'll recess until 8:15 p.m.

The committee recessed from 8:04 p.m. to 8:14 p.m.

[G. Robertson in the chair.]

C. Hansen: I appreciated the recess that the minister offered and the consultation that we were able to have with his officials. After that consultation, what I would like to do is withdraw the motion that I moved earlier and instead move a different motion.

This motion would be: to delete the words "in a trade or industry" and replace them with "in a trade and industry." I was grateful for the explanation. I understand why this particular amendment might accomplish what we're trying to accomplish and still be consistent, I think, with the objectives that the minister set out as what this particular provision was trying to accomplish. With that, I'll put the amendment on the floor.

[2015]

Amendment approved.

On section 48 as amended.

C. Hansen: Earlier my colleague asked the minister for the 33 multi-employer plans in the province, and I actually did a pretty good job of writing them all down while he was very quickly reading them out. I think I only missed two. He also said that this particular legislation would apply to only 16 of those. I'm wondering if he could tell us which 16 of these would be subject to the provisions of this section.

Hon. D. Lovick: My reference was to the building trades plans.

D. Symons: One of the concerns that has been raised by the minister is the fact that when a pensioner goes back to

[ Page 13583 ]

When they started the job, however, the concept was that the retirement age was 65. Somewhere toward the end of that period of employment, however, for one reason or another, they might be encouraged to leave. But when your employer or the pension plan is accommodating those who might be willing to take early retirement, is there not a rule of reduction that takes place so that your pension will be adjusted and you will not affect the viability of the plan? Is that not done customarily by people who are putting together early retirement pension benefits -- that they are working in the plan to make sure that the viability of the plan is not affected by early retirement?

[W. Hartley in the chair.]

Hon. D. Lovick: What we're talking about here is a process of topping up the adjustments so the person is more likely to be able to accept the early retirement provision. It's a topping up. The term I used before was subsidizing; that's exactly what it is.

D. Symons: Again, the minister says that rather than applying the rule of reduction, you're using a subsidy to the pension. So you're basically encouraging the person to leave by saying: "Rather than reducing your pension because you're going to have more pensionable years of service, we're not going to reduce it by as much, or we might even give you a year's salary" -- something of that sort -- "paid out in pension." So you're subsidizing it.

But would the plan administrators not still be required to determine that any of these subsidies that are given are actuarially sound as far as the plan goes so that you would not be affecting the viability of that plan? Whether it be the rule of reduction or a subsidy, it would be incumbent upon the plan administrators to make sure that the plan is not going to be affected as far as its viability goes. We seem to be correcting a situation, by the way the minister's been speaking, that developed because the trustees of plans have not taken due care to make sure that what they're doing is actuarially sound.

Hon. D. Lovick: I'm not sure I've got the member's question exactly, and if not, I apologize. But let me put it this way. By not being able to suspend, a plan has to protect itself against large numbers taking early retirement and going back to work, in effect. They have to protect themselves. Therefore the actuarial advice they will get is to be very conservative. The intention here, of course, is to set it up in a way to protect the plan, obviously, to its maximum benefit and still give those retirement benefits.

I think I understand the member's question as saying that if they have to do this -- if they have to, in fact, have a provision whereby they might want to suspend -- does that mean that the plan is not as capable of dealing with the claims on it as might otherwise be the case? Is that really what the member is asking?

[2020]

Hon. D. Lovick: And would he like to try it again?

D. Symons: I'm really getting at the point that the plan administrators -- no matter whether it be a reduction or a subsidy that they're giving if somebody's taking early retirement -- have to take due care, as administrators of that plan, to make sure that the plan can accommodate the changes they're making by allowing people to retire early.

Something the minister said in his response, too, that I'll just add to what I said before is the fact that the plan and the ability to take early retirement, I think, is within the means of the people who are operating and administering the plan. Again, I can't simply demand that I take early retirement. There has to be an incentive or an offer made to me to take early retirement. So again, the simple solution, if the minister is saying that too many people are taking early retirement, is: why not cut off early retirement? Why claw back in order to say: "That's the way we'll stop the people from receiving their benefits if they go out and work"? Why not simply say: "The plan cannot afford more people on early retirement"?

Hon. D. Lovick: I think that's exactly what the plans are saying: that if we don't have this ability, then indeed we are going to put in jeopardy -- maybe not right away but down the road -- not so much those already receiving early retirement but rather those coming behind. The broader answer to the question is simply that the early retirement provisions -- for example, for people in sheet metal -- were based on the pre-1993 suspension rules. Without those rules in place, the costs would go up and the ability to fund would go down. That's in fact the driving force for this particular measure.

D. Symons: However, I took an early retirement -- and I'll just use my own case as an example -- a few years back and then found myself in another job in this legislative chamber. My pension isn't threatened -- at least not yet. So I gather that I belong to a multi-employer pension plan, as the teachers' pension plan would be. There are 75 school boards and a few other people that contribute to the teachers' pension. I'm not too convinced that maybe a year from now or two years from now, possibly, you'll come back and bring in one that will affect my plan as well.

When I retired, there was an agreement made. In fact, there was an early retirement incentive given to teachers to move them out at the top end so they could bring new teachers in at the bottom end. They're getting half the pay that the people going out at the top end were. There was a monetary value to getting the people at the top of the scale off and bringing people in at the bottom of the scale. There was an incentive there, but at the same time, there was an agreement made when I retired as to what I would get as a pension.

Basically what you are saying in this act is that you're going to break any agreement that an employee had. I suppose, then, if you want to be fair to those who went out on a given agreement, that you should grandfather those who are currently on pension and not say, as you're saying here, that we can take anybody who's already on pension and hit them. They left with an understanding of the pension they were going to be receiving. You now want to change that understanding. If you want to change the understanding, you should change it for those who are retiring from this point

[ Page 13584 ]

Hon. D. Lovick: The issue of possibility of suspension if one goes back to work in the same trade, if I can use that term, is not news. That's been around before 1993, as well, and everybody was well aware of it.

The analogy more appropriate, I think, was something like a public plan, like a teacher's plan. If the member went back to teaching, at that moment he would no longer collect his pension. Just as if he were an MLA and collecting pension, let's say, like some of those people who retired from this business ten years ago or whatever and were re-elected -- came back, ran again as an MLA and were re-elected -- then he would no longer be collecting that pension. That's the basic rule that governs all multi-employer pension plans. The non-contributory plans are somewhat different, but the same basic principle obtains.

[2025]

I could, however, go to a private school that wasn't on the pension plan and teach. It seems, by your regulations there, that I could end up tutoring, as many teachers do, or substitute teaching. As long as I didn't earn too much while back in the public school system, I could still be receiving my pension. Once I earned over an amount, then there was a reduction in the pension, so I was allowed to earn something. But I knew the rule. When I retired, we were told what that was.

Hon. D. Lovick: You could earn as much as you want.

D. Symons: I could earn as much as I want. But there was a certain point at which the pension would be suspended, until. . . .

Interjection.

D. Symons: From teachers.

The Chair: Through the Chair, please, member.

D. Symons: Well, mine was under that impression, until I reached 65. But anyway, my understanding was, at that time when I retired before 65, that if I had gone back to teaching on a fairly substantial basis, my pension would be stopped at that time and then resume when I left teaching. But I could go into other related things where there was not a plan -- private school or tutoring and so forth -- and that would not affect my pension coming in. I could even get elected as an MLA, and it wouldn't affect my teacher's pension.

I just have concerns that. . . . Again, you see, the rules were there, and I knew what they were. I would be most angry if I were told today: "Well, for some reason or other, we're going to change those rules." If you grandfather them, then I think there's some continuity there in the sense that I was told what the rules were, and they apply to me under those rules. But those coming from now on would retire under the other one.

When you're encouraging people to retire, as seems to be the case with teachers and as it seems to be the case with some of the trades as well. . . . When you encourage people to retire and you say, "These are the conditions; here is the pension you're going to get," it seems wrong to me that at some future date -- today being the day -- you're going to say: "Well, I'm sorry, but you cannot go back to work. It was all right the day before. But from this point on, you can't go back to work, or your pension will be suspended."

Hon. D. Lovick: I'm not sure I can give an answer that will entirely comfort the member across the way. But what I can tell him is simply this: it is absolutely commonplace -- all right? -- in these multi-employer pension plans for suspensions to occur. The difference is that there hasn't been a legal mandate to do so -- which, ironically enough, has caused more difficulty for individuals who took early retirement, simply because they have had no comeback, no required explanation, nothing. In other words, quite arbitrarily they could be suspended. That is indeed a common feature of multi-employer plans, well known across this country -- well known, moreover, across the United States. I think that's the difference: that it isn't a matter of suddenly discovering that the rules had been changed in midstream; rather, that was the norm.

D. Symons: Well, I understand that the courts sort of indicated the opposite of what the minister has just said. I believe the courts indicated that when that was tried. . . . When somebody had his pension suspended, he went to the courts and found that indeed they weren't allowed to do it. That's why we're bringing this act in, I suspect. Basically it was found that this was incorrect.

Just to ask another question -- the minister may want to respond to that too. . . . In section 48(a) it says: ". . .in paragraph (d) by adding "or prescribed retirement income fund." I wonder if you can tell me if the words "prescribed retirement income fund" mean a defined benefit or a defined contribution plan? Or does it mean both of them? Is it inclusive of both types of plans or just the defined benefit plan? You've got RRSP in it, obviously, and I want to know whether the words "prescribed retirement income fund" include a defined-benefit and a contribution plan or just one or the other of those types of plans.

[2030]

C. Hansen: I want to pick up on comments that were made earlier by my colleague from Richmond Centre, and that's this whole issue of the basis upon which people make decisions for early retirement. Earlier the minister was talking about the individual who had been profiled in the news

[ Page 13585 ]

I want to give the minister a very real case of somebody who, no matter how we amend this particular section, is, I guess, the intended target of this section. This is an individual who has worked in one of the building trades unions for many years. I'm not going to tell you which one, because there's a great amount of suspicion out there in terms of the powers to be vindictive, I think, to somebody who perhaps comes to talk to a member of the opposition, in the whole current climate that we're in today. This is an individual who, in his mid-fifties, found that through the hiring hall he was no longer getting the kind of assignments that were necessary for him to basically take care of his family. Here he was in his mid-fifties, after many years in his trade, which he was very good at and very proud of, and he found himself in a situation where he wasn't getting the assignments. The assignments were going to the younger members at the hiring hall. They were the ones who could lift the heavier loads perhaps. They were the ones who were more current in their training. As a result, he found that he had some very real choices to make. He had to sit down and decide how he was going to continue to put food on his table and continue to pay the insurance on his car.

The only choice that he had was to take this option of early retirement. Actually, I know the exact amount of his monthly retirement to the penny, but I also know that that will probably allow somebody in the building trades to figure out exactly who it is I'm talking about. This individual's pension is less than $450 a month, and he still has several years before he would reach normal retirement age. So this is an individual who isn't out there trying to build up a bank account. He's not out there trying to get extra money so he can take trips around the world or something like that. This is an individual who is just trying to survive. This is an individual who realizes that he's got a couple more years that he has to live on this pension of less than $450 a month plus -- and this is the key part -- whatever else he can earn in his trade.

That was a decision that he and his wife made by sitting down and looking at the reality of their situation. Now we have legislation that is basically going to say: "No, we're going to suspend that pension." I think that the unfairness of this is the retroactive nature of it, which my colleague was talking about earlier.

K. Krueger: One of the unfairnesses.

C. Hansen: It's one of the many unfairnesses, as my colleague adds.

But certainly one of the ways that I think the minister could make this particular change a little bit more palatable is to eliminate the retroactivity of it.

So, hon. Chair, I want to propose an amendment. This would be to section 48(c), and it's in line 5. It's the first line of subsection (ii), where it now says: ". . .the suspension of benefits of a former member who has begun to receive an early retirement pension. . . . " My amendment would be to add a comma after "a former member who," and then add "after this section has come into effect."

On the amendment.

[2035]

The purpose of my amendment would be to say that there can be no retroactivity. As unfair as we think this provision is to start with, let's not make it retroactive for people that have already made those decisions. Let's at least only make it apply to those who have to make those decisions in the future, so when they sit down with their spouses and decide how they're going to feed their families in those years, from their mid-fifties until they can qualify for full pension, they can make those decisions from here forward in full knowledge of the implications of this provision -- knowing that they cannot count on outside income or additional income in the trade that they have worked in for so many years. But at least allow them to make those decisions with that full knowledge, rather than having this changed on them retroactively after the fact. I think that's one of the huge, major injustices of the wording as we have it before us today.

Again, hon. Chair, I think this is an opportunity for the minister to make this a little bit more palatable and to bring some humanity and some understanding into what the implications of this section might be.

Hon. D. Lovick: Perhaps if I simply tell the member the facts of the matter, he won't feel quite the same concern about his amendment. This is not retroactive. This is not looking back. None of this will come into effect until (a) the legislation is passed and, then, (b) the regulations are created. So somebody who is currently receiving some pension income from the building trades plan, that she or he -- he, in this case -- belongs to would continue to be able to do that while working in their former trade for somebody who was a non-contributing employer to the plan. Nobody is affecting that until such time as the regulation, as I say, comes into effect.

It's not going back in time, and I think the member's case seems to be that individuals have made these plans and are carrying out their lives, and we're somehow taking that away and going back in time and doing so. No, this is forward-looking. This is prospective, not retrospective.

Also, I would just make the point that the member tells me that the individual's predicament -- even though he worked for a number of years in the trade and was skilled but apparently has not worked very much, given that relatively small pension entitlement he refers to. . . . That would lead me to believe that the individual obviously worked on a number of other jobs and for other kinds of contractors, rather than those that are participants in the plan.

Also, I would note, on the point the member makes about the hiring hall effectively discriminating against somebody because they're in their mid-fifties, that if anything, it's usually the other argument one hears about a hiring hall -- namely, that the seniority provisions are so solid that it's the young guys who never get the opportunity. Indeed, there are too many people at the other end of the age range, and they're the ones that are getting all the work that the hiring hall happens to be apportioning.

[ Page 13586 ]

In any event, as they say, I think I've answered the member's question and why I don't think the amendment, frankly, is necessary.

[2040]

That's the whole point. The provisions of this, as it currently reads, allow an individual who is currently receiving a pension to have those pension benefits suspended. So the purpose of my amendment is to say that it's only people who start a pension in the future, or after this act comes into effect, that could be affected by this. As I say, I still find that repugnant, but at least it's better than what we have today, which is this retroactive provision. The minister's words were some comfort to me, because I would have liked to have seen that in the legislation. To have the minister on record in Hansard, saying that there's no retroactive provision, was perhaps the best we were going to get in terms of an assurance. But then he undermined it by saying "until such time as the regulation comes into effect."

Interjection.

C. Hansen: I'll give the minister an opportunity to clarify, then. The first thing I'd like the minister to do is agree to this amendment so that it's in the legislation that there is no retroactivity. The second-best thing would be for the minister to make an unequivocal commitment that there will be no retroactive provisions to this legislation, either now or after the regulations come into effect.

Hon. D. Lovick: I understand the confusion, and I apologize for my contribution to it. I am not giving the member the assurance he wants. I think what he's asking for, effectively, is that everything that is now happening be, in effect, grandfathered. Anybody who is now collecting will be able to continue to do so. I am not prepared to do that.

Instead, though, what I am telling the member is this. I gave him and his colleagues a copy of the regulations, as we envision them taking shape, and said that all members of the plan would be given notice of the rules. They also have an opportunity to. . . . They'll be told in advance what's happening; they'll have an opportunity to appeal. If, in the case of this individual, the circumstance is such that he is earning a relatively small amount of pension, clearly isn't able to make it, is obviously of an age where he still has an active working life and requires a certain period of time, who's to say that the trustees are going to be absolutely hard-nosed and say: "We don't care if it's one nickel or whatever; you're out of here"? What we do in this is give it to the trustees of a plan and say to them: "You have this power." But it's a power that obviously we hope will be sensitive to the needs of individuals and will indeed give them the opportunity to recognize the individual circumstances of the person.

Finally, I guess I'm very reluctant to offer an amendment to legislation that's based, essentially, on anecdotal evidence and one particular case. That's a practice that I have some difficulty with. But the member's real question, of course, is whether I am willing to look receptively at the notion of grandfathering. The short answer is that I'm not.

G. Plant: I think that the last part of the minister's comment is helpful, at least in terms of understanding his position. I mean, my colleague told a story about a real-life situation not because one case of hardship should constitute the grounds for changing the bill but, rather, to illustrate the predicament. At the very least -- and this would be conceding quite a bit to the government on this one -- in the group of people that I think are being treated extraordinarily unfairly here would be anybody who, last week or last month or last year or a couple of years ago, made a decision to take early retirement and will now find that there's a new ball game that applies to that decision.

[2045]

The minister says that he won't go that far. I think that at the very least, the group of individuals that are most hard done by in what amounts in fact to a form of retroactivity -- even if it may not technically be that -- are all those people who've been taking early retirement and are now going to get caught by these new regulations, which say: "Oh, about that decision you made last month on the basis of a bunch of rules. . . . We've changed the rules; so sorry you made a bad decision. That's what we do in government. We're government; we get to change the rules. We get to do anything we want, and we've decided to put you at risk of this new penalty in the unhappy event that you should be forced to go back to work."

I support the amendment in its totality, but what I can't understand is how the minister can defend the government's interference with the rights of those people who have made those decisions to take early retirement just on the eve of this change to the legislation being introduced.

C. Hansen: The minister talked about changing, based on one anecdotal story, but you know, hon. Chair, I don't believe this is just one anecdotal story. This is a story that applies to hundreds of individuals who have chosen to take early retirement under the building trades pensions. The minister said that the trustees, when they decide whether or not to suspend somebody's pension -- and I think I've got the minister's words right here -- would, hopefully, be sensitive to the individual's needs.

[ Page 13587 ]

The minister talked about individuals having the right to appeal and said that they'd have to be given notice prior to the suspension and would then have an opportunity to appeal this. I would like to ask the minister: who would decide what kind of appeal would be appropriate? Who is it that would hear the appeal? Is it the trustees -- the very individuals that have suspended the individual in the first place? Is there an appeal to the courts? Is there appeal to the Minister of Labour? Or is there appeal to the ruling body of the building trades? Perhaps the minister could enlighten us.

Hon. D. Lovick: On the right of appeal, I understand that an individual could take it to the union, to the trustees and could take it directly, as well, to the superintendent. I think the point that I would like to get on the record, because I have a hunch that we have lost sight of this. . . . This was the legal opinion that came down in the Supreme Court decision, in the sheet metal worker's case -- the one, as we know, that is indeed the animus for this. The judgment said very clearly that plan trustees still have a fiduciary duty to consider whether the suspension is in the best interests of all the members, including the member suspended, under the common law. That's what the trustees' judgment call is.

[2050]

They're saying -- and this indeed was the principal argument that was presented during that court case and subsequently -- that the plan and the trustees of the plan said: "We would love it, obviously, if no individual had to lose his or her rights to collect pension benefits and go on early retirement. That would be wonderful. However, our judgment, as the trustees of the plan, is that we can't allow individuals that luxury without jeopardizing and perhaps destroying the plan." In other words, for the sake of those individuals, we will destroy the rights or the benefits for that collectivity -- that group of individuals.

I'm not asking one to say in absolute terms: "Go ahead, chose sides. Are you on the side of individual rights versus the collectivity?" But I am saying that in fairness, surely we have to acknowledge that there are two sides to the debate. To be sure, the case that the member for Vancouver-Quilchena presents, in terms of the individual who is obviously having a difficult time and is quite legitimately saying: "Look, if all I've got is -- what? -- $400-and-some-odd a month and I'm too young to qualify for full-time Canada Pension or something like that and finding work in something other than my own trade and skill is difficult. . . ." Who the devil wouldn't have sympathy for that? Who wouldn't?

An Hon. Member: You.

Hon. D. Lovick: Nonsense. Come on, member, please. Don't play that silly game.

Interjection.

Hon. D. Lovick: Obviously one has, but by the same token, juxtapose against that the other reality that some workers who are now paying into that pension plan -- trying to make it go -- may well discover that they don't have one in ten, 15 or 20 years from now because too many people were, in fact, taking those early retirement benefits and, whether intentionally or otherwise, were effectively destroying the health of the plan. That's all I'm saying. Please recognize that there are two realities competing.

Mr. Chairman, I see the lateness of the hour and the committee's return. With that, if appropriate, I would move that the committee rise, report progress and ask leave to sit again.

Motion approved.

The House resumed; the Speaker in the chair.

[2055]

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

Hon. J. MacPhail moved adjournment of the House.

Motion approved.

The House adjourned at 8:56 p.m.

PROCEEDINGS IN THE DOUGLAS FIR ROOM

The committee met at 4:51 p.m.

ESTIMATES: MINISTRY OF EMPLOYMENT AND INVESTMENT AND
MINISTRY RESPONSIBLE FOR HOUSING
(continued)

S. Hawkins: When we concluded at the end of the day last week, we were talking about the ministry's business plan.

[ Page 13588 ]

Hon. M. Farnworth: The primary differences are that this plan responds more to some of the problems in Asia and the fact we have softer commodity prices. They weren't part of last year's plan.

I. Chong: Last week we were discussing the business plan in terms of competitiveness, and he did give a quick outline as to what this government refers to. But also, I asked about the economic strategy, and the minister at that time referred to the economic strategy as diversifying into various other industries. I'm wondering whether the minister can provide any more depth as to what an economic strategy would be. Would there be specific programs that the ministry will be looking at in the 1999-2000 year which are different than in past years, given certainly that we've had this Asian economic downturn? Regardless of that, to continue to encourage investment in British Columbia, there certainly may be other strategies that aren't industry-specific but overall in terms of programs. Can the minister provide more clarification on that?

Hon. M. Farnworth: One could expend a great deal of time on this subject, because you can go into as much depth as one wishes to discuss. But primarily. . . . I said before that we dealt with the issue around competitiveness, but we're also looking at it in terms of diversification within British Columbia's economy: how we deal with what's happening in resource communities and how that ties in to our markets. It also ties in to trade agreements -- in particular, for example, the softwood lumber agreement with the United States -- and how we take advantage of the arrangements and agreements that we currently do have, ensuring that British Columbia gets and exercises its full potential under those trading agreements.

Part of the strategy is a focus on value-added. If we have a problem, for example, with the softwood lumber agreement, and part of the challenge for resource-dependent communities is to diversify the wood products sector, is looking at value-added a way that we can put value-added into the resource sector? That also applies, though, to technology. Can we take technology that's either developed here in B.C. or is Canadian technology, for example, and find ways of value-adding to that for export?

[1655]

We also need to take advantage of new, emerging markets -- i.e., South America and, in particular, Mexico. With the free trade agreement in place with Mexico, and then the Canada-Chile Free Trade Agreement, there are opportunities there for British Columbia, and we need to be taking advantage of them. All those fit into a strategy as to how we start to diversify British Columbia's economy or look at ways of ensuring that we can take full advantage of some of the agreements that we have entered into.

I. Chong: I appreciate the minister expanding on that, because those were some questions I had, recognizing that a number of trade missions have occurred over the past year to Chile, Latin America and Mexico -- and we certainly received all the news releases regarding those.

In addition, in the introduction of the business plan it states that the ministry is the lead agency for communicating the government's economic strategy. My question is: if the economic strategy is to have these trade missions, specifically how is the ministry communicating that economic strategy to encourage more investment? I note that on the return of a number of those trade missions, there'll be press releases indicating that a number of contracts were signed, but does the ministry go further in communicating that?

Also, when we get into those areas, will the minister provide us with the performance measurements for those contracts that are signed? Certainly at the time of the trade missions sometimes those who attend do in fact sign contracts. Is there follow-up? Are there successes that we can in fact follow? Are those that are signed and do not come to fruition also reported on?

Also, the minister, in expanding on the economic strategy, didn't speak so much about the summits that have been carried on over the year. I know that the critic will expand on this in her deliberations later on when we do the debates, but the minister didn't expand on communicating the government's economic strategy in terms of the summits that have been held. It would appear that they're very -- I won't say sporadic. . . . Those economic summits seemed to be targeted to specific regions, and the province as a whole wasn't always clear on what was happening.

That's why I raise some questions as to the communication of the economic strategy that this ministry has -- if in fact there is a comprehensive plan of communication for that. Again, targeting certain areas, while perhaps beneficial at the time. . . . Those international or national investors don't always pay attention to summits that are held every few months. If there is a plan to communicate that, then perhaps the minister can also provide us with that information. If so, for the 1999-2000 year, where might we be able to find out the extent of the economic summits that may be envisioned for 1999-2000?

[1700]

Earlier you were talking about how we communicate with people wanting to invest from outside of British Columbia. Part of that is through our overseas strategy. We seem to be slipping into. . . . This is for my critic through the Trade and Investment Office part of our estimates, so if we want to make a note of that, that's fine. The point is that in terms of the

[ Page 13589 ]

In terms of the summits, there we're dealing internally to British Columbia. We're trying to address that, and the issues there are around regional issues and regional problems and regional solutions; so if it's in the Kootenays, the focus is specific to the Kootenays. We're trying to address those particular issues. The communications plan, if you like, or the strategy, is to target those particular areas. Sometimes a change may be of a provincewide nature. At other times a regulatory change or project may be of a specific local nature, in which case we would target that local audience.

An example of both might be the summit in the north. I think it was the John Hart Bridge that was identified as a piece of infrastructure that was critical to Prince George's economic well-being. That's a message that you target in Prince George. You don't need to target that in the Kootenays.

One of the things that came out of the summit in the southern interior, though -- in Kamloops -- was around the issue of the J licences. That's still fairly regional-specific, but while it affects the province as a whole, it does tend to be something that the Okanagan and the interior are concerned about -- more so than, let's say, downtown Vancouver. So that's an example of how we do things. Okay?

S. Hawkins: I was just saying to the minister: the J licence issue isn't new; it's something we've been working on for years. It took the Premier's summit to come closer to home, I guess -- to hear it loud and clear. We're still waiting, so we'll wait for good news on that. I'm sure it's coming shortly.

In the introduction, it also points out that the B.C. Gaming Commission, the gaming policy secretariat and Crown corporations such as B.C. Hydro and the B.C. Housing Management Commission have separate business plans. I'm just wondering what the status of those business plans is and if the minister would commit to letting us review those business plans as well.

Hon. M. Farnworth: I will commit to getting them for you.

I. Chong: I'd like to just move on -- now that we've passed the introduction -- to the mission statement. I'd like the minister to focus on the commentary on the mission statement and the role of the provincial. . . . I'll just read the quote into the record: "The role of the provincial government is to create a positive business and investment climate. . . ." I suppose I'd like the minister to perhaps share with us what he envisions a positive business and investment climate would entail. Here we go -- a chicken in every pot.

Hon. M. Farnworth: I think maybe my critic gave me the answer: a chicken in every pot. That's probably true, because everyone's chicken is different. It depends. If you give everybody what they want, then they're happy. But I think that in general a positive business climate is one where British Columbia is competitive with our neighbours; where we are able to market British Columbia firms abroad; where we're able to take advantage of trade opportunities that are presented to us whereby we are able to put in place initiatives to help and encourage diverse sectors of the economy -- an example would be a value-added strategy; and where we can ensure that British Columbia firms can maximize their potential.

[1705]

What I'd like to know is: within the context of the mission statement and the commentary on the mission statement, why has the issue of lower taxes -- apart from being, perhaps, an ideological difference -- not been part of the Employment and Investment economic strategy? Clearly others are stating this time and time again, and those that would know how to create jobs are imploring this government to hear those calls for lower income taxes.

Hon. M. Farnworth: I guess I'll make a couple of points. First off, in terms of tax policy, that's in the purview of the Ministry of Finance. The Ministry of Finance is responsible for taxation issues. Having said that, in our latest budget we. . . . That's why small business taxes were lowered to be lower than Alberta's. That's why you've seen personal income tax cut on the high marginal tax rate. That will drop to 49.9 percent next year. The fact is that if you earn under $80,000 a year in this province, you pay the second-lowest taxes of any of the provinces. Those things do recognize that. The question of further tax cuts comes in terms of overall budget priorities. Where do we want to spend the money? That gets into the budget debate. Some of the things that we have done over the past couple of years start to address some of those issues that the member is talking about.

I. Chong: Certainly I do recognize that taxation policies exist within the Finance ministry. However, if this is a ministry that has spun off into economic development and into an Employment and Investment ministry, and the ideas of job creation and competitiveness have to exist, then clearly high taxation is an issue that needs to be addressed by this ministry -- even if it is in conflict with the policies set out by the Ministry of Finance. I would suggest to the minister that high taxes do not create a positive business and investment climate. In fact, they create a negative business and investment climate. I'll leave that. I appreciate the minister's comments on that and recognize that we'll have to deal with that through the Ministry of Finance, which we will continue to do.

Before I yield to my colleague the critic, I also want to mention the issue and factor of job creation. I was glad to see

[ Page 13590 ]

I'm wondering if the minister can advise: in so stating within its mission statement, the issue of job creation. . . . How does this ministry track its job creation record? Or does it do anything to track its job creation record?

[1710]

S. Hawkins: Just to go back to the comments that the minister made and the debate he was having with the member for Oak Bay-Gordon Head about creating a positive business environment and investment climate, I think that although they don't have the power to change taxation, this ministry certainly has the influence to change those kinds of policies. This minister knows as well as I do that private investment is portable. It will go where the investors feel confident that they will get a return on their investment. Right now we don't see a lot of private investment coming from outside in this province, because investors don't feel that they're going to get the best bang for their buck. We want to invite those investors in.

I don't see anything in here -- as the previous member pointed out -- on the taxation policies of this government. We have listened to business interests; we have listened to investors' interests. They are going to other jurisdictions that provide fairer taxation policies. I want this minister to comment on what this ministry is doing to influence the Ministry of Finance in restructuring the tax structure so that we do provide a positive message to investors by saying: "You can come in and get the best bang for your buck."

This minister knows as well as I do that taxes such as the corporate capital tax aren't paid by big business -- and it isn't paid by big corporations. It's paid by the taxpayer; it's passed on to the taxpayer. Those businesses -- small businesses, big businesses -- have to pass that on to meet their bottom line. Higher taxes on corporations and taxes on small businesses like the corporate capital tax aren't paid by those big corporations; they are passed on.

I want the minister to comment on all of those kinds of influences and what his ministry is doing to move the Finance minister in the direction of inviting private investment back into this province.

Hon. M. Farnworth: I have a couple of points. In terms of overall tax policy, there's a general discussion in government around budget time on the directions that we want to go. A large measure of that focuses on the economy, and that's why our priority this past year was on small business, in terms of recognition that small business is the engine that drives the economy. As such, we made a dramatic cut in the small business tax rate, taking it to lower than Alberta -- to the lowest in the country, I think. That was a deliberate, conscious effort on the part of government.

Second is to identify sectors within the economy that are growing -- where there is a great deal of interest and opportunity. I'll give some specific examples. In terms of the aerospace industry and air traffic within British Columbia, the fact is that YVR has become an international airport. It is competitively located to be the west coast destination of choice, the entry port into western North America -- certainly the entry point into Canada and increasingly western North America, as it has now outpaced Seattle and is also starting to rival San Francisco, if not overtake it.

We lowered the fuel taxes for the airline industry -- reduced the jet fuel tax. That was an initiative to stimulate investment in the economy. We also focused on other particular areas, such as oil and gas, where we made changes in the past year. The film industry is another one. There have been significant tax reduction changes taking place there.

[1715]

S. Hawkins: I'm very pleased that Vancouver airport, YVR, is doing very well. We see our investors flying out of the province to invest in other places. Our airport is so successful; it's taking our investment dollars out of the province faster -- more flights per day.

Anyway, we'll move to page 2 of the draft business plan. There are a lot of good, positive statements in this plan. But I will move to guiding principles. I wonder if the minister could touch on the first five guiding principles and briefly give me an idea of how the ministry is going to do that. The first one is: "Support a corporate (multi-agency) approach to economic development." If he can give me a few examples in each of the first five and how they're going to move to implement these.

Hon. M. Farnworth: I'm wondering whether I should be keeping my remarks short and brief and to the topic at hand or whether we should be engaging in a more philosophical discussion. That way, if we want to talk about YVR, we can talk about that and how many new airlines are relocating here because of the opportunities that are here and the fact that those 14,000 jobs have gone to 23,000. For example, recently two very wealthy Taiwanese companies. . . . One came in to invest $500 million; another Taiwanese investor was over here just the other day to announce that he's investing a great amount of money.

So we can get into that discussion. But I think the member's question, and what we should be focusing on, is around the guiding principles, which is what we want to talk about right now. In that sense, what we're talking about, in terms of a multi-agency approach. . . . You see, if we agree to keep our discussion to the point, I think we'll be focused. I'm trying to be focused, as I'm sure my critic will try and be focused.

[ Page 13591 ]

I'll give some examples around that. One is working with the Crowns in terms of achieving objectives and working, for example, with the JPC in terms of dealing with specific companies here in British Columbia, where the JPC's interests are working. My ministry ensures that Hydro is cooperating with them, and we try and do things on a cooperative basis. The second is where there's a multi-agency approach where there are different competing, legitimate interests that need to be addressed, both from an economic point of view, for example, and an environmental point of view, let's say, where environmental issues need to be brought into play. For example, one issue is around our ski hills policy -- to try and address those things in a one-stop place so that they're not going to different competing agencies.

Other areas, in terms of working together with the federal government. . . . Well, Team Canada missions are clearly an obvious point there. But second is also to work with our embassies, because in some areas of the world we have a very strong provincial presence, and I think that that's served us well. But there are other areas where it's more advantageous for us to work with, you know, the federal government and the embassy system, and we try and do that.

The second is to try and work in partnership with provincial agencies that are delivering programs and federal government agencies that are delivering programs, to try and ensure some cooperation.

S. Hawkins: Was that sort of a nutshell of the first five guiding principles, or was that just a nutshell of the first guiding principle? The second guiding principle, I believe, was. . . . I'll just go back a minute. I heard the minister talking about working with the feds, working with the Crowns, working with the Job Protection Commission, working with competing legitimate interests such as environmental movements and business interests and whatever. Is there anything in the first guiding principle that talks about working with regions, working with EDCs -- that kind of stuff?

[1720]

S. Hawkins: Just as a follow-up to the regional summits, I believe this government has held a summit in almost every major area of province. I don't recall if there have been any on Vancouver Island yet. Can the minister tell me: will there be follow-up summits? We'll get into the details when we get into the reports from each of the summits. But can he tell me how they plan to do the follow-up for the regional summits, so we know that the plans and the meetings and everything that took place and is well-documented are actually coming to fruition, or that there's some action being taken on the good ideas that local people come up with in the summits?

Hon. M. Farnworth: In terms of future summits, I think the Island hasn't had one yet, or the lower mainland. So I would expect those are potential future summits.

The second, in terms of follow-up summits. . . . Are there plans for follow-up summits? I wouldn't say summits right now, but certainly in terms of follow-up actions from the summits, those do take place through, first, published results and, second, through communications with the committees, in terms of follow-up actions that have taken place. For example, legislation was tabled today that deals with the issue around the J licences. So that would be an action that would then be communicated as a follow-up.

S. Hawkins: I want to move on to situational analysis, then -- the next section. I'm interested. . . . Under "External Environmental Scan," under "Strengths," the first one is "Political stability." I'm just wondering what that means as far as our province is concerned -- whose politics? And what's the definition of political stability there?

Hon. M. Farnworth: This is how B.C. positions itself globally vis-à-vis other political jurisdictions in the global marketplace, and we are a very politically stable province in that sense.

S. Hawkins: Under "Weaknesses," the second one is: "Conflicting community and special interest group lobbying on key issues." I wonder if the minister can give me definitions of what he means by "conflicting community and special interest groups" and who he would put in each. As far as weaknesses as a whole, I don't see in there, unless it's within the second point, the recognition of the differences -- and I think it is a weakness -- in the business summit and chamber issues that have come forward and certainly have sent a message to this government that taxes are high, debt is high, private investment is low, balanced labour legislation is needed. I wonder where that's addressed in this recipe list.

Hon. M. Farnworth: I think if you read further down, under "Challenges," that's where you'll find the issues that you're talking about.

[1725]

We will go to "Challenges," then, because there's a whole list of challenges under here. I don't see under "Challenges," I guess -- and I'm wondering if the minister would care to comment on this -- the performance of the Premier and some of the announcements that have taken place in the last few

[ Page 13592 ]

Hon. M. Farnworth: I'll resist the opportunity to make some sort of wise-ass comment about. . . . But, you know, what we try to do is identify some of the key challenges and issues that need to be addressed within the province, and look at them from a sectoral basis. So frankly, I think the approach and the way that they've been laid out here is in an appropriate format and is something that we're working on. What we do is focus on what British Columbia's strengths are, and we try and address what some of the weaknesses in B.C. are and what the challenges are. You know, your weaknesses can become your strengths. Some of the things that impact British Columbia right now are such things as the Asian economy. Some of the things within British Columbia, for example, that are challenges around red tape, we can address by a concerted effort of government and different ministries.

So those are the things we're trying to do. We look at this in a very positive way, and we move forward in that direction.

B. Penner: To start with, I would agree with part of the minister's characterization of our critic's comments -- at least the first part. I think her observations were wise. I wouldn't go so far as to agree with the minister on the second part of that characterization.

I'd like to take the minister back to the heading "Weaknesses" and, again, the reference to "conflicting community and special interest group lobbying on key issues." I'd like the minister to clarify for us, if he could, exactly what is meant by that. Is that really the government's copout or excuse for not making decisions on difficult issues -- pointing to various groups in the province having conflicting points of view on proposals?

I can think, for example, of the issue revolving around the moratorium on fish farms. We all know that British Columbia needs more jobs. We know that the traditional fishing industry is in decline, and we know that there is tremendous potential for more jobs, investment and tax revenues if the fish farm industry is allowed to expand. British Columbia's share of the world market in the fish farm industry is declining, largely as a result of this government's moratorium on the expansion of fish farming.

We know that the government itself commissioned a report that said an expansion of the industry would not jeopardize the environment, or at least that any risks associated with expanding the fish farm industry were manageable and minimal. Yet this government has continued to dither on the issue of the moratorium on fish farms, and we're still awaiting a decision.

Just a few months ago -- I think it was just before Christmas -- the Minister Responsible for the Public Service said a decision on the moratorium was imminent and would be reached within months. Since then I believe the government has gone back on that commitment, and we're still waiting. I've asked the minister to clarify exactly what is meant in his document by "conflicting community and special interest group lobbying on key issues." It seems to me to be rather convenient to point to that as a weakness, when the government has plenty of information before it and could make a decision if it wanted to.

Hon. M. Farnworth: Well, what this represents and what this recognizes is that we have in this province a diversity of opinion on a number of issues, and those things need to be taken into account. One of the key ones is on environmental issues and, for example, how they relate to parks. There are very strongly held views in this province, and that's a legitimate form of debate. We have very diverse. . . . That's what that means.

In terms of the issue the member raises, the moratorium on salmon farming is an issue that is being addressed by the Ministry of Fisheries. In terms of looking at all the issues that go with that and in terms of questions about when that will be lifted or not, that's best left to him.

[1730]

Whereas tuna has gone in and marketed to the consumer in the United Kingdom. . . . So you get not only tinned tuna but tuna not in oil -- tuna in water, different sources of tuna products. They've targeted tuna to different demographic markets, and those types of things have eroded, for example, salmon's market share in the U.K. What's required is to encourage diversity in terms of marketing of a product such as that. That's one of the challenges, for example, that industry needs to face -- to recognize what our markets overseas want. How do we address that? So I understand your example, and there's a legitimate question around salmon farming and moratoriums. But to say that the problems facing market share are the fault of the province, I think, is erroneous.

Anyway, the issue around conflicting community and special interest groups comes down to, as I said earlier. . . . We have a diverse range of opinion. Those have to be taken into account, because if you want to get good public policy, you don't go one way or the other without trying to address those issues. At the end of the day you may not be able to, and you may have to come down and make a decision. I think that, while that is a weakness in our system, if you like, it's also a strength. At the end of the day, when you have had public policy made that recognizes the different interest groups in this province, that recognizes the competing interests -- whether it's land use or aquaculture or issues around treaty negotiations which come into things -- if those different viewpoints are addressed, then you make good public policy. And that, in the long term, makes for better investment decisions.

B. Penner: Perhaps the minister misinterpreted my remarks. It's a matter of public record that B.C.'s share of farmed salmon in the world market is decreasing. That has to be the case, because we have not opened up any new salmon farms in British Columbia for the last four years, due to the NDP-imposed moratorium on fish farms. Other parts of the

[ Page 13593 ]

I note that in the minister's mission statement for his ministry -- and I'll just read it here again -- it says: "To support economic growth and job creation in all regions of B.C. through promotion of private sector investment." Expansion of aquaculture is a perfect opportunity for the minister to live up to his mission statement of promoting private sector investment -- because that's where the money comes from for fish farms -- and encouraging economic and job growth throughout British Columbia, particularly in hard-hit coastal communities that are hurting from the downturn in the forest industry and a decline in the traditional fishing sector.

What position does the Minister of Employment and Investment take on the issue of the moratorium that has been imposed on fish farms? Is he an advocate in cabinet for job creation and private sector investment, as his mission statement would lead us to believe? Or is he content to see the Ministry of Fisheries continue to dither with respect to the moratorium?

Hon. M. Farnworth: Judging from the member's comments, he would have us go headlong into this just because everywhere else is. The fact is that yes, there's job potential here in aquaculture, and yes, I think it's an industry of the future in this province. But at the same time, we have to be very mindful of some of the challenges and some of the problems that are faced in that industry. It's not one that you just rush into -- okay? We have to make. . . .

Interjection.

The Chair: Member, please, through the Chair.

[1735]

I don't know if you happened to read the Globe and Mail the other day, but there's a full-page article devoted to an issue that's now currently threatening the rainbow trout species in North America. It has now hit Alberta, and it is only a matter of time before it hits British Columbia and wipes out significant local stocks. It's because of a spore parasite that came into North America in the mid-1950s, in a carton of farmed trout from the Netherlands. It may seem inconsequential, but one small packet or one small shipment of farmed trout that was frozen and disposed of improperly released spores into the ecosystem which have basically wiped out native trout populations in the eastern United States. It's now entered Alberta. There's no treatment for it, there's no cure for it, and it's now on its way to British Columbia.

We want to enter into an industry when we are confident that not only have we addressed issues such as whether Atlantic salmon spawn in native streams and whether they infect spawn in native streams. . .and that we're not displacing local species. But at the same time, we want to make sure that the containment systems and waste disposal systems and all the issues around that don't result in us creating significant problems.

Yes, I think the industry has potential in this province. Maybe where we focus is, for example, on shellfish aquaculture and then we move into finfish aquaculture. But we've got to do it when we're convinced that the technology's right and we can answer the questions that the people of this province have asked. They have asked questions like: is it safe? Are you going to threaten the wild stocks? All those things need to be taken into account, and if it means we're proceeding cautiously, then we will proceed cautiously.

B. Penner: Sounds like the minister is content with the pace of deliberations by his colleague the Minister of Fisheries.

Can the minister gives us any other examples of what is meant by "conflicting community and special interest group lobbying on key issues?" What does the minister have in mind when in his document comes up with that kind of a comment under "Weaknesses"?

Hon. M. Farnworth: I can think of two right off the top of my head. One is around forest products and environmental groups in this province that like to go outside the province to Europe and. . . . Even though we have some of the toughest environmental regulations in North America governing the cutting down of timber, they want to go to Europe and try to get European suppliers to not do business with British Columbia firms because they don't harvest timber to the exact specifications that they would. That's an example.

Another example would be around the issue of the oil and gas moratorium. That is an issue where people in the northwest of this province have some very strongly held views, and there is a movement to lift that moratorium. But in other parts of the province there is an equally strongly held view that that moratorium was placed there in the early seventies for a reason and should not be lifted. So there's competition there -- competition around conflicting opinions there -- and those have to be resolved.

S. Hawkins: We'll just move down the list. I see at the bottom of page 3 "Internal Environmental Scan," and there are points under "Strengths." I'm glad to see the points there -- certainly the "willingness to try out new ideas." That's great. Hopefully we'll be able to give the minister a few good ideas through this exercise. He might be willing to try out some of the ideas the opposition puts forward.

Under "Weaknesses," I do have some questions. The first point under "Weaknesses" is: "Lack of regional representation on broad economic development issues." Obviously this is an area that the ministry is wishing to address. I would ask the minister to comment on any plans that they might have to enhance this. If he can just go down the list and give us a few ideas under each one of the points on how they plan to address some of these weaknesses that they've listed.

[1740]

[ Page 13594 ]

In terms of the Asian flu, there are a number of things there. One is to get a better understanding of what's happening in Asia -- to look at some of the changes that they are making in terms of their economies internally.

S. Hawkins: Top of page 4 -- sorry.

Hon. M. Farnworth: Oh, sorry -- I was thinking you wanted the other. . . .

So that's the regional representation issue.

In terms of the budget reductions, what we're trying to do is better utilize the resources that we have, to ensure that there's better cooperation and that interministerial staff are working in the same direction that, for example, our trade desk. . . . We're trying to ensure that there's continued cooperation. We're trying to build links with other agencies, with associations -- for example, working closely, as I said earlier on, with the Manufacturers Association. It's a way of building links with the private sector. For example, I've met with the board of trade on a number of occasions and worked with them. What we're trying to do is ensure that we cooperate with the private sector as much as we can and also watch the number, I guess, in terms of ad hoc. . .making sure that ministries don't do one-offs but that they're working together in trying to ensure that there's a coordinated strategy and that we're all going in the same direction, and resolve issues ahead of time, as opposed to having them in conflict.

Certainly we're trying to ensure that we work as effectively with the resources that we have. . . . I happen to think, for example, that we should have, as a province, a stronger presence abroad -- that we should be placing more emphasis on provincial representation abroad -- because I think there are opportunities that we can maximize there that we can't necessarily get just by working with the federal government or using their embassies. I think it would be fair to say of each province, but certainly this province has special areas that we're focused on. Clearly Asia is one. With the links and the cultural diversity we have in this province, the opportunity should be there for us to have more resources.

S. Hawkins: I think one of my colleagues has a question on the last point. But just to go back to point No. 3: "Links to private sector and other ministries/agencies have to be rebuilt." If the minister would comment on what kinds of links and what fell apart that has to be rebuilt.

A Voice: Who broke it?

S. Hawkins: Yeah -- and who broke it?

Hon. M. Farnworth: Basically what we're talking about is that we don't have the budget that we used to have. So in order to have the programs that we used to have, we're not able to deliver in the same way. We're not able to maintain the same types of programs and some of the links and relationships that we did when we had a larger budget. What we have to do is refocus the resources that we do have and prioritize those links and work, in some cases, at re-establishing them -- but, in others, at redirecting and refocusing them. In some cases it might be taking an umbrella approach, as opposed to a specific approach with you and you and you. We try and do that through a more umbrella approach, where we bring different groups together.

S. Hawkins: I'm sensitive to the fact that this is a draft plan, and a lot of the meat hasn't been put around the bones. I'll put the minister on notice that next year we'll probably be going back to the plan to see what kinds of measurables were put in place, because I don't see a lot of measurables. I see them here and there in the plan. It's a start -- that's how I am taking this draft. Some of the questions we're highlighting this year, I'm sure we'll be getting back to next year when we stand up in budget estimates to see what kinds of things were done, what objectives were put under some of these points and how the ministry is planning to set targets and measurables to see if these are actually accomplished.

I know that one of my colleagues has a question, so I will defer to him.

[1745]

Before I sit down, I'd like to applaud the minister for coming up with a draft business plan and making it available for all members of the House to have input on. I think it's a useful exercise.

Hon. M. Farnworth: We've had to make some tough budget decisions, and those decisions included closing some of the trade offices -- or reorganizing them. Those decisions were taken a number of years ago. What I'm saying as minister is: in a perfect world, if you ask me where I would like to focus some resources, that's where I'd like to focus some resources. We do have some opportunities that we should be taking advantage of and have the potential to take advantage of. We have relied on our embassies to do that, and that's the role of the embassies. But what I'm saying is that I think there are key areas in the world that British Columbia as a province should focus on. Clearly some of those have been in Asia, and we focus on them. I think we need to do more.

I said it last year, and I'll say it this year: we have spent a great deal of time on Asia. I think that sometimes that has

[ Page 13595 ]

The Chair: The member continues.

B. Penner: Actually not. I'll pursue this matter at greater length later.

The Chair: Noting the time, member, I recognize the member for Oak Bay-Gordon Head.

I. Chong: I'll be brief. If the minister is focused on this, we can have this wrapped up and move on to the other sections when we convene after supper.

The second bullet on the weaknesses, where it implies budget reductions have cut MEI's toolkit and research capabilities. . . . My concern is that what we saw happening in other ministries -- and in particular, for example, the Ministry of Environment, Lands and Parks, where a reduction in budgets. . .where staff actually were reduced, creating a backlog of applications. . .or investment opportunities were hindered and, in fact, lost for British Columbia. . . . I'm wondering if this indication of a weakness is also going to create lost investment opportunities for British Columbia. Is this how the ministry is addressing a possible concern that, as a result of those budget reductions -- as a result of a reduction in staff -- there may also be lost opportunities? Is he trying to forewarn us about something? Perhaps the minister can comment on that.

[1750]

I. Chong: I thank the minister for clarifying that, because it is important to have that on the record.

I just want to make a quick comment about what the critics addressed earlier about this being a draft plan. I too am grateful for it. But I also want to just note for the record that although this is a draft business plan, it actually is not independent of the estimates for the year 1999-2000, because I would think that your business plan would, in effect, be developed in conjunction with your estimates. That's what your spending is going to be geared towards, so your business plan in fact would have to entail that. Even though it is a draft plan, and we appreciate receiving it, I would hope that in the future we would receive it a little bit earlier.

With that, I will defer to the critic.

S. Hawkins: I would just say to the minister that I think we will suspend the discussion of the business plan at this point. We're going to break very soon, and just. . . . After supper, I think the member for Fort Langley-Aldergrove will do the Housing section, and then we will continue with the business plan -- starting with strategic priorities, if that's agreeable.

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

Motion approved.

The committee rose at 5:52 p.m.

The committee met at 6:42 p.m.

[E. Walsh in the chair.]

ESTIMATES: MINISTRY OF EMPLOYMENT AND INVESTMENT AND
MINISTRY RESPONSIBLE FOR HOUSING
(continued)

R. Coleman: This evening we have the distinct pleasure of going through the Housing portion of the minister's portfolio with two -- I'll call them relatively capable -- individuals who I've had an association with over the years, along with the minister.

I want to make a couple of opening comments, first of all, and that is that I go back when the minister and I did debates in Housing when he was Minister of Municipal Affairs and Housing a number of years ago. I stated at that time -- I think that was in 1996 -- that one of my concerns about housing in this province was the way that it was so scattered all over agencies of government. It appears that we're still in that position today. The minister is responsible for social housing, B.C. Housing Management Commission programs and the construction secretariat. Then there are about five or six other ministries of government that have various other impacts on housing. It always concerns me, when things are moved around so much, that we actually have the ability to react, whether it be through the secretariat or whatever, which we'll get into tonight.

Municipal Affairs has a whole list of housing issues, and of course, we know that the Attorney General has residential tenancy, which affects even social housing as far as how it operates. Finance has the new Strata Property Act, which was formerly the Condominium Act. Health has a number of group homes. The Ministry of Women's Equality has transition houses. Scattered throughout in a number of ministries are other group homes, whether they be for drug and alcohol counselling or what have you.

I remember that back in 1996 -- in reviewing my Hansards -- the minister agreed with me and told me that he was going to take that discussion up to his colleagues in government. I'm wondering, since it's now 1999, how far that discussion went. Obviously not far enough, but what progress have we had in getting some consolidation in housing issues?

[1845]

[ Page 13596 ]

Ideally, I suppose, we will at some point get to a situation where all the different sections are together, but. . . . One example that does constrain somewhat is around the issue of, for example, housing policy as it relates to leaky condos. I live in one, so it's kind of inappropriate for me to be the minister responsible for that. Some people would say that to do that, I'd be in a conflict. I think the general trend is to try and start to get some sort of consolidation underway, if you like, and we're starting it. I would agree that it's probably proceeding in smaller steps, but we are moving in the right direction, I think.

R. Coleman: Just for the minister's information, in my briefing for the ministry, it was the Minister of Municipal Affairs that had the coordination of special needs housing and also supportive housing initiatives for seniors. How does that relate back to your comments relative to you driving the agenda on special needs and supportive-type housing?

Hon. M. Farnworth: That's policy direction. We do the actual delivery of the services and the coordination.

R. Coleman: So you're still doing the management of the operating agreement for these particular units across government. Is that all group homes and all supportive-type housing in all ministries that you're doing that management of the operating agreements for, or just for some? And who are they for?

Hon. M. Farnworth: We do a central database now. So all the information on all the group homes is contained within my ministry. In that sense, we are the coordinating agency.

R. Coleman: When you say the "coordinating agency," are you actually delivering the service and managing the service with the operating agreements, or are you just coordinating the information that these units actually exist? Last year -- I think it was -- in the Ministry of Health estimates, the ministry was quite surprised that they actually had some management responsibilities for some group homes within their ministry. They thought it was all being handled by B.C. Housing. I don't know if that was '97 or '98 that that answer came from the Ministry of Health. I think it was 1997. If that's changed, I'd like to know that.

Hon. M. Farnworth: Within those that are supplied by PRHC, that's done by this ministry. But if you, as a different ministry have, let's say, some group homes in Health, you will still put in place the services that you're supposed to deliver there, but it's done under an umbrella within this ministry. We keep a record of what's happening, and we are in a position then. . . . If someone's coming for information on them, we can say how many there are and what services are being delivered.

[1850]

Hon. M. Farnworth: PRHC does all the major capital. So if there's an operational -- janitorial, whatever -- that will be done separately.

R. Coleman: Separately, by the ministry responsible, not by the B.C. Housing Management Commission? Or does the B.C. Housing Management Commission have any responsibility back to the operating agreement and maintenance of those facilities?

Hon. M. Farnworth: The operator's engaged by the appropriate ministry, so that if it's through Health, the operator's engaged by Health.

R. Coleman: I'm trying to get to the nub of a very simple question here. There's an operating agreement in place, as I understand it, on almost every facility that government operates, whether it be a group home or social housing or whatever. That operating agreement states a number of things, and it also has a budget that has to be submitted annually relative to capital reserve for the facility and all those things. When I've quizzed other ministries, they didn't believe that they had the responsibility of overseeing those operating agreements and those budgets, but that it was being done by the B.C. Housing Management Commission. What I want to be clear on is whether you are actually doing that or whether it is actually being done by ministries. Then, obviously, it leads to a series of concerns for me that it doesn't appear that they have either a real estate or a management arm that understands that they are actually managing these facilities and how they're supposed to manage them.

Hon. M. Farnworth: I'll explain this and try to do it as simply as I can. I guess perhaps it's best to look at it in terms of a triangle. For example, Health will have an agreement with the group home. They'll be responsible for client services and day-to-day operations. Then the group home has an agreement with B.C. Housing, the PRHC, and they do physical plant, if you like. That's what they're responsible for; they do repairs if they're required. Then Housing and the ministry will have an agreement for funding.

R. Coleman: So you can understand why I think there's confusion in the Ministry of Housing and different areas of government. Let me just be clear, then. The physical plant of group homes in this province is the responsibility of B.C. Housing as part of the agreement with the ministry they're doing business with.

Hon. M. Farnworth: If they're owned by the government, that's correct.

[1855]

[ Page 13597 ]

R. Coleman: I'll actually canvass this with the odd ministry. I'm not going to get into any more confusion for you. I already have a list from various ministries of all the group homes in the province. I had some concern about some of the management of physical plant, frankly. I think that some of our assets are deteriorating out there, but I think it's because of a lack of direction in that whole management of those particular units, simply because there has just been too much confusion in their management and ownership over the years. I think we have addressed some of those things in some legislation that we discussed last year.

I'd like to just go quickly to the minister's press release and discussions and some documents I read about the expansion of your mandate in Housing. It was mentioned in the provincial budget that you're going to do 1,200 additional units over the next two years and that you're basically going to be announcing a multimillion-dollar social housing program which is upcoming. I wonder if the minister could tell us today what the plan was prior to the additional 1,200 in the budget -- how many units you were going to produce. With the additional 1,200, that obviously gives me a total number for the two-year period. What is your time frame for actual implementation in getting those units on the ground, given the number of proposal calls you have before you -- some that are short-listed, some that still have a lot of work to do? Where are you going to find the land and the inventory to actually produce that many units, given what you have in your pipeline at this point in time? Maybe I'll just stop there, because it obviously leads to a number of other questions.

Hon. M. Farnworth: The past couple of years. . . . Since I've been minister, there's been an allocation of about 600. From that, we've actually been able to build around 900, in part because we have worked in partnership with local governments. There's an opportunity, particularly with some of the. . . . Well, for example, it's been done here in Victoria. Also, especially in the city of Vancouver, the province and the city have worked together and have been able to leverage the allocation into more, with things that the city has brought together. I expect that that will continue.

[1900]

R. Coleman: If they don't have it under option yet -- at a price -- and it's going to affect the price anyway, depending on the markets. . . . I would like to get a sense of the dollar amount. This number is reflected in the provincial budget. Twelve hundred additional housing units over the next two years are reflected in the provincial budget. What is the ministry anticipating that amount of money is? In addition to that, where would that be reflected on the books of the government and its borrowing?

Hon. M. Farnworth: In terms of the capital costs, they are mortgaged with the society. That's where it goes, and it's not going to show up. In terms of the subsidy, it'll be $21 million per year over the life of the mortgage.

R. Coleman: Well, it is actually reflected on the books of the government. It may not be reflected in your ministry, but I'd like to know what the dollar figure is of the capital costs for these 1,200 units. It actually is funds guaranteed by government, and it does show up in the public accounts under, I believe, "Other Commitments and Guarantees" -- or something to that effect. Obviously it is a guarantee of debt by the government, so I'd like to know what the reflection of that amount of debt would be for those units.

Hon. M. Farnworth: I can't give an exact figure, because in part it depends on a number of factors. But I can give a range. So let's say $90 million to $150 million, depending on whether or not there are equity partners, depending on a site and the location and depending on what other agencies bring to the table.

R. Coleman: Would the minister be able to tell me today how much of similar time and reflected debt is presently on the books of government for housing in addition to the $90-150 million that would be presently on the books relative to our financial commitments to housing?

Hon. M. Farnworth: There's about $388 million worth of mortgages out right now.

R. Coleman: Can the minister tell me what the present annual subsidy is, before you add the $21 million?

[1905]

R. Coleman: I love it when the minister presents me with a smorgasbord of additional questions. I'm looking for the annual subsidy and, I guess, the program we're basically talking about is provincial commitment to. . . . If I'm not mistaken, it's about an $82 million annual provincial commitment; and there's an additional federal commitment starting in about 1986, when we went into the one program. . .and there was a different form of subsidy prior to 1986.

Hon. M. Farnworth: The total provincial subsidy for all programs is $90.9 million.

R. Coleman: The new units, according to the minister's press release -- and of course, one never wants to rely completely on a press release or an article in a newspaper -- are said to be aimed at people with disabilities, women and seniors. I just want to clarify if that is correct.

Hon. M. Farnworth: In fact, we're doing a full range across the spectrum and those are some of the examples of the groups that would be served by the program that we're looking at.

R. Coleman: My understanding is that there are about 10,500 people on the social housing waiting list. So did the

[ Page 13598 ]

Hon. M. Farnworth: That's one of the tools that we use. We also use information and data supplied by communities themselves on what they see as some of their core needs and what the needs of different groups are in different areas of the province.

R. Coleman: I just wanted to move briefly. . . . This discussion leads me to an area in the annual report that I want to touch base on before I move into another portion of my discussions, and that is that in the annual report there is a comment made about rent supplement programs. The minister and I had a discussion in 1996 about rent supplements, and I think he was still the minister in 1997 when we had a discussion about rent supplements.

Hon. M. Farnworth: Actually, I only became minister in '97. Remember, I was never minister in '96.

R. Coleman: So in 1996 it was somebody else.

Hon. M. Farnworth: Yeah -- I was '97.

The Chair: Order, members.

[1910]

The discussion on rent supplements back then was centred around value for money and the cost of subsidy and the cost of financing total capital costs versus being able to deliver more units into the marketplace. I notice that we still have 1,956 units shared with the federal government for rent supplement programs. Has B.C. Housing done any calculations about how many more units have direct rent subsidy into a rental market that isn't exactly tight right now -- the $21 million annual subsidy, and how many extra units that would actually subsidize versus building our own?

Hon. M. Farnworth: The answer to the question would be no, in the fact that what we're trying to do is meet some of the demand that's out there for the supply, the stock -- which is slightly different in many cases from the regular housing stock that is on the market.

R. Coleman: I think I'd like the minister to elaborate on that. I found that answer slightly confusing. You're saying that you don't want to go into the marketplace and subsidize and place an individual into vacant units in the marketplace; you'd rather build units in addition to what's in the marketplace. Is that it?

Hon. M. Farnworth: No, what I'm saying is that we build stock for people with disabilities, people with special needs, and supportive housing units for seniors. We're prepared to look at different ways of providing housing for people in different stages of developmental needs. For example, some people can function quite happily in independent living. Others can't; they need provision for some sort of supervision. We're prepared to do those things, and that's the type of stuff that takes place in a Homes B.C. program. The market doesn't provide that.

R. Coleman: That's correct. The market doesn't supply that, but the market does have apartment units, and the market does have townhouse units in the marketplace that may or may not be vacant today. If we're going across the spectrum -- as we discussed just a few minutes ago -- on who we're targeting some of this housing to, and it's across the spectrum, my concern is that when you target the housing into the families sector, if you've already got vacancies why aren't you using your rent supplement program to actually achieve more longer-term housing stock, through long-term relationships with the owners of those units, rather than going out and spending the capital and borrowing the money to build those units? I understand the complexities around special needs and disabilities, but that's not this discussion.

In seniors housing we have the same issue. In seniors housing, there are a lot of seniors that need subsidy, but they are not necessarily in a place where they're not. . . . They're not disabled.

Hon. M. Farnworth: I guess I'll make a number of points. First off, there is a place for rent supplements, and we will provide rent supplements. As I said earlier, we're trying to catch up on a lot of the demand for stock that's out there, and that's been a significant part of our proposal and our work over the last number of years, and we expect that to continue. The fact of the matter is that there is a significant problem when it comes to the people I've outlined, people with disabilities, people with special needs, because they are part of the debate, and they are part of the target groups that we're trying to reach.

We are trying to do things that are creative with seniors, for example. Just because certain parts of the province have a vacancy rate that's higher doesn't mean that that exists throughout the rest of the province.

[1915]

R. Coleman: I've actually read that report and some others, though, that give different answers to what that particular report did. That's why I wanted to have the discussion.

In your discussion and some of the comments that have been made in some of the minutes of different advisory councils and what have you that I have today, there are comments that basically, with partnerships through the city of Vancouver, building trades unions and other organizations, you're hoping to substantially increase the 1,200-unit figure. I understand the relationship with the city of Vancouver, because they do have housing stock and land stock, and there would be a relationship that would obviously lower the cost of the delivery of the product. Can the minister tell me what type of relationships he's anticipating with building trades unions, which will have an impact to be able to produce more stock?

[ Page 13599 ]

As I said earlier and I've said publicly on numerous occasions, I think our relationship with the city of Vancouver is a classic model. That's the type of thing we want to look at with other communities around the province and also with different groups or foundations -- pretty well anyone who has an interest in providing social housing. If they want to work with the province, we're willing to sit down and find ways of working with them.

R. Coleman: The thought of investing pension funds -- and I won't even. . . . I'll just stick with building trades pension funds, because the thought of investing pension funds is actually new to the operation of B.C. Housing. B.C. Housing has traditionally done its financing in block financing through bidding out to the major chartered banks or major financial institutions, because they were able to get a better point break, basically, based on their larger borrowing whenever these mortgages would come up on a series of allocations every five years or whatever. So is this is a departure, or is this a one-off that we're talking about? Is this a departure from the normal financing that we've been doing?

Hon. M. Farnworth: I guess the point I'm making is that this isn't a one-off or a departure. I think what we're trying to do is be creative and say to people that social housing is an important issue in this province -- the provision of social housing is an important issue in this province. The provision of social housing is important, and there is a potential role for a wide diversity of groups to play. If people want to come to the table and sit down and talk with B.C. Housing about how they may be involved or if there's an opportunity for them to get involved, we're willing to look at ways and explore new ways of doing that. I think that part of the problem has been that sometimes everyone's bound in their set box, and they're not willing to step outside and consider being creative. One of the things we're trying to do is to do that.

I think that's one of the reasons why the city of Vancouver and ourselves have worked very well together. It's that we are both coming to the table open-mindedly and not sort of saying: "You do this and you do that." It's a question of: "Look, we can bring this. What can you bring?" So if someone wants to come to us, whether it's a union pension fund or a non-union pension fund or a corporation -- whoever -- and say, "Look, we've got something we'd like to bring to the table," or "We have a project that we're thinking of doing. Can we make it work?" we're prepared to sit down and look at that.

R. Coleman: You must have some sort of plan to solicit that type of involvement from these organizations. On what basis would you be soliciting the involvement? Would they be based on return on investment over a number of years, based on straight mortgages? I guess the second question that I'd like to ask is: does the minister anticipate a movement that the construction of social housing will now fall under the fair-wage guidelines or under one of those models of construction that we've seen in roadbuilding?

[1920]

R. Coleman: No to both of my questions, or just no to the second half of my question? The first half of my question was: what plan do you have to go out and solicit that involvement and those financial arrangements with a return on investment?

Hon. M. Farnworth: For that part of the question you're going to have to wait till the announcement. But to the second part of the question dealing with the fair wage and HCL, the answer is no.

R. Coleman: With all due respect to the minister, this is the estimates debate of the Ministry of Employment and Investment. You've already announced the 1,200 units. I think that the formulas for those 1,200 units, which are in this year's provincial budget. . . . I don't think I should have to wait for the announcement to have an idea as to how we're approaching that relationship out into the community to make this work. I think that's what the budget is about. The budget is what disclosed the 1,200 units, and I think we in this House should be entitled to a little better explanation than just that we have to wait for the announcement.

Hon. M. Farnworth: Well, look at it this way: that's all the information I can give you today, for a couple of reasons. As I said earlier, you're going to have to wait for the announcement. There has been the traditional way that B.C. Housing has delivered the number of units, and that could in fact -- may well; it's possible. . . . That's how all this year's allocation is done. What I have said is that we would like to try and be creative. We would like to bring other partners to the table; and if we can do that, we will.

In terms of the subsidy, I've given you the subsidy. In terms of the capital cost, I've given you a range. And if we can find ways of reducing that. . . . Those are some of the things that we're looking at. But in terms of the exact specifics, you're going to have to wait till the announcement. I'm not going to give the specifics of the announcement here today, because I can't do that.

The Chair: I'll ask all members to please direct their comments through the Chair.

R. Coleman: Would it be safe, then, to say -- since the minister says that we could very ell be doing it the traditional way -- that at this point in time there are no concrete agreements in place for any of those particular types of initiative outside of the norm?

Hon. M. Farnworth: There are no agreements with pension plans, apparently, at the current time, but there are equity groups -- non-profits, for example -- who have projects that they would like to see happen. They're prepared to bring things to the table.

R. Coleman: In a briefing package I recently received, there's a comment made about an investment fund. At the beginning of the briefing package I got, it says that the ministry is no longer allowed to talk about the proposed housing stimulus package that they presented three weeks ago behind closed doors, which the Premier has promised. Would that be a correct statement?

[ Page 13600 ]

[1925]

R. Coleman: I guess what we'll do, then, is go through the record. The minister can decide either to confirm or to deny this information, but my understanding is that the investment fund is actually the pet project of the chair of the Housing Commission. I see that the chair of the Housing Commission is here today. I'm wondering what the involvement is of the commission and the chair, and of the members of the commission and the advisory councils of the commission, relative to an investment fund for B.C. Housing.

Hon. M. Farnworth: Well, I guess what I'll say is that there are all kinds of things that are looked at and analyzed. What I told the members is that there has been nothing decided on. The thing that the member is talking about -- the investment fund -- is not the pet project of the chair of B.C. Housing. We analyze and look at all kinds of ideas and options and opportunities. At the end of the day some things come to fruition, and some things don't come to fruition. But the one I can tell the member that we are moving forward on -- concrete -- is the social housing initiative. Other than that, I would say that the rest is just speculation right now.

R. Coleman: So the minister would confirm, then, that there's no investment fund that would be described as the provincial government not bailing anything out or subsidizing anything but simply as making a prudent investment in projects that already had 50 percent of the required equity in land or in cash and needed the rest to be investment. There's no move to have an investment fund like that set up by government -- or where it would be funded from.

Hon. M. Farnworth: What I'm saying is that we look at a variety of ideas and initiatives and analyze them. But in terms of decisions having been made on them, there have been no decisions made.

R. Coleman: Have there been any discussions or recommendations made?

Hon. M. Farnworth: As I said, we look at all kinds of initiatives, all kinds of options, and discuss all kinds of things, and an investment fund is an option. But in terms of whether decisions have been made, there have been no decisions made. As I said, we discuss all kinds of options and initiatives.

R. Coleman: As I understand this, as I try to define this for myself -- and, obviously, investment funds work in different ways -- it appears to me that there's an opportunity being explored here for an investment fund to take the debt of government off the books but at the same time to have something like this not work out like other programs similar to this have worked out. I'm wondering if the minister is familiar with a program that used be called NOHO.

[1930]

Hon. M. Farnworth: Yes, I am.

R. Coleman: I think I'm going to come back to this because I think this discussion is actually going to go longer, given my notes. I want to move down and get off the topic of where housing is going, so I'm going to come back to this investment discussion relative to some confidential notes that I seem to have in my possession.

The priority placement program for B.C. Housing. . . . Recently the Housing Commission changed the applicant policy relative to the non-profits. It used to be that 75 percent of units were rented by the non-profits and 25 percent were rented by the commission. In other words, the commission sent the tenants. That was changed; I'm not objecting to that. I think that our discussions over the last number of years have made it clear that the local interviewing and management of the tenant has probably proven to be more effective than to just send it off the list. My concern, though, is -- you're referring to it as priority placement housing in your briefing package that I was given: with the 25 percent moved aside, what type of relationship or agreements have we put in place with the non-profit sector to ensure that we're taking good care of the second-stage housing for women coming out of transition houses and needing another second-stage, safer place to live in those units? I know some of the non-profits do that by virtue of the relationships they've built. But when we changed that mix of housing -- the mix within the units -- did we put in a policy change to try and encourage those organizations to do just that?

Hon. M. Farnworth: There are no formal agreements. We rely on the working relationship that we have with the non-profits. Frankly, we find that it does work, and we're able to meet our objectives. We still retain the right, though, to place directly into the housing stock that the province owns directly.

R. Coleman: That right is retained by virtue of your operating agreements with all the non-profits, because that's in the operating agreements with those organizations. Leading up to April 1, you had a series of consultation meetings throughout the province -- the commission did -- with these different communities, relative to basically establishing a process that ensures that victims of domestic violence continue to get priority for housing and that outside the lower mainland, transition houses and housing providers would work together to ensure that the households in need are considered for available units.

[1935]

Hon. M. Farnworth: I'll make a couple of points. One, we don't place into transition homes.

R. Coleman: I know.

Hon. M. Farnworth: Okay. That was just a clarification. The way it came across, it sounded like you said that, so I just want to make that point clear.

[ Page 13601 ]

R. Coleman: Has the commission corresponded, though, with each community where there's a transition house, encouraging the non-profits in those communities to give priority to people coming out of transition housing particularly and needing second-stage housing -- coming from abusive situations?

Hon. M. Farnworth: We haven't had to do that. What we find is that once someone comes out and goes onto our priority list, we put out the resources to locate the non-profits in community X and suitable accommodation.

R. Coleman: When the board of commissioners of B.C. Housing made the decision to eliminate the applicant referral policy, I understand they asked staff to ensure that the implementation of the policy change continued to support the board's principle -- that victims of domestic violence should continue to be given priority. Has the implementation of that policy change started taking place -- underway, being thought about, planned?

Hon. M. Farnworth: That's always been our policy -- that victims of domestic violence should be on the priority placement list. It's something that we have not had a problem in implementing.

R. Coleman: That wasn't my question. I was of the understanding that the commission asked staff -- right? -- to ensure that the implementation of the policy change continue to support the board's principle relative to domestic violence. I'm wondering if that staff implementation of policy change has started or has been done. What is happening with that particular policy change? Not whether it's been discussed. . . . But that is my understanding.

Hon. M. Farnworth: What the commission board is saying is that they didn't want that policy change to have a negative impact on the placement of victims of domestic violence. What we're saying is that it hasn't and that they receive priority placement.

[1940]

Hon. M. Farnworth: When someone comes from a transition home, they go to the top of the list and we place them.

R. Coleman: I want to move now to the strategic plan for just a few minutes. B.C. Housing has been actively engaged in a three-year strategic planning process which was initiated in 1996. The plan was designed to define where they wanted to be as an organization over a three-year time frame and to ensure that as an organization they were clear about their goals. The plan was adopted by the B.C. Housing board of commissioners in January 1997. Now we've had at least a full year of implementation and plan on a bit more. I wonder if the minister could tell me how the commission is doing relative to its strategic plan, which has a number of processes and visions relative to that plan. I'm wondering how you're measuring the outcomes and how you've been doing with that strategic plan to date -- maybe a quick summary; I'll have some more specific questions.

Hon. M. Farnworth: In terms of the strategic plan and its components, there is the strategic plan, the business plan and the individual annual plans. The strategic plan is currently under review, along with the business plan which is in the final stages of development. That will be presented to the board at the next meeting. We can provide to the member individual annual plans for each of the preceding years. Those we can do measure specific performance targets, if that's what the member's after.

R. Coleman: I understand that there were terms of reference established for revisiting the strategic plan. As part of the scope of the work, a consulting firm was expected to:

"Establish a consultation process and facilitate a series of meetings from mid-February to early April in order to review the work done to date and identify 'active strategies' for year 3;

"Seek input from tenants, staff and members of the board of commissioners to create a business plan which establishes clear linkages between the 'active strategies' for year 3 and the budget planning cycle and which synchronizes the planning and budget cycle;

"Identify linkages to other major corporate initiatives such as the development of performance measures and accountability monitoring, the development of individual branch plans, training and development strategies, the use of information technology and other strategic initiatives which may be underway. . . ."

"Identify an appropriate planning cycle reporting system which allow the general manager, the executive committee, the board of commissioners and the government to track the organizational performance of B.C. Housing.

"Identify any strategies or areas currently not covered by the plan which may be of interest to members of the board of commissioners."

[1945]

[ Page 13602 ]

Interjection.

Hon. M. Farnworth: They are the consultants, and they're doing the work on the strategic and business plans.

In terms of the annual plans and the detail around accountability, that's in each of the annual plans. We can get that information to you as an example of the type of information and the type of accountability and the type of measurement tools that we use. For example, it is our goal to collect 97 percent of the rents by the fifteenth of each month. That's the type of thing that's in there.

R. Coleman: Just out of curiosity, how are you doing on that one?

Hon. M. Farnworth: We are the highest in the country. We meet that target.

R. Coleman: So you're collecting 97 percent of the rents by the fifteenth of the month?

Hon. M. Farnworth: Yeah.

R. Coleman: Does the minister endorse the accountability matrix that's applied by government across his ministry?

Hon. M. Farnworth: Yes.

R. Coleman: I would have been disappointed if the answer wasn't yes, considering that the minister actually sat on the Public Accounts Committee at one particular time.

My concern is that we seem to continuously be doing strategic plans and business plans for these different levels of government, these different agencies of the government, and every time a lot of energy and resources are required to do that. I don't know why we can't build a strategic business plan that actually works like business does.

Some of the considerations that should be given in the development of a strategic plan are somewhat of a concern to me. That is, considering how long the commission's been around, there's still a need today for a coherent and unified strategy and reporting system which helps to link the work of each individual in the organization to the corporate strategic priorities. What have the members of the commission been doing up to now, relative to a unified strategy and reporting system?

[1950]

R. Coleman: I just wonder how you know whether you did a good job last year and will have one this year when you're looking at trying to establish some measures of accountability today and monitoring that. I would have hoped that it had been there before. Why are we hiring a consultant to put measurements and accountability plans in place in 1999, yet you make the comment that we operated well last year? I have read the annual report, and I don't entirely disagree with the comment, but I'm concerned that we're tightening up our measurements today. I'm just concerned about what the measurements were in the past.

Hon. M. Farnworth: The short answer is that organizations and policy objectives change in organizations.

The fact of the matter is that we have been doing a good job, but we think we can do better, and we are constantly trying to do that. If we can find new ways of doing things or find ways of being slightly more accountable, we want to do that. After all, when I was on the Public Accounts Committee, we spent a lot of time in terms of accountability and an accountability framework and trying to get the message out that government -- right across government -- has to be more accountable and try to find better ways of doing things. That's part of the exercise at B.C. Housing. Just because you're doing something now does not mean that what you were doing before was wrong; it just means that you're trying to find a better way of doing things.

R. Coleman: Going back to one of my earlier questions regarding the amount of the contract for the consultant to do this strategic plan, I'd also like to know what the cost was for Tudor Williams Inc. to develop the strategic plan from 1997 to 1999.

Hon. M. Farnworth: We'll get those numbers for you.

R. Coleman: I just want to touch briefly on the strategic plan from 1997 to 1999, seeing as we're still in 1999. I have reviewed the strategic directions of the strategic plan. I reviewed them back to the annual report of the commission and to some of the business plan things I've seen in the past and to some of the announcements the minister has been making recently. Frankly, the corporate strategies part of the document that is in place pretty well covers a gamut of housing relative to the commission. It has "Housing Programs," "Organizational Effectiveness and Efficiency," "Housing Stock," "Public Support for Affordable Housing" and "Partnerships."

[1955]

Hon. M. Farnworth: Oldring Consulting's job is to develop the business plan, to link it to the strategic plan and at the same time to go back and see that the goals outlined in the strategic plan from '97 to 99 are still valid. Do we need to make changes? Do we need to add new ones as we go forward?

R. Coleman: In all fairness to the minister -- and this is just a comment -- we had the first full-time paid chair of the commission in its history, and we have an acting general

[ Page 13603 ]

Hon. M. Farnworth: I guess I'll make a couple of points. One is that it's probably a question of time in terms of. . . . You know, there are never enough hours in the day to do all the things that one wants to do. The second is that it helps to bring in someone with an outside perspective, because quite often we get involved in our own agencies. . . . It's not that we're not doing a good job, but if we bring in someone from outside, they can bring in a different perspective as well.

R. Coleman: We already have the Minister's Advisory Council on Affordable Housing, which can give some of that outside perspective as well. There are some pretty substantive people on that. Maybe we should just check and see what the hours per day of the head of the commission are and see whether he has some open time within his day to see if that's possible.

Hon. M. Farnworth: I think the member raises a good point there. Maybe we should go back, check the timecard of the chair and see if there are some hours in the day that could be devoted to that.

R. Coleman: I'd like to move on from the strategic planning side of this thing, because I don't know that we always. . . . I know I'm going to get the numbers on these different consulting contracts from the minister. I do have a concern that sometimes you're not relying on your quality people internally to drive the agenda -- rather than always having to go outside.

There's a number of issues that basically are tied back and forth, I guess, with the Minister's Advisory Council on Affordable Housing. I know I'm not going to bounce into the ones that affect Municipal Affairs, but I want to touch on the ones that affect the commission.

My understanding is that the housing policy section is looking for a legislative amendment. You've been using quite old legislation from Lands, Parks and Housing that established B.C. Housing, which allowed B.C. Housing to enter into an agreement. Using this, you would then enter into agreements with societies that would prohibit the sale of land. Such agreements would be registered on title, as opposed to a section 219 covenant, as I understand it. These amendments passed on July 29 last year, without debate.

Basically, I'm just wondering how the minister is proceeding with this legislation and how it's affecting his stock, because of the objective that we laid out. The reason there was no debate is because, I think, we obviously agreed at that time that the protection of our non-profit housing stock -- relative to its future development, future ownership or what have you -- had to be protected more strongly through legislation so that we wouldn't lose the asset. I'm wondering how that's being applied to the stock today.

[2000]

R. Coleman: There are some issues around housing that I think sort of fall through the cracks. I guess they fall through the cracks because nobody really knows who's responsible for these new forms of housing or what's being addressed. I want to run a couple by the minister to see if the commission is involved in any advice or any movement towards seeing how these forms of housing are going to be dealt with.

One of them is life leases. We've discovered that a number of seniors housing groups or societies -- we all know this -- are looking to have people enter their life leases to cover mortgages during a redevelopment or a development. There are no regulations around life leases, which might or might not be tenancies. Some of these contracts have rather unusual terms, including provisions that don't allow the lease to be registered, thereby avoiding the property transfer tax but giving no security to the tenant, who has paid a substantial upfront payment. As hybrids of housing and affordability come in, it falls to the commission, it seems, when you're talking about your policy development and reviews, to have a. . . . I understand that there is someone working on a report relative to life leases. I'd like to confirm whether that's being looked at and if that's true or not.

Hon. M. Farnworth: Yes, I can confirm that, but it's being done through Municipal Affairs. We don't have any involvement with that.

R. Coleman: The next one is what we might call supportive housing. We have a number of different descriptions for it. Basically I'll just run you through what I understand is going to get done, and then I'll also ask the minister if the commission is involved in this or who's involved. In reality, the commission is involved in all of these in some way if they're involved with the advisory council, because I think there's an interrelationship between members of the commission and what have you on the advisory council, if I'm not mistaken. The minister might confirm that in his answer to this one.

I understand that we're working on an approach to develop a guide on supportive housing for municipalities -- particularly small municipalities; that consumer protection measures, possibly a supportive housing act, may be in the works; and that somebody's going to try and sort out the links with Health. Right now if a facility so much as goes to remind the residents -- this is the way it used to be -- for instance, that it's lunchtime, they need to be licensed. Licensing may be an onerous problem, so somebody's trying to look into consumer protection on this, on licensing measures and then on affordability -- which comes back to the affordability of housing to the commission.

We're seeing more and more people taking an interest in this phenomenon, frankly, for a development -- probably because of the softening of the condominium market, through issues that we're not going to get into today. The term that I've heard recently is Care-A-Minimum, which is one of the new terms. I think that there used to be one where we used to call seniors "hermitized" when they got stuck in a house and didn't move out and couldn't afford to go anywhere. We always have a new term that comes out in housing about every six months to a year.

[ Page 13604 ]

[2005]

[E. Gillespie in the chair.]

Hon. M. Farnworth: Just in quick order: Care-A-Minimum -- we don't have anything on that, and we're not involved in anything at this time. In terms of seniors, we are involved in terms of rental housing for low-income seniors. We are looking at trying to expand that program this year so that we can expand the supportive care for seniors so that there's a wider range that's available. I forget the first one you mentioned.

R. Coleman: Guidelines.

Hon. M. Farnworth: I think the guidelines. . . . That's being developed at the policy branch in Municipal Affairs.

R. Coleman: Again, obviously that reiterates this confusion in housing and trying to actually handle an industry correctly. That's one of the concerns. Relative to B.C. Housing itself, there are a number of concerns. Back in 1993, the government actually started to make a move to require that 43 percent of housing units in projects were occupied by people designated by government, up from 25 percent. You've abandoned that, and you're now allowing all the non-profits to choose the people they house, with the option which you have in your operating agreements. It appears to me that you're moving towards having government involved in fewer aspects and details of social housing and having the sector operate it. Would that be a fair assumption?

Hon. M. Farnworth: Yes.

R. Coleman: As that takes place on the operational side, has there also been a bit of an attitudinal shift. . .that the government could be a better developer or builder or architect than the industry could be? Is it more of a shift now to saying: "We will strictly manage the portfolio, manage the opportunity. We'll let them provide us with the product, versus us being as heavily involved in the development of the product"?

Hon. M. Farnworth: Yes, I would say that's correct. We're moving more to having private industry do it, as opposed to government.

R. Coleman: So would that mean, then, that the commission itself is now going to move into more of a role of more support to the non-profit sector, and support them in operational ways and in negotiations on land with the private sector, rather than being the driver of the agenda in those particular sectors?

Hon. M. Farnworth: Yes.

R. Coleman: Perhaps the minister could just make comment on a note I made to myself that not spending money on housing leads to other costs, whether it be costs in health care, social programs or Attorney General. I'm throwing you a softball here, but it also leads back to being able to produce the maximum stock for the dollar, and of course it leads me back to my concern about rent supplement.

[2010]

Hon. M. Farnworth: I confess, as my critic says to do. The answer to your question is yes.

R. Coleman: There are a number of older sites that we have, and I'm wondering what policy decision or direction we're going in with them. For instance, if I'm not mistaken, we have a site called -- I'll have to pick my memory here -- Little Mountain. I think it's about 16 acres, and it needs some industry involvement in its redevelopment. How are we dealing with sites like that? I believe that one actually has some CMHC or federal ownership. I'm wondering how we're entering into that redevelopment opportunity.

Hon. M. Farnworth: We are working on ways of dealing with older stock. I think that's of critical importance, particularly over the coming years. I think there are some terrific opportunities to provide more housing, to get the private sector involved and to be very innovative. With this particular site, as with a number of the older sites, there is the involvement by CMHC. In this particular case, it's about 75 percent. That is part and parcel of the broader devolution debate.

R. Coleman: I'll get into the devolution in a second, with CMHC. Just a couple of comments and pieces of advice that I think the minister's already heard before. Is the auditor general reviewing the subsidies and governance of B.C. Housing at this point in time and expected to report back soon?

Hon. M. Farnworth: Yes, the report is due at the end of July.

R. Coleman: Does the ministry have any sense about any significant change the auditor general may be making relative to B.C. Housing's relationship back to CMHC?

Hon. M. Farnworth: With CMHC? No.

R. Coleman: In cooperation with anybody else -- any other agency of the B.C. government? Are you expecting any significant changes as to how B.C. Housing works with BCHMC or PRHC or anything like that?

Hon. M. Farnworth: In terms of the subsidies component of the report, we're not anticipating any major changes or major recommendations, but there may be recommendations around the relationship between PRHC and B.C. Housing.

[2015]

Hon. M. Farnworth: There is within the co-op sector, and we are supportive of that.

R. Coleman: Just in the co-op sector. Not in any other sector?

[ Page 13605 ]

R. Coleman: I understand that the process is quite slow, relative to the land trust in co-ops. I think it has taken three years to transfer three parcels of land to the land trust, after cabinet approval. Is that a fair comment? Am I correct on that?

Hon. M. Farnworth: Yes, it is taking a considerable amount of time. Things move slowly in government, but they move even more slowly when several levels of government are involved. In this case, the federal government is involved through CMHC, so that has complicated things.

R. Coleman: Obviously you move slowly when there are a number of ministries of government relative to the housing sector. I keep coming back to that comment, and that may be my mantra for some time to come.

I want to talk about devolution for a minute. I was given just a numbered briefing package from the acting general manager of B.C. Housing, relative to the number of units that are out there with CMHC. Basically it comes down to a total of 44,548 beds or units, including 13,003 in the cooperative programs, 28,426 in the non-profit programs and then 3,119 in the native programs. I'm sure that you have a copy of that.

There was some indication recently in discussions I had in Ontario that they were close to a deal with the federal government on their devolution. But they backed off, though there was an agreement that co-ops should be off the table. My understanding is that the co-op sector in British Columbia wants co-ops off the table in the negotiations regarding devolution. Am I correct there?

Hon. M. Farnworth: That is correct, and I have been pushing that position with the federal government.

R. Coleman: Is it also true that we want aboriginal housing to be dealt with outside the devolution process?

Hon. M. Farnworth: Off-reserve only. We are working with this sector to try and come up with an agreement that is acceptable to them.

R. Coleman: I know I asked this question some time ago -- whatever year it was -- when I was first discussing the CMHC devolution. Having talked to people in and around the industry, I'm sure it's the Little Mountain site that somebody passed comment on to me one day -- that they thought it would take seven years to redevelop that site. Obviously we might be planning for it now, but seven years to develop one site is a little bit slow. It's 16 acres, and I think we should be able to develop it.

I guess the question is: in your negotiations. . . . I remember saying to the minister some time back that: the title should never get off the table. We should gain title to the asset for redevelopment purposes -- for us in British Columbia -- so that we would have control of the destiny of that asset and of its redensification relative to how we create housing stock in the province, rather than have the federal government involved in any way other than. . . . If they want to turn over the operation, they can turn over title. I'm wondering if that is still the position and the policy of the minister.

[2020]

R. Coleman: I don't think either one of us has to go any further on that discussion.

The other issue, as I understood it, was that there was some work done relative to zoning as a tool for affordable housing within communities. I'm not clear whether that is a commission-driven initiative or a Municipal Affairs-driven initiative. And then there was also, I believe, one where housing agreements were also being looked at as to how they could make housing agreements understandable and more streamlined for smaller towns, in particular, that wanted to, let's say, do private-public partnerships with their own land.

I guess we could deal with zoning as a tool, first of all. Basically there are a number of issues about density bonuses and what have you -- mixed opinions on whether higher levels of government should be telling local governments what to do; that sort of thing. And there's a whole. . . . You know -- the uses of things to combat NIMBYism. I know that there's this interrelationship. I'm just wondering: as far as trying to address those affordability issues, who is it that's trying to address it, and how?

Hon. M. Farnworth: While that initiative now is with Municipal Affairs, it still is very much a tool for us in B.C. Housing, and I think it's a valuable one. I think it's to use it as a tool, a persuasive tool, as opposed to, say, telling local government: "Thou shalt." Given our relationship and our experience with some of the other municipalities -- again I come back to Vancouver; Port Coquitlam is another one -- I think that moral suasion can work. But I also think that we probably need to do a better job of educating local governments on the positive aspects of using zoning and density bonuses -- and ways being created in terms of the public-private partnerships that they can form around this issue -- to provide more housing stock.

R. Coleman: Who is driving that initiative, to get that affordability?

Hon. M. Farnworth: It's made, I think, in that sense, for all levels of government, and can equally apply to the federal government if they want to get back into housing. But the policy section is within Municipal Affairs; they have the ability to drive policy forward. On a practical side, it also is something that we do in terms of discussions with local governments.

R. Coleman: Is anyone working on a template for local governments, to deal with such things as giving them a template of a sample lease that's applicable within their community into a private-public partnership for a leaseback on 99 years or 60 years, compiled with the strata lot lease if they were going to do a combination of strata lot versus rental, and a package that says: "This is how you put this package together if you want to do this type of program within your community to effectively create some affordable housing"? Is that taking place? Is there a package that is being developed for these communities to be able to do P3s without having to reinvent the wheel every time?

Hon. M. Farnworth: I'll make two points. First, we're not doing that in terms of B.C. Housing, but I do think it's a good

[ Page 13606 ]

[2025]

Having done some private-public partnerships where rental property came out at no cost to the taxpayer by using the value of land and then creating the lease around it and the strata lot lease, I know that once you've done one, you can pretty well make it sell just about anywhere else, as far as saying: "This is how it works, and these are the people who are satisfied with how it works." I think that creating that template would be an invaluable tool towards your investment in affordable housing in the community, and I would encourage somebody to take that initiative. Compile that information of what's working in other communities outside of Vancouver, because when we get into the rural areas, we're dealing with, call it, a different sophistication about having experience with long-term leases or leases similar to what Vancouver's had for the last 40 years. I think it would be an invaluable tool for those groups to have that available to them, and I would encourage the ministry to look into that.

Hon. M. Farnworth: I said a moment ago in my first answer I thought it was a good idea, and I still do.

R. Coleman: Does this ministry, through the commission, have any input into changes to the Municipal Act that might want to be considered for affordable or social housing? Are you being asked for input on how to encourage municipalities, for instance, to increase their capacity, to encourage social planning within the municipalities -- or to provide any of that? Are you part of that process, or do the Municipal Act changes that might affect you actually operate arm's-length from the commission, and you're not getting the input you should have?

Hon. M. Farnworth: No, we are involved in providing input and bringing forward suggestions and changes that we would like to see take place.

R. Coleman: I want to just touch, basically, on SROs in the downtown east side and throughout the province.

I understand that the government wants to protect the remaining SRO stock that's out there. I have a very big concern about the rental stock in general for this province. I believe that, when the next turnaround in real estate takes place -- as the cycles always do take place in real estate -- that what we've lost in this stock is going to create a rental crisis for us -- not just in the social housing sector, but in general in the rental market in totality. That's mainly because of the fact that a lot of product is being moved out of the marketplace in various forms -- a lot of it is by being able to be strata-titled, or whatever. There is certainly a concern in the Victoria area that some people are just prepared to walk away from their buildings and let them be redeveloped by tearing them down rather than having to put up with the problems they have with the residential tenancy and the return on investment they're experiencing. That's another argument for when the new legislation in residential tenancy comes into place. But I can tell you that it's my prediction -- and I'll bet you that I'm right -- that we're going to have a terrible shortage of rental housing in the not too distant future because of the loss of stock.

Having said that, you want to preserve SROs, and yet, while you're preserving that housing stock, what are you doing about additional-type stock to fulfil the void of the lost SROs that we have already? I have a great concern that for a certain client base we may be overbuilding the unit and not actually providing the service that's required. I'm wondering: has the commission come to have a feel for what the ideal square footage now is for an SRO in the downtown east side that would be functional? And once it's functional, what is its measurement for cost-effective ability to bring it into the marketplace and replace some of the old stock? And is that actually in the so-called "Wait for the announcement" -- to find out whether there are going to be any SROs taking place?

[2030]

R. Coleman: Do you have some pro formas that the commission could make available to me, which would indicate that increase in cost if you go a little bit smaller?

Hon. M. Farnworth: We will get that information for you.

R. Coleman: Moving on from the SROs, I just want to go back briefly. I believe there's been some discussions about an investment fund. I believe that investment fund is going to target some patient money, so to speak -- whether it be a union pension fund or some other pension fund -- where that money is targeted and forms into a partnership. I would like to have from the minister tonight some commitment that I can sit down with the people in the commission who are anticipating this pension fund, or this investment fund, to sort of give me an outline of what their thinking is or what they're discussing. It's not that they have to commit to what they're doing, but if they would give me some feel for it, perhaps we can be of more assistance than a hindrance, relative to that discussion.

Hon. M. Farnworth: There are a lot of options looked at, a lot of things talked about and a lot of ideas put forward, but there haven't been any decisions made other than the social housing component. What I will tell you is that if we decide to go ahead with something like this, we will sit down with you and brief you on it. And if you have any questions or ideas, you can bring them forward.

R. Coleman: I'd like to go one better. I'd like to have a round-the-table discussion with the management and the

[ Page 13607 ]

Hon. M. Farnworth: May I make the suggestion that you arrange to meet with the chair of B.C. Housing, and we can sit down and discuss it?

R. Coleman: That's where I was headed, actually. I think the chair of B.C. Housing may or may not know me, and he may find that I do have some expertise in this and in similar fields to his, as does the acting general manager of B.C. Housing. I think it's important that if we're moving into this type of formula, we sit down and touch base on a number of these things.

I just have a couple of other quick questions on some actual constituent-type issues relative to housing. I've reviewed the financial statements of PRHC and their business plan and all that. They don't really have a business plan, but I know how PRHC operates. I don't think I need to get into a discussion about that.

[2035]

I'm wondering if the commission has come across this problem or been contacted about the problem and how you're dealing with that type of concern, where we have these kind of mixed-program sites with different calculations for how rent is paid. In some cases, you'll have a bachelor suite in one building that is actually costing more than the 30 percent of income in another building on exactly the same site. I'm wondering if the commission is aware of this and how you've dealt with it in the past.

Hon. M. Farnworth: We are not aware of this specific problem at this specific location. We are aware of this type of problem around the province. It generally occurs where there is a federal-provincial mixture taking place, and it is one of the goals of devolutionists to try and rationalize this problem.

R. Coleman: And while you're waiting for the devolution -- which, given that we want title, could take some time -- how have you dealt with this concern in other sites?

Hon. M. Farnworth: We can't. We find it very difficult for the federal government to be flexible with us on this issue.

R. Coleman: Well, I would've thought that the head of the commission, being that he was formerly with CMHC, at some time would be able to straighten out those people over there in some manner or other. As he would say, when I look back at one of my first careers, that was another life a long time ago, and there probably isn't too much hope there either, I guess.

I don't know where this responsibility falls, because it seems to move like the ever-bouncing ball, but it's the issue of homelessness. We have to recognize that we do have a significant issue around homelessness in a number of our cities -- this city and Vancouver in particular.

We've had different networks, like the B.C. Housing and Homeless Network and what have you, work on different things and recommendations. There's a number of activities that were sort of suggested in a number of these things. I'm just wondering where the commission's involvement is relative to the homelessness issue on our streets, relative to the shelters -- whether they're involved in any attempts to develop additional shelter beds within the communities, how they're basically measuring the stock they have and what database they're keeping to try and understand the movement of the homeless client when we get them to move up into housing into a different level or they're moving on to other communities, etc.

Hon. M. Farnworth: Traditionally, the homeless have been viewed as an income assistance issue. What we are saying is that it is a homes issue. My ministry is taking the lead on that in coordinating the three ministries involved: Municipal Affairs, my ministry and Human Resources. We provided funding for a CHI grant to Victoria to do networking in terms of the inventory of beds that are available around the province, and we're trying to bring that into the work that we're doing with this ministry.

[2040]

One of the concerns around homelessness when you read, basically, different reports from across North America about how different cities have attacked their homelessness -- some successful and some not so successful -- was the creation of the ability to actually monitor the transient and the movement of the homeless, to actually come to a formula where you can start to address it based on the needs of the clientele in any particular jurisdiction -- whether it be Vancouver's east side, greater Vancouver as a whole or Victoria as an example. You're actually almost tracking, within a database, that clientele to know what their needs are and how we have to address their needs.

Hon. M. Farnworth: The answer to that is yes, and that is one of the projects that my ministry is working on.

R. Coleman: I would like to compliment the ministry on taking that initiative, because I think it's somewhat overdue.

[ Page 13608 ]

I'd also like to tell the minister that I look forward to being able to sit down with his people and go over this in more detail -- and the patience of your staff this evening in answering my questions.

S. Hawkins: I want to thank the staff from Housing and the commission for coming over. I also want to commend the member for Fort Langley-Aldergrove. He has housing expertise beyond my depth. I appreciate him asking the minister those good questions and engaging in that debate.

We will continue with the business plan tomorrow -- the never-ending business plan -- and perhaps we have a little homework for the minister. I'm joined by my colleague from Okanagan-Penticton, who is the new Chair of the Public Accounts Committee. He's had a peek at the business plan, and he has some questions as well.

I think we had finished up until about the middle of page 5, and we were starting with strategic priorities. The minister can answer this question tonight or take some time to think about it. When I went through the business plan, given the news release last week and the comments made by the A-team leader, the Minister Responsible for the Public Service, on the new green-economy plan, I didn't see that reflected in your ministry's business plan. I'm wondering how that overlay will be reflected in this plan. I'll give the minister a chance to think about that, and then my colleague has a question.

Hon. M. Farnworth: It's there in the plan. We don't list it, but it is there. We don't list everything we do, because we do so many things.

S. Hawkins: It seems to be sort of a centrepiece for the economic renewal of the province, the way the announcement was made last week. Certainly the green economy seems to be a moniker that's catching on with the government. Maybe the minister can just point out where in the plan. . . . Or does every part of the plan cover it? Can he give me some examples of where it's covered in the plan?

[2045]

R. Thorpe: I'm sorry I missed the first part of the debate on the business plan, and I look forward to joining it tomorrow.

I realize that the member is a former member of Public Accounts. When I was looking at this business plan, I noticed on page 7 that it started with some performance measures, and I noticed that there seems to be not much detail with respect to the targets and with respect to the year 1999-2000 and action required. I was just wondering, to have an informed debate, if in fact we could have the appropriate detail for the debates tomorrow.

Hon. M. Farnworth: Well, for one, if we turn to page 7, there's a thing on performance measures.

The second point I will make to the member is that this is a draft -- very much a work in progress right now. I brought this forward to help facilitate my hon. critic. So, you know, here are changes and revisions. This is to help us through the estimates debate, but it is very much a draft at this time.

R. Thorpe: I'm just wondering, if it's a draft. . . . Here we are; in another 15 days we are going to be entering the fourth month of the fiscal year. We have a budget that's been all detailed out. Usually, how you do a budget and get your financials is that you outline all the things you're going to do, when you're going to do them, who's going to do them, etc. Then you cost that out, and that's how you get the book. I'm just wondering: is the minister saying that they don't even have a draft of their targets? Or is it their final targets that they don't have in place? Or perhaps they don't have either. What is it?

Hon. M. Farnworth: Each division within the ministry has its own detailed plan that goes along with this; each branch has its own. We'll be more than happy to sit down with you and go through with you each of the components of that and each of the outcomes of that. As an example, we expect 150 missions from China alone to come through our office this year, each with a set of outcomes. We'll be quite happy to sit down with you and brief you on what the mission is, what the objective is, what the proposed outcome is. There are 150 of them, each with that in place. We'd be more than happy to do that.

R. Thorpe: What I think I'm hearing -- and I want to make sure it's what I'm hearing -- is that in fact you not only have drafts, you also have the details by each branch, each division or whatever they are all called. Would it be possible, then, just in the interest of time, to have staff maybe pull together just the performance measurement sheets for each branch -- just put them in a little binder? Then we could look at them at our leisure. Would it be possible to have that done in the next day or so?

Hon. M. Farnworth: I'm quite happy to get that information for the hon. member, but it won't be able to happen in a day or so. It takes a lot more time than that.

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

Motion approved.

The committee rose at 8:50 p.m.

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