2000 Legislative Session: 4th Session, 36th Parliament
HANSARD
The following electronic version is for informational purposes
only.
The printed version remains the official version.
(Hansard)
TUESDAY, APRIL 18, 2000
Afternoon Sitting
Volume 18, Number 25
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The House met at 2:08 p.m.
R. Coleman: I have a couple of introductions to make today. First of all, for the last couple of days a number of us have been meeting with the members of the B.C. Real Estate Association. On behalf of the opposition caucus, I would like to welcome Dan Bennett, the president of the B.C. Real Estate Association, along with executive director Robin Hill and the members of the B.C. Real Estate Association visiting us in the gallery today. Would the House please make them welcome.
I have one other introduction to make: a friend of mine, Archie Bobsin, and his wife Catarine Gamonnat, along with a friend of theirs, Roseli van Abercrone. Archie has been a great contributor to the B.C. economy for many years, and Catarine is just good people. Roseli is visiting us from Germany. Would the House please make them welcome.
Hon. J. Doyle: Today in the members' gallery we have a special visitor from Finland, His Excellency Veijo Sampovaara, Ambassador of Finland to Canada, who is accompanied by Lars-Henrik Wrede, honorary consul general of Finland in Vancouver. His Excellency has served in Ottawa since December 1995 and will be leaving his post in September of this year. Please join me in welcoming our special guests today.
Hon. G. Mann Brewin: In the House today are two University of Victoria students from the school of social work, Kerstin Grossmann and Stephen Morrissey. They've been doing a practicum in my community office since last October, and I would like to take this opportunity to thank both of them for their very, very hard work.
Joining them is my special assistant in my ministry office, Jody Yurkowsky. She was a social work practicum student some years ago who came to the constituency office and never left. Would the House please welcome all three of these very special people.
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R. Masi: It's my pleasure today to introduce my constituency assistant, Michael Michener. Michael served in the House here as an assistant a few years ago, and we're very happy to have him now. He's over here visiting for the day.
J. Reid: I would like to welcome to the House today Cathy and Jim Stewart, friends from Nanaimo. I'd ask that the House give them a warm welcome.
Hon. J. Pullinger: I am among those who have superb staff working in my office. They're so good that even the opposition has complimented me and them on their work. Today two of those members of my staff are in the House with us. I would ask the House, therefore, to welcome Marnie Faust and Pete Stegar.
D. Symons: One of the joys of my previous life of being a teacher is that in my new profession, I end up running into some of my students. We have one of those students in the gallery today, Valerie Berg, who was a very young person when I knew her many years ago -- and I won't say how many. With Valerie is her friend Dave Abbott. I wonder if the House would make them welcome.
G. Hogg: In the House today we have 52 students from Jessie Lee Elementary School in Surrey-White Rock, accompanied by 12 adults and their teachers, Ms. Warnock and Ms. Haslett. Would the House please make these inquisitive, exciting students welcome.
Hon. D. Lovick: On behalf of the government caucus, I would also like to extend a warm welcome to those delegates from the British Columbia Real Estate Association who have been here visiting for the last day or so and who are effective indeed at the lobbying they undertake. I would ask members again to join me in making them most welcome.
E. Walsh: Hon. Speaker, yesterday I got up and introduced a constituent of mine who I found out wasn't here yesterday. You know, I get so excited when I have constituents of mine here that I just can't wait to introduce them. I want to reintroduce a constituent of mine who happens to be the government liaison representative for the Kootenay Real Estate Board. I would like the House to again please welcome Philip Jones to Victoria.
POTENTIAL CLOSURE
OF CARIBOO AREA SCHOOLS
J. Wilson: I have a question for the Minister of Education. The people in the Cariboo are in shock that five of their community schools can be closed. Many of these schools have been around for decades. Meanwhile, at the exact same time, this government is spending more money fixing toilets and engines on their fast ferries than it would take to keep these schools open. Can the Minister of Education explain to the families in the communities in the Cariboo why they should suffer while her government continues to squander hundreds of millions of dollars?
Hon. P. Priddy: As the member knows, I was actually in Williams Lake and met with the parents from the five schools that are concerned. Clearly for those parents it's an incredibly difficult time. The board has made a decision to close five schools. Those decisions have to be reviewed in a very intensive way in terms of whether that is indeed the best way to meet a deficit of $1.6 million. I gave my commitment to those parents that my senior ministry staff would work with that board to make sure that every single option or every single amount of money, including the money that's in the schools as a result of school-based decision-making, would be looked at before any kind of decision like that could be taken.
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The Speaker: The member for Cariboo North with a supplemental question.
J. Wilson: Hon. Speaker, this is about choices. I am damn mad at the choices this government is making.
The Speaker: Order, member.
J. Wilson: The people of the Cariboo are damn mad at the choices this government is making.
The Speaker: Excuse me, member. Order, member. Perhaps the member could rephrase his question.
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J. Wilson: Certainly. I'm darn mad. We're fed up. If it isn't a billion dollars on a secret labour deal, it's half a billion dollars on a ferry that won't work. This is about choices. This minister has the choice to keep these schools open; it's entirely her choice. Will she make the right choice today and guarantee the parents and children in these communities that their schools will remain open?
Hon. P. Priddy: Hon. Speaker, I think that if the government
Interjections.
The Speaker: Order, members.
Hon. P. Priddy: Let's be really clear where the choice was. The current choice is -- and this budget has not been submitted to the ministry as yet
G. Campbell: There is one choice for this government to make, and that is to say clearly and unequivocally to those parents and those children in the Cariboo that their schools are staying open. For the sake of $1 million, five schools -- five rural schools, five community schools in the Cariboo -- may be closed down. The choice here is clearly in the minister's -- and only the minister's -- hands. What the parents want to hear from this minister is that she will not allow these schools to be closed and that they will open next year and the year following that. Will the minister make that commitment to the parents today?
Hon. P. Priddy: I think it's easy to say: "Make the choice now." People across the floor know that this is a school district choice, not a government choice. This school board will submit their budget to us, and we then review it with them. Let's bear in mind that there was an increase to budgets this year. There's been an increase to district 27's budget this year, and yet the board is choosing to close five schools as opposed to looking at reducing field trips or reducing band programs. We do expect school boards to be able to manage their budgets and submit balanced budgets. For the largest part, they're able to do that without affecting the quality of education.
The Speaker: Leader of the Official Opposition with a supplemental question.
G. Campbell: The minister knows that these schools can only be closed with her approval. What the parents want to know from the minister is that she will not approve their closure, that those schools will be kept open, that the resources necessary to provide rural students with their education will be provided and that those five schools in the Cariboo will be kept open.
Just a couple of weeks ago the government got a $35 million windfall because they closed students out of class. That's 35 times what they need to keep these five Cariboo schools open. Will the minister commit to the parents, to the students and to the communities today that she will not allow those schools to close and that those schools will remain open?
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Hon. P. Priddy: The Leader of the Opposition is correct. In the end, it is the minister who needs to approve school closures. That has not been submitted as yet to our ministry at all. That's a decision I believe the trustees have told the community. They haven't talked with the ministry at all about that and about their final decision. When they do that, we will make every effort to work with them to ensure that they can balance their budget. They have money sitting in individual schools that they have not used to offset their deficit.
Hon. Speaker, we have provided and continue to provide increases in education funding every single year for the last nine years -- far greater than you see anyplace else in the country. And yet this board continues to leave money sitting in individual schools and chooses to close five schools. I'm sorry, hon. Speaker, but we need to see that information come into the ministry. Then we'll work with that board.
I think that people over here are playing with the feelings of parents. I went up there. I met with those parents. I spoke individually with almost all of those parents. They know that we are committed to ensuring that their students continue to receive the best education.
PROVINCE'S ROLE IN IMPLEMENTATION
OF FEDERAL GUN REGISTRY SYSTEM
J. Weisgerber: A report was tabled in Ottawa yesterday indicating that 1,400 people are working to implement the federal gun control legislation in this country -- 1,400 people that could be fighting serious crime in this country. My question is to the Attorney General. Can the Attorney General confirm that 90 people are working in the B.C. provincial firearms office, including 24 RCMP officers who've been taken off the street? And can the minister advise how many officers we have investigating organized crime in this province?
Hon. A. Petter: With respect to organized crime, I'm very pleased to inform the member that we've recently increased our allocation by over $3 million to the Organized Crime Agency here in British Columbia as part of our provincial commitment to fight organized crime. In respect of the province's role in respect of the federal gun initiatives, as the member knows, our efforts have been directed towards trying to minimize the burden on gun owners, working with groups such as the Wildlife Federation and others in order to make sure that the federal regime does not in fact cause some of the consequences many of us fear it might otherwise. The province's role has been to try to minimize that disruption. Through our efforts, I believe that we have made some strides in doing exactly that.
The Speaker: The member for Peace River South with a supplemental question.
J. Weisgerber: Well, Mr. Speaker, Bill C-68 exempts single-shot weapons produced before a given date. But in
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British Columbia we require that owners check every gun to see whether or not it fits British Columbia's criteria. Far from reducing the paperwork, our government is making it incredibly more difficult than the feds do. In fact, the firearms office won't even issue a list of those single-shots that don't meet the criteria for exemption. You have to call every single time you want to know. So don't give me that baloney about reducing the amount of paperwork here in British Columbia.
In 1995, Allan Rock told Parliament that it would cost $85 million over five years to implement Bill C-68. I think it's fair to say that nobody believed that figure then. To date, five times that amount -- $350 million -- has been spent, and we're going to spend a billion dollars in this country before the program is complete.
Can the minister advise who's paying those 90 people in British Columbia and why this money wouldn't be better spent combatting organized crime and illicit drugs in this province?
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Hon. A. Petter: I appreciate the member's concerns. However, the member should be well aware that this government has worked hard to try to ensure that while the safety of individuals is protected and public order is maintained, the gun registry system that is being put in place is one that has the least disruptive effect. If the member believes he has further suggestions that can assist us in that goal, I'll be very happy to sit down and meet with him and pursue those suggestions.
The fact is that we want to ensure that in British Columbia and in Canada, the dangers that are posed by guns are dangers that do not create threats to health and safety, on the one hand, but that gun owners and organizations that are concerned about the rights of gun owners are respected and that we make sure than any regime in place is one that is administratively convenient. That's our goal; it remains our goal. If the member wants to assist us in that, I'm happy to work with him to that end.
The Speaker: The Chair would remind all members that questions that are succinct and factual and brief are best received in this House -- questions and answers.
100 MILE HOUSE HEALTH CARE FACILITY
C. Hansen: In 100 Mile House there is a new 39-bed health care facility that has been sitting ready for occupancy since February. But it has no patients because of this government's mismanagement. The MLA for the area is quoted as saying that he doesn't think it's a serious problem that this facility has no medical staff, it has no patients, and yet it does have a complement of administrators in place. Can the minister tell us how much it is costing the taxpayers for each month that this facility sits there with administrators in place but no patients in the beds?
An Hon. Member: Yes, minister. Yes, minister.
The Speaker: Order, members.
Hon. M. Farnworth: And I have spoken to Sir Humphrey on this. So I'm pleased to tell the hon. member that the facility is up and is ready to open and will open in May. In fact, there has been a delay in terms of the construction, because the contractor hadn't finished all the required work.
I know members of the opposition would not want this facility to open when it is not complete. So that's important, because I know how many ambulance chasers there are on that side of the House. If someone were to slip on a floor and break a leg or if there was some system that didn't work, I'm sure one of those members would be first in there with a lawsuit. So, hon. member, we have to make sure the facility is up to code and is ready to open and all the things have been done. That has been done.
It has to be staffed. They were concerned about ensuring that the funding was in place for staffing. I'm pleased to report to the hon. members that in fact the funding has been put in place. They were notified in February that they can hire the staff. I'm pleased to let them know that the facility has got the budget allocation which they requested for this year, which they were notified of in February. It will open fully staffed and in place on time.
Hon. D. Lovick: I call
G. Campbell: I rise to present a petition on behalf of 245 parents whose children attend General Gordon Elementary School. They're concerned about the erosion of quality education in schools and ask that the government start putting students first.
Hon. D. Lovick: I hope visitors will recognize that in the spirit of conciliation, cooperation and friendliness, I rapidly yielded my place to the Leader of the Opposition so he could present his petition.
Having done that, I want to call second reading on Bill 9.
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COOPERATIVE ASSOCIATION
AMENDMENT ACT, 2000
(second reading)
Hon. J. Kwan: I move that the bill be now read a second time. This bill amends the Cooperative Association Act, which was passed in July 1999. The Cooperative Association Act modernizes the legislation governing the creation and operation of cooperatives to reflect new international cooperative principles and to support the growing sophistication and development of the cooperative sector.
It is expected that the new act, which is broadly supported by the cooperative sector, will be brought into force later this year. I must also take a moment to thank my predecessor, the Minister of Social Development and Economic Security, for actually having done a lot of work prior to my arrival with respect of this act.
This bill includes amendments that are the result of further input received following the introduction of the Cooperative Association Act. While the primary purpose of the amendments is to make technical changes and clarify ambigu-
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ities in the new Cooperative Association Act, the amending bill also responds to stakeholder concerns by revising the appeal process related to determination of membership in a housing cooperative.
I am pleased to inform this House that the appeal process has been improved in many respects. The revised process establishes a clear procedure for appeals from terminations of membership in housing cooperatives and broadens the basis on which appeals may be brought. As well, it ensures that courts may review the facts in evidence supporting the cooperatives' decision to terminate membership and expressly permits the court to reinstate a person's membership in the housing cooperative. The bill also provides for a regulation that will that ensure access to the Supreme Court is not denied for appellants who cannot afford to pay the required filing fees. Finally, the appeal process has been streamlined by requiring that orders for possession of residential units be heard at the same time as the appeal from termination of membership.
Cooperative associations are playing an increasingly important role in economic development and community diversification in British Columbia. The changes introduced in this new Cooperative Association Act will take cooperative legislation from an outdated model to one that's designed for the challenges and realities of the twenty-first century. The changes proposed in this amending bill are necessary to bring the new modernized legislation into effect.
I've met with members from the cooperative sector; they are in support of this bill. I know that the Tenants Rights Action Coalition and others are also in support of this bill. And I know that there may well be members of this House who would wish to speak to this bill, so I await their comments before I close debate on second reading.
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J. Reid: This bill is an amendment to the Cooperative Association Act that the government did pass last year. That act has not been brought into force, yet already we see amendments to this bill coming forward.
I could certainly understand amendments coming forward on a bill once it has been in force and daily practice reveals different issues and different situations that come to light and that need to be addressed. That's not the case with this bill. The amendments to this bill mainly consist of typographical errors and grammatical changes. These small errors on the bill certainly should have been caught last year.
I have to admit that it does raise some worrisome questions, because we know that last year the bill was introduced very quickly and passed through the House very quickly. The Cooperative Association Act, 1999 was introduced for first reading on July 8 last year; second reading was July 13 and committee stage on July 14. There was a rush to introduce this bill; there was a rush to produce this bill; yet we haven't seen this bill brought into force.
When we see the kinds of amendments coming forward today and look at what implications they might have, there is the concern that certain other parts of this bill -- the original bill -- were not well thought out and hold certain problems as well. One of the sections that this bill amends is section 37 of the act. Last year this section of the proposed bill was amended in committee stage by the minister. Now it comes forward to be amended again -- all this, and the bill has not yet been put into force.
We do have a few concerns that we will be exploring in committee stage. We have a concern with regards to the issue of auditors for co-ops. This was discussed last year in committee stage with the original bill. There is an amendment to this bill, and we will certainly be raising those concerns and discussing them to see how they have been addressed.
There are some details, as the minister has mentioned, brought forward in the amendments for this bill. Yet in other parts of the amendment a large section of detail has been omitted from the bill. We will be pursuing that matter and issue, as well, in committee stage.
We agree that cooperatives certainly are a vital part of our communities. The social and economic impact they have on our communities is significant. The cooperative bill does allow for a new generation of cooperatives to address changes in society and allows a certain creativity and structure to be able to further enhance the work being done in communities. These community groups deserve legislation that gets it right, is well thought out and is carefully planned. We do look forward to third reading debate.
Hon. J. Pullinger: I'm pleased to rise in my place to speak briefly to this piece of legislation that my colleague has introduced to the House. I move to speak particularly because of the comments of the member opposite. I want to begin by addressing some of the issues, so that people who read or hear this debate understand what in fact is going on.
When the legislation was introduced last year, it was introduced on the understanding that there would necessarily be amendments this year. Everybody involved was clear about that, and I believe, although I'm not certain that I said it in the House, these are anticipated amendments. These are outstanding issues which were dealt with as best we could. We also recognized that it was not possible to do that. Rather than stall the legislation again, we wanted to move forward with most of the legislation and make those amendments this year. The other reason for doing that is because we knew, as well, that there would be subsequent or consequent amendments needed. We knew there were other pieces of legislation that it would affect and that because of the timing of that legislation, we needed to do those amendments this year. So these are entirely anticipated amendments. The co-op movement knows that well. They would certainly support that argument.
I also have to take issue with the notion that this was somehow concocted in a back room and rushed through the House. If the opposition didn't do due diligence, I can't stop that. I mean, obviously they don't care enough about co-ops to actually make an argument or to involve themselves in the debate. I can't fix that. If it went through the House too quickly for them, then they need only to look in the mirror.
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The development of this legislation was done over a number of years, and it was done in fact starting in our last term of government by the now Minister of Women's Equality. It has been an intensely consultative process. We have consulted all of the co-op movement as best we can. We've put it out to the public. It has therefore received very strong support from everyone affected, as my colleague appropriately says. It's just simply wrong to say that there was some kind of a rush to put this in the House. There wasn't. We did want to get that legislation passed last year so it could be in
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force this year, because the co-op sector is quite appropriately eager and anxious to get that legislation in.
I would make the argument that co-ops are one of the most underutilized or underused tools in our economy and in any modern economy. There is certainly a big place for cooperatives -- co-ops, as the opposition member noted -- as we have a new generation of co-ops. That new-gen co-op movement, if you like, is in large measure small businesses that are coming together. They understand that by forming a cooperative and only, in many cases, by forming a cooperative, the small businesses that we on this side of this House value can come together and find the economies of scale and efficiencies they need to become a big enough force to compete in a global marketplace.
As borders disappear economically, obviously small businesses are repeatedly faced with a corner store up against an international big-box store. We all know who the loser is in that kind of dynamic. Co-ops are one of the ways that the small enterprises that are British Columbia-owned, that are family businesses or slightly larger, can come together and actually compete. We see it across British Columbia. We see shellfish co-ops; we increasingly see value-added co-ops in the forestry sector. There are three or four significant, important co-ops that are growing in that sector. We also see it in the non-profit sector. We see non-profits coming together in cooperatives for the same reasons.
Over the last few years the cooperative movement has
Interjections.
Hon. J. Pullinger: It's so sad, again, to see the members opposite jeering at the voluntary and non-profit sector. It is so sad that they continue to jeer at that, and it's a very significant sector of the economy and our communities as well.
In the last two years alone, we've seen growth of 750 jobs in the co-op sector, and that's under the old legislation. Sadly, in the 1980s when the members opposite, under a different name, were in power, co-ops were not only ignored; they were actively discriminated against in the way policies and legislation were made. The result is that we have had very outdated legislation until now, and we have had policies across government that excluded cooperatives.
I'm pleased that over the last seven or eight years, that has changed dramatically, and I think it's fair to say that this amendment in many ways is the culmination of very intense work by the movement and by this government.
I would simply like to applaud my colleague who has brought this legislation forward. She's done a superb job of doing so; I know the co-op sector is very pleased to work with her. I would also applaud the staff, who I know worked very hard in many ministries on this, but above all members of the co-op movement, who have worked so well with our government over the last numerous years to make the co-op sector much more viable in British Columbia.
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S. Orcherton: I've long been a supporter of cooperatives and credit unions in British Columbia, and I'm not alone in that. Indeed, there are about 1.8 million members of cooperatives and credit unions. About a third of British Columbians are members of credit unions, and cooperatives and credit unions employ about 13,000 people in British Columbia. There are about 700 cooperatives involved in British Columbia, 350 of which are housing cooperatives.
These amendments are good amendments. They are amendments that are supported by housing cooperatives, and I am particularly pleased to see that they are moving forward on the issue of establishing a clear appeal process for terminations of membership in housing cooperatives. It's important that those rules are put in place.
Cooperatives are a financial vehicle where people can pool their resources -- people who otherwise don't have the financial wherewithal to be able to purchase their own homes, the financial wherewithal to be able to access banking facilities in a traditional way. They are a way for people to pool their resources so that they can have economic viability in their communities.
I was very pleased to hear the member for Parksville-Qualicum speaking about her understanding and her support of the social context of cooperatives in her communities. I want to make it clear to people in this House that cooperatives are indeed a socialist principle. It is very, very encouraging to hear at least one member of the opposition speaking in support of socialist principles -- the ability of people to pool their resources so that they can have a home in British Columbia.
I know that many in Victoria in the early 1950s got involved in the cooperative movement, starting credit unions and housing cooperatives, and I am very happy that many of those organizations are still in place today. Certainly there has been a strong sense of community involvement in housing cooperatives in my community in Victoria. I point to a housing cooperative, very aptly named the Alf Toone Housing Cooperative, in Victoria. This cooperative is named after a predecessor of mine, the former secretary-treasurer of the Victoria Labour Council, who went on in political life to become the mayor of the city of Victoria. He was a strong, strong supporter of the cooperative housing movement in Victoria and a very strong supporter of the credit union movement. I think that if he were here today, he would be pleased to see the Cooperative Association Amendment Act coming into play and these amendments that put in place clear rules for people involved in housing cooperatives.
The housing cooperative is, as I said, a very important mainstay in the community which I represent. There are over 350 cooperative housing organizations in British Columbia offering home opportunities -- places for people to live in this province, where people can indeed pool their resources and have a home where they can raise their children and family and be part of a community.
This legislation and these amendments are very appropriate. They came, as others have said, with wide consultation with the housing cooperatives, and it's a necessary amendment. I rise in support of the amendment. I'd urge all members to do so. Indeed, as I said earlier, and I want to reiterate for all members of the House, I am very encouraged to see the members opposite -- at least one -- subscribing to some of the basic principles of socialism in this House.
Interjection.
R. Coleman: Hon. Speaker, I'm sure the Minister of Agriculture will be more than happy to wait until I've expounded on co-ops for a couple of minutes before he gets his opportunity to speak this afternoon.
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First of all, I want to spend most of my time today talking about housing cooperatives. The reason for that is that there is some misunderstanding that exists on that side of the House as to the involvement of our provincial government in the management of housing cooperatives in Canada. Ninety percent of the housing co-ops in Canada are still under federal administration, and the reason for that is that the Cooperative Housing Federation wants it that way. They've asked that they be allowed to have a national body and stay not through the devolution of CMHC's other social housing programs to the provinces but be allowed to stay within a national body, because they feel they have a different form of housing relative to its management.
There are 250,000 Canadians that are members of nearly 2,200 non-profit housing cooperatives located in all parts of Canada. There are cooperatives that are as small as three dwellings and as large as 770. Most have between 40 to 80 units in their cooperatives. They are apartments and townhouses, for the most part.
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People like living in cooperatives because cooperatives are another form of housing. It's a form of home ownership, in reality, and it shouldn't be confused with other programs relative to that. They are satisfied with their housing, and they are much more satisfied than those who rent privately. In fact, the turnover rate in co-ops is about half that of private rental properties in this country. In fact, about one-third of renters say they would move into a housing cooperative if they were given the opportunity and they could, and more than 40,000 Canadian households are presently on waiting lists for housing cooperatives.
They are very clear in their literature, hon. Speaker. They say: "We are members, not tenants." That is the attitude that pervades the cooperative movement. They manage their housing democratically, they elect their boards of directors from among the residents, and every one of them has an equal voice in the decisions and the management and the operation of their form of housing. Almost all of them -- eight out of ten -- have volunteered in their communities and do work within their cooperatives. Their success through the economic cycles of the past 25 years has been based on volunteerism supported by democratic governance, member training and education, and the goal of economic self-sufficiency.
Most co-ops in Canada are non-profit. They have no equity investment in their homes, and they reinvest all surpluses into their own housing to pay down their costs. They live in this mix of housing because nearly 90,000 homes in co-ops in Canada receive some rent geared to income supplement -- assistance from federal or provincial governments in actual fact. This is something that the minister and I have debated, and there may be a definition around whether you want to refer to it as a rent supplement or rent geared to income or whatever it is. But there is a supportive activity in the co-op movement that is outside the traditional social housing supportive basis.
In federally sponsored cooperatives they provide assistance to more than twice as many households as required by their operating agreements and, with CMHC, at no extra cost to the taxpayer. They manage their rent-geared-to-income subsidies economically on behalf of the government. CMHC says that cooperatives have been highly successful in achieving income mixing without polarization of income groups. Income was basically a non-issue for members: "We care about our success in social integration."
It's very important that we understand that the operating costs of co-ops are below those of all other forms of assisted housing. They are 19 percent less than municipal or private non-profit housing, and they are a blazing 71 percent less than government-owned and -operated public housing in this country. They share the benefits of those savings with taxpayers, since lower operating costs reduce the government rent-geared-to-income subsidy billed to all of us. The value of the time that they contribute to housing activities was estimated by CMHC in 1992 as being from $905 to $1,430 per household per year. In 1992 the federal government saved $504 in subsidies by accommodating a low-income household in a co-op instead of a non-profit housing unit and $1,907 for every low-income household living in a co-op instead of a public housing unit. That represented a saving of $17 million against non-profit housing or $63 million a year against public housing. Those savings in co-ops grow every year.
They are Canadian people, people of special needs or people on different levels of income. They are people who work together to save us as taxpayers money within the operations of their housing, and at the same time, they provide good quality housing for their members. They are great people. They are everything from seniors to families to disabled to those with other special needs. Nearly one-quarter of them are newcomers to Canada. They are a self-help movement. They are a group that, on a national basis through the Cooperative Housing Federation, plan and continue to plan to increase the professionalism and management in co-op housing across this country.
The Cooperative Housing Federation of B.C. and the Cooperative Housing Federation of Canada have made it clear that they wish to have a national body, that they wish to have their operations continue to be controlled and managed on a national basis by a federal administration and not be devolved to the provinces. Up to this point, our province and every other province has agreed to that concept. For us to deliver housing that is affordable and that is actually going to save the taxpayer money as we deliver programs into the future, this form of membership or form of ownership in housing will be a vital component in an overall vision and overall long-term strategy for housing in our province.
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Hon. C. Evans: Hon. Speaker, I rise to talk about the co-op bill that is in debate. I would like to congratulate the hon. member that just spoke. He obviously knew a great deal about the subject, and I appreciated his support.
One thing I find fairly unsettling or unfortunate is that I think this is perceived in this chamber, in this building, in the galleries and out in the world -- people on the other side of the television sets -- as a fairly boring subject. Yet I would argue that here, in the calm and quiet of this debate, we are literally changing the world for the better. I want to hold it up to what's been going on in Washington, D.C., in the last two days. You see pictures of people with billy clubs and tear gas and mace. On the other side there are demonstrators, and they are having a big clash -- same thing happened in Seattle.
What is going on down there? What is really going on is that an entire generation is saying that they are losing control over their lives to the globalism, the monetarism, the free trade, the whole notion of capital moving around the world. You see the kerfuffle on television as the different points of view come to blows instead of discussion.
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And way across North America in Victoria, B.C., in the Legislature, with only six people watching, what is really going on? A minister brings forward a bill. No noise, no television, no tear gas, no brass band, no cymbals -- she brings forward a bill. What is it about? It is the antithesis, the 180 degree-opposite of the loss of control to the limited liability corporation, which is happening around the world. She brings forward a bill that says: "You can take control." It's not the age-old 1930s form of control that made the wheat pool and the dairy co-op and all the institutions of our parents and grandparents. She brings forward a bill that says: "We are going to respect the changes in how the economy around the world is changing. People's lives are changing. We are going to make it possible for a brand-new generation -- those kids with the dreadlocks and the rings in their ears that you see on television -- to participate in the co-op movement, the notion that we invented as a way to take control."
You know, it's boring. There is nothing really going on down here. Everybody gets up, reads their notes and mumbles on. But what you are seeing is a completely different approach in making democracy work for people -- to the credit of the minister and the previous minister in the government. [Applause.]
Yeah, good on you. We don't have needs for big demonstrations and riot squads here, because we are going to help people take control of their lives. I will tell two quick stories to illustrate what I was talking about.
Interjections.
Hon. C. Evans: Hang on, you guys. This is not ideological. I will tell you a story.
In 1982 everybody knows the forest economy cratered; you couldn't sell anything. It wasn't the fault of the government. Social Credit was the government. Was it their fault? It just happened around the world. You couldn't sell boards or trees. My partner and I owed a whole bunch of money on our cat, and the John Deere company came to find it and repossess it. We hid it under the trees in the forest, and I went looking for a job.
Meanwhile in Castlegar, B.C., 60 families were being kicked out of their homes by a Vancouver developer -- not necessarily a supporter of this party, but perhaps a supporter of somebody in this room here today. But at any rate, they were evicted from their homes by a Vancouver developer because he wanted to triple the cost of those apartments. So, hon. Speaker, since I was unemployed as a logger, I got a phone call from a friend who said: "Corky, do you remember how to organize?" I said, "Well, it's been a long time, but maybe I could give it a shot," and he hired me to go to Castlegar to meet with those 60 families and see if they could take control of their lives and keep from being evicted from their apartment complex by their landlord, who lived in Kitsilano and just saw them as numbers who didn't pay enough rent.
Over the course of the next six months I saw primarily immigrant families -- people from eastern Europe, people from South Africa, people who worked at Cominco, people who worked at the pulp mill, people who swept the streets, literally -- take over six buildings in which they raised their families. I guess this is the point of the story; it had nothing to do with the buildings. It had to do with changing their lives, to stop seeing themselves as labour for the boss, to stop seeing themselves as tenants for the landlords, to stop seeing themselves as victims of the society, to stop feeling like they lived in a world that was out of control and to take control of where they lived.
[1500]
Over the ensuing 15 years, I saw those very same people change and blossom, their kids go to university, the dynamics inside their marriages change, how they raise their kids change and everything about their lives change, because they were able to take control from the landlord -- from the outside landlord, from the city landlord, from the capital that wanted to come from away and control their lives. What the minister is doing here today is assuring that the legislation will make that possible in the future for our kids' generation, just like it was for us.
Now, I want to move to the second part.
Interjections.
Hon. C. Evans: Hang on, hang on. Don't do that. I'll get done quicker if you don't heckle. I want to move to the second part of the legislation, hon. Speaker, which is about agricultural co-ops, essentially. In Creston in the 1930s, as a response to the changing economy of the times, the apple growers in the town got together, formed a co-op and built a fruit-packing plant, because everybody knew that if you let the man pack your fruit, you were going to lose most of the value. So we'll do it together.
That worked for decades, and then, of course, along came the 1990s, and the world changed in how you sell apples, who wants to buy them and what the quality is. And the co-op began to fall apart, and it began to lose money. This government attempted for two, three, four years to prop it up with various assistance and feasibility studies and the like, to see how they could change. They came to the conclusion that the only way they could change is if they could change the co-op, because certain members who were growing fruit and sending it in there wanted to do it for a living; other people just did it for a hobby.
Those people who wanted to grow quality fruit and send it around the world weren't allowed to invest in the co-op. They couldn't change the machinery, the marketing and the whole process of how the co-op worked, because the co-op legislation said: "One member, one vote, one investment." So this government -- this minister -- came along and said: "In order to make co-ops work in the economy of the moment instead of the economy we remember, maybe we'd better change the share structure so you can actually invest in the co-op if you depend upon it for making a living."
If this bill passed here today -- which some previous speakers have suggested is sort of boring or irrelevant or shouldn't be happening
I like the contractor; I like the guy who runs the packing plant in Creston. But it's no longer the members, because the legislation that we're bringing in here today was illegal a few years ago.
I want to wind up this story by saying that I'm glad these people are here watching this minister make it possible for
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their children to take control of their lives in a way that's not being replicated in Washington, D.C., at this moment or Seattle last year. Hon. members opposite, don't forget it: if you participate in change -- in democracy -- allowing the civil society to develop, blossom and work, you won't need the civil strife that you see down south.
G. Farrell-Collins: It's always entertaining to listen to the member opposite. I want to speak a little about co-ops too, very briefly, if I may. Then I want to talk a little bit about the process and how this bill has come forward.
First of all, I think that co-ops, as many members on both sides of the House have said, play a valuable role in our economy and our society and also in housing -- as part of that as well. People need to have choice. They need to be able to choose different options on how they want to run their business or their farm or how they want to purchase their goods or how they want to live. This co-op act that we're amending today is one of the tools that provides people with that opportunity to make those choices. I always think that the better the mix of options for people, the more likely we are to find an option that suits people, and they can choose that of their own accord.
I grew up in Saskatchewan, where co-ops certainly are not rare by any stretch of the imagination. In fact, they're everywhere; they're ubiquitous. We were members of the co-op for years in Moose Jaw, where I grew up. Our number was 4732. I can still remember it. It's ingrained in my head from going through the checkout. Certainly it provided great service to us as a family. My parents participated, and I think my brother-in-law is on the board there to this day.
Our summer cottage, which has been in our family for almost 50 years and where I hope to be married this summer in July
An Hon. Member: Hear, hear.
G. Farrell-Collins: Thank you. It's where we were all raised and the grandchildren are being raised, and now the great-grandchildren are being raised there and are spending their summers there. It's a wonderful place. That was an opportunity for 50 people to come together and, for $100 each, chip in and buy this property in 1949, I think it was, or 1951. I'm sure my mother will correct me when I get out of here.
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Certainly we wouldn't have been able to do that without that opportunity and that choice. It's a piece of property and a place where we've all grown up. My father passed away a few years ago, and we spread his ashes there. So it has been part of our family for a long time, and I hope it remains part of our family for many decades in the future.
I want to make one comment, because I know that the member for Vancouver-Mount Pleasant and I have one thing in common, if nothing else. She currently represents an area of Mount Pleasant and Quebec Manor, which is one of the housing co-ops in her riding. And after the next election and with the redistribution of boundaries, I hope to be able to represent those constituents of hers in this House. They have their twentieth anniversary celebration coming up. For anybody who's been there, you're driving through Vancouver -- the Broadway and Main area -- and you go down the corner a couple blocks to 7th Avenue and Quebec Street, and there's a great, wonderful heritage brick apartment building there that's in beautiful condition.
It's a heritage place. It was a building that 20 years ago was running into disrepair, and the tenants got together, formed a co-op and took it over. It's a great place now. People comment on it as they drive by and walk by. It's certainly been a great option. I live three blocks away in another heritage building, and it's nice to see that neighbourhood retaining some of its heritage. They probably couldn't have done that without the co-op. So congratulations on 20 years to Quebec Manor. I certainly wish them luck in the next 20 years.
I want to talk a little bit, though, about this piece of legislation and how it got to this House. It's a perfect example of how this Legislature hasn't worked to the best advantage of the constituents that we're here to serve. While we all support the bill and support the amendments, and while we'll get them through eventually, the reality is that this legislation could have been in force years ago -- certainly last fall. This is part of a negotiation we're trying to encourage the government to follow and adopt over time, and we've been doing it for a number of years.
It is that if the government were to introduce its legislation in the spring session and have it there for exposure -- committees can do hearings; the public who are affected by that legislation have a chance to look at it and make comments and recommendations; the bureaucrats have a chance to look at the legislation and find out if there are errors or things that need to be changed -- and then come back in a fall sitting to pass that legislation with the amendments that have resulted and arisen as a result of the ongoing discussion and public exposure of the legislation, we could then complete that legislation in one year.
[T. Stevenson in the chair.]
As a result
That's one of the goals we're trying to achieve, and this piece of legislation is a prime example of that. This bill could have been in place last fall if the government had called the Legislature in the fall. We know that they were otherwise occupied with a leadership contest -- a somewhat acrimonious one, where I think the needs of the constituents were overridden by the needs of the party.
I think that if the government were to move forward with those kinds of changes, we could get better legislation sooner. All constituents, the public in British Columbia, would have more input into that legislation and would have it in place sooner, in better form, and it would be something that they could rely upon.
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I just want to add my few words in support of the co-op movement and the many achievements it's attained over the last number of years. I want to encourage a new process for introducing, tabling and passing legislation in this House that will ensure that constituents, like those people who are involved in co-ops, will receive their legislation earlier and in better form.
B. Barisoff: I ask leave to make an introduction.
[1510]
Leave granted.
B. Barisoff: On behalf of the member for Vancouver-Langara, I'd like to introduce 39 students. Sir Winston Churchill Secondary is hosting the Lycée Sacré Coeur from Reims, France, along with two adults, Ms. Dellis and Ms. Guillaume. Could the House please make them welcome.
J. Weisgerber: I just want to speak very briefly about Bill 9. In our part of the world, in the Peace country, co-ops are very much an integral part of the community. Sometimes the debates within those cooperative organizations can be feisty. Just very recently there has been quite a controversy in Dawson Creek over a proposed expansion and reformulation of the co-op centre -- hardware, dry goods, grocery
The members kind of lined up on two sides of the issue and started looking into their rights. I assisted them or thought I was assisting them by providing them with copies of the legislation that we passed last year. It seemed part of my normal responsibilities, and it seemed reasonable -- although, in hindsight, incorrect -- to have assumed that the legislation had been proclaimed. But indeed, we went through a process last year to introduce legislation, to debate it and to pass it, and then somebody obviously understood that they'd made a mistake: "Whoops, we made a mistake here. Let's not proclaim this legislation; let's bring an amendment back next year." And we have -- or the government has.
The question in my mind is: what kind of a process went on last year? Who proposed the legislation? What kind of consultation went on? There can't be that many cooperatives in this province. What kind of consultation went on with the stakeholders? Why was it important last year, at the end of the session, to drive this legislation through? I don't know the answers. But what bothers me
I hope the minister can tell us when she closes that this is a dramatically different piece of legislation than the piece that was introduced last fall. I don't know whether this is good legislation or not. I don't know whether the government has consulted with my constituents. I certainly haven't heard that they were. Indeed, those people who are at the centre of the cooperative movement in Dawson Creek were amazed to find out that the 1999 legislation had never been proclaimed. They got halfway through their debate and then found out that they were working on assumptions that were not correct, because the legislation had never been proclaimed.
If anything, it reinforces the position just put forward by the Opposition House Leader, and that is around exposure legislation -- the notion of introducing legislation, letting it sit on the order paper, allowing the affected parties to examine the legislation and make comments and then amending the legislation before going through debate.
I expect I'll support this legislation. Sadly, I expect I will be called upon to decide whether or not to support this legislation so quickly that my constituents -- those co-op members who will be affected by these amendments -- won't get a chance to see them. If they do happen to see them, they will have trouble examining the amendments and comparing them to the existing legislation. If they somehow manage to do those things, they will have difficulty organizing a meeting and getting a consensus opinion back to me before the legislation is passed. I have no doubt that it is the plan of the government to introduce this legislation today, bring it forward tomorrow for third reading and have someone in to give final assent before the end of the week.
[1515]
So we appear doomed to continue to repeat the same mistakes over and over again. I hope this isn't one of those mistakes, but I haven't seen or heard anything to suggest that these amendments are any more thoroughly thought out, any better thought out, than the ones that were introduced -- as the Minister of Agriculture said -- with little fanfare and little 1930s rhetoric. Well, maybe a little more rhetoric, a little more fanfare and, most importantly, a little more time would have allowed us to avoid having to come back in less than eight months.
Interjection.
J. Weisgerber: I'm sorry. The former minister -- someone who might have had a hand in the last piece of legislation, I suspect -- appears anxious to speak, and I certainly am anxious to hear her speak. So I'll take my place and try and decide whether or not I'll support this legislation when the opportunity arrives.
Hon. J. Kwan: It gives me great pleasure to rise to close debate on second reading of Bill 9. I'd like to thank all the members who gave comments with respect to this bill. There were a number of questions that raised. There were actually contradictory comments from various members. One member in particular, the member for Vancouver-Little Mountain, is suggesting that the action, in terms of modernizing the Cooperative Association Act, is too slow. We have other members -- Peace River South and Parksville-Qualicum -- suggesting that the action on moving the bill forward is in fact too fast and there isn't enough consultation. As is always the case in British Columbia politics, we have different opinions, and such is the democratic process.
Let me just, first of all, address a little bit of the concept of cooperatives. Indeed, as we talk about democracy and the democratic process, the cooperative very much centres on the notion of democracy. Each member in the cooperative has the democratic process to control their cooperative. Each member of the co-op is able to participate and vote on issues that affect them. They are not deemed as a tenant in the case of a housing cooperative; they are seen as a person who actually has ownership of the cooperative. They have a share of the cooperative, so they're not just simply tenants within a housing project. They're owners of the project who own shares and who have equal concern and therefore protection, if you will, for their own cooperative.
[ Page 15058 ]
This bill is meant to actually modernize the operations for cooperatives, particularly giving members within a housing cooperative more authority in terms of rights and protection of their rights around eviction and other issues. In particular, I would like to address the issue around consultation. The bill, prior to my arrival and the discussion of bringing forward amendments to the Cooperative Association Act, has been ongoing for some five or six years. In fact, prior to last year the act had not been modernized since 1988, and that was the last change with respect to the Cooperative Association Act.
Last year -- in 1999 -- my predecessor brought forward this bill, and this year we're bringing forward an amendment. At that time there was extensive consultation with the community around that. I indeed have a list of folks who have been consulted. The consultation involved the Canadian Cooperative Association, B.C. Region; the Cooperative Housing Federation; the Credit Union Central; the Federation of Worker Cooperatives; the Association of Canadian Child Care Cooperatives; and other individual co-ops and, of course, within the ministry as well.
Further to that, it was anticipated that there would be further amendments to this act, and there has been further consultation with respect to this amendment of the act. Ongoing consultation has taken place with the Canadian Cooperative Association, B.C. Region; the Cooperative Housing Federation, who have been extensively involved around this; again, within the ministry; with the Certified General Accountants Association of British Columbia, and I know the member for Parksville-Qualicum raised perhaps some issues around that. In fact, this amendment brings forward some of the changes they have suggested in addressing some of those concerns. The Tenants Rights Action Coalition has been consulted extensively, along with individual cooperatives and other community agencies. So there's been ongoing and extensive consultation with respect to this amendment.
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I think all members of the House recognize the importance of cooperatives in terms of their role in our communities. Approximately 1.8 million members of cooperatives and credit union members exist in the province. They are significant employers and, if you will, economic contributors to our province. The credit unions own some $20 billion in assets in the province.
There are about 700 cooperatives in the province of British Columbia, of which 350 are housing cooperatives. Most housing cooperatives are located in the lower mainland, although not all, and they provide some 13,000 homes to individuals in the province. The retail co-ops serve some 71,000 members and make about $262 million in annual sales. Federated Cooperatives Ltd. retail members are located in about 20 communities throughout British Columbia. They range from Port Alberni to Dawson Creek to Sointula to Ucluelet. Mountain Equipment Co-op, as an example, has about one million members in Canada, and there are some 125 child care cooperatives in British Columbia. Agricultural cooperatives are important in British Columbia, particularly in the dairy, fruit and flower growing industries. Indeed, the fastest-growing type of cooperative in British Columbia is the worker cooperative, particularly in areas of resource management, tourism and community development.
These are just some examples in terms of cooperatives in that sector and how it is changing our economy and changing our community on the whole. It is based on a different model and a different concept and is very much fundamentally based on the idea of democracy. I know that the member for Peace River South was concerned with respect to consultation, particularly in his own riding. I know that my predecessor, the Minister of Social Development and Economic Security, was in fact in the member's riding talking to cooperative members around cooperative issues. So there has been that kind of ongoing discussion with members.
The Canadian Cooperative Association, particularly, has worked hard on this issue. In fact, they were in the House yesterday. David Lach and John Restakiswere in the House. I had ongoing discussions with them around this act. They were very excited to see the amendment go through. They do feel that it is advantageous for the co-op sector not just on one aspect of the co-op sector but really on all aspects of it.
I do want to take a moment, also, to touch on the issues around housing. Nearly half of the cooperatives that exist in British Columbia are actually involved in the housing sector. As the member for Fort Langley-Aldergrove mentioned, they are an important component of providing housing in British Columbia.
As we know, in other provinces where they have stopped providing housing programs, whether it be social housing or cooperative construction, they actually are faced with a major homelessness problem. Ontario is one of them. I just recently met with the federal minister responsible for homelessness, Claudette Bradshaw, who was telling me that there is a problem across the country with respect to affordable housing and housing for people who don't have the means to access safe and affordable housing. The cooperative sector is a major force in providing that housing. They are people who take ownership and responsibility of the housing units in which we work in partnership with them.
I know that recently, again, the member for Fort Langley-Aldergrove made a comment with respect to a rental supplement, saying that this should be the model for housing in British Columbia and should indeed replace construction of affordable housing in both social housing and the co-op sector. I know that the Cooperative Housing Federation took issue with that. Indeed, if we just move to a model of providing for rental supplements to individuals, you take away the assets that the community would own. You take away the opportunities for these members who have shares in the cooperative sector, who own these assets in our community. Effectively, you will destroy the co-op housing sector.
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That is the approach that I know our government will not take. Indeed, we want to work with them as partners to build the assets all throughout British Columbia, to ensure that we bring in legislation even though it means that we would have to keep on working on it, to make sure that we modernize it and make sure that amendments are brought forward to reflect the needs of the co-op sector on an ongoing basis. They are an important resource in our community, because not only do they provide support to community members but are an economic engine in our communities as well. They are a growing sector. We must make every effort to support the cooperative sector.
Finally, I just want to wrap my comments up by saying that there are a lot of people who work well under the cooperative sector. I know that we've been working with the Ministry of Women's Equality particularly in encouraging women
[ Page 15059 ]
to get into a new way of doing business under the cooperative model. There's been a lot of small business individuals who are starting up utilizing the cooperative model. My own ministry provides for the co-op advantage program, again utilizing the support, providing seed moneys and so on to individuals and small groups of people who want to begin the co-op movement in their own arena. Those are opportunities for our community. These are the partnerships that we want to work with in our community. This bill provides them with more autonomy around that, gives them more support and does indeed modernize the cooperative sector in the province.
With that, hon. Speaker, I'd like to move second reading of the Cooperative Association Amendment Act, 2000.
Motion approved.
Bill 9, Cooperative Association Amendment Act, 2000, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.
Hon. J. Doyle: I ask leave to present a report.
Leave granted.
Hon. J. Doyle: I'd like to present a business plan for the year 2000-2001, Ministry of Forests.
Hon. D. Lovick: I call Committee of Supply. For the information of members, we will be debating the estimates for the Ministry of Forests.
The House in Committee of Supply B; T. Stevenson in the chair.
ESTIMATES: MINISTRY OF FORESTS
On vote 34: ministry operations, $297,814,000.
Hon. J. Doyle: Hon. Speaker, speaking to the item I just gave you, I am pleased to introduce this year's budget for the Ministry of Forests. The forest sector continues to be the economic engine of British Columbia's economy. It is vital that we strengthen and diversify the sector in a way that cares for our communities, for workers and for our forests while respecting the aboriginal rights of first nations.
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The fiscal year past brought a dramatic improvement in the forest sector. Jobs increased, and so did profits. The upswing was led by a robust market and by both government and industry contributing by making significant changes that put us in a more competitive position. It was a challenging year. It was a year of consolidation among the big companies. Weyerhaeuser bought MacMillan Bloedel, and Canfor took over Northwood.
Government was busy, as well, cutting red tape. In communities around the province the Ministries of Environment and Forests worked with industry to identify ways to cut costs. We initiated seven community forest pilot projects. Those are giving local communities, including first nations, more control of local forests. We responded to industry's suggestions that we consider what a results-based Forest Practices Code might look like. We now have five pilot projects in the field. The goal is to meet or beat the code.
We brought in legislation to protect key environmental values on forest land. We committed an extra $7 million to combat the beetle problem in our interior forests -- through sanitation logging, pheromone baiting and trap trees treated with a synthetic herbicide -- and an extra $15 million to continue replacing Forests roads bridges that have reached the end of their life spans.
On the other hand, our stewardship on the land was enhanced by developing a wildlife management strategy to minimize logging impacts on at-risk species. A landscape unit planning guide was developed. It will lead to some 1,300 old-growth management areas around the province set aside in perpetuity.
To strengthen our small business program and support the value-added sector, we redirected 1.4 million cubic metres of wood to the value-added program. We developed a more market-based pricing system, which is working well.
To encourage new markets and protect existing ones, last year the Minister of Forests joined a federal trade delegation to China, where we promoted British Columbia's forest products and opened a joint Quebec-British Columbia office. We also visited the United States and Japan to reinforce our commitment to those markets.
Those actions provided a solid foundation for a more diversified and competitive forest sector. We will continue to speak on this foundation. The beetle battle continues, with an extra $10 million in funding this year. We will work with industry to negate the spread of those destructive insects. The bridge replacement program also continues. Safe structures are critical to the safety of industrial and public users of Forest Service roads.
We are committed to pursue new cost-saving measures. Bringing down costs is one way to keep us competitive. But a more serious concern this year is market access, particularly access to the all-important United States market. The softwood lumber agreement expires April 1, 2001. As it stands, the agreement is not good enough. We will work for a new deal, a deal that allows British Columbia companies to grow and create jobs.
Certification is another key to market access. More and more of our American, European, Japanese and Chinese markets are demanding wood that has environmental forest management certification. It is vital that we support industry on this move. As a first step, we are moving our small business program towards certification. We will develop a provincewide management system, test the three certification systems in different areas of our province and scale back clearcutting on the coast. If we expect to compete in the global market, we must show the world that British Columbia's forest practices and land use planning are working to protect the environment. The recent and unprecedented discussions between coastal forest companies and the environmental community illustrate the degree to which our customers are paying attention to the matter in which wood products are harvested.
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That's not all. We must also increase first nations participation in our forests. My ministry will do this by helping
[ Page 15060 ]
develop relations between first nations, industry and government, participating and developing in development of pre-treaty and non-treaty-related agreements, and encouraging business arrangements that involve first nations.
Another priority: we must continue moving up the value chain. We must get more value and more jobs for every tree we cut. It is vital to the health of our forest sector. More than this, it is vital to the economic, environmental, social and cultural needs of our communities and our people in British Columbia.
It is also vital that we continue working together -- industry, communities, workers and environmentalists. Last year we asked Garry Wouters to conduct an independent review of all forest practices policies in this province. His report is now available to the public. We want to hear from British Columbians on the recommendations he has made. As we explore new and better ways of doing this business, we will ensure a balanced approach that benefits all British Columbians. I do believe we can work together. We can have a strong, competitive forest economy, healthy communities, productive workers and a environmental legacy we can pass on to our children.
G. Abbott: It's a pleasure to rise and join the debate on the Ministry of Forests estimates for 2000-2001 as the opposition Forests critic. I just want to note at the outset that we have forwarded to the minister a list of the topics that we plan to canvass in these debates and the order in which we plan to proceed with them. I am pleased that we have shown that measure of cooperation. I look forward to a very productive debate here.
I want to start with a positive comment. Occasionally, folks across the House say that they don't hear enough positive from the opposition. Of course, I'm sure they just say that for very shallow political reasons. But they do occasionally say that they'd like to hear more of a positive nature from the opposition. I'm going to start that way today, because I just think back a year to the 1999 Forests estimates. We were talking about the $1.1 billion loss that the forest industry had suffered in 1998, when we were talking in our 1999 estimates. We also talked about the very considerable job layoffs that occurred in 1998. We talked about mill closures, investment drying up and so on. In fact, in the 1999 Forests estimates the former minister really projected little or no improvement in the situation that had existed in '98. So the results from 1999 were very much a pleasant surprise certainly for the minister and, I suspect, some in the industry as well.
I'm not sure if the minister attended the Pricewaterhouse conference of a couple of months ago, which always takes a good and thorough look at the forest industry in British Columbia and kind of assesses the results of what occurred the previous year. But the pleasant surprise for '99 was quite a dramatic turnaround in the return on capital employed and profits of $511 million, so that's a very happy note at this time for the forest industry. Also we saw additional employment as a consequence of increased production flowing from the forest industry -- certainly not up to the 21,000 direct new forest jobs that were anticipated from the jobs and timber accord that the government produced a few years ago. It fell short of the 21,000 direct new jobs, but there was certainly some improvement in the employment picture as well. So is this good news? Certainly it's good news. The 1999 results are very encouraging, and they are good news.
Have we resolved the underlying problems that produced massive losses in '96, '97 and '98? I have to say no, we have not. The 1999 results of $511 million were not built on tax and regulatory reforms. The $511 million was a product of high commodity prices, primarily on the American softwood lumber market. That's the reason why suddenly we had a shift. It's that we had some remarkably good prices, particularly during the first six months of 1999. Even at that, the return on capital employed -- even at $511 million -- is certainly modest in comparison to some other industrial sectors where a more substantial return on capital employed might be expected.
[1540]
So I think the fact that those results were based on extraordinary prices as opposed to correcting the inherent cost structure problems that we have in the industry should be something that, if not causing us concern in an immediate sense, we still want to address, because we are in every case talking here of a cyclical industry. Prices go up and down. If we want to stay in the market when they're down, we have to have an industry that can compete when the prices are down. It is a simple but I think very important truth that we have to address if we are going to have a competitive industry in the long term in British Columbia.
I think that the very high prices that we enjoyed on the American softwood lumber market, particularly during the first six months of 1999, and the consequent returns from those mask a continued cost problem in British Columbia. Obviously we're going to be spending some considerable time in the days, perhaps weeks, ahead -- I'm sure not months -- in Forests estimates talking about those issues. It's important to appreciate that even though the problem may be masked by very good commodity prices, the problem is still there.
It also masks declining competitiveness for the B.C. forest sector. I think competitiveness is something that we always need to keep in mind when we are looking at the forest industry in British Columbia. We're not alone in the world; we don't produce a product in British Columbia that nobody else produces. Perhaps we'll just spend a moment talking about that as well.
There are lots of positives when we are looking at the B.C. forest industry -- lots of positives. We have a large and very productive land base in British Columbia. The climate favours us. We grow trees just as well as anybody in the world; we've got a great land base to do that. We produce very high-quality timber on that land base. Again, it is a natural advantage that we enjoy in British Columbia, one we've got to ensure that we protect and sustain. We also have an efficient, educated and productive workforce in British Columbia. That is certainly a great advantage to us as we make our way in the world of global competition.
Best of all, I guess, we have a renewable resource in our forests in British Columbia. It's tough to keep trees from growing back here; they grow back. It will provide us with a resource for our children, our grandchildren and our grandchildren's grandchildren. It's a resource that, if managed well, will serve us forever.
Given all these advantages, why are we experiencing some problems in the forest sector in British Columbia? I have to point to the government opposite and conclude that a number of the policy initiatives that they have taken have in fact been very destructive of the competitiveness of the forestry industry in British Columbia. I think that what we have
[ Page 15061 ]
seen from this government is long-term mismanagement of our most important resource. I believe that the government opposite naïvely believed that the forest industry was a goose that would continuously lay those golden eggs for British Columbia, regardless of the kind of cost burdens that might be imposed on it. Of course, 1998 was an example of how that was wrong.
[1545]
We also find from this NDP government a sometimes unstated, sometimes explicit, view that we can shift our economy in British Columbia from the forest to things like film, ecotourism and so on. Those are all very good, but frankly, in comparison to the economic importance of the forest industry in British Columbia, they simply are no substitute. I think there has been, particularly under some of the former advisers to the former Premier, a particularly profound attachment to the notion that we could move from a forest economy to a film economy and somehow sustain the quality of social services and the quality of life that we enjoy in British Columbia. It simply is not so.
One also finds from the government opposite an attitude that while certainly revenues are always welcome in government coffers, and certainly forestry has been for years, decades now, the principal contributor to the coffers of the province -- close to some $4 billion whenever things are turning over well -- lots of money coming in
There's been a whole range of things that have entered into this. Certainly one of the principal problems is the very process-oriented, very regulation-oriented, very prescriptive Forest Practices Code that we have in British Columbia. Certainly that's been a problem. We have also seen, since '91, very considerable increases in stumpage, primarily for things like Forest Renewal B.C. But generally those have gone up. We have seen the escalation of taxes in British Columbia. All these things have added up to dramatically increased costs in this province. And it has, in a real and obvious way, undermined the competitiveness of the B.C. forestry industry as they face tremendous challenges in the world marketplace. So I think that's something that we need to bear in mind.
Again, we can overlook the impact of escalating costs when prices and markets are buoyant. When we have a situation like we had in the first six months of 1999, when there were record or near-record prices on the American softwood lumber market, we can overlook the inherent cost disadvantages that the B.C. forest industry has. When markets reverse, those costs become instant job-killers in British Columbia. When markets change -- and they inevitably do
What we have seen in other times -- again, we've got to try to learn from history here, and '98 would be a good example of that -- is the forest industry effectively crushed between a descending ceiling of world commodity prices and a rising floor of delivered wood costs. The industry got caught in there; in fact, the costs exceeded the prices. Of course, what that means is that the industry loses massive amounts of money, and a lot of people who depend on the forest industry for their jobs are not enjoying the benefits of those jobs anymore. We ignore cost issues at our peril. Frankly, while it pays lip service to it, I don't believe this government has given it the attention that is needed if we are going to withstand the next downturn in British Columbia.
[1550]
What we have seen, broadly speaking, is that over the course of the 1990s, British Columbia has moved from being one of the leanest, most efficient, low-cost producers of forest products in the world to being one of the high-cost producers in the world. This leaves us vulnerable and uncompetitive in the late 1990s and early 2000s, as we try to survive and thrive in that market.
We are at a competitive disadvantage at a time when the world, to use that old expression, is awash in wood. We are facing some unprecedented competition in the world of forest products from a variety of areas. Some traditional players are certainly big-time in the market. Scandinavia, the U.S., eastern Canada -- all traditional players -- have been taking a bigger piece of our pie in the U.S. market, the Japanese market and certainly in Europe as well.
We've also got a host of new players in the forest products sector. For example, the Baltics, eastern Europe, western Europe, Russia, Brazil, New Zealand are all relatively new and indeed rapidly growing players in the forest products market. It means that we have to be tough and vigilant in control of our costs in British Columbia if we want to meet the challenge of places like Russia as they move into our marketplaces and try to win there.
A turnaround in markets is not necessarily going to lead to a turnaround in our fortunes. We need to be much more competitive if we want to survive in what has become an increasingly competitive world. Among the problems we have seen in the last ten years, particularly under the tenure of this government, is the decapitalization of the forest industry. We see much less money -- and certainly much less money than is needed -- being invested in the forest industry in British Columbia. This has been a product of long-term poor results. It's a consequence of a poor investment climate. In part, the decapitalization has been a product of the superstumpage directed toward Forest Renewal B.C. That certainly was something that the industry agreed to -- no question about that. But the productivity of that organization has certainly been something less than was hoped by the industry and hoped by the public of British Columbia. Those deficiencies, errors and omissions are well documented by the auditor general in his recent report on Forest Renewal B.C.
We somehow need to reverse what has become quite a destructive spiral in British Columbia. Because companies are not enjoying the prospect of a return on their capital employed, they are not exhibiting investment confidence. They're not reinvesting. As a consequence, competitiveness is further undermined. Of course, as competitiveness declines, the prospect for profit declines as well.
[1555]
I don't believe that there is a great prospect of reversing this spiral under the current government. I don't think it
[ Page 15062 ]
would matter how good the Forests minister in British Columbia happened to be. I think that as a consequence of long-term accumulation of dangerous rhetoric and an accumulation of, in retrospect, quite idiotic policies and edicts out of Victoria, the confidence of the forest sector and, even more broadly, the business sector in British Columbia has been so undermined by this government that, frankly, until there's an election and we get a new government, there isn't going to be a turnaround. I think it's unfortunate, but we do need some change to see competitiveness restored.
Certainly on this side of the House we are very much committed to some reforms to ensure that our forest industry in British Columbia is competitive and to ensure that when markets change, we are able to compete vigorously and viably in all marketplaces. For example, we need to get our regulatory side under control. It seems that while at times Forests ministers on the other side may have the best intentions, when the dynamics of cabinet come into play and we see the government valiantly but uselessly attempting to balance off the needs of the forest industry against the environmental wing of the NDP, it's the environmental wing of the NDP that wins. Frankly, the dominant view, as a consequence, has been that if a little regulation is good, a lot must be a lot better. Regrettably, that is just not the way it is.
So we need to get the regulatory side under control. I'm pleased to hear the minister acknowledge that the government is pursuing a results-based code and has some pilots out there to try to deal with that. We'll certainly welcome the discussion around that. We do need a results-based code in British Columbia. Without that, we are just going to be penalizing ourselves in an ongoing way into the future.
We need to get away from the exorbitant tax structure that we have in British Columbia. Again, that's been something that has penalized everyone, forest workers included. We need to get away from things like the jobs and timber accord -- the fatuous notion that somehow a government in Victoria can wave a wand or deliver an edict or a decree saying: "We're going to get more jobs per cubic metre. We're going to create 21,000 new jobs." It just doesn't happen that way. Everybody knows that, except possibly the government themselves.
People will invest here if they see a prospect of some return on that investment. Without that prospect, the investment simply is not going to be there. We can have the greatest resource in the world in British Columbia -- and indeed, perhaps we do. But unless there is a sense that investment is welcome and that there is a possibility of return on that investment, it is not going to be here. We have to turn around that very destructive cycle that I talked of earlier -- things like the New Forest Opportunities-HCL model of unionization of silviculture workers. Again, it seems like a small thing, and in some ways it is. I think, to date, something like six IWA workers have actually participated in the NFO-HCL model in the past year. It has not done what was anticipated. It was an ideological imposition by the government on an industry, and it's just moved us one more notch away from competitiveness in the province of British Columbia. We need to move away from some of that.
I see I'm making the Government House Leader most uncomfortable, and I think that's good. He should feel uncomfortable about that particular initiative. It was, frankly, a sop that has not worked out. It has been, I guess, one of those running sores that has tended to diminish the credibility and reputation of this government in so many different ways.
[1600]
Again, just a final note -- and I know I've perhaps gone on a bit long here in my introduction. The minister makes reference to diversification of the forest sector, of higher-end products, value-added products and so on. That is a fine and noble objective; there is no question about that. The point I would make -- and I think my preceding remarks would be directed towards this -- is that we are not going to have a value-added industry in British Columbia because the government says we want to have a value-added industry in British Columbia. We will have a diversification of our product stream. We will have a diversification of the forest industry base when people see an opportunity where they see the prospect of a return on their investment, where they see a tax and regulatory structure that they can live with, where they can produce a product for a marketplace and get a return on that, which will justify their continuing efforts. We'll get diversification, but we'll get diversification only after we have restored the opportunity to get some return, some reward, for initiative in the province of British Columbia. I'm sad to say it, but I think that has been lost under the current government.
I'm sure we'll have some interesting debates around this, but I think the current government views the diversification of the forest sector as an alternative to regulatory reform, rather than being something that will result from regulatory reform. Frankly, I think there's a reason why we see so much value-added production in the province of Alberta compared to the province of British Columbia, when we have the far superior resource base. Why is that? Because they have a tax and regulatory framework in Alberta that attracts that investment. Until we move away from the situation we have in British Columbia of tax and regulatory overload, we're not going to get that kind of diversification that the government is looking for. It is not going to happen until we get our fundamentals in line. It's simply not going to happen till that occurs.
That is my initial comment in what, I hope, will be a productive, interesting and fruitful debate around the Ministry of Forests estimates for 2000-2001. Let me begin by inviting the Minister of Forests to outline what he believes to be the major challenges facing the forest industry as we move into the twenty-first century.
Hon. J. Doyle: First of all, I would like to say that I appreciate the list the member opposite provided to the ministry staff this morning during his briefing, so that we could have an orderly process of these estimates in the coming days.
Also, Mr. Chair, the forest transition group will be here -- for the member opposite's information -- Thursday morning, if that's okay with you. I would also like to, at this time, introduce staff: the deputy minister, Lee Doney; Bruce McRae, ADM in the Ministry of Forests; and Dan Evans from trade policy.
As for return on investment -- return on capital was mentioned by the critic across the floor -- when the Pricewaterhouse report came down some weeks ago, it said that return on investment is the same in British Columbia as it is across the rest of Canada -- the same thing. It is 6 percent in B.C. and 6 percent across the rest of Canada. I know the forest industry would like to see that go to 12 percent. I would like to put on the record that it is the same in B.C. as it is in other provinces.
[1605]
[ Page 15063 ]
As far as what the province has done in the last year to lower the cost of wood for mills in many, many communities across the province, we lowered stumpage by $200 million. The cost-driver initiative also
The member opposite has put his finger on the forest industry in general across the world. Investors are turning away from the old economy towards a new economy. Last Friday, I think it was, we found out that in high-tech the shock waves had been through the stock markets across the world. I think that showed a lot of people that something like the forest sector is a good place to be investing. I think the recognition of the importance of this industry to our province and to this country was again emphasized, because forestry has its ups and downs, as was mentioned by the member opposite, but is and will continue to be a very, very important part of the economy of British Columbia.
I should note that the industry is optimistic because of the major investments they have made over the last year in British Columbia. I would like to just mention some of the capital investments that have been made in the last year. Just for the information of those in the House, these are Statistics Canada numbers. Statistics Canada's survey of investment intentions indicates that capital investment by the British Columbia forest industry is expected to increase by 15 percent in the year 2000 to $775 million, compared to an estimated $670 million in 1990. When comparing capital investment across different time periods, the only reliable systematic and consistent source of information is Statistics Canada. Examples for the House of capital investments across British Columbia include: Canfor investing $49 million to upgrade three sawmills in Prince George, Fort St. James and Chetwynd; Slocan Forest Products investing $10 million in a plywood mill in Fort Nelson; Louisiana-Pacific investing $280 million to build four new value-added operations in northeastern British Columbia and to upgrade its existing pulpmill in Chetwynd, and an oriented strand board mill in Dawson Creek. Tembec is building and is actually opening, as we speak, a value-added mill in Cranbrook.
Examples of recent financial transactions involving British Columbia forest companies include Tembec's acquisition of Crestbrook Forest Industries, Slocan's sale of its share of Finlay Forest Industries to Donohue for $80 million. And closer to home -- in the member opposite's riding and mine -- Georges St. Laurent, when he owned Evans Forest Products, invested about $100 million in the operations in Golden and right through to Malakwa in the member opposite's riding. As we know, that company, Evans Forest Products, was recently sold to Louisiana-Pacific. So I think there is room for optimism. We are on the way back. It's a good place to invest in the forest industry, based on some of the stats I just mentioned.
[1610]
G. Abbott: I thank the minister for his remarks. I certainly think the province of British Columbia is a good place to invest as well. I think the forest industry in British Columbia, with some decent management of the forest policy framework by the government, is a good place to invest as well.
The recent acquisitions in British Columbia are perhaps encouraging in some respects. They are also, in some cases at least, reflective of companies buying into British Columbia at a time when asset values are reduced. That certainly is the case as well.
The minister mentioned some of the results that were outlined in the PricewaterhouseCoopers report of earlier this year -- the thirteenth annual Pacific Northwest forest industry conference
We've talked about the net earnings. Certainly people were pleased with the turnaround from 1998 to 1999, and $511 million is something that is welcome in comparison to a loss of $1.1 billion. Just so people understand that this is not an exceptional place to do business for forest companies, the results in 1999 were the first positive results since 1995. We had continuous losses in the forest industry since that time.
I think we also need to temper our enthusiasm for the turnaround when we look at the continuing problems facing the coast in British Columbia. We see again, from PricewaterhouseCoopers, some of the continuing problems for coast forest companies. Yes, a big part of their problem is Japan and the decline of the Japanese market -- no question about that. The fact that they were geared to that market and were unable to quote on the American market
We do have -- even at a time when a number of companies are doing very well in 1999 -- a number of coast-based companies that still continue to record very large, very substantial losses. Their situation is one, again, which I think directs us back to the point that we need to take out those unnecessary costs which shackle and constrain the opportunity for industry to survive, never mind thrive in the province of British Columbia.
[J. Cashore in the chair.]
The last point I'll make around the PricewaterhouseCoopers numbers -- again, we may come back to it if the minister wants to return to it
[1615]
We've got longer-term structural problems that need to be addressed here. The problem is not all cyclical. The problem is not one which will be eliminated by cyclical high
[ Page 15064 ]
prices.Those come and go, and I think the minister has acknowledged that as well. It is something that has to be of continuing concern.
Further to that, I want to get a sense from the minister of what importance his ministry is attaching in the year 2000 to dealing with the cross-structure issues. What steps is his government taking in 2000? He's already told me about some of the steps that have been taken in 1998-99 to try to deal with that, including the average $5-a-cubic-metre reduction in stumpage back on June 1, 1998; we know about that. What steps is the minister taking with his ministry to address the delivered-wood cost problem and address those inherent cost problems in the B.C. forest industry in the year 2000?
Hon. J. Doyle: Following up on the remarks by the member opposite as far as what the province can do, I mentioned when I spoke before that there is $1 billion identified in savings. Hopefully, that will mean that it will assist companies this year, next year and years after as the world economy in forestry goes up and down, as it has in years past.
But one thing that we will not be changing, hon. Speaker
Also, as far as concerns that are raised in this House, we have to make sure that we negotiate a new agreement -- whatever kind of agreement we have -- with our major market to the south in the United States. That's a very, very important thing -- to make sure that we negotiate a new agreement. I'm working on that as closely as I can with this sector across the province and with the federal government.
Also, we must make sure that we get new markets out in the world. The former minister was in China some months ago. We are selling very little to China; I think it's only $3 million worth of wood per year. So there are markets out there in China, India and other parts of the world that I think we can develop to make sure that we're more diversified.
The coast was really hit in the last year or two when the Japanese market went down, after being in that market for 30 or 40 years. It's been very good to the companies, to the coast, to our province and to our country. I think it just proved to us as a province and to those companies and workers in those communities that it's bad to have too many of our eggs in one basket.
G. Abbott: The minister's comments obviously raise a bunch of areas, and it's tempting to try to address them all in my comments, but we'll try to deal with them one at a time.
The issue of environmental standards. There are always either implicit or occasionally explicit comments from the government's side about the notion that somehow a results-based code is one in which environmental standards are compromised. There is a real ambivalence in the government's response around that. We shouldn't underestimate the element of politics in here, and that's fair enough.
I have never heard anyone in the province in industry or elsewhere say that we want to compromise the environmental standards of British Columbia. I've never heard that from anyone. It's a bogeyman that's occasionally offered up by enemies of the forest industry, but I have never heard anyone in the forest industry of British Columbia, nor have I ever heard anyone on the opposition side of the House, say: "Let's compromise environmental standards in order to reduce costs." No one has said that. What they have said over and over and over again is that we need to eliminate unnecessary costs. Theoretically, at least, even the government agrees with this.
[1620]
I recall very clearly -- I think it was 1998 -- a press conference held down in the press theatre here in the Legislature. The former Minister of Forests was there, and the former Minister of Environment was there. They had quite an elaborate press conference surrounded by great masses of stacks of paper. The press conference was all about how the province was going to move to a results-based code, and all the paper that was sitting behind the ministers was going to be eliminated. They were reducing the number of plans, and so on and so forth.
The upshot of it all was that the government was saying: "Okay, we're going to move to a results-based code. We are going to eliminate unnecessary regulation that is costing the government and the forest industry a whole lot of money." The estimate that was provided that day by the former ministers was $300 million. They believed that through the technical changes in the structure of the code, $300 million a year would be saved.
Now, one of the media folks who was interviewing the ministers was quick to note that given that the code had been in place for three years, it appeared that quite unnecessarily there had been three years times $300 million -- a billion dollars in unnecessary costs. The ministers argued, and argued forcefully, that in the reform of the code there were no environmental standards being compromised.
Let's be clear about that. Nobody is saying: "Let's compromise environmental standards." But a whole lot of people are saying: "Why are we doing some of these things that we are doing in an inefficient and unnecessary way?" If we can, through reform of the Forest Practices Code, achieve the results we want to achieve without compromising environmental standards, then why aren't we doing it? That is the core of the issue, and again, it is something that we will want to explore more fully when we get around to discussing the reform of the Forest Practices Code.
I think there are some very interesting projects going on in the province around the pilots, and I in fairness to the minister and the Ministry of Forests, I think the pilots are a good, constructive way to look at changes to the code. I think this government has been more cautious than it should have been with respect to sort of fencing the projects. Nevertheless, hopefully, there are going to be some useful changes to the code that come out of that. I think we need to move in a more constructive, more positive way towards a results-based code than we have seen from this government.
Again, it's always a question of balancing political interests across the way. I know that's something that this minister
[ Page 15065 ]
and, I'm sure, previous Ministers of Forests have encountered -- getting those changes through cabinet. I didn't want to let the comments of the minister go unchallenged, because I think it's important to clarify that point around environmental standards.
[1625]
The other points I want to address
I see the member from Burnaby agreeing with me. That's good. I don't think the government ought to be in the business of trying to pick the winners and losers. This government's been pretty good at picking the losers. That's clear. But I don't think the government ought to be in the business of picking winners and losers. The government ought to be in the business of setting out a sound tax and regulatory environment in which people can exercise their energy, their initiative, their ingenuity and, hopefully, build a business that employs people and provides them with a return on their effort. That's where I think we ought to be going.
In fact, I believe that our resource sector in British Columbia, if it is functioning on all cylinders, can be a huge magnet for the growth of the high-technology sector in British Columbia. I don't think there is a tension between the two. If the resource sector can do well, I think our high-tech sector will do well. I don't see it as a competitive relationship between those two; I see it as very much a complementary relationship. Further, I think companies like -- I'll be a constituency guy for a minute -- Newnes Manufacturing, which builds very high tech computerized equipment for sawmills in British Columbia, Canada and indeed around the world, are a perfect example of the kind of new economy we can build in British Columbia based on the strength of our resource economy.
We're not going to get the new economy, and we're not going to get the high-tech stuff, if somehow we penalize the forest industry in order to see someone else benefit. I think that distinction is an important one. You've got to put a sound framework in place, and people will build on that. This is a great province. We've got great resources; we've got great people. All we need to do is get the tax and regulatory structure in place, competitive with other jurisdictions, so that people will want to come and invest here. Those are comments on two areas that the minister raised. I just wanted to set the record straight on what the view of the official opposition is.
The next question I have for the minister is: could the minister set out for me how he arrives at the $1 billion in savings that he has noted on a couple of occasions now? Are those cumulative? Are they annual? Do they include the stumpage reform of June 1, '98? Stumpage has been up and down and all over the place since June 1, '98. Where does the $1 billion come from? I would like a relatively specific enumeration of that $1 billion, if I could, please.
[1630]
Hon. J. Doyle: The critic across the floor had quite a long statement, and I'd like to reply to some of the items he spoke about and then get down to the questions that he asked at the end.
The results-based code is, in many respects
As far as the last question from the member opposite, there is $250 million in stumpage savings. There is roughly $5 per cubic metre across the province in the cost-driver initiative; that's $300 million. And there was $5 per cubic metre for the cost-driver initiative also and $150 million for the forest action plan, the plan that was put in place -- the 30-day, 90-day action plan.
G. Abbott: I'll just go through the list here. The first item was the $250 million saved on stumpage. I just want to get a sense of where that figure comes from. Going back to June 1 of 1998, the Premier announced in Kamloops a reduction in stumpage, which FRBC actually took the brunt of. The average across the province was going to be $5 a cubic metre. It was larger for the coast, a little smaller for the interior. The average was $5 a cubic metre times, I guess, 50 million cubic metres, which would yield a savings of $250 million in stumpage. I'm not sure that's where the $250 million figure comes from. Is there an assumption that that was a savings, and then stumpage was going to go up and down after that? I'm not quite sure where the $250 million for stumpage comes from. Could the minister give me some of the computing behind that $250 million figure?
Hon. J. Doyle: Regarding the question, the stumpage reduction was announced on June 1, 1998. They're calculated at $4.89 per cubic metre. Initially, it was thought that this would be a reduction of $293 million; that was reduced to $250 million. The cost, it was roughly estimated, was $8.10 per cubic metre, for a total of $146.5 million. In the interior it averaged out at $3.50 per cubic metre, which worked out to $146 million. The reduction was based on the average harvest from Crown lands, for the four years, of 60 million cubic metres -- 18 million on the coast and 41.9 million in the interior.
[1635]
G. Abbott: I thank the minister for the clarification on that point. The balance of the $750 million, of that total $1 billion savings -- the cost-driver initiative -- was something that we discussed last year. Certainly the minister was hoping that there would be a savings of $5 per cubic metre from that cost-driver initiative.
Could the minister enumerate for me how the ministry arrives at the total of $5 in savings? I know that last year at this
[ Page 15066 ]
time the minister was pointing to some 800 suggestions that had come from industry, government and others around the cost-driver initiative. How did that $5 -- if indeed the $5 has been achieved, and I judge from the minister's comments that it has
Hon. J. Doyle: The question on the log cost reduction
G. Abbott: I get that part. What I want to know is: what are the initiatives or changes that, on a per-cubic-metre basis, produce that $5 saving?
Hon. J. Doyle: In answer to the question, there were 860 different items brought to us by the industry. The ministry has looked at three-quarters of those, as we speak, and is still continuing to look at the rest. Some of them have been implemented, as we get through the process of looking at the proposals that came to us from the industry and the province.
G. Abbott: Again, that part I understand. I don't mean to be pushy about this, but perhaps I will be. If the minister doesn't have the detail on how that $5 is made up, I'm happy to revisit this at some point later in the estimates. But I would expect that in coming up with that $5 figure, there are probably some things that save 20 cents per cubic metre and some things that might save 90 cents a cubic metre. There might be some that save 3 cents a cubic metre. I presume that somewhere there would be some kind of breakdown of how the ministry arrives at the conclusion they are saving $5 a cubic metre on the cost-driver initiative. I'm happy to set aside the question, although I see another staff member arriving, presumably with the detail on that. I'll await the minister's comment on it.
[1640]
Hon. J. Doyle: In answer to the question, the appropriate staff person just did arrive as the member was speaking, as he noted.
There were 827 potential cost-saving measures identified; 639 of those -- 380 regional and 259 headquarters -- have been resolved. Regional industry-agency teams coordinated the implementation of those. An interactive web site was used to disseminate information. Industry costs are down. There are 180 at issue; 69 regional and 129 provincial remain to be addressed.
Some of the changes
G. Abbott: I thank the minister for that explanation. I would appreciate if the minister could table or at least send on to me a copy of that. I'd like to see the detailed breakdown of the savings, for my interest. We're just up over $500 million, theoretically, at the present time, including the stumpage and the cost-driver initiative.
The third element the minister identified, which I think a figure of $5 a cubic metre was assigned to as well -- I missed that. Could the minister repeat that, please?
Hon. J. Doyle: Forest Practices Code changes worked on in the ministry and announced in 1998 stated that the revised regs will reduce industry costs by $5 per cubic metre or about $300 million a year, based on last year's harvest. This implies a harvest of about 60 million cubic metres. There's no breakdown for coast versus interior on this.
G. Abbott: So the $5 that is attributed to the Forest Practices Code changes -- is that assumed or notional or something? Or are there definitive numbers that can be attributed to Forest Practices Code changes?
[1645]
Hon. J. Doyle: I think I mentioned earlier, when I mentioned the Slocan report, where they've identified roughly $12.50 in savings. If I could ask the member to wait till June, when the Pricewaterhouse report comes out
G. Abbott: I won't dwell on this point. We're going to be coming back and talking about the Forest Practices Code, some of the pilots, some of the changes and some of the continuing problems with respect to the code. So if there are no precise allocations in terms of where the presumed $5 per cubic metre savings are at right now, I'll leave it until a later point. Perhaps we'll have to leave it until Pricewaterhouse brings out its report later on this year.
The final area where the apparent $1 billion savings
Hon. J. Doyle: This package is about operational deficiencies, stabilizing the current situation and aligning government policies and regulations more closely with current market realities. An example of some of the actions in the forest action plan: utilization threshold -- eliminate
G. Abbott: I thank the minister for that breakdown of the forest action plan numbers.
[ Page 15067 ]
[1650]
One of the questions I have
When the government uses the $1 billion savings figure, what proportion of that would be savings to the government? Again, we've talked about a number of the elements in the cost-driver initiative; we've talked about a number of the elements in the code changes, the forest action plan. Certainly for many of those, there is not only a saving in eliminating unnecessary steps, not only a saving to industry but also a saving to government. When the minister advances that $1 billion figure, does that include savings to the government as well as to industry, or is the notion that the $1 billion is a saving to industry alone and that there is some additional saving to government as well?
Hon. J. Doyle: When we mention $1 billion, that's savings to industry out in the province.
G. Abbott: Then we still have to find some way to explain the cynicism around that $1 billion figure, whether it's been delivered or not. I expect that no doubt I'll receive a great barrage of e-mails after today from folks around the province saying that the $1 billion figure is grossly inflated. But perhaps not. At any rate, it is good that the government at least recognizes that savings on the cost side are required and that we need to move in that direction.
Just to follow up on that question, what is the estimate of the savings to government to this point from the various initiatives that have been discussed here?
Hon. J. Doyle: The government doesn't have an estimate of savings to government as such. We just worked hard
G. Abbott: The overall log cost or the average cost of logging a cubic metre of wood on Crown land. The estimate for 1998 was $79 per cubic metre. The former minister indicated in last year's estimates that he had hoped to bring that delivered-log cost down to $74 a cubic metre -- in short, to achieve another $5 in savings. Theoretically, at least, the government is saying that has been achieved. Would it be correct, then, to say that in 1999 the average log-cost per cubic metre on Crown land was reduced from $79 to $74? Is that fair?
Hon. J. Doyle: That it is the hope of government, but we will have to wait for the Pricewaterhouse report in June. The savings we feel are there will be vouched for in that report.
G. Abbott: I am hoping that among the people that Pricewaterhouse is going to talk to in arriving at their figures is the government -- but then, government doesn't know everything. Pricewaterhouse perhaps does. That's good. We will leave that point, for now at least.
In terms of what this minister's objectives are further to log costs in the year 2000-2001, does the minister have a goal in terms of further reducing the cost of logs on Crown land in British Columbia?
[1655]
Hon. J. Doyle: Government continues to look at the suggestions with COFI; we are working with COFI on this. We are going to prioritize the areas that would be the greatest savings. I want to continue to work with the industry represented by COFI.
G. Abbott: Is the minister prepared to acknowledge at this point that in the government's view it is important, if not vital, to continue to find ways to address delivered-log costs in British Columbia and to try to bring down that per cubic metre figure so that again, given that it is really at the heart of the competitiveness issue, we find ways to continue to achieve those economies?
Hon. J. Doyle: Yes, the ministry will continue to do that. The easy stuff has been done. We are going to continue to work now on some of the harder stuff, but we will continue to work at that.
G. Abbott: I don't want to leap to any assumptions which are unwarranted, but I am assuming from those comments that unlike the former minister in the 1999 estimates, the ministry is not at this point setting out a goal for themselves -- i.e., $5 a cubic metre in savings. Is that correct? Is the ministry only proposing to work with COFI?
Hon. J. Doyle: There is no defined dollar amount to identify it. We won't stop trying to search to look for dollars that could be cut out of the price of a log.
G. Abbott: Again, we are broadly canvassing some of the key issues around the state of the industry in the year 2000. There is always some confusion here, because it can be done on a fiscal-year basis or a calendar-year basis, but I would like to get a sense from the minister -- and he can do it either or both ways -- of the last three years in terms of what the designated annual allowable cut was for Crown lands in British Columbia and where the harvest levels stood in relation to that annual allowable cut. If the minister could give me a sense of that for the past three years.
[1700]
Hon. J. Doyle: I would like to say that we don't have that information with us right now, but I'll get it to the member as soon as possible.
G. Abbott: Perhaps we can come back to that harvest level AAC issue, because it is an important one. Certainly in their relatively recent document -- October 1999 -- COFI sets out, in "A Blueprint for Competitiveness," their concerns about declining AAC. I think we also need to be concerned -- and I think it is a reflection of some inherent problems in our cost structure in the forest industry in British Columbia -- that we have been cutting below the AAC for, I think, three years
[ Page 15068 ]
now. That may not have been the case. This is actually the clarification I'm looking for: whether we cut below the AAC in 1999, when we were enjoying a particularly robust lumber market in the United States and quite good returns for at least some companies in their finances.
[T. Stevenson in the chair.]
Hon. J. Doyle: The 1999 harvest was up, actually, by 17 percent from 1998. It was still below the AAC. We were still constrained by the softwood lumber accord and the fact that the Asian markets were still off. There was reference made by the critic across the floor to what the cut should be. Should it be higher or lower? Some people, I think, in COFI are mentioning that it maybe should be 100 million. I don't know what the opposition view is on that 100 million. I'd be interested.
G. Abbott: I'm sure that I can be most helpful in providing the opposition's views around that. It appears that I can also be somewhat useful in providing some information on harvest levels. This is from last year's estimates debate. The figures I had at that time were a harvest of 75 million cubic metres in '96, declining to 68 million cubic metres in '97 and down to 64.8 million cubic metres in 1998. I understand from the minister's comments that that 64.8 million cubic metres increased by 17 percent in '99, but that was still well below the designated annual allowable cut set out by the chief forester. Is that correct?
[1705]
Hon. J. Doyle: In 1997 the harvest was 68.628 million cubic metres, in 1998 it was almost 65 million cubic metres, and in 1999 it was just a penny or two short of 76 million cubic metres.
G. Abbott: We're talking here of the harvest as opposed to the AAC. Could the minister tell me what the AAC was?
Hon. J. Doyle: Chair, in 1999 the cuts were set by the chief forester, and there were cut control periods and all those things in there, as the member knows. The AAC on Crown land was 71.5 million. Private land was between five million and six million.
G. Abbott: That helps me a bit with my confusion. The 76 million cubic metres was private and public lands rolled in together. The public land portion of that, I presume, would have been around 70 million cubic metres. Is that correct?
Hon. J. Doyle: Yes.
G. Abbott: The minister invited me to comment on COFI's suggestion around the annual allowable cut. Of course I don't speak for COFI, but certainly I'm pleased to comment on the issue of annual allowable cut generally. This is an issue which we will revisit in a much more comprehensive fashion, I'm sure, when we are discussing the report by Mr. Garry Wouters around the review of forest policy in British Columbia, because he does identify it as an important issue.
Again, if I'm understanding the position of COFI correctly -- and I certainly don't speak for them -- it is this: we should work through a variety of means, including more intensive silviculture, better management of the land, and so on, and we should set a goal for ourselves over the decades ahead of increasing the annual allowable cut to 100 million cubic metres, if we can.
Frankly, from my perspective as an opposition Forests critic, that makes a lot of sense to me. If we can work through whatever means, whether it's better planting stock, better silviculture practices or better management of our resources on the land, and if we can increase the annual allowable cut in British Columbia, I certainly think it's something that we should do. One of the reports I have here -- and I will get to it presently, no doubt -- indicates that for every thousand cubic metres we can add to the annual allowable cut, we can add something like one and a half to two new jobs in British Columbia.
[1710]
Clearly if we can, in a responsible way, over time, enhance the annual allowable cut in British Columbia, as has been suggested by COFI and others, certainly we should do that; that's my view. I certainly welcome the minister's view. We do like to be equal opportunity people here in this Legislature. I'll be glad to hear the minister's view now, but we will revisit that in the context of the Wouters report as well.
Hon. J. Doyle: I appreciate the opposition views on COFI's opinion, but I'd still like to know still what the opposition view is on the cut. As far as the government opinion, it's my opinion -- or the member, like myself, who's got children
G. Abbott: I'm sure I couldn't state it any better than the Minister of Forests has done here. Obviously among the things we need to do is ensure that we set the annual allowable cut in a responsible and sustainable fashion. Therefore I'm pleased to hear the minister reconfirm his belief in the authority and independence of the chief forester in the province. The bedrock on which we build good sustainable forestry in British Columbia is the impartiality, the independence and the right-thinking and informed thinking of the chief forester. I presume that's the point the minister was attempting to make. Is that correct?
Hon. J. Doyle: That is right. The chief forester does a super job, and the integrity of his office and the work that he does to make sure that the forest is sustainable is beyond reproach.
G. Abbott: We'll revisit that point when we come to the Wouters report as well, because it had some interesting suggestions to make around a review agency that might, in some respect, bring about some changes in the office of the chief forester. It's an important policy decision that we'll discuss in the context of that debate.
Anyway, we were talking about AAC and the changes there. What is the projection of the Ministry of Forests with respect to the year 2000? Is it anticipated
Interjection.
[ Page 15069 ]
G. Abbott: Are you okay, hon. Chair? You were trying to sort out the panic button issue, I gather.
The Chair: Thank you, member; thank you for your help.
G. Abbott: I am ever concerned with the welfare of the Chair.
The Chair: I can see that. Thank you, member.
G. Abbott: So as long as we aren't starting World War III
The Chair: I do know what button to hit, yeah.
G. Abbott: Good. I'm just trying to remember where I was at, at that moment.
The Chair: Sorry, member.
G. Abbott: Could the minister advise what the anticipated cut level is for the year 2000? I presume you have that, given that revenue projections are built around it.
Hon. J. Doyle: We don't have the numbers right here. To the member across the floor, the appropriate staff persons are not here right now, but we will get you that number.
[1715]
G. Abbott: We'll set aside the anticipated revenues at this point; that's not available. Perhaps I'll try to set out the reasons for the question here. Perhaps -- as occasionally miraculously occurs -- the answer will walk in the door as I set out the reasons for the question.
I'm curious as to whether the government anticipates, in the year 2000 -- based on the American softwood lumber market -- whether we will see diminished demand and, as a consequence, again, diminished harvest in British Columbia. I don't see the final figures coming in the door, but what's the anticipation of the government around that point?
Hon. J. Doyle: Compare '99-2000 to 2000-2001. On the coast it's 17.6 million cubic metres for '99-2000, and for this year, it's 16.5. In the interior for '99-2000 it's 48.1, and for 2000-2001 it's 45.7. The totals for '99-2000 were 65.7 million cubic metres, and for this year, 2000-2001, it's 62.2. We did find the numbers after you asked the question a few minutes ago. We didn't have them right then, so that's why I'm repeating the numbers to you now.
G. Abbott: Thank you to the minister for finding those figures. We are looking at -- just to make sure I've got this right -- the anticipation for 2000-2001 of a decline in the harvest level from 65.7 million cubic metres last year to 62.2 million cubic metres in the current fiscal year. Is that correct?
Hon. J. Doyle: That is correct -- in '99-2000, 65.7, and in 2000-2001, 62.2.
G. Abbott: To what factors would the ministry attribute that decline in the annual allowable cut of some 3.5 million cubic metres?
Hon. J. Doyle: I'll just read a quote here on that very item:
G. Abbott: The note from the minister certainly answers some of the other questions I had around market expectations. We're looking at perhaps a modest softening in the American softwood lumber market and modest strengthening in the Japanese market. The overall consequence of that, given the importance of the U.S. in comparison to Japan, is a softening of about 5 percent in the expectations around harvest."Overall, the ministry is forecasting a slight decline of revenues this year compared to last year. Continuing strong housing markets in the United States are expected, but SPF prices are expected to decline by about 8 percent. The Canadian dollar is expected to appreciate against the U.S. counterpart during the year. Pulp prices are forecast to continue to strengthen in 2000-2001, averaging $670 (U.S.) a ton, up 20 percent over 1999-2000.
"The Japanese housing market is also projected to improve this year, as the Japanese economy continues its gradual recovery. Those factors together should result in relatively high timber volumes being cut again this year, although the forecast calls for a decline in overall volumes harvested from Crown land of 16 percent. In '99-2000, harvest volumes for both the coast and the interior were well above average."
[1720]
Can the minister, based on that decline of 3.5 million cubic metres in anticipated harvest
Hon. J. Doyle: For '99-2000 the forecast was $1.235 billion. For 2000-2001 the estimates are $1.212 billion. The revenues for '99-2000 are better than what were projected, but I don't have the final number right here.
G. Abbott: Essentially, the projection for '99-2000 was just over $1.2 billion. We don't know what the actual was. Perhaps the minister can give me a ballpark on that, if he has it. But the ministry's projection for 2000-2001 is that revenues would remain in that $1.2 billion range. Presumably the ministry is anticipating at this point -- given that the actual for '99-2000 was considerably better than $1.2 billion -- a considerable reduction in 2000-2001 over '99-2000.
Hon. J. Doyle: We're forecasting, to the best of our ability right now, that the total revenues for 1999-2000 will be about $1.6 billion. There's $260 million that goes to FRBC, and $1.212 billion is the estimate for this year. Again, we can't project any better than that. Hopefully, it will be better than what we have projected, but we can't state it at this time.
G. Abbott: Thank you for that clarification; that is what I was looking for. In terms of the accumulated undercut in the annual allowable cut, I want to address that for a moment. The minister noted a figure of 62.2 million cubic metres as the harvest in the year 1999 and 65.7 million cubic metres the year before that. Is that correct? I think so; anyway, we'll get it out
[ Page 15070 ]
there. As I understand it, the annual allowable cut across British Columbia is in the neighbourhood of 70-point-something or 71-point-something million cubic metres per year. So for the last year, we are looking at an undercut of something in the neighbourhood of nine million cubic metres and for the previous year, probably six million cubic metres. I expect -- in fact, I know -- a very considerable undercut the year before that, because the harvest was down to below 60 million cubic metres. First of all, if the officials could confirm for the minister what the undercut was for the past year and then perhaps give us a sense of what the undercut has been over the past three years.
[1725]
Hon. J. Doyle: We would confirm those numbers tomorrow, to the hon. member across the floor.
G. Abbott: Just to continue some of these questions around the state of the industry, could the minister outline for us
Hon. J. Doyle: In answer to the question, it would depend on what would replace the softwood lumber agreement. If there is no softwood lumber agreement, we would expect an increase in exports. But at the same time, we would expect a decrease in prices.
G. Abbott: That's certainly what I would expect as well -- that in the absence of an agreement, that is probable on both counts. We'll explore that simplistic evaluation undoubtedly as we go into our discussion of the softwood lumber agreement a little later on in these estimates.
In terms of, again, just a general sense of where we're at in British Columbia with our forest industry, PricewaterhouseCoopers
[1730]
For example, this is a section entitled "The profitability of B.C.'s forest industry has not kept pace with the forest industry in the rest of Canada." It goes through a number of graphs and analyses on return on capital employed in different parts of Canada and on different commodities. One of the things it notes, for example, is: "Between 1989-1992 the B.C. lumber sector was significantly more profitable than that in the rest of Canada. Since then, B.C.'s lumber industry has not been as profitable as the rest of Canada, and the gap is large and increasing. In 1998 the B.C. interior [return on capital employed] was 1.9 percent, while that in the rest of Canada averaged 14.3 percent, for a gap of 12.4 percent. The gap with the B.C. coast amounted to 14.4 percent in 1998." That is, in my view, an analysis which should cause us very considerable concern about not only the profitability, obviously, of the B.C. forest industry but also the competitiveness of the B.C. forest industry and our ability to attract capital and consequently see an expansion of jobs in British Columbia.
Does the minister have some comment on that very difficult prospect? Is the analysis of PricewaterhouseCoopers with respect to this something that is of grave concern to the ministry? What can be done to see an improvement with respect to that matter?
Hon. J. Doyle: In most of those years that the member makes reference to, the Japanese market was good as far as the coast. In the interior we have been constrained with the softwood lumber agreement of 1995, because we're constrained with just how much we can ship. As the member knows, there are mills in the interior today that are closed because they don't have quota. They don't want to pay the moneys that they have to, to ship their product over the borders. That has been a problem for this province -- the softwood lumber accord and, of course, presently the downturn in the Japanese market, which thankfully is coming back.
G. Abbott: I would accept the minister's explanation except for these factors. B.C. is not the only province in Canada that is constrained by the softwood lumber agreement. Certainly there are some provinces that are not, but they tend to be smaller producers in the American softwood lumber market -- i.e., the maritime provinces tend to be small players in comparison to British Columbia, Alberta, Ontario and Quebec. I'm not sure that we can explain away the very poor performance of British Columbia in relation to the rest of Canada by saying that we are constrained, because we are not only ones that are constrained.
[1735]
Furthermore, certainly the Japanese market is a huge problem; there is no question about that. It would be foolish to suggest that it hasn't been a problem, particularly for coastal producers. But again, looking beyond that -- looking beyond just the downturn in the Japanese market -- I think it goes back to the cost-competitiveness issue that I have tried to articulate to this point in the estimates. The fact of the matter is that when the Japanese market went sour, the British Columbia producer, because we tend to be the high-cost producer on the block
Is it not the case that lower-cost producers in eastern Canada -- i.e., Ontario and Quebec and certainly Alberta as well -- have been able to move into the American softwood lumber market and pick up some of our market share because of our cost problem? Similarly, is it not the case that for the Japanese lumber market or the Japanese housing market, some countries have been able to go in and exploit British Columbia's position as a high-cost producer in the Japanese market and grab some of our market share in that low-end market?
[ Page 15071 ]
Hon. J. Doyle: Breaking it down into two, because it's very much interior and coast, the Japanese market now is demanding kiln-dried products. By and large, the industry on the coast doesn't presently have many kilns. They are looking at putting in kilns so that they can access some of that market and compete in that marketplace. By and large, they have lost some of it because of the demand for kiln-dried products in Japan, and there are very few kilns up and running on the coast.
As for the interior, in the context of North American regions that produce lumber for the U.S. market, British Columbia has never been the highest-cost producer. British Columbia costs are higher than those in eastern Canada; British Columbia companies produce a higher-value lumber product mix than does the rest of Canada. Therefore it is important to examine mill margins -- that is, both costs and mill revenues. British Columbia costs are higher, but B.C. selling prices are also higher.
G. Abbott: The question of whether B.C. is a high-cost producer is an interesting one, and there may be some difference of opinion on that. Again, the PricewaterhouseCoopers analysis, which I hope the minister accepts as sound and straightforward, suggests the following
"The B.C. interior was the high-cost lumber manufacturer in 1998: ten years ago its costs were between those of Ontario and Quebec. Wood costs have risen $129, or 110 percent, per mfbm, in B.C. since 1989, compared to $36, or 31 percent, and $73, or 87 percent per mfbm, in Ontario and Quebec respectively. This cost difference accounts for almost the entire difference in lumber profitability between B.C. and the rest of Canada."
[1740]
It would seem to me that what PricewaterhouseCoopers is saying here is that in fact the B.C. interior now is the high-cost lumber manufacturer, that over time we have moved away from Ontario and Quebec, and that while they have seen increases, they are much less substantial than we have seen in costs in British Columbia.
Hon. J. Doyle: Pricewaterhouse doesn't consider the product mix -- for instance, wides and longs -- that we produce in British Columbia. Also, as far as costs, we have increased environmental standards. That has had an effect, without a doubt, on the cost of wood delivered to mills -- bringing in the Forest Practices Code and other things which we felt we had to bring in to make sure of some markets in the world for our products.
G. Abbott: The question again -- and I guess we have been talking about it and around it over the past couple of hours -- is whether we are administering, enforcing and managing the environmental issues around the code as efficiently and effectively as we should be. That's really the issue. I've seen a recent report that was actually prepared for the Ministry of Forests, which indicated that, for example, B.C. is alone in Canada certainly -- and, I gather, alone in the world -- in having multi-agency regulatory approvals for cutting permits. That alone is a striking example of where -- at least as far as I can tell -- we are doing something that nobody else in the world is doing, and that is multi-agency regulatory approvals. We can talk all day about it. The costs have gone up because we want to take better care of the environment. That's not an issue. What becomes an issue is whether we are taking care of the environment in as efficient and effective a manner as we should.
[1745]
It seems to me that it is implicit even in the government's approach around results-based code pilots and so on. It seems to me that implicit in that is an acceptance and a realization that we aren't taking care of the administration of environmental issues as efficiently and effectively as we should in the province of British Columbia. We have to make some further changes to get rid of those unnecessary costs which, again, make us -- according to Pricewaterhouse, at least -- one of the high-cost producers, if not the high-cost producer, in North America.
Again, we may come back to this issue in the context of our detailed discussion of the code. I am sure we will. But I want to make that point to the minister, and I want to hear his response about that. He can use the example I've used -- the multi-agency regulatory approach that we have in British Columbia -- which, as I understand from the reports I've seen, is unique in the world.
Hon. J. Doyle: I would have to say that most of what the hon. member across the floor spoke about over the last few minutes is old news. I would like to say that what we're doing now, with the code pilots, is finding new ways of doing business in the province. We're working with the sector -- government and the forest sector working together -- to identify savings but still protect the Forest Practices Code.
G. Abbott: I'd hate to think of a report that has not yet been released to the public by the Ministry of Forests as somehow old news, because it's a report that we were able to access through the Freedom of Information Act. We're happy to have it, but it's hardly old news.
I think the central point which at least I am drawing from the report at this point is that there's a distinction between maintaining -- enhancing -- environmental standards and doing those things in the most efficient and effective way possible. Again I advance the issue, because I think it's an important one. One that is identified very clearly in this report is that unlike any other jurisdiction in the world, I think -- certainly any other jurisdiction in Canada -- we are clinging to a multi-agency approval process when nobody else has even gone down that road.
I put it to the minister that there's that and many other ways in which we can deliver environmental management in the province in a much more efficient and effective way. I would like his comment. Again, I think it's a critical part of restoring a competitive forest industry to the province of British Columbia.
Hon. J. Doyle: Probably the biggest opportunity for regulatory reform may be in the professional people in the province working with the industry -- working together to see the savings that they could find. That's something that must be done. But the concern and the problem is that as far as government, people are telling us that they don't always trust the work that might happen out there.
[ Page 15072 ]
I talked some weeks ago to the professional foresters in Prince George. No doubt they are a professional group. But the public out there is still demanding a very high standard in the Forests Practices Code, so that's what I will offer to the member across the floor.
G. Abbott: I commend the minister for his frank acknowledgment of the politics in this. In my view -- and I meet with the professional foresters all the time too and am very much impressed by them
[1750]
We don't have, for example, teams of lawyers that second-guess every legal opinion that is generated by every lawyer in the province. If people heard that, they would say: "Well, that's just silly. Why would we do that?" We don't have a team of government doctors that second-guesses every diagnosis that is generated by doctors around the province of British Columbia. We just don't do that. In fact, if someone were to advance that notion, they'd say: "Well, that's just nuts. Why would we have a team of government doctors second-guessing the diagnoses that are put forward by other doctors? That would be silly."
I think that in the same way, somehow we have to get beyond the mind-set which the minister articulated: "Hey, you know, we don't really trust professional foresters. We really don't trust the forest industry." I think we've got to get beyond that, and we have got to say: "Frankly, it's silly to have a team of government foresters second-guessing professional foresters from the industry." I think that's just something we've got to get beyond. Maybe not everybody's going to be on board initially. But I think that over time what we need to do is ensure that professional foresters do get the respect, the accountability and the responsibility that obviously they're educated for and that they have ethical standards around.
Frankly, just the notion that some people say they don't always trust professional foresters or they don't always trust the industry is not a good reason to add an unnecessary cost burden onto an industry that has to compete in a global marketplace with jurisdictions that in many cases have environmental standards that are nothing compared to ours. Again, it's the distinction between proper, suitable, appropriate environmental management, and doing it in the most efficient and effective way.
The minister would like to respond?
Hon. J. Doyle: We agree. But you can only go so far as the public will accept change. The task for industry and government is to prove that the professional foresters are ready to take on this responsibility and be a self-regulating body. Code pilots will hopefully go a long way to do that. Landscape unit objectives will also make it easier for professional foresters to take on this.
Noting the hour, I move the committee rise, report progress and ask leave to sit again.
Motion approved.
The House resumed; the Speaker in the chair.
Committee of Supply B, having reported progress, was granted leave to sit again.
Hon. D. Lovick: Hon. Speaker, I would simply advise members of the House that we shall indeed be sitting tomorrow. With that, I move that the House do now adjourn.
Motion approved.
The House adjourned at 5:55 p.m.
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