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)
MONDAY, MAY 1, 2000
Afternoon Sitting
Volume 19, Number 4
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The House met at 2:08 p.m.
Prayers.
The Speaker: The member for Cariboo North.
D. Zirnhelt: Cariboo South, Mr. Speaker.
The Speaker: I'm sorry. My apologies, member. It's Cariboo South.
D. Zirnhelt: That's fine. I'm pleased to represent both ridings. The member isn't here, and on his behalf I'm making some common introductions, hon. Speaker.
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I'd like to introduce to the House some very aggressive, dedicated and concerned parents, from school district 27, who are here to meet with Ministry of Education officials about concerns they have about school closures proposed by the school district. They are Robin Rusau and Brian Rusau from 70 Mile Elementary School, Caren Folster and Zena Thorsteinson from Buffalo Creek Elementary School, Vicki Elzinga and Isabelle Dodd from Riske Creek Elementary School and the Toosey band. Representing Crescent Heights Elementary School, although she's from Mcleese Lake, is Heather Robertson. And representing McLeese Lake Elementary School, which is in Cariboo North, are Barb Scharf, Kim Atchison and Marie Beck. Accompanying them is Terry Tate from the IWA local in the Williams Lake area. Please make them welcome.
Hon. U. Dosanjh: Hon. Speaker, I want to welcome back a very important member of the press gallery. BCTV cameraperson, or cameraman
G. Farrell-Collins: For our side of the House, we'd like to welcome Ron back as well. I just advise everybody to stay out of his way and you'll do just fine in the corridors.
Hon. M. Farnworth: In the gallery today we have a special guest, Shirley Douglas, the daughter of the late Tommy Douglas, one of the founding members of the CCF-NDP and the Premier that brought medicare into Canada. Shirley is here to meet with community groups and myself later this afternoon to discuss the future of medicare in British Columbia and Canada. Would the House please make Shirley welcome.
Hon. D. Miller: In the gallery today are two members of the team of the northern development commissioner. Cheryl Soucie is the executive administrative assistant for the commissioner and Ron Burleson is the senior coordinator for the Northern Development Commission. I'd ask the House to make both of them very welcome.
M. de Jong: I'm thrilled that my sister Pat is in the gallery, and with her today is a friend from Saskatoon, Saskatchewan -- Cass. I hope the House will make both of them welcome.
G. Hogg: In the gallery today are 20 grade 11 students from the independent Southridge School, along with their teacher Mr. Julian. Would the House please make them welcome.
E. Walsh: I'm pleased to introduce someone to the House today who works very hard for all residents of my Kootenay riding. I would ask the House to welcome my CA, Laura Kirkhope, to the Parliament Buildings.
G. Abbott: In the gallery today is my constituency assistant, June Wayslow, and I'd ask the House to make her welcome.
Oral Questions
RESERVATION SYSTEM FOR B.C. FERRIES
G. Plant: B.C. Ferries, the B.C. Ferry Corporation, is looking at imposing a mandatory reservation system, despite the fact that the idea of mandatory reservations has been condemned by everybody from the B.C. Automobile Association to the gang at the other end of the hall known as backbencher NDP MLAs. Well, thanks to the FOI Act, Mr. Speaker, we have a B.C. Ferries memorandum from April of 1999 on the subject of reservations and recommendations, and here's what it says: "Mandatory reservations are not an option." Will the minister responsible for B.C. Ferries please tell us why she and her Crown corporation continue to push a scheme that it knew a year ago was an unpopular non-starter?
Hon. J. MacPhail: There have been ongoing consultations throughout the late fall -- and will continue throughout this spring -- about ways to improve B.C. Ferries services. I know that not only my colleagues on this side but the colleagues on the other side will agree that there should be an improvement in service. I wholeheartedly support the corporation figuring out any way that will improve service. All of the improvements will have to be based on wide-ranging public consultation; that's what's occurring now, as we speak. It's good to get the feedback.
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The Speaker: The member for Richmond-Steveston with a supplemental question.
G. Plant: Well, Mr. Speaker, the minister can talk about customer improvements, but the very memo that expresses opposition and recognizes the bad public policy idea known as mandatory reservations also explains its primary purpose. This is what that memo says: the primary purpose of reservations programs is "to increase net revenue." Surprise, surprise -- government talks about one thing, but in fact we find another cash grab. Will the minister agree that when everyone who takes a ferry has to pay a mandatory reservation fee, what she's really talking about is a fare increase?
Hon. J. MacPhail: Sorry, hon. member; that's not what this is about at all. In fact, the Ferry Corporation was recently put on sound financial footing by the first government ever to actually give them a dedicated stream of revenue for the very first time -- a dedicated fuel tax. The debt of the Ferry
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Corporation, the past debt of the ships being built, is going to be accommodated by the central government. The Ferry Corporation is now solvent.
What the Ferry Corporation now must concentrate on is improving service to the customers. I hope that the members opposite will agree with that goal. I hope that the members opposite, rather than just responding to the media, will actually engage in the public consultation around ways to improve service. I hope the members opposite will fully understand that any change in the fares, whether they be changed up or down, will be open to wide public consultation.
FAST FERRY PROJECT INFORMATION
C. Clark: You know, the fast ferries have certainly suffered their fair share of bad luck these days. The Premier, on the fast ferry file, insists that we know everything there is to know, that it's all open -- case closed. It's time to move on ahead as his party sails off into the sunset. Well, we have also put in another FOI request. We asked for all the information -- all the correspondence that had been generated -- on fast ferries out of the Crown corporations secretariat. You know, I should have looked in my crystal ball, because instead of getting the information
Hon. J. MacPhail: Hon. Speaker, there have been several reports that give all of the details on the fast ferry project -- people who were to be held accountable, all of the details of what went on during that time. The auditor general's report, the Hugh Gordon report, the JJMA report, a technical report -- all of that information has been in the public domain for over a year.
The Speaker: The member for Port Moody-Burnaby Mountain with a supplemental question.
C. Clark: Hon. Speaker, if all the information is in the public domain, then why don't they hand it over when we ask for it under the Freedom of Information Act? We ask for the information, and we get a document that is so heavily severed that most of it isn't even there anymore. If this government is so committed to being honest with the public, then tell us what they've got to hide. And if this minister will not tell us what is in this document -- if she will not table the rest of this document that she's withheld from the public -- will she at least stand up today and tell us that she is going to have the chairman and the CEO of B.C. Ferries and the head of the Crown corporations secretariat sit in this House during estimates and answer the questions so that they can fill in the blanks?
Hon. J. MacPhail: The member opposite knows full well the rules of the Freedom of Information and Protection of Privacy Act. Our act is complied with always, and there are avenues of appeal if that's not the case.
Hon. Speaker, if somehow the opposition is suggesting that all of the information concerning the project of the Pacificats is not in the public domain, then they're not doing their homework. It is unbelievable that on May 1, 2000, the Liberal opposition is still searching for answers that we get on this side. We've got the answers, we know who's to be held accountable, we know what mistakes are made, we know how to fix those mistakes
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Interjections.
The Speaker: Order, members.
Hon. J. MacPhail:
LAUNCH OF THIRD FAST FERRY
M. de Jong: It's an interesting response from the minister. Curiously, at no point did she mention the launch of the third fast ferry that took place last week. How odd. Remember, Mr. Speaker, the old days -- the first launching of the ferry? The NDP Premier amid flowing champagne proclaimed: "They said we couldn't do it." And then, when they launched the second ferry, the NDP battle cry was: "I wish we hadn't done it." Now, last week, with the third launching, I guess the NDP battle cry is: "I didn't do it."
Can the Premier or the minister explain what pressing government business kept them from attending the launching of this multimillion-dollar NDP-sponsored white elephant?
Hon. J. MacPhail: It is marine tradition to launch a vessel. It's the time when you get to honour the workers involved with building the vessel as well. I do note that at the first two launches, unfortunately neither of whicn I could attend
Hon. Speaker, this vessel, while according to marine tradition was launched and named, will not be put in service and will be offered for sale as a new vessel.
The Speaker: The member for Matsqui with a supplemental question.
M. de Jong: It's a curious non-answer. We did adjourn for the week so that the Premier and the minister could be in attendance. Why doesn't the minister just take this opportunity to be honest with British Columbians and tell them the truth and say: "We were too embarrassed, having wasted almost half a billion tax dollars -- hard-earned tax dollars -- from British Columbians?" They were too embarrassed to attend.
This is my question to either the minister or the Premier: why don't they stand up today and apologize to all those British Columbians who waited in a lineup last long weekend
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while this floating white elephant sat idle in the ocean -- a testament to this government's mismanagement and ineptitude?
Hon. J. MacPhail: They do
We have admitted to mistakes in the past. We are fixing the problem of the fast ferries, and we will continue to move forward on placing a high value on the ferry service on which communities rely.
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MENTAL HEALTH PLAN IMPLEMENTATION
C. Hansen: My question is also to the Deputy Premier, but on a very different subject. It was more than two years ago that she announced a $125 million program for mental health to be implemented over seven years. Earlier this year the now Minister of Education, her colleague, said that not only has the program not been implemented but that funding for that mental health plan had not even been included in the budget.
My question is to the Deputy Premier, because as Minister of Health she announced a program that had no budget, and as a Minister of Finance she failed to follow through and provide that budget. Will the Deputy Premier, on behalf of the government, apologize for deliberately misleading B.C. families in announcing a plan that was nothing but a sham?
Interjections.
The Speaker: Order, members. The Minister of Health.
Hon. M. Farnworth: Thank you
Interjections.
Hon. M. Farnworth: Are we ready?
Hon. Speaker, I would like to inform the opposition that in fact the mental health plan is being implemented. What's taken place is a number of steps which are critical to the successful implementation of the plan. First and foremost were legislative changes, which this House debated and which came about as a part of a consultative process which saw that mental health community groups and advocates from right across the province had input into the legislation and the changes. That legislation was adopted and debated in this House and was supported by all sides of this House, and that was the cornerstone of the mental health plan. That was put in place in November. That is critical if you want to fund the plan further, hon. member.
Second, hon. Speaker, what was taking place was the development of best practices so that we can implement the rest of the mental health plan -- best practices which have now been compiled and which are available so that different regions of the province can see what's happening in terms of the implementation and best practices for providing mental health services in British Columbia. In fact, it is so comprehensive that at a recent mental health conference in terms of best practices in this country where we were anticipating 250 attendees, we had over 500 people, because British Columbia is leading the way.
The Speaker: Member for Vancouver-Quilchena for a supplemental.
C. Hansen: What British Columbia is leading the way in, in mental health, is false hopes, announcements with no substance, and process after process and no community support.
Hon. Speaker, last Saturday marked the second anniversary of the very tragic suicide of Shawn Arsenault, who was a young Victoria man with schizophrenia. The coroner's report that came out on Shawn's death said that he was unable to access the mental health services that he needed -- the very kind of services that are set out in the mental health plan. Will the Minister of Health -- since the Deputy Premier would not do it -- admit that his government has acted cruelly towards the families who are suffering with mental health problems and has given false hope by not providing the mental health services that were promised over two years ago?
The Speaker: Noting that the red light has gone on, I'll ask the minister to be brief in his answer.
Hon. M. Farnworth: Hon. Speaker, I have said publicly and will state here in this House that we will be implementing -- and are implementing -- the mental health plan. It is to be funded over five to seven years. In fact, there are projects being funded that will deal with the services that the people of this province require in places like Prince George and Nanaimo and Kamloops, which are seeing services relocated out of the lower mainland and regionalized into different parts of the province.
The plan is being implemented. The money is in place to put those services into the region. That's what's happening, hon. Speaker, and it will continue to happen.
The Speaker: The bell ends question period.
Point of Order
Hon. D. Lovick: Mr. Speaker, I'm rising on a point of order. The absolute, quintessential rule for question period in this chamber is that all questions must be directed to ministers concerning matters that fall directly within the area of ministerial responsibility. If there's one thing that's a constant throughout the entire parliamentary system throughout the entire Commonwealth, that's it. That's the quintessential rule, Mr. Speaker.
The question that was posed a few minutes ago
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Interjections.
The Speaker: Order, members.
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Hon. D. Lovick: The question that was asked to the Deputy Premier a few moments ago had nothing whatsoever to do with the Deputy Premier's responsibility. It also accused the Deputy Premier of misleading the House. It as well, Mr. Speaker
Interjections.
Hon. D. Lovick: It as well, I think, if we look closely
Interjections.
The Speaker: Members.
Hon. D. Lovick: If we were to look closely
It's a deliberate, flagrant abuse of the rules of this House, Mr. Speaker. I am rising now simply to ask the Speaker to please take under advisement the matter I have merely alluded to here and to investigate and review the issue. It seems to me we are in danger of destroying any decorum or due procedure and process in this chamber.
The Speaker: The Opposition House Leader on the point of order.
G. Farrell-Collins: Mr. Speaker, I think what we're
Mr. Speaker, the member from the opposition benches posed the question on mental health to the government. It is impossible to get straight answers out of this government. Ministries change. I don't know how many Ministers of Health we've had in the last couple of years. I don't know how many Ministers of Finance we've had in the last couple of years. If the Deputy Premier is uncomfortable answering for her record, then I'm sure the janitor is glad to get up and answer the question for her, as he's done repeatedly. So, Mr. Speaker, members are able to ask those questions. If the government doesn't like the questions, that's unfortunate.
On the second matter, Mr. Speaker, I think that if the Government House Leader reviews the record, he'll note that the member for Vancouver-Quilchena did not accuse the Deputy Premier of deliberately misleading the House. He accused the minister of deliberately misleading the people of British Columbia, and that is true.
Interjections.
The Speaker: Order, members. I want to thank both the hon. members for their presentations on the point of order. The Chair is of the view that the question to the Deputy Premier would have been out of order had the Minister of Health not decided to answer the question.
As to the rest of the matter of the point of order, I'll review the Hansard and if necessary come back to the House. I think that ends the matter for now.
Orders of the Day
Hon. D. Lovick: I call Committees of Supply. In Committee A, we will be debating the estimates of the Ministry of Transportation and Highways. In Committee B, we will continue the debate on the estimates of the Ministry of Forests.
The House in Committee of Supply B; T. Stevenson in the chair.
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ESTIMATES: MINISTRY OF FORESTS
(continued)
On vote 34: ministry operations, $297,814,000 (continued).
Hon. J. Doyle: Before I continue, hon. Speaker, I'd like to refer back to the last time we were sitting in this House, the week of April 17, before we took the one week off. The opposition spent several hours reviewing details of the forest worker transition program, administered by Forest Renewal British Columbia since 1996. No doubt the member for Shuswap intends to continue with some questions on this matter. Before I turn the floor over to my hon. colleague, I would like to take a few moments to review the facts before us.
I trust the opposition has gained an appreciation for the complexity of the issues surrounding the decision of the Canada Customs and Revenue Agency to assess taxes against clients involved in this valuable program. Unfortunately, one of the most revealing comments made when the House last sat was by the member for Shuswap. It was that members opposite weren't interested in whether the program was successful or not -- couldn't care less. I apologize to the hon. member now, because I am going to talk about the facts of the matter, including the success of this program.
Forest Renewal B.C. has assisted over 8,000 displaced forest workers through this program with up to $27,000 in income support for training allowance -- a very generous program. It's one of the most generous in the country, I think -- up to $27,000. Some people got $5,000, but you could go up to $27,000. A hundred million dollars was provided to clients over the last four years in this program, and 80 percent of the people that took the program -- unqualified -- are now working because of this program. If the opposition had its way, there would have been no program, no help provided -- nothing.
For the record, Forest Renewal received opinions from recognized tax accountants and tax lawyers. Forest Renewal sought confirmation of those opinions from the federal tax department. Forest Renewal B.C. attempted to do two things: (1) get a definite ruling from Revenue Canada; (2) in the meantime, make sure that clients received the most benefit for the program dollars that they received. Forest Renewal kept clients informed of its actions. Some clients heard the warnings and took action; some did not.
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For instance, all clients that were registered in the 1997 program received notice before the time to file their taxes in 1998. They all received letters from FRBC telling them, before they had to sign their 1997 taxes, that there was still some concern ongoing as to the federal government's stand on the
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tax issue. Having lost the fight with Revenue Canada, a portion of those program dollars must now be returned to the federal government in tax. We think it is wrong, but it is the law.
What have we done? What has the government done and what has FRBC done to help the clients? It's true that some clients face hardship as a result of Revenue Canada's decision to impose taxes. But the taxes they face today are no more than the taxes they would have faced then. In fact, as a result of the agreement that our officials have reached with Ottawa, the taxes they face are a good deal lower. So I'm pleased as the minister to have worked out, in the first month, the agreement-in-principle which assisted those workers. In the agreement that we worked out, clients receive a two-year tax deferment on the federal taxes. One-third of taxes owing -- that being the provincial portion -- was forgiven by the province. Clients have been offered an amount equivalent to two years' interest on the balance of federal taxes owing.
Just for the interest, since the last time we were in this House a week or ten days ago, FRBC has had over 300 calls from clients who have been through this program asking about the agreement-in-principle. When the agreement-in-principle is explained to those clients, actually 96 percent -- that's up from 95 percent -- of clients who have been contacted and used the FRBC line
What I can not say, which has been some of the problem the last time we were discussing this item in the House
G. Abbott: I want to make a few comments here off the top too, in response to what the minister has had to say. First of all, hon. Chair, I would like you to take particular note of what the minister has said today. It seems to me that what the minister is attempting to do here is to have his cake and eat it too. He wants to be able to get up, give the government spin on this most unfortunate situation but then not defend it. I take exception to that.
I think you should make note of this, hon. Chair -- that if he wants to get up, if he wants to maintain a particular spin about how this has occurred, then he should get up and defend it as well. I take exception to the minister getting up and telling me that it's this way and then not defending it. We have an important public policy issue here. I want to see the
Yet he is going to use that shield of the legal defence, I'm sure, just as soon as we get on to it. I want you to make a note of that, hon. Chair, because I think it's going to have a bearing on the way that we should respond to these questions.
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Second point: we did spend several hours in here -- no question -- on the previous Thursday talking about this. The several hours were largely comprised of me asking very brief questions followed by very long pauses, followed frequently by the minister getting up and saying: "Well, I can't answer that." That was how we spent several hours in here. We haven't begun. We have not yet addressed some of the critical questions around this. The minister shouldn't think this is going away. I'm not going to sit here in this House and have the minister tell me, "Well, it's this way," and then not defend himself in terms of what the government's response to those questions is. So I want the minister to appreciate that. I'm not going to sit back and be a part of this attempt to rewrite history.
The point here is very clear. The minister wanted to talk about the principle of the thing. He said that the taxes would have been no more today than they would have been had they paid them back in '96, '97 and '98. Well, the fact of the matter is that any responsible government and any responsible government agency are going to want to apprise their clients about what their real, actual tax situation is. If people know that, then they can make provision to pay those taxes. Surely, after all the debate we have had here, that should be clear. People don't want to be surprised in December of 1999 that they owe back taxes for two or three years or whatever period of time they happen to have been in the program; they don't want to suddenly be confronted by that. They want to be told up front what their real, actual tax position is. Then they can govern themselves accordingly.
Our debate has been around that point of whether the response from Forest Renewal B.C., the response from the government, was appropriate. I think that we have, to this point, presented a good deal of evidence to suggest the contrary, most of which the minister has responded to by saying: "I'm not going to respond to that, because it would prejudice our legal position."
As I understand it -- I'm not a lawyer, and I'm very grateful for that -- a writ of summons has been issued, but there is certainly not any case active. There is no case active, and the minister knows that. So we can continue on. Hopefully, some of the questions that went unresolved last day can perhaps be resolved today. I don't know. I'll be surprised if they can be.
But I think there's an important public policy issue at play here. I think there are important lessons that the government should have learned from all this. Obviously they're not acknowledging that there has been a failure here; they're not acknowledging that things could have been done better. I'm yet to be convinced that the government has learned its lesson and that they have adjusted their practices in keeping with that.
Where we were last day is that we talked at some length about the development of this program, the initial debate
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around whether those benefits would be taxable. We talked about the engagement of Doane Raymond, their initial opinion and their letter subsequently to Revenue Canada about whether those benefits would be taxable.
One of the questions that was unresolved
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Hon. J. Doyle: Actually, the reason we didn't get back to the clients for up to a year is because it took Ottawa approximately a year to get back to us.
I'd just like to say
It took a long time to get final word out of Ottawa as to the tax status of this program. It took almost a year to hear back from Ottawa, hon. member -- on your question.
G. Abbott: Can the minister advise what steps Doane Raymond took between the time they issued their letter, in October 1996, and September 1997, when we got the formal response from Revenue Canada? On what occasions did FRBC contact Doane Raymond with respect to whether an explanation had been forthcoming from Revenue Canada? And did Doane Raymond in turn follow up and attempt to secure the status of that particular issue?
Hon. J. Doyle: It is the belief of the government that Doane Raymond was in contact during that year, during that time, with Revenue Canada to try to get a definite answer from them.
G. Abbott: On what basis is that belief held?
Hon. J. Doyle: It's based on the fact that there was communication between FRBC and Revenue Canada staff.
G. Abbott: So the minister is saying that between October '96 and September '97, there were direct interventions by FRBC to Revenue Canada surrounding the issue of the taxability of benefits. Can the minister advise: on how many occasions did FRBC officials contact Revenue Canada with respect to that issue?
Hon. J. Doyle: We don't have a definite number as to how many times there was communication back and forth.
G. Abbott: So what is the belief that, in fact, follow-up occurred based on? Is there no evidence of e-mails or records of telephone calls -- or written correspondence, for that matter? Is there none of that to support the suggestion or belief?
Hon. J. Doyle: There are no written records of the communication, but there was communication.
G. Abbott: So there's no written record; there was no e-mail; there was no conventional mail. Are we to understand, then, that there was some contact made by telephone?
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Hon. J. Doyle: While there is no written record, I will assure you that FRBC was very concerned during the year that we were speaking about a minute ago and are still speaking about -- when there was this concern about taxation between Ottawa and the clients out there. There was communication between FRBC and Revenue Canada.
G. Abbott: We've heard from the minister now on a couple of occasions on how carefully they have monitored calls incoming from former clients of the forest worker transition program to Forest Renewal B.C. In fact, we have a documented number of calls. We know the precise nature of those calls -- whether they were supportive of the agreement-in-principle and so on. Yet when it comes to the issue of what happened between October 1996 and September 1997, there doesn't seem to have been a whole lot of tracking with respect to when the calls occurred or what the response of Revenue Canada was. Is there any indication of what the response of Revenue Canada was to the indefinite number of contacts from FRBC?
Hon. J. Doyle: I have said to the hon. member across the floor that there is no written record of the communication that there was between FRBC and Revenue Canada. You make reference to the calls that FRBC received in the last month or two. I will let you know that before the agreement-in-principle was worked out at the end of March, there were many, many calls to FRBC from clients, mostly of a negative nature. But since the agreement-in-principle was worked out, as I mentioned earlier, 96 percent of people that called, when the AIP is explained to them, are satisfied with what we have done to try to put this issue to bed.
G. Abbott: I thank the minister for again reinforcing the point I'm attempting to make, and that is: now that the agreement-in-principle is in place, theoretically, and FRBC is getting some calls, and we know that FRBC had calls before the agreement-in-principle, and that all seems to be very well documented, do we not have any documentation of any sort around this very critical period between October 1996 and September 1997? I want to know whether Doane Raymond was doing their due diligence as your accountants to secure a decision from Revenue Canada, and I further want some evidence that Forest Renewal B.C. was doing due diligence either through Doane Raymond or directly with Revenue Canada. Is there nothing to substantiate that suggestion?
Hon. J. Doyle: I think that you, the hon. member across the floor, know that FRBC was very concerned to try to get this issue dealt with. That, hopefully, explains to you and other people who are in this House that FRBC did work to the best of their ability to try to get an answer back from Revenue Canada.
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G. Abbott: In fact, I don't know that at all. It's been one of the things that has puzzled me from the first time that I looked through this file. There is a very long gap between October '96 and September '97, where it appears that the issue was thrown into some kind of void -- a kind of black hole -- where there was no discussion, no follow-up and no explanation. Frankly, I am not reassured by the minister's comments to date that in fact there was that follow-up to this very important issue. I'm still not hearing it. The fact that FRBC apparently was concerned enough to ask Doane Raymond to write a letter and get a conclusion to the issue is not sufficient. I want to know whether there was follow-up from October '96 when Doane Raymond wrote their letter to Revenue Canada. Who followed up? Who was pursuing the file on a daily, weekly or monthly basis?
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Hon. J. Doyle: I feel that I've tried to answer the question. FRBC had made communication with Ottawa on the work on this file. I don't have anything written; I don't have any information other than what I'm giving you today, hon. member. But FRBC is telling me that this file was worked on with Revenue Canada to the best of FRBC's ability.
G. Abbott: Can the minister advise who in the Forest Renewal organization and who in Doane Raymond were responsible for pursuing the tax issue with Revenue Canada during that period, October '96 to September '97?
Hon. J. Doyle: The individuals in Forest Renewal that worked on this on our behalf were Judy Pryce and Jacqui James, who were employees at that time.
G. Abbott: Can the minister advise who in Doane Raymond was responsible for the file after October '96?
Hon. J. Doyle: The individuals in Doane Raymond that worked on this were Andy Little and Susan Mehinagic, tax partners in that firm.
G. Abbott: If there had been written communication between either Judy Pryce or Jacqui James of FRBC and Revenue Canada, would it have appeared in the package of documentation which was provided to us through the Freedom of Information Act?
Hon. J. Doyle: Yes.
G. Abbott: I am presuming, therefore, that there was no written communication between Judy Pryce, Jacqui James and Revenue Canada or Doane Raymond through that period. Certainly there's none evident to me, and I think the minister has already acknowledged that there is none evident to him. Would it be the practice of Forest Renewal B.C. to make a notation whenever a verbal communication was made between themselves and Revenue Canada over an issue as important as taxability of benefits?
Hon. J. Doyle: Not necessarily.
G. Abbott: Not necessarily. Could we assume, then, from that response that there may or may not have been a record made of calls of that sort and that therefore either there were no calls made or there were calls made but they were unrecorded? Is that a fair summary?
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Hon. J. Doyle: We can assume there was no record of the calls.
G. Abbott: In summary, then -- and I don't propose to spend the rest of the day on this -- we have no evidence of written communication, nor do we have evidence of verbal or oral communication with the federal government. But we do have a belief that the appropriate officials followed up at indeterminate dates with Revenue Canada on this. Again, is this a fair summary?
Hon. J. Doyle: Yes. It's on the record that FRBC staff were concerned about this issue.
G. Abbott: Again, there would be no point in disputing that FRBC was concerned about the issue. Presumably they were concerned enough at least to engage Doane Raymond to attempt to secure an answer.
I would think the organization would have been concerned a month, two months, three months, six months after that there had been no explanation. I remain puzzled, subject to a better explanation from the minister, as to what evidence there is that this concern on the part of Forest Renewal B.C. manifested itself as an intervention with either Revenue Canada or Doane Raymond to ascertain, in reasonable order, that there had been no conclusion reached with respect to the Doane Raymond letter to Revenue Canada. Again, the issue is not around whether they were concerned. Obviously we'll never prove one way or another whether they were concerned or not. We could easily offer up the explanation that of course they were concerned; they engaged Doane Raymond. The issue is: was due diligence followed in terms of securing from Revenue Canada that definitive decision around the taxability of benefits? Again, I don't want to spend all day on this. Does the minister acknowledge that there's no evidence to suggest that that occurred?
Hon. J. Doyle: I feel that I've given the hon. member across the floor all the information that I can on this issue as far as communication between FRBC, Doane Raymond and/or Ottawa.
G. Abbott: I'm not going to beat my head on this particular wall any longer.
Near the conclusion of our last day of debate around this, we did talk about the advice from Revenue Canada in September of '97 -- the advice that in fact those benefits were taxable. I think there was an acknowledgment from Doane Raymond at that point in time that, yes, they were taxable. The minister suggested, in response to a question from me, that when FRBC secured the decision of Revenue Canada around taxability, they immediately -- or at least in the next pay period -- sent out an advisory to their clients with respect to the taxability issue, and that is a document which I did not have in my possession at that time.
I still have not been able to secure that document. The minister promised me that he would provide me with a copy
[ Page 15164 ]
of it. Can the minister advise me of where that document is, which was promised? Can he send it across to me now? Does he have any other documents to table?
[1510]
Hon. J. Doyle: Hon. Chair, I must admit to the member opposite that I did not realize that you cannot table documents in committee -- I was made aware of that after we went into committee this afternoon -- or I would have tabled them earlier. So that was an honest mistake. But I will send across the floor the copies of the information that FRBC did send to clients.
G. Abbott: I won't hold up proceedings here to look at the documents now, but I will try to review them as the day goes on. If there are questions that arise as a result of that document, I'll ask them then rather than hold up proceedings here.
One of the issues that was critical in our last discussion, which I think still remains a very critical issue here, is how effectively the taxability question was communicated by contractors or other delivery agents to clients of the program. My hon. friend the member for Fort Langley-Aldergrove had a number of questions around that last day. It seems to me that it is one of the important issues that remains outstanding here.
I want to read into the record a communication around this particular point and then invite the minister's comments, because I think it goes to the heart of whether delivery agents and contractors were properly carrying the message with respect to taxability -- if indeed there is a way of describing proper in this particular context. The communication is from the CEO of FRBC, Roger Stanyer, Friday, on February 20, 1998, to Kelly Nontell, who's an FRBC official, with respect to this:
To that Kelly Nontell responds later in the day: "I'm asking Brian, Christine, Jim and Katherine, who all became involved in the [forest worker transition program] at different times, if they have any information in writing -- meeting minutes, e-mails, etc. -- that indicate what and when advice regarding the tax issue was provided by Victoria to our delivery agents." This was February 20, 1998, 3:44 p.m."I am quite concerned that we are going to get into a disagreement with the lower mainland offices over the appropriate remedy, based on what the clients were or were not told and what communication had taken place between the executive director's office and the lower mainland offices.
"Therefore we should attempt to acquire copies of any written communication between the Island office and clients as well as any written communication between the Island office and the lower mainland offices or copies of any minutes of meetings where the issue was discussed between the offices.
"The reason for concern comes from conversations between the minister's office and one of the lower mainland offices. The people in Van" -- which I'm presuming is short for Vancouver -- "deny any knowledge that these moneys might be taxable. I don't want to stir anything suspicious at this point, but we need to prepare for the argument."
I'll be interested to hear what the minister's reading of this is. But my reading of this is that there was a good deal of concern at the highest levels in Forest Renewal B.C. -- at least on February 20, 1998 -- about how effectively contractors and other delivery agents were carrying the message with respect to taxability. Is that a view that the minister shares?
Hon. J. Doyle: I think that the letter in question from FRBC CEO Stanyer shows that the CEO of FRBC was concerned in case there was any misunderstanding between FRBC through the contractors to the clients. So what FRBC did before one would normally file their taxes is send letters to all the clients, copies of which I gave you a little while ago in the House.
[1515]
G. Abbott: The issue here, though, is whether the direction of head office in Victoria was being reflected in the direction, the advice, that was being rendered in the Vancouver office and presumably elsewhere. Is the minister aware that there were discrepancies up to and including February 20, 1998, between the kind of advice that was being delivered in different parts of the province?
Hon. J. Doyle: I can't speculate about what was spoken individually from a client to a contractor. But to ensure that there was no doubt as to the tax status of these moneys between FRBC and Ottawa, letters were sent out to FRBC that made sure that all clients got the same information.
G. Abbott: Certainly letters went out. Certainly at different stages we see the issue becoming a little bit more definite. But it seems to me -- and I don't have the letter in front of me
Hon. J. Doyle: The opinion that FRBC got from Revenue Canada in September 1997, as you can see by the letter that FRBC sent out to clients in February 1998, was in no way a clear opinion. It was very hard to read between the lines as to just what they were saying. That is why that fairly lengthy document went to clients in February of 1998. Also, it was not a binding opinion from Revenue Canada at that time.
G. Abbott: I'm fascinated by the reference to a binding opinion. What is a non-binding opinion from Revenue Canada? Why would one think that?
Hon. J. Doyle: The opinion in September 1997 was from staff, but it was not bound in law. It was from staff; it was not a definite reading of the law as far as Ottawa's or Canada's decision on this issue.
G. Abbott: How did FRBC reckon that that binding resolution would be found?
[1520]
Hon. J. Doyle: Because of the uncertainty of the letter we got back from Revenue Canada in September 1997
Because of the kind of decision we got back from Ottawa
[ Page 15165 ]
to get a possible clear answer from Ottawa -- hopefully the one we wanted, being that this wasn't taxable. But we continue to fight it on behalf of the client base in the province.
G. Abbott: I think we'll get into that point later on. Again, just to summarize, FRBC receives the decision of Revenue Canada in September '97. They say to themselves: "Well, we have to look at this on a case-by-case basis, and perhaps we can still challenge it legally." Presumably the thought is that at some point, the tax lawyers can be engaged on this file and that perhaps we can overturn the decision. Is that a fair summary of what the objectives of FRBC and perhaps the ministry were at that point?
Hon. J. Doyle: Remember that our clients were receiving a maximum of $400 per week to support themselves and their families while in training. Because of the tremendous impact of this opinion on those clients, in February 1998 Forest Renewal referred this technical non-binding opinion from Revenue Canada to tax experts employed by Lawson Lundell Lawson and McIntosh.
G. Abbott: Let's pursue that point for a bit. The minister said that people are making $400 a week. That's true. Obviously people don't want to lose a cent off their cheque if they don't have to. Again, the fact of the matter is
I think that's the important point here. When we don't give people what should be the clearest of advice, then people will not be able to make decisions on the soundest basis. Again, in February '98 -- this document that was just provided to us -- the clients are being told to claim the money as social assistance. So it seems to me that we are still not being up front with the clients in not communicating to them what the implications of the Revenue Canada decision are. I think there is real avoidance here of coming to grips with reality.
To go on, the issue is referred to Lawson Lundell, the tax lawyers in question. I'm assuming that Lawson Lundell took some actions in terms of developing a strategy around challenging the Revenue Canada ruling. Can the minister advise what steps were taken subsequent to that point? What has been done?
[1525]
Hon. J. Doyle: I'd first like to clarify that every client was advised by February 28, 1998
G. Abbott: Why didn't the letter stop there? Why go on and say: "We think we should attempt to get it done as social assistance or as a bursary or whatever"? Why didn't you just communicate that brief thought: "Revenue Canada is telling us that, in their opinion, both the training support and the income support you've received under the forest worker transition program are taxable"?
What you do in this letter of February 28 is go on and say: "I am writing to inform you that Forest Renewal B.C. is disputing that decision. FRBC has obtained legal advice that agrees with Revenue Canada's position with respect to the training support. However, legal advice is that the income support is equivalent to social assistance, which is not taxable" -- and on and on.
I think, again, that if people are going to make the best decisions
Hon. J. Doyle: The letter from Revenue Canada in September 1997
G. Abbott: That seems to me precisely what you do in the letter of February 28, 1998. You say, through the vice-president of communities and workforce: "
[1530]
Hon. J. Doyle: FRBC chose to provide information that presented both sides. Revenue Canada's reply to us wasn't clear in any way. Clients could make up their minds as to the benefits and also have the right of appeal that they would have individually.
G. Abbott: I just don't see how one could possibly read that into the letter. There's a very clear recommendation from Christine Lattey, the vice-president, around how to manage this tax situation. There's a very clear recommendation about how to do it. I don't see how it can be construed as saying: "You may do this or you may do that." It says: "We recommend
I don't know how you can escape that. No amount of words saying, "Well, we didn't give tax advice" or "We didn't do this" or "We didn't do that" or "We warned people
I guess we can go on all day about that, with nebulous answers and perhaps well-defined questions that the minister
[ Page 15166 ]
really doesn't want to answer. Whether the Deputy Premier's enjoying it or not, we're going to continue on.
The issue of what the legal counsel for FRBC did after September of '97
Hon. J. Doyle: Yes.
G. Abbott: I'm sorry, hon. Chair; I missed the answer. Could the minister repeat it?
Hon. J. Doyle: The answer to your question is yes.
G. Abbott: So the legal counsel for FRBC attempted to get a prompt determination on that. When was that obtained?
Hon. J. Doyle: Verbally we received word on February 25 and in writing on February 26.
G. Abbott: Of what year?
Hon. J. Doyle: Of 1998.
G. Abbott: So in September '97 we have the non-binding decision -- or what the minister has termed "non-binding decision" -- of Revenue Canada. On February 26, '98, the issue from the perspective of FRBC and the government, is resolved. Lawson Lundell have pursued the matter and apparently have arrived at a conclusion about whether or not the Revenue Canada decision is right. What was that?
[1535]
Hon. J. Doyle: The letter that we received on February 26, 1998, from Lawson Lundell
G. Abbott: So strong arguments exist. Does that mean that the issue's resolved in FRBC's favour?
Hon. J. Doyle: No, but it did show us that there was significant doubt as to whether we should or shouldn't cave in to Revenue Canada.
If I could, hon. member, I'd like to quote further from the letter that was sent out by FRBC on February 28, 1998, to all clients registered in this program. The first paragraph hasn't yet been read out by anyone in this House. The first paragraph of that letter reads:
"Re: Client support payments under the forest worker transition program
I just want to put the first paragraph of that letter on the record."Revenue Canada recently told us that, in their opinion, both the training support and income support you received under the forest worker transition program are taxable. This includes money you have received directly and any money paid to a training institution for your tuition, books or other training-related costs."
G. Abbott: I think that's actually the third time that part of the letter's been put on the record. Again -- I mean, I just asked this question ten minutes ago -- why didn't you stop there? We've had an explanation around that. Again, it's clearly on the record.
Going back to the legal advice, we have the lawyers saying in late February '98 that there is significant doubt about the Revenue Canada decision. So what? What do you do then?
[1540]
Hon. J. Doyle: Staff advised Revenue Canada that it would issue a T5007. Revenue Canada never responded to the inquiry in an official way until July 1999.
[J. Cashore in the chair.]
G. Abbott: That doesn't address the question that I raised, which is: what did FRBC and/or Lawson Lundell do in the wake of their expression that there was significant doubt about the issue? Is the suggestion being made by the minister here that the response to that, on behalf of the clients of the forest worker transition program, was to write to Revenue Canada and say: "We think there is significant doubt." Is that it? Is that what the public policy from that point on was based around?
Hon. J. Doyle: Based on the legal advice that FRBC received, we issued T5007s. We advised Revenue Canada of this and awaited their response.
G. Abbott: Apparently Lawson Lundell at least didn't just sit and wait for a response to Revenue Canada. In a letter of July 28, 1998, they write to Forest Renewal B.C., attention, Kelly Nontell, with respect to the forest worker transition program income tax status of payment. This is a long letter, several pages long, and contains a great deal of detail. But I think there are portions of the letter where we really come to the heart of the issue from their perspective. I will ask the minister to address point 5, particularly as set out on page 2 of the letter. Point 5 reads in part:
And then it goes on to talk about the costs and so on. But I won't go into that."We confirm that, in subsequent discussions with Kelly Nontell of your office, we advised you as follows: (a) Revenue Canada's position, as reflected in the technical interpretation sent to Doane Raymond, is consistent with Revenue Canada's stated administrative position in earlier technical interpretation of which we are aware. (b) Given Revenue Canada's stated administrative position, it is unlikely, in our view, that Revenue Canada would alter its position unless forced to do so as a result of a court decision. As such, it is our view that FRBC would not be successful in challenging assessments against program participants at the appeals division level. Rather, it is our view that a court challenge would ultimately be required."
The last point with respect to that -- and I think it's a follow-up from point 5 in part, as well as paragraph 6
Then they go on to further discussion around that. It appears that at least at the level of discussion between Forest Renewal B.C. and Lawson Lundell, there is still discussion ongoing. It would appear -- and again I'll characterize it, and
[ Page 15167 ]
the minister can tell me if he takes exception to it -- that the guts of the Lawson Lundell letter of July 28, '98, is that if we go to court, we're going to lose. Is that a fair assessment?
[1545]
Hon. J. Doyle: The letter that you quoted from, hon. member, was based on five clients that had been reassessed by FRBC -- five clients only.
G. Abbott: Is the minister telling me that in the discussion and analysis of this situation as contained in the letter of July 28, '98, the belief of FRBC and of the ministry was that in fact they were still going to succeed should there be a court challenge?
Hon. J. Doyle: Hon. member, it was not FRBC's decision to dismiss a court challenge. We also continue to review other options.
G. Abbott: So it's the position of Forest Renewal B.C. and a position of the Ministry of Forests, from your perspective or their perspective, that the issue of Revenue Canada's position around the taxability of income support payments is still not resolved. Am I understanding you correctly?
[1550]
Hon. J. Doyle: Yes.
G. Abbott: Why then the agreement-in-principle? Why have we again let what appears to be a very important legal issue go unresolved for a very extensive period of time? In fact, we have negotiated this very one-sided agreement with Revenue Canada or what purports to be a negotiated agreement with Revenue Canada. Why do we not have a resolution of this issue? Surely that's possible.
Hon. J. Doyle: On November 4, 1999, Revenue Canada closed the door on further administration discussions on this issue. I decided when I became minister, and within one month of that, we worked out the AIP with the federal government. You know the results of that -- that we would pay the provincial tax and pay the interest for two years on the federal tax to bring some peace to those families that were concerned about this, these clients.
G. Abbott: The minister says that on November 9, '99, Revenue Canada closed the door with respect to administrative issues around that taxation question. I don't understand why, notwithstanding the letter of July 28, '98, where Lawson Lundell says, "If you go to court, you're going to lose," and the minister says: "Well, that's only with respect to five of the clients
Hon. J. Doyle: The agreement-in-principle that was announced on March 29 does not in any way restrict any client's right out there to fight this case with Revenue Canada.
G. Abbott: But what the agreement-in-principle does -- and we discussed that at the start of these estimates -- is commit B.C. to paying the provincial share of the income taxes owing on the income support received by the program clients. It commits the province of British Columbia to pay the federal government an amount equivalent to the interest charged by the Canada Customs and Revenue Agency on the balance of the tax debt for 24 months. That's what the agreement-in-principle does. It binds the federal government to absolutely nothing except, presumably, to receiving all that money.
Again, if there is significant doubt in the minds of the minister and of Forest Renewal B.C. about whether in fact the non-binding decision of September '97 was wrong, why didn't we test it legally?
[1555]
Hon. J. Doyle: It's the opinion of FRBC, and
G. Abbott: I think the critical point is that in a long period of time from October of '96 through, effectively, January -- or today -- of 2000, clients have been led to believe that there was significant doubt about the decision that had been put forward by Revenue Canada. If that's the case, if there was and if there is a sincere belief that significant doubt exists around the validity, the legality, of Revenue Canada's non-binding decision of September '97, why is it not pursued? Why, after all this time
[T. Stevenson in the chair.]
Hon. J. Doyle: FRBC continued to explore that option as well as others which would help clients retain maximum benefit of the program funds. At the end of the day we judged that the agreement-in-principle was the way to go to bring some certainty to their lives. We could have waited from '96, '97, '98 or '99 through to the year 2000, almost, to get a final clarification from Ottawa. Hopefully the member is not suggesting we wouldn't have put the program in place until then, held it back and not have had this program in place for the 8,000 people that registered until we got a final decision from Ottawa.
I think we did our best. At the end of the day we did the agreement-in-principle to bring some resolve to this long-term matter.
G. Abbott: I don't recall anyone at any point suggesting that the program shouldn't proceed. The issue is: what's the advice that you give to clients about the taxability of their benefits? Given that it's going on four years, and the fact that it was an issue in October '96 and continues on and on
[ Page 15168 ]
through to the present, seems to me to underline the point that if there are serious questions in the minds of Forest Renewal B.C. about the legality of the Revenue Canada decision, you've got to test it at some point. Yet that doesn't seem to have been done.
[1600]
Now, the minister says: "We decided that it was better to pursue an agreement-in-principle rather than to test what we believed to be the significant doubt around the taxability issue." It seems to me, in fact, that what has happened is that the government didn't believe they'd win. Therefore they decided that it would be better to deal with this by pursuing an agreement-in-principle. Perhaps the minister would like to comment on that; perhaps not.
I will also, while I have the chair, ask this question: when did the minister reach the conclusion that the direction to go was an agreement-in-principle rather than further testing of the legality of the Revenue Canada decision?
Hon. J. Doyle: The decision by FRBC and the minister to go ahead with the AIP was made in mid-February 2000.
G. Abbott: So mid-February 2000 is when the minister and FRBC say to themselves: "We have decided that rather than testing the significant doubt around the legal issues, rather than testing that, we are going to pursue an agreement." That's mid-February of 2000. Is that correct?
Hon. J. Doyle: That is correct, yes.
G. Abbott: Is it fair to say that the commencement date, in terms of whatever negotiation has gone on between Revenue Canada and FRBC and/or the Ministry of Forests
Hon. J. Doyle: January 10, 2000, is when communication was made with Ottawa on this issue.
G. Abbott: So, in fact, the decision not to pursue any further legal action on the taxability issue but rather to commence a negotiation with Revenue Canada was made on or around January 10, 2000.
Hon. J. Doyle: January 10 was when the minister started the discussions. It led Ottawa to think that we should get into some discussion to resolve this issue. Mid-February is when we started negotiations, and as you know, the agreement-in-principle was worked out on March 29.
[1605]
G. Abbott: Up until early January, Forest Renewal B.C. and the Ministry of Forests were still actively pursuing the possibility of undertaking a legal challenge against Revenue Canada's decision -- correct?
E. Gillespie: I ask leave to make an introduction.
Leave granted.
E. Gillespie: I'm very pleased to introduce to the House today 50 students from Highland Secondary School in Comox, along with their teachers, Ms. Van Dinter and Madame Provencher. There are a number of parents who are accompanying these students as well. I ask all my colleagues to please make them welcome.
Hon. J. Doyle: We always kept that option open. We also looked at ways of helping clients in their own appeals.
G. Abbott: I guess the issue of whether that option was being kept open is reinforced by the letter of December 24, 1999, from Lawson Lundell to Katherine Rowe, which states in part: "As requested, I am enclosing a summary of arguments that may be used to counter Revenue Canada's position that the income support payments are taxable." It goes on to say: "If you have any questions concerning these arguments, please telephone me."
Would it be fair to assume, given that a summary of arguments was requested at some point prior to December 24, 1999, that FRBC or the Minister of Forests continued to mull over the possibility of a challenge, but for some reason chose at some point on or prior to January 10 not to pursue it? What was it about the character of those arguments, or the character of the case that could have been mounted against Revenue Canada, that caused the minister to pull back and say: "Whoa, we're going to try to negotiate our way out of this"?
Hon. J. Doyle: The letter that the hon. member is reading from was advice to clients, not to FRBC. FRBC decided not to continue fighting this, because there was concern that it could go on for many years. And it was not just the tax bill that they might owe Ottawa and/or Victoria, in those days but that the interest on it could get to be very, very high. So that's where FRBC, or government, decided to look at the agreement-in-principle which you worked out and which we've talked about over the last 20 minutes.
G. Abbott: That's very nice, but let's cut to the chase here. Frankly, your decision must have been based on some kind of appraisal of the strength of the legal arguments you could bring to bear in a court of law with respect to the decision of Revenue Canada. Surely there was some consideration or analysis around that point in making the decision to go down a path of negotiation as opposed to a path of legal challenge. Surely that must be the case, is it not?
[1610]
Hon. J. Doyle: The reason that government decided to go the AIP was because we were concerned about the delays and the cost to clients as this thing went on from year to year. That's why we decided to go for the agreement-in-principle.
G. Abbott: So the minister thought that they could win. Is that right? You just didn't want to put people through the delay and the pain of delay? But surely, if we are talking of people who have unexpectedly received tax bills of several hundred to several thousand dollars -- they're all blown away by it -- and if we've got a good case, why the heck aren't we pursuing it? I don't think that we want to insult the intelligence of the people of British Columbia and say: "We think we had a great case, but we're not going to pursue it, because we think negotiation's better, because then we can do something quickly." Surely, if we've got a case, we want to pursue it, do we not?
Hon. J. Doyle: Government, or FRBC, considered many options. At the end of the day we decided that the AIP was
[ Page 15169 ]
the way to go. I'd like to say that based on what I've mentioned earlier, based on the AIP that is in place
G. Abbott: So the minister is telling me that in their learned consideration, they still have a heck of a case there; it just hasn't been pursued. Is that right?
Hon. J. Doyle: We are saying that the strength of the case was one of many options or many factors that were looked at. At the end of the day the agreement-in-principle was the best policy decision. As I mentioned earlier, 96 percent of clients who call the FRBC office are saying it was the right thing to do. They are glad to get on with their lives.
[1615]
G. Abbott: Could the minister remind me
[B. Goodacre in the chair.]
Hon. J. Doyle: The best estimate we have today is $10 million. It might fluctuate up to $12 million -- the cost of the agreement-in-principle.
G. Abbott: So the AIP, as it is currently structured
Hon. J. Doyle: No.
G. Abbott: So the decision was not based around it costing $10 million or $12 million or $50 million or $100 million. The decision was to pursue a negotiated course rather than challenging legally -- with apparently some purportedly good arguments -- the Revenue Canada decision. Is that a fair assessment? The decision was made to go down the negotiating road, and it really didn't matter what the amounts were.
Hon. J. Doyle: I remind the opposition that when this item broke last year, the opposition said to us as government: "Why didn't you go to Ottawa and try to work out the best agreement possible?" I feel we have done that on behalf of the workers.
Also, the member makes reference to dollars. I would remind him that we invested $100 million in 8,000 workers, and 80 percent of the people that graduated from FRBC, from the courses they took, are now working because of this program. It's been a very, very good program.
G. Abbott: That's very nice, but I'd like the minister to answer my previous question.
[1620]
Hon. J. Doyle: Could the member repeat the question please?
G. Abbott: The question was around whether
Hon. J. Doyle: Government decided to pursue the negotiation process.
G. Abbott: The next question I have in my mind, then, given that we have negotiated an agreement-in-principle which accounts for the provincial share of the income taxes owing and accounts for the amount of the interest charged by CCRA on the debt for 24 months
The letter then goes on to talk about the payroll information up to and, presumably, including 1998. It talks about what the amounts owing on the above would be, and it goes through the amounts. I'll get the minister to do the math on the letter of August 23, 1999. But it appears to me that what Revenue Canada is offering to do on August 23, 1999, is settle this matter with the province. Indeed, that's exactly what the opposition have been talking about with respect to the resolution of this. Is that a correct reading of this letter?"Dear Sirs:
"The employees of Forest Renewal B.C. have received incorrect information slips for the 1996, 1997 and 1998 taxation years. The information slips issued were T5007s, when in fact correctly should have been T4As.
"It is the department's understanding that Forest Renewal B.C. is considering paying the income taxes owing by the employees as a result of the incorrect information slips being issued. The department would only accept this alternative with the understanding the amount is not recoverable from the employees and Forest Renewal B.C. will undertake to issue proper information slips in the future."
Hon. J. Doyle: Much has been made by the opposition and certain critics regarding the so-called deal proposed by Revenue Canada to resolve this issue during this period. I would ask everyone to consider the following. First, the federal government offer, at that time, was only for the 1997-1998 tax years, or some 6,300 clients enrolled at that point. Even then, their offer was approximately $2 million higher than their own estimation of the taxes owing. Add to this the 1999 enrolments and those who would not graduate until the spring of this year, 2000, and the total number of clients is pushed to 8,618. The cost of the so-called deal, in Ottawa's terms, rises as high as $20 million.
[1625]
With those terms, Forest Renewal B.C. decided it could not justify settling with the 1997-1998 clients only, when the
[ Page 15170 ]
1999-2000 clients had been given substantially the same information. More importantly, given all the efforts made to communicate the facts to the clients as mentioned, there was no reason then -- just as there isn't now -- why Forest Renewal should be responsible for the taxes that individuals face.G. Abbott: Again, it seems to me precisely the case that the government is trying to argue two things here: that they were doing it right and that Revenue Canada was wrong, that even though they claimed to be giving, over time, better and better advice around whether the benefits were taxable, somehow the '99 people should receive the same treatment as the '96, '97 and '98 people -- even though, by the minister's own claims, they were giving more substantial and clearer advice to the clients at that point. So it seems to me that the government is arguing in three different directions here: they did the right thing; Revenue Canada is doing the wrong; we gave people good advice; we didn't give them good advice; they should benefit; they shouldn't benefit.
It seems to me that you can't dismiss this proposal from Revenue Canada that easily. They're saying: "The department would only accept this alternative with the understanding the amount is not recoverable from the employees and" -- here's the kicker -- "Forest Renewal B.C. will undertake to issue proper information slips in the future." FRBC never did that, did they?
Hon. J. Doyle: Yes, FRBC did do that.
G. Abbott: Then why do we have the problem?
Hon. J. Doyle: Revenue Canada's advice came in hindsight; that was after the fact. Our concern was not to jeopardize the client's right to full use of the moneys that had been forwarded to them.
G. Abbott: I am completely puzzled by that response. Revenue Canada's advice came in hindsight? Surely the minister will acknowledge, after our many hours of debate here, that Revenue Canada has been saying the same darned thing from day one. From October of 1996 they've been saying the same thing over and over and over again: "The benefits are taxable; the benefits are taxable; the benefits are taxable." How can the minister possibly stand in this House and tell me and tell the people of British Columbia that Revenue Canada's advice came in hindsight? I am utterly, utterly baffled by that response.
[1630]
Hon. J. Doyle: Revenue Canada said nothing until September 1997. I think they made reference to it in 1996, just to clear the record, and then their advice was unclear. To help clients to have full access to the program dollars when they needed it, based on legal advice, we took the position we did in 1998.
G. Abbott: In fact, clearly Revenue Canada is saying in '96 that it's taxable. I don't know why else you would assume
Again, the issue of August 23, 1999
[1635]
Hon. J. Doyle: Yes, based on the fact that there was legal disagreement on advice given to the clients.
G. Abbott: The position of the government is that as of August 23, 1999, FRBC was issuing proper information slips. The minister has said yes -- that as of that date, they believe they are still doing it right. In fact, at that point in time, we know that they also have legal advice that they have a strong argument to make against Revenue Canada's position. FRBC thinks they're right; the government thinks they're right. They have legal advice that they're right.
Why don't you take the government on? Why don't you take Revenue Canada on at that point? Why maintain a fiction? Why not grab the bull by the horns and resolve it at this point in time? I mean, clearly everybody thinks they're right here. They think they've got a strong case. You know, if we're going to say no to the proposal that's put forward by Revenue Canada at this point, why aren't we taking them on?
Hon. J. Doyle: Back to the questions that you asked. Fact 1: Forest Renewal B.C. cannot take Revenue Canada to court on its own. Legally the only ones that can do this are individual clients. Fact 2: until clients had been reassessed, there was nothing to challenge. Reassessment did not happen until December 1999.
[1640]
G. Abbott: Again, we know that as of July 28, Lawson Lundell has been engaged to look at that issue for precisely five clients. The upshot of the letter of July 28, as we discussed, is that if we go to court, we lose. Is that not correct?
Hon. J. Doyle: The opinion that you're reading was based on the chances of five clients only, not on anything wider than that.
G. Abbott: Well, exactly. The minister has just told me that the client would have to take on Revenue Canada, and here we have five of those clients. I presume that's all that had been identified at that point. Or was there a whole other bag of clients who got a different opinion from Lawson Lundell? I don't think so. I think you had five, and you had an opportunity to take them on. You looked at your legal situation and said: "No, we're not doing it." Is that not correct?
[1645]
Hon. J. Doyle: The five cases you mention were not our best cases. We knew there were stronger cases out there. We wanted to go with our best cases, and we did not have our best cases until after everyone was reassessed in December 1999.
[ Page 15171 ]
G. Abbott: Then I'm a little puzzled by this. This is a memorandum from Kelly Nontell dated February 20, 1998. Under a heading entitled "Current Position" she says: "Subject to the advice of legal counsel, Forest Renewal will challenge Revenue Canada taxation's technical interpretation No. 963865 with the objective of eliminating any tax on the training support and income support provided to clients. This will take time."
It appears to me that as of February 20, 1998, what we have been talking about has in fact been extensively discussed, and it appears that we're ready to go. What happens?
Hon. J. Doyle: I'd like to remind the member opposite that the goal was to come up with a solution that helped clients to make the best use of the program dollars they got back and to get back to work. The legal opinion you're referring to now was one of several opinions that we looked at, at that time.
G. Abbott: So the government and/or Forest Renewal B.C. are looking at a legal opinion back on February 20. They're actually considering a legal challenge on February 20, and they say: "Subject to legal advice." The minister also made reference to clients with a better case or the best case or whatever, in answer to an earlier question. Am I to understand, then, that there is a different legal opinion floating out there with respect to clients who, in the opinion of Forest Renewal B.C., are in a better position to challenge? Is that correct?
Hon. J. Doyle: No, there are no other legal opinions. Actually, in the last question I made a mistake when I said "opinions." I meant to say "options." So I guess that's where we got off track in this discussion.
[1650]
G. Abbott: Thank you for that clarification.
So the notion that we had clients of the program who would be in a better position to challenge Revenue Canada on the issue of the taxability of the benefits is a notion that is internally generated, as opposed to something about which the agency received legal advice. That view or that notion was internally generated, as opposed to generated by legal advice. Is that correct?
Hon. J. Doyle: It was jointly arrived at between staff and legal advisers that there were other better cases out there than the one that we referred to earlier -- the five people in that opinion that we talked about.
G. Abbott: Why wouldn't the identity of those better clients be just as clear in February 1998 as it would be in February 1999?
Hon. J. Doyle: At that time there were no reassessment notices on which to build a case.
G. Abbott: But surely you don't need reassessment notices to appreciate the position people are in. Obviously that is already the subject of a lot of discussion around Forest Renewal B.C. and within government as well. Surely there would be an opportunity to clarify this point with Revenue Canada in February 1998 -- would there not?
Hon. J. Doyle: To launch a court action, you need a decision to challenge. Revenue Canada did not make a decision until December 1999.
G. Abbott: Again, that goes back to the issue of why the offer from Revenue Canada on August 23, 1999, was rejected. If Revenue Canada hadn't given any final reinterpretation or reassessment notices until that point in time, what are we doing talking about a settlement agreement back in August '99? Is there not a sense in the government and in the corporation that there's a problem? Is the fact that we are now dealing with the issue -- and dealing with it in much bigger numbers -- not testimony to the fact that they simply let a bad situation go on for another year?
Hon. J. Doyle: The hon. member is entitled to draw any conclusions he likes. We've been forthright in the facts on why Forest Renewal did not accept this deal offered by Revenue Canada. I feel that we've tried our best to answer questions that have been raised on this issue. It's my feeling that some of the questions we're getting now are repetitious, and we have answered, or tried, to the best of our ability. Sometimes there are legal concerns in the way of an answer. On some of the questions that are being asked now, I feel like we've been there before; an answer has been given to the best of our ability.
G. Abbott: The latter part of the statement perhaps is true: to the best of your ability. That may well be the case.
There's another portion of the memorandum from Kelly Nontell of February 20 that I want to ask the minister about. "Consideration is being given to providing additional funding to clients to help offset the tax liability generated by client support payments received under the [forest worker transition program]." What was the outcome of that consideration that was given to providing additional funding?
[1655]
Hon. J. Doyle: We decided not to.
G. Abbott: Why was it even being considered?
Hon. J. Doyle: It was one of the many decisions we were considering at that time.
G. Abbott: I'm going to try to be my usual helpful self here and suggest why it was being considered. I think the answer -- at least one of the potential answers -- to the question is found in an e-mail of February 4, 1998, from Kelly Nontell to Jim Cameron. It says -- and I think this should be noted and emphasized: "It's pretty clear that there has been considerable inconsistency about information related to applicants and clients, and selective hearing and interpretation and implementation of 'directions' from the program management on the part of the program delivery managers." That would seem to me to be pretty much at the heart of the reason why FRBC, at that point, was considering providing additional funding to clients to help offset the tax liability. Does the minister agree?
[1700]
Hon. J. Doyle: The member opposite noted the date of the e-mail as February 24, 1998. The correspondence was
[ Page 15172 ]
passed over to the member some time ago that on February 28, 1998, FRBC sent letters to all clients providing them with consistent information on the issue.
G. Abbott: If that's the position of government -- that as of that date in early 1998, consistent information was being provided to clients -- why not then take the deal that was tendered on August 23, 1999, that goes up to and includes '98? The minister was telling me that it didn't include '99; therefore, it couldn't be accepted. It seems to me there's an inconsistency in what's being said here.
Hon. J. Doyle: I mentioned this earlier. With the terms offered by Revenue Canada, Forest Renewal British Columbia decided it could not justify settling with the 1997 and 1998 clients only, when the 1999 and 2000 clients had been given substantially the same information.
[1705]
G. Abbott: But the minister just told me that as of February '98, they were providing clear and consistent information to the clients. Did he not?
[T. Stevenson in the chair.]
Hon. J. Doyle: The same information letter that you have -- which I sent over some time ago, hon. member -- went out on February 20, 1998. Similar letters or the same letters went out to clients in 1997, 1998 and 1999. So why would we take a deal that only dealt with 1997 and 1998 clients?
G. Abbott: So the minister is saying that qualitatively, there is no difference between the advice provided to program clients in '97, '98 or '99 -- or perhaps 2000, for that matter.
Hon. J. Doyle: As of February 1998 we ensured that the advice was consistent. By providing a letter to all clients, we continued to provide this advice until November 4, 1999, when Revenue Canada closed the door on an administrative solution.
G. Abbott: So the position of the government is that effectively the same information was delivered over time to the clients, but that there may have been regional variation with respect to that prior to February '98. Is that the government's position?
[1710]
The Chair: I'm pleased to advise the House that in the precinct today are 28 grade 8 visitors and five adults from St. Matthew's School in Seattle, Washington. Would the House make these young people welcome.
Hon. J. Doyle: As you can see from the record, there were some variations in the early information. However, in February 1998, FRBC took steps to ensure that all clients were on a level playing field as far as information was concerned.
G. Abbott: Again, if that's the position of government -- that there is a difference between '96 clients, '97 clients and perhaps '98 clients in comparison with those subsequently, who the provincial government argues were given clear and consistent advice -- why does the Revenue Canada proposition not make sense?
[1715]
Hon. J. Doyle: As of August 1999, the position of Forest Renewal B.C. was that all clients had been provided with consistent information. That was one reason why the deal was rejected.
Let me remind the hon. member of the other reasons. First, the federal offer at that time was only for the 1997-98 tax year or some 6,300 clients enrolled at that point. Even then, the offer was approximately $2 million higher than their own estimation of the taxes owed. Add to this the 1999 enrolments and those who would not graduate until the spring of this year, and the total number of clients pushes to 8,618. And the cost of the so-called deal on Ottawa's terms rises as high as $20 million.
More importantly, given all the efforts made to communicate the facts to the clients, as mentioned, there was no reason then -- just as there is no reason now -- why Forest Renewal B.C. should be responsible for the taxes that individuals face. I know I've read that out before, but I just want to emphasize my statement initially and back it up with the information I just read.
G. Abbott: Then I guess we've come full circle. If that's the position of government, why are they negotiating an agreement-in-principle around it? Because they're compassionate? Is that the sum of it -- they're compassionate? I see nodding over there -- that this is all based on compassion, not any legal liability. That's an interesting point. I'll ask the minister if that's correct.
Hon. J. Doyle: The agreement-in-principle was not to compensate clients; it was to address the financial hardships created by CCRA's decisions.
G. Abbott: So, not to put too fine a point on it, this all the fault of Revenue Canada, and the government of B.C. is just generously stepping up to the plate to help out those folks who've been victimized by Revenue Canada. That's the interpretation of the minister here -- that there's no responsibility, despite the raft of documents we've talked about, about the inconsistency in which this is delivered. It's the position of the government that it's merely the NDP government being generous to a group who've been victimized by Revenue Canada. Is that correct?
[1720]
Hon. J. Doyle: The answer is no. A legitimate dispute over the tax status existed. At the end of the day, Revenue Canada made a decision, as it is entitled to do. We examined a number of options to help clients deal with the consequences of this decision. The agreement-in-principle was the best policy decision or best option in our opinion, and we made that decision to go with the agreement-in-principle to address this issue.
G. Abbott: We may come back to that proposition at some point later here.
I want to talk about how, administratively, this issue of taxability was managed. Earlier on in our debates on this particular issue, I made reference to an e-mail of October 29, 1997, from Katherine Rowe to Jacqui James. It stated:
[ Page 15173 ]
The response to that from Jacqui James to Katherine Rowe reads, in part:"About six to eight months ago we requested a ruling from Revenue Canada on whether or not the income support we pay to clients on the [forest worker transition program] is taxable income. I was told that you were coordinating this.
"Have we heard anything back? It is getting fairly urgent -- if they do say income support is taxable, we will have to implement a system to process about 3,000 T4As quick like a bunny in order to have them ready in January."
And then, again, later that day a response from Katherine Rowe to Jacqui James:"I recently contacted the CA firm who was dealing with Revenue Canada and I have been informed that the tax partner I was dealing with has retired and the new one starts in a few weeks. However, they have received an answer from Revenue Canada very recently, and it doesn't look like we can avoid issuing the T4As. However, I should be getting the official wording soon and will update further."
So that's the discussion around whether T4As would be used. My recollection from our previous debate -- if indeed the minister responded to this one -- was that a decision was made to go with the T5007s as well as the T4As."Thanks, Jacqui, this has a huge significance for the program, so as soon as you hear for sure, please let us know. Is there any way we can follow-up with Revenue Canada directly? Katherine."
Anyway, this issue continues, and it continues clearly on February 24, 1998, when there is an e-mail again from Christine Lattey to Jacqui James. It says -- and this is around the issue of T4As:
On February 25, the following day, Kelly Nontell wrote to Jacqui James:"We will know tomorrow early afternoon what we are going to do. It will be either: (1) Proceed with issuing the T4As, but revise the letter to be sent with them. (2) Prepare new forms, one for tuition and one for income support. The latter would be a social assistance form. New letter to be written."
"The decision has been made to go with a new strategy regarding the tax forms for the [forest worker transition program]. This means Barb Pley will be producing new T4As for the training support only and T5007s for the income support -- as 'social assistance' payments -- and linking these up with new covering letters. Therefore, the copies of the existing T4As and the master list that Barb has prepared for Revenue Canada must be 'dumped.' "
[1725]
My reading of that exchange is that administratively, Forest Renewal B.C. had reached the conclusion that they should go with T4As, in line with the advice they had received from Revenue Canada. However at some point -- and it would appear to be around February 25 -- there is a change of direction, and in fact they've decided to attempt to maintain the previous position of the corporation and go with the T5007s. Is that a fair assessment of the situation -- that the corporation was contemplating doing T4As as per the advice of Revenue Canada but changed its strategy and went with the previous strategy?
[1730]
Hon. J. Doyle: We received Revenue Canada's advice in January 1998. As we had to meet the standard February 28 deadline for issuance of tax slips, we put steps in place to do this while at the same time seeking legal advice. We received that advice on February 25, and it said that we should issue T5007s to preserve appeal rights of clients. So on February 28, we issued the T5007s.
G. Abbott: The prospect of changing the treatment, which again I understand to be based on legal advice -- and we may have to pursue that point a little more; we talked about it earlier
I hope the Chair forgives the "damnedest" reference, but perhaps it's appropriate in this case."Income Tax -- Do I need to say anything? We have bent over backwards to prepare the T4As within the deadline imposed by Revenue Canada. The envelopes were stuffed and ready to be mailed. Then Victoria changed the letter and promised to send the new version as soon as possible. We unstuffed the letters. Then they decided they would take a different approach with Revenue Canada and send out T4As and T5007s, depending on who received what type of income. And new letters too. We are still waiting for a directive on that. This means yet more work for all staff. I'm not sure we can make the deadline, but we'll do our damnedest to try."
Now, who is developing this direction? Are we to understand that the corporation as a whole was moving in a particular direction around accepting Revenue Canada's advice, going with T4As? And then in February we get legal advice that says: "No, don't go there." Is that right?
Hon. J. Doyle: That is correct -- yes.
G. Abbott: I don't have that document in front of me. The only Lawson Lundell correspondence that I have
[1735]
Hon. J. Doyle: The decision was based on information provided by Lawson Lundell. It was based on their read of the Income Tax Act.
G. Abbott: Could the minister advise of the date of the correspondence providing that advice and what specifically the advice was based on? I mean, their reading of the Income Tax Act might be a broad explanation of that, but I am looking for a rather more specific explanation of why, at that point, the FRBC's legal advisers would be saying that we should go in that direction.
Hon. J. Doyle: As mentioned previously to the hon. member, we received verbal advice on February 25, 1998, and written advice on February 26, 1998. The hon. member has the opinion in front of him. I think he's been reading from the opinion, so he has the opinion on the letter of February 26 from Lawson Lundell in front of him. If he wants to read more or wants to ask more questions, of course that's his right.
[ Page 15174 ]
G. Abbott: I don't know what the minister's referring to when he talks about Lawson Lundell's letter; I don't have that here. I have a letter of July 28, 1998, from Lawson Lundell, but I don't have a legal opinion of February 26 from them. So I'm not sure what the minister's talking about when he says that I'm quoting from it.
Hon. J. Doyle: The information or the letter I'm referring to was in the FOI package. But if you don't have one handy, I'd be happy to send you another one.
The Chair: Through the Chair, minister.
Member continues.
G. Abbott: I'll attempt to secure a copy of that letter as well. But can the minister address the latter part of my previous question, which was: what are the specific reasons why Lawson Lundell recommended that we move from the approach that had been apparently accepted -- which is T4As, the accepted approach from Revenue Canada's perspective? Why the move to T5007s? That seems to me to be the crux of the question. What is in the Income Tax Act that Lawson Lundell saw, which said: "Do it this way"?
[1740]
It would seem to me that -- and again, let's just cut to the chase a little bit here -- the prudent, safe way to proceed here, rather than to continue on with the possible consequences of this for another year, would have been to do what had been initially anticipated, which was to go the T4A route.
Hon. J. Doyle: I could read the letter of February 26, 1998, but it's eight pages long and self-explanatory. I suggest that we provide another copy of the letter to the hon. member, and he can revisit his questions after he has a chance to familiarize himself with the document. Did you find a copy, hon. member?
G. Abbott: I'll take the minister's advice and review the letter and perhaps revisit this legal advice issue. In fact, certainly we will.
Will the minister agree, though, that prior to the receipt of that legal advice, the administrative direction of Forest Renewal B.C. was to incorporate the advice of Revenue Canada and to issue T4As as per the direction of Revenue Canada?
[1745]
Hon. J. Doyle: We could have taken Revenue Canada's advice, but it was unclear. We wanted further legal clarification, knowing of the impacts that the Revenue Canada decision could have on our clients. Overall, we wanted to ensure that our clients could access the funding they needed to help them become re-employed.
G. Abbott: The question I asked, actually, was whether the administrative direction of Forest Renewal B.C. prior to the receipt of the legal advice contained in the letter of February 26, 1998, and delivered orally on February 25, 1998
Hon. J. Doyle: Yes, that was the opinion, pending legal advice.
G. Abbott: The question, then, is why, prior to the legal advice, did FRBC administratively take that position?
Hon. J. Doyle: We have already mentioned that we had to take this advice, because the tax deadline was February 28 to get information to clients.
[1750]
G. Abbott: I just want to refer now to the letter of February 26, 1998. The minister had mentioned an eight-page letter. The one I have -- maybe it's the Coles Notes version
I guess my question to you is: is there another letter that contains rather more compelling advice than what I'm reading here? Actually, no -- pardon me. That is page 8 of the document. I just don't have the full document; I just have pages 1 and 8. That explains that. So clearly this is the advice coming from Lawson Lundell that FRBC would not be acting, I would use the term, unreasonably in issuing T5007 slips."Given the arguments set forth above, and the complete lack of judicial guidance in relation to paragraph 56.1(a) of the act" -- possibly 51(u) of the act -- "it is our view that should Forest Renewal B.C. decide to take the position that income support payments made under the program constitute 'social assistance' payments for the purposes of the act, Forest Renewal B.C. would not be acting unreasonable in doing so. Accordingly, it is our view that Forest Renewal B.C. would not be acting unreasonable in issuing T5007 slips to the recipients of such payments."
Well, it seems to me that there's a big difference between saying to go out there and issue T5007 slips because it's the right thing to do
Hon. J. Doyle: Respectfully, to the hon. member across the floor, he only has two pages of the document; so it is incomplete. He needs to read the middle six pages before reaching his conclusions, and
The Chair: Through the Chair, minister, please.
Hon. J. Doyle: The hon. member needs to read the middle six pages before he can reach a decision. And if he can't find the other six pages, we'd be happy, as I said earlier, to pass them on to him.
G. Abbott: I can't imagine anything I'd rather do more this evening than read the middle six pages of the legal opinion. Therefore I would like to move that the committee rise, report progress and ask leave to sit again.
[ Page 15175 ]
Motion approved.
The House resumed; the Speaker in the chair.
Committee of Supply B, having reported progress, was granted leave to sit again.
Committee of Supply A, having reported resolution, was granted leave to sit again.
The Speaker: I understand the Lieutenant-Governor is in the precincts, so we'll wait for his arrival.
[1755]
His Honour the Lieutenant-Governor entered the chamber and took his place in the chair.
Law Clerk:
Holocaust Memorial Day Act
Tuition Fee Freeze Act
In her Majesty's name, His Honour the Lieutenant-Governor doth assent to these acts.
[1800]
His Honour the Lieutenant-Governor retired from the chamber.
[The Speaker in the chair.]
Hon. D. Lovick: I move that the House do now adjourn.
Motion approved.
The House adjourned at 6:01 p.m.
PROCEEDINGS IN THE DOUGLAS FIR ROOM
The House in Committee of Supply A; D. Streifel in the chair.
The committee met at 2:47 p.m.
ESTIMATES: MINISTRY OF TRANSPORTATION AND HIGHWAYS
(continued)
On vote 46: ministry operations, $464,471,000 (continued).
D. Symons: Just continuing on with the questions toward the end of our last session, there were some questions dealing with the Okanagan bridge. I think one thing that wasn't asked at that time
Hon. H. Lali: We have not resolved the funding arrangements with local government. Work is still underway, and we need to see what happens with that.
R. Neufeld: I'll maybe touch on some things that have to do with Highways today, so we'll go to Fort Nelson first and the Sierra-Desan road. Maybe I could get a brief update on the Sierra-Desan road, on how that contract's going. It was signed, I believe, at the end of 1998. There are some specific amounts in the contract that deal with road structure, drainage, roadside and bridge structure upgrades, and some maintenance services. I'll go through them one by one, and maybe the minister could tell me how much is expended on each one of those contracts. It's a five-year contract that this money will be expended on -- a total of $11 million, including almost a million dollars in financing and bonding costs. But the road structure upgrade is the first one, and the price for that -- and I'll round the numbers off -- was $5.7 million. If the minister could tell me how much of that has been expended on the Sierra-Desan road, that would be great.
Hon. H. Lali: The contract is on budget and on schedule. As far as the costs that the hon. member is asking for, we'll have to supply those figures to the hon. member, because we don't have them with us here right now.
[1450]
R. Neufeld: Okay, I appreciate that. I'll put it in the record, so you'll be able to go back to the record. I expect you'll be able to draw those numbers out fairly quickly, as one is one fiscal year past and we're in the next fiscal year. But the first one was a road structure upgrade. Actually, maybe it would be easier if I gave the minister
Hon. H. Lali: We'll get back to the hon. member on all of those issues that he has just outlined.
R. Neufeld: Could the minister tell me how soon I could have that information, so I can ask some questions yet, before his estimates are over? If I can get that information fairly quickly
Hon. H. Lali: We can get that information to the hon. member within a day.
R. Neufeld: That's great. I appreciate getting it in a day. I'm actually quite surprised that we don't have that information a little bit sooner than a day. I know it's maybe convenient for the ministry not to have to answer questions around those numbers, but these are fairly straightforward. They are in the ministry's own documents, their own contract, and I would assume that we have staff on hand that are monitoring that
[ Page 15176 ]
contract. I would hope that someone is monitoring -- and monitoring the cost -- to make sure that that money is expended.
If you don't have the numbers for those first few things, can you tell me whether Energy and Mines has expended its share of money on maintenance for the Sierra-Desan road that it promised to do to date? There's a matching amount that the contractor will put in, and there's a matching amount that Energy and Mines will put in. Will the minister tell me where, within the estimates, I can find how that money is allocated, or where
Hon. H. Lali: Energy and Mines has an annual contribution of $300,000, which they did last year and will do this year. As far as some of the other information the hon. member is asking for, we have about 500 projects in any given year that are carried forward throughout the province. Obviously the member has been asking questions that are related to cash flow on each of these contracts. Obviously that information that he's asking for is not here with us, but we'll get it over to him. It's not any attempt to try to not answer any questions or that somebody has deliberately left any information out. It's just that it would be too onerous to try to carry information on the cash flow on every single project that the ministry and the TFA carry forward every year.
[1455]
R. Neufeld: I appreciate that. This is a project that's being financed by industry, and BCTFA is actually just the agent for administering it. Industry is actually paying the total costs of this upgrade on this highway. The reason I thought I might be able to get some of those answers is because every time I pick up a press release that relates to northern roads, there happens to be a mention about the Sierra-Desan road as though it is something to do with the ministry.
In fact, we'll go to the last press release where I read it. That's just April 26, 2000, where the North Peace highways improvements have been announced. There are 15 items that are announced. One of them happens to be the Sierra-Yoyo-Desan road. I thought that I would be able to secure that information, because it seems to be a favoured one for press releases. Obviously I'll have to wait a day, and I wait in anticipation of receiving that information.
I'll go to the press release of April 26, and I understand it's about North Peace. The minister can correct me if I'm wrong. I'm actually going by the newspaper, so one can sometimes get the wrong number. It states that $6.1 million is going to be expended on the constituency of North Peace roads. In the press release there are a number of items that I recognize -- again, like I said, the Sierra-Desan road. I want to find out whether that's included in the $6.1 million, because that is industry-funded. Let's make sure it's not in the $6.1 million.
There are three other ones that are talked about, which are the Alaska Highway and Fort St. John modified traffic islands, construction of north- and southbound deceleration lanes and the Alaska Highway at 108th Street, Fort St. John. The amount of money that's included in the $6.1 million that the ministry announced -- is that the total cost for those three items or the ministry's share only? Also on the Sierra-Desan road, I want to ask if that was just put in there as an add-on. Or is some money allocated from the Sierra-Desan road in the $6.1 million? Are we actually going to get $6.1 million on our roads?
Hon. H. Lali: The $6.1 million does not include the Sierra-Yoyo-Desan road, and it also does not include the oil and gas initiative 2. I think the hon. member wanted to know what the items were under the $6.1 million. I understand that he has a copy of the ministry and TFA projects for the Peace River North electoral district. If he wants, I could read some of this into the record. But the $6.1 million does not include the Sierra-Yoyo-Desan road.
R. Neufeld: Through the Chair to the minister, thank you for that answer. The other three items on that press release were: Alaska Highway at 100th Street -- if you've got a copy of the press release -- Alaska Highway at 96A Street, and Alaska Highway at 108th Street, all going through Fort St. John, which will be jointly funded with Fort St. John. What I'm asking is: is it the total amount of dollars that you have put into the $6.1 million or just the ministry's share?
Hon. H. Lali: It's just the TFA share.
R. Neufeld: In 1998, Peace River North enjoyed $11 million in reconstruction; in 1999, $6.5 million; and this year $6.1 million. I do notice that Peace River South this year will receive $9.3 million and in fact last year got a lot more than Peace River North too. I am not saying that Peace River South doesn't require some funding for roads, but the rural road task force identified the roads in the North and South Peace that needed reconstructing, and it seems to me that the major use for oil and gas roads is in the North Peace. I am wondering how we managed to only allocate $6.1 million to the North Peace and $9.3 million to the South Peace.
[1500]
Hon. H. Lali: I don't have the information on one part of the hon. member's question with me, but I'm going from memory. When I first became minister two and a quarter years ago
Interjection.
Hon. H. Lali: The hon. member can make jokes all she wants, but as I recall, she didn't do a heck of a lot in terms of the sawmill that went down in Lumby when that came up. I think she may want to recall that.
Anyway, the first part of the hon. member's question
R. Neufeld: I appreciate that response.
Going on to some of the other issues in the press release, the Hudson's Hope Bridge
[ Page 15177 ]
and design strengthening of critical components -- cables and anchors." I assume that's the bridge at Peace Canyon over the Peace River. I know I'm going back before the minister's time, but staff will know the Peace River bridge on the highway
I wonder why both those bridges across the Peace River, when the Peace River is the dividing line, are specifically charged to North Peace rehabilitation and nothing goes to South Peace. It may be hard to draw the line down the middle of the river, but it's an interesting concept that both those bridges are totally financed and fixed on North Peace money and never on South Peace money. Maybe the minister could explain that to me. There might be something I don't understand.
Hon. H. Lali: We don't allocate funds on a riding-by-riding basis. It's done provincewide or regionwide. Up in the Peace River we look at the entire Peace River country as one area to put an investment in, rather than saying what the north is going to get and what the south is going to get.
R. Neufeld: That's an interesting answer, because I specifically read the press releases to say: "North Peace Highways Improvements Announced." That's my constituency, North Peace. The next day: "South Peace Highways Improvements Announced." So there's obviously a distinction that you make in how you fund it. The minister just said that the money that was allocated -- in fact, he agreed with my numbers earlier
Hon. H. Lali: If the hon. member wants, obviously in next year's budget it could be done that way, so that if there's a bridge spanning two constituencies, 50 percent is allocated to one side and 50 percent to the other.
It's just a communications tool that the hon. member is talking about. I think one of the reasons why it was done that way was so that somebody comparing wouldn't say that there are actually two different projects if it was charged 50-50 to the south and the north. That's why it was done that way. It's just a communications piece, not anybody actually sitting down at the table saying: "How many dollars are we going to put into Peace River North as opposed to Peace River South?" It's done on a regionwide basis or a provincewide basis but not on a constituency-wide basis.
A prime example of that would be Prince George, for instance, where there are three constituencies that intersect the community. One does not try to say: "How much is going to go to each corner of that particular constituency?" Rather, you try to make funds available on a regionwide basis.
[1505]
R. Neufeld: Through the Chair to the minister, I'm not going to beat this any longer, but I can go to an April 20 Hope Standard release that says: "I've been the MLA for Yale-Lillooet for nine years now, and doing a quick calculation, this announcement has totals over $11 million for Yale-Lillooet."
So obviously you do section it out to constituency. Your press release is sectioned out to constituencies. The reason I ask is because some of the costs of maintaining some of these large bridge structures are huge. Specifically, when they painted the Peace River Bridge, no money went into the roads for three years straight. It all went into painting the Peace River Bridge, every bit of it. So there is an effect on the road system when you charge one constituency all the costs of fixing a major bridge. Smaller bridges are a different thing. But when you talk about fixing a major bridge
We'll go on to a realignment of the South Peace hill. Maybe the minister can just tell me a little bit more -- we've been working on the South Peace hill for quite a number of years now -- about how far along we are in design and whether we can see some changes or some contracts going out on the South Peace hill fairly soon.
Hon. H. Lali: We have done the preliminary engineering and also the value analysis. We still have to do detailed design. We hope to let the contract out this year. But the member must understand that it is not a simple task or a simple issue; it's very complex. It's a big slide area. I know that the member's intimate and familiar with that in his neck of the woods. It's not something that, obviously, we can have a solution to just overnight.
R. Neufeld: I never asked for a solution overnight. The hill's been sliding for the last 20 years or probably even longer. I was just wondering where we were with design and letting a contract out. I don't think anybody expects it overnight.
Yeah, I've lived there all my life. I know that we pave it about every two months, and it sinks away and slides away. At some point in time there's not going to be a road there, and then we're really going to be in trouble.
I want to go on to the Oil and Gas Commission; that's my last question -- I mean the oil and gas allotment of money. Before I go into it, maybe the minister could tell me quickly if it has been decided where their money's going to be expended. Have there been some contracts let, or are they in the works? What's happening with it?
Hon. H. Lali: We're working very closely with the Ministry of Energy and Mines. The finalization of which projects are going to get done or not get done is still being determined. We hope to have an announcement in the next few weeks and let the public know what will or won't be done.
[1510]
R. Neufeld: Can the minister tell me who is making the decisions? Is it TFA who is responsible for financing it, as we just passed in the House? Or is it the Oil and Gas Commission that's going to be in charge of it? Who is actually going to be looking after the money that's expended?
Hon. H. Lali: Both the Ministry of Transportation and Highways and the Ministry of Energy and Mines make a recommendation to the board of the B.C. Transportation Financing Authority. They make the decision, which is then ratified by Treasury Board for final announcement.
R. Neufeld: I have, and so does the minister, a copy of the rural road task force working with the Ministry of Energy and Mines, the Ministry of Forests -- all the ministries -- TFA, Ministry of Transportation and Highways. It makes some strong recommendations; I would hope that we follow on those fairly soon.
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Again, where I come from, time is of the essence. The weather's broke; winter's gone. We should be out there starting to do some work on some of those roads.
When I look back at when this was first announced, the first press release came out August 3, 1999. That was the first press release, announcing $103 million for oil and gas for roads. The second one came out November 22, 1999 -- $103 million for northern roads. The last one came out March 31, 2000 -- $103 million for northern roads to support the oil and gas industry. I'm just wondering how many announcements or how many press releases we have to have before we finally get some rubber on the road.
Time is going by. If we are actually going to spend the money, and if it's going to happen -- the $23 million this year -- it should happen sooner than later, so that we can get some of that money onto the roads.
I find it quite surprising that you would announce something in August of 1999, and on May 1 of the year 2000 we're still saying we're finalizing plans and trying to finalize how we're going to spend $20 million on roads that the minister and the ministry know quite well. This didn't just happen overnight; these roads have been in terrible condition for quite a number of years. I just wonder why we're taking this length of time to get that money out in contracts and actually get something on the road and start fixing them, instead of another press release.
Hon. H. Lali: Hon. Chair, I'm glad the hon. member mentioned that. I know he's trying to get a little householder out to send to people in his riding. That's fine. As an MLA he's supposed to do that; that's his job. But he fully knows that when the announcement was made several months back
Interjection.
Hon. H. Lali: It was actually about nine months back, hon. member.
What we have been doing is that both the Ministry of Transportation and Highways and the Ministry of Energy and Mines have been working not only with the various stakeholders, such as the rural road task force -- the hon. member was showing their booklet -- but also with the oil and gas industry to determine which roads it's going to be. Again, it's not something that the ministry has said: "Here, we're just going to shove this down the throats of the people who live in the Peace River North and South." Rather, it's been a bottom-up process to try to
[1515]
When I first became minister, we had more than doubled the budget for northern British Columbia from the year before. Actually, it was 2.6 times what it was the year before, up to $66 million. The year after that, which would have been last year, it was $69 million. This year it's $110 million in total, which includes oil and gas. I've already told the hon. member in the previous question that a vast majority of this year's oil and gas moneys will be in that member's constituency. He knows the money is there, and he knows that the projects would not be announced until the year 2000-01. We're doing it. We're just waiting for the final lists to be determined before it goes to the TFA board and then on to Treasury Board, which will take a few weeks.
R. Neufeld: The rural road task force started in 1998, and I will put in Hansard that it started with a lot of my encouragement. It was in place in 1999. We've got the year 2000 report. It isn't getting jammed down; it is coming from the bottom up. These people are working in conjunction with your ministry, with the Ministry of Energy and Mines, with forestry, with oil and gas, to get all the information into these reports so you can spend it, so that when you do make the announcements in August of 1999
I just want it to get on the record to make sure that this is actually going to happen: that we're going to spend the $23 million and that it will be spent the way the people in the northeast want it spent -- by the rural road task force reports that the minister has, three of them in a row, telling the ministry where it should be spent. I wouldn't think it should be that hard to decide how to spend $23 million.
Hon. H. Lali: The member opposite should know that this is great news. When the announcement was initially made, it was made clear that the moneys would be in next year's budget. I suspect the hon. member knows that, and he's just using this opportunity to try to showboat. He also knows, again, that this program that will be announced shortly will be consistent with the rural road task force. The ministry and the TFA have been doing their due diligence -- planning that had to be done as well as design work that needs to be done.
When the program is revealed in a few weeks' time, I suspect that the hon. member will be front and centre trying to take full credit for it, and perhaps he deserves some of the credit for having worked with the rural road task force. But I think, ultimately, the credit has to go to the people who live there and the people who have formed this committee -- the rural road task force in the North Peace. They're the ones who worked very closely with the ministry officials in the district, in the region in the north, to identify specific projects. Even in the last couple of years some of their priorities were also the ones that were on the list that had been funded in that neck of the woods.
A. Sanders: Three questions for the minister. The first one is about the Deafies Creek Road to Silver Star. The second is about the Highway 97 bypass through Vernon on 27th Street. And the third has to do with the Monashee Economic Development Advisory Council -- Mr. Larry Thomson, chairman -- and a question that he wished to have answered. So if that makes things easier for the staff, hon. Chair, to give them time to look at these various projects
One of the very important areas in my riding is Lumby. Lumby has been devastated by the lost of Weyerhaeuser as a
[ Page 15179 ]
major employer, both on an employer basis and on an economic basis with respect to the village of Lumby. We have a very significant unemployment rate there, and the village has been doing a tremendous amount of work in the last year to try and look at ways to develop economic opportunities for the individuals who live there so that the town can get back on its feet.
[1520]
One of the projects that the village has come up with is a road -- an alternate road -- to Silver Star Mountain. That road goes up a place called Deafies Creek. There are a number of reasons for this project. For those of you who have been to Silver Star, there is only one way up and one way down. If you have a very serious accident, or if you have a snowslide or any other kind of problem, all the people who are up in this area, which is very heavily used now, have no other access to getting off the mountain.
Both Silver Star and the village of Lumby are interested in seeing an alternate road go up Deafies Creek, which goes from the Lumby side up through Trinity Valley and up the creek to the back side of Silver Star Mountain. That would provide a safe alternate route for evacuation of the mountain, should that be necessary, but it would also provide a very fast method of getting on the mountain for the individuals who live in Lumby.
The advantages of that, from an economic point of view, cannot be underestimated. There will be many construction jobs up at Silver Star, as Silver Star is expanding the housing and condominium market again. There is quite a significant plan in place to expand the ski hill itself to accommodate more skiers. The ski hill has had its heaviest year ever this year, and there is good evidence to show that's going to continue.
So my question to the minister is: is the minister aware of the Deafies Creek road situation? Have there been any discussions of the Lumby area with the ministerial staff with respect to this issue? And what is the minister's opinion about the plausibility of this project going forward?
Hon. H. Lali: Generally speaking, most ski hills have only one way up and one way down. We are aware of the proposal that the hon. member has talked about. The TFA finances ski hill access roads on a 100 percent cost-of-recovery commercial basis from direct beneficiaries. The BCTFA has, in other instances, favoured lift-ticket levies, as these revenues are relatively predictable. The TFA may also consider other revenue sources to facilitate repayment, such as hotel room taxes or land sales proceeds.
A. Sanders: Does that mean that there has been no discussion from this ministry with the village of Lumby with respect to this project?
Hon. H. Lali: We have met with people. We're not quite certain if they were from the village of Lumby or not, but they were certainly pushing for this particular project. We're happy to meet with anybody, particularly the village of Lumby if they so desire, to start talking about this particular proposal in more detail.
A. Sanders: My understanding is that the ministry would recommend that this road be built by levying the skiing industry and that there would not be provincial dollars going towards the project. So I have it clear, is that the message I am to take back?
[1525]
Hon. H. Lali: I'm not going to pre-guess anything. We'd be more than happy, as I said, to have officials meet with local folks, including the village of Lumby, to talk in more detail about this proposal. What I had outlined earlier was basically the policy that we've got in place, which is that BCTFA finances ski hill access roads on a 100 percent cost-of-recovery commercial basis from direct beneficiaries, and I gave a couple of examples of how that could happen.
A. Sanders: For clarification, was the precedent not set with Mount Washington being funded 50 percent from ministry funds?
Hon. H. Lali: Regarding Mount Washington, there was already a public road that existed there. Also, it's more than just access to a ski hill. There's Strathcona Park, and private property owners are also in the area. It's the only access road to Mount Washington as well.
A. Sanders: I think, again, just to get complementary situations looked at complementally, Silver Star is in a park. It's in Silver Star Provincial Park, which is the same as Mount Washington. There are a very significant number of private properties on Silver Star, exactly as there is on Mount Washington. So that we're all talking off the same page, I think those comments by the minister need to be responded to.
I look forward to the minister being open-minded in dealing with the individuals from Lumby who will come forward. Their proposal has the support of the other municipalities, Coldstream and Vernon. People who have been asked to look at the proposal feel that it is a viable way of giving Lumby back some kind of economic base after it's been gutted by the downturn in the forest industry in this province.
The second question I have is on the bypass. In Vernon there has long been on the books a proposal for a 27th Street bypass. This is primarily to bypass a significant hill in front of the hospital. The city council of the time was very concerned about another situation similar to what occurred in Kamloops, where some heavy vehicles had serious results as a result of brake failure, and a bypass was suggested onto 27th Street.
There have been significant groups that have come forward in the community which do not want the bypass. These are church groups; these are parents of children who go to the elementary schools that would be on the proposed bypass route. So we have two different factions: those who want the bypass and those who are very significantly against it. I know that of the groups concerned, the minister met with the parents, I believe it was, and I just want, for the record, to have the minister's comments and opinions on this particular project.
Hon. H. Lali: I've just one final comment on this comparison with Mount Washington. Right now, we're not actually going to negotiate the arrangements of the Silver Star situation that the hon. member mentioned. But I also want to point out that the hon. member is not asking for improvements on the same road; rather, she's asking for a new road there.
[ Page 15180 ]
Also, through Vernon
There are other options, which include improving the current highway, using the extended 27th Street as part of a one-way couplet, and bypasses. These options may be preferable and should be considered in the local government's long-range land use plans. The province is refining the right-of-way envelope for a 27th Street extension as a basis for continued corridor protection by the city of Vernon.
[1530]
A. Sanders: Again, I would encourage the minister to hear all sides of the argument, as it is a very lively one in our community.
The third point I want to bring up is a letter from the Monashee Economic Development Advisory Council's chairperson, Larry Thomson. This is having to do with the condition of local area secondary roads. Mr. Thomson writes:
A response from Emcon Services suggests in their letter -- a letter from J.P. Wrobel, engineer, division manager -- that it must be recognized that their ability to satisfy requests for upgrading is limited. They have works planned, but the expectations may not be as much as people would like."At a recent meeting of MEDAC -- Monashee Economic Development Advisory Council -- the bad conditions of area secondary roads were brought to our attention, in particular Creighton Valley Road and Trinity Valley Road.
"The condition of these roads is such that besides causing severe inconvenience to local residents, it is also impacting the operations of local tourist operators. Actual damage has occurred to vehicles, and visitors to the area have said they would not be returning. MEDAC is most concerned about this.
"Efforts have been made by tourist operators to resolve this matter with Emcon Services Inc., contractor for road maintenance in this area, but with no success. We'd be very grateful if you could assist in helping rectify the situation."
What comments does the minister have about the secondary roads in this area? What resolutions can be arrived at when there are such road maintenance concerns, where damage to vehicles travelling there is actually occurring?
Hon. H. Lali: The hon. member has taken some good deal of time, rightfully so, to try to outline some of the issues. Unfortunately, they're part of the ministry estimates, and I'd be more than happy to talk about that when ministry staff are here; right now there are BCTFA staff. If the member wants to hold off, either later today or tomorrow I'd be more than happy to answer those questions.
A. Sanders: I would be happy if the minister would commit to having this come forward to the appropriate staff and having it answered. I don't need to bring it back if that commitment just comes forward from the minister.
Hon. H. Lali: The answer is yes, we will have that information over to the hon. member. I want to thank her for her questions. I also want to thank the hon. member for mentioning right off the bat the three or four issues that she wanted to have answered so that the staff have time to actually look for them in advance.
The member for Peace River North asked for some information earlier on the Sierra-Yoyo-Desan road project. One of my staff just recently went out and grabbed it. In terms of base repairs, it is 100 percent complete. Gravel crushing is 100 percent complete. I'll go a little slower; I know the hon. member is trying to write this down.
An Hon. Member: I'll read it in Hansard.
Hon. H. Lali: Okay. That's fine.
Fifty-millimetre gravel application is 33 percent complete; 19-millimetre gravel application is 100 percent. Brushing is 100 percent complete. Ditching is 100 percent complete. Culverts: the 600-millimetre are 72 percent complete. Culverts that are 900 millimetres are 35 percent. Culverts of 1,200 millimetres are 8 percent complete. Geotextile is 38 percent complete. Beaver cages are 100 percent. Signs are 100 percent. Bridge upgrade is 100 percent, and maintenance is 28 percent. The rest of it will be finished by September 2000.
[1535]
R. Neufeld: I'll just send over the document that I'd like the numbers and the amount of dollars put by, and then maybe the ministry can do that, because the culverts are all included in some global numbers here. So if I could just
The Chair: We've established trust in committee. It's amazing.
R. Thorpe: Last Thursday the minister was in the riding of Okanagan-Penticton, and although I received the notice of the meetings rather late, I was able to make one of the meetings. What I'd like to know, because in answering my colleague from Okanagan-Vernon, the minister made reference to communities not being unanimous
My question on behalf of the residents of the Okanagan
Hon. H. Lali: First off, I would like to apologize to the hon. member for the late notice. There was a bit of a communication mixup in my office, but I'll take the responsibility, as minister, for that. Nevertheless, I was happy to see the hon. member attend one of the meetings in Penticton. He was right; there was a similar message that was heard in Peachland, Summerland and also in Penticton.
In terms of the issue of safety and congestion between Peachland and Summerland, it is something that the ministry has been aware of, and we feel that it is something of a high
[ Page 15181 ]
priority for us to be able to look at. The member wants to know when we could get an action plan. Well, I just had a chance to actually meet with the mayors and councils in the three communities, and I also talked to my regional district staff. I've asked them to go back to their offices and start looking at some viable options. At the end of the day, the hon. member well knows it's the funding that will determine what we may or may not be able to do in between there. But whatever it is that we do end up doing, in terms of getting rid of the congestion and safety issues there, would have to be done on a multi-year basis. I know that sits well with the hon. member and also the mayors and councils that I met with. It's going to take a few months. I can't give an exact amount of time, but it will be a few months, after which we will be able to come back with something.
R. Thorpe: Since it's going to take a few months, and since there were unanimous views within the Okanagan and, I'm sure, actually even with his own staff in the district office
Hon. H. Lali: I wonder what kind of an important date September 30 is for the hon. member. Yes, we will have something for the hon. member and his constituents before that date.
[1540]
D. Symons: I have a few short questions, the first one involving Moyie bluffs. I believe the design work has been finished on that, and the actual work a while back was said to be subject to funding approval. Has that funding approval been made?
Hon. H. Lali: Regarding the Moyie bluffs, we've done preliminary design on six kilometres of the section and detailed design on "Truckers corner" and "Jones corner." In our budget this year we have funding for one of the corners but not for the other, so we are looking for a source of funding for the other.
D. Symons: Possibly next year, then. I'm asking another one, in a sense, for the Chair of the committee here, because he's not in a position to ask about the Mission bypass. Apparently you announced planning at the beginning of last year. We've had a year now. I suppose that on a project that size, the planning has been completed. What is the current status of that project, and when could he expect a start on it?
The Chair: With great expectation, the Chair recognizes the Minister of Transportation and Highways.
Hon. H. Lali: I'm wondering if there's any collusion going on between the hon. Chair and the hon. member across the way -- that we have members of the opposition asking questions on behalf of members of the government. I'm just joking, hon. Chair; no offence intended.
On the Mission bypass, there were some planning moneys under MOTH last year. It's a fairly expensive project. Right now, we've done some conceptual plans but not anything further than that. The next stages are that we're going to actually look at it in the context of a corridor study on the whole corridor, as opposed to maybe just doing it one-off.
D. Symons: Just a few other questions of that nature. This might come under HCL, possibly, but we'll see. The wildlife fencing that went along between Mud Bay and Courtenay -- I gather that close to $1 million has been spent on that particular project. I am wondering
[B. Barisoff in the chair.]
Hon. H. Lali: Joining me here today for the estimates is Christie Brown, who's the president of Highway Constructors Ltd.
[1545]
Yeah, on the wildlife fencing, the labour is supplied under HCL, but in terms of the suppliers of the posts and the other materials, that's not a requirement.
D. Symons: We'll be moving into HCL questions fairly soon, but not quite yet. One other question dealing with the Courtenay north connector
Hon. H. Lali: We built the south Courtenay connector, but the north Courtenay connector was never in the scope. So obviously there wouldn't be any economies of scale, because that was not in the plans.
D. Symons: I have a few other questions which, to shorten things down a little bit, I'm going to pass on at some future date and ask for a written reply back.
I'd like to move into HCL now, since we have HCL represented here. Last year I was asking about the pension plan for HCL workers and whether some would get enough work in order to be vested. Actually, the Minister of Labour -- in a letter that we received later on that went back to the Minister of Highways from the Minister of Labour -- really indicated that there possibly could be some problems in that.
"It is not possible," he said in his letter to the Minister of Highways, "to determine if these workers would accumulate the necessary 350 hours each year for two years required for vesting
I am wondering if the minister could give me an idea
[ Page 15182 ]
with. But I am wondering if you could tell me, for the overall Island Highway project, what proportion of the work done there would be done by day labourers rather than under the regular contract?
Hon. H. Lali: We don't have the exact figure, but a very small portion is actually done through day labour.
D. Symons: Next question, then. Up until the end of last year -- and you will not have this last fiscal year -- could you give me the total amount that's been paid into the pension plans of the HCL-participating unions by HCL? You have a number of unions there. This would be some material you would not have here, and I would expect that at some future date, I would hope. Along with that, I have some further questions, as well, relating to HCL agreements. I would pass a copy over to you, if I could, and ask that these be answered at a later date as well. So I'll pass it over.
One further question in relation to labour agreements with HCL: I'm wondering if you could tell me when the last renegotiated contract was. I think they are two-year contracts. Has one just come up recently? Were there any changes to the contract?
Hon. H. Lali: For the Vancouver Island Highway project, a total of $15.5 million has been contributed to the various plans and funds. That also includes the health and safety fund. In terms of the contract being renegotiated, it was 1.5, 1.5 and 2. But then, that was done in 1998. It has not actually been amended since 1992. So there's a six-year gap in it.
D. Symons: So the contract was signed that had those salary increases in '98. The government has been holding a lot of other government employees to zero-zero-and-2, and this seems to add up to 5 percent over a three-year period. I'm wondering if you could tell me when the current contract runs out and what negotiations are going on for the next contract.
[1550]
Hon. H. Lali: There are no negotiations going on right now, and the contract expires at the end of the year 2001.
The member asked, while other unions had zero-zero-and-2, why this particular HCL was not subjected to that. Previous to that, the hon. member should know, they actually had six zeros in a row. What was happening elsewhere was coming off five years with no increases. The settlements for highway construction workers provided an end-lift in compensation of 5 percent at the end of this agreement. As the settlement pattern for the public sector and public service has provided some increases during the past seven years, the end-lift for the broad public sector is 5.4 percent. Accumulative expenditure for this period for the public sector is 21.6 percent, as compared to the accumulative expenditure for highway construction workers over this period of 6.5 percent.
D. Symons: I'm just curious. The minister said "previous to 1998." He went back six years. I don't think HCL existed at that time. So I'm not sure how you're counting back six years, but we'll let that one go.
I gather that between March '97 and April '99 you had a Mr. Len Werden who was working on contract for HCL. I'm wondering if you could give me an idea of what his duties were and what the financial arrangements of that contract were.
[1555]
Hon. H. Lali: Regarding the question on Len Werden, it was a personal services contract. He did a lot of work on the sub-subcontractors. There was a dispute that we had going on at the same time, and he had expertise in this field, so he gave us advice on how to change our contracting regarding subcontractors to sub-subcontractors to protect the sub-subcontractors and provide fairness to both the sub-contractors and the sub-subcontractors -- also to protect government. He also gave us similar advice on contracting prices.
D. Symons: There was also a second part to the question -- what the financial arrangements were of that. He was working for two and a third years, roughly. What financial arrangement did you have for that?
Hon. H. Lali: It was the consulting contract to the BCTFA, and he worked for less than two years.
D. Symons: I'm curious, because we'd asked for an FOI on those people that were on contract for HCL, and his name wasn't there. So maybe he's operating under a company name or something. You confirmed that he was working and that it was a contract with HCL -- or with TFA. Again, what were the arrangements for that? Can you give us the moneys that were paid for that contract? It should be listed on a list of contractors.
Hon. H. Lali: I don't have that information right now, but we'll get back to the hon. member.
D. Symons: One of the problems with HCL has come about because of local hire. I notice that on both the Island Highway project and the Trans-Canada Highway project there have been complaints by local companies, particularly day labourers, who have been overlooked and where workers have come to the project from outside the local area. I note that workers from the Merritt area are working on the Trans-Canada Highway in the Shuswap area, while the local independent contractors have been left out. If you have a local-hire process, why is it that people who are local seem to take second place to people who are from further away?
Hon. H. Lali: I think there's a bit of confusion. I just want to clarify it for the hon. member. On the Cache Creek to the Height of the Rockies, Trans-Canada Highway 1, there are some contracts that were tendered out. The firm out of Merritt that he's talking about won that contract through the tendering process. They're not a day labourer contractor.
Then there's the other issue of the day labourer. What we've done this year is mix the MOTH list with the HCL list and put them together. So that's probably why he hasn't heard any negativity coming out of it; we're trying to pick the best out of the two merged lists.
D. Symons: Then I assume that the contractor who won the contract, regardless of where he's from in the province, will still be hiring local people on that, and HCL would be seeing that for the people that are working for that particular contract, outside of the day labourer thing, it would also be local hire as much as possible. So it's him and his five employees who'd be the only people from the Merritt area in that specific example. The others would be people
[ Page 15183 ]
I see a nodding.
[1600]
Hon. H. Lali: Correct.
D. Symons: That's the fastest exchange ever.
I have an order-in-council here, February 17, year 2000. Basically it says: "
I'm somewhat surprised that now the TFA is also financing the Attorney General to provide policing on highways. Is this a new venture for TFA? It seems to be totally outside of what TFA was mandated to do.
[D. Streifel in the chair.]
Hon. H. Lali: We've had the RCMP provide enforcement on the Trans-Canada HOV ever since it started. We found that it would
D. Symons: I'm curious, because in the TFA mandate you're to find a funding stream to pay back. I'm wondering how you're going to have the funding stream. You might explain the funding stream for that particular expenditure from TFA; that'll be interesting to hear.
Hon. H. Lali: It was expense, and that's why it requires a grant. It's not something like capital, which is amortized over the life of a particular project.
D. Symons: Again, I wasn't quite sure, in the mandate of the TFA, if you can expense things out. My understanding was that each thing had to be financed in such a way that the money would be recoverable through our highways tax or whatever -- gasoline tax.
Anyway, going back for a few minutes here, can we take a look at Highway 97? There's been considerable discussion on that as having it a federal designation and on possibly some U.S. involvement in, I hope, funding for some improvements to the highway. Has the minister been involved in this discussion, and is it going to go somewhere? It sounds interesting.
Hon. H. Lali: The push is actually coming from the Okanagan region as well as Senator Fitzpatrick, who wants the province to ask that Highway 97 be designated a national highway so that we could be eligible for funding from the feds -- if there ever is any money coming from the feds. I also want to caution that designation alone does not guarantee us federal funding, but it does make us eligible in case there is some funding. There are no guarantees. What I told the local folks, when I met with mayors and councils in Peachland, Summerland and Penticton over the weekend, was that I'd be more than happy to write to federal Minister Collenette to have that included as a national highway.
D. Symons: I think we have to work on that. I know the minister has been working with the other transportation ministers on a national highway system for Canada and some federal funding to go with it. I would encourage him to continue those efforts and hope you're successful with them.
One last question to do with TFA. Each year the minister sends out to each MLA the listing of the projects taking place within that particular member's riding. I'm wondering if you might have it in the form -- I think I passed a copy on to your office, but I'll give you another copy now -- that was used a few years ago, where the funding is broken down into major rehab funding, minor capital funding, major capital funding and total capital funding within the riding. If I could have a copy of it laid out in this way, for all 75 of the constituencies, I would appreciate it. I'll pass, again, a copy of this across to the minister. We will pass it when somebody's there to pass it over to.
[1605]
Hon. H. Lali: We will pass the information on to the hon. member in the way that we actually organize now. We're doing it a little differently than the sheet that the hon. member has, which I think is about three years old. But the way it's outlined now
D. Symons: I thank the minister for that response. I think you have a copy of this in your office already, but just in case
The Chair: The Minister of Transportation and Highways on vote 46, and I'm expecting the minister will introduce the new staff just joining us.
Hon. H. Lali: That's correct. I'd like to introduce, to my right, Dan Doyle, assistant deputy minister for operations, Ministry of Transportation and Highways. Sitting behind me to my left is John Dyble, assistant deputy minister of highway planning and major projects for the Ministry of Transportation and Highways.
D. Symons: Under vote 46, ministry operations, I note that ministry spending on capital construction, as opposed to TFA spending, has remained constant, about $500,000, whereas TFA debt financing spending on capital projects is almost a thousand times as much as the non-debt finance spending.
It seems that the vast majority of rehabilitation work is now classified in the TFA-funded capital works. There is, however, $151 million under recoverable highway rehabilitation. What is the figure for non-recoverable that is ministry-funded rehab work for this year?
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Hon. H. Lali: Including capitalized betterments, the figure is $33.098 million.
D. Symons: Onto another question here, I note that last year $24.4 million was paid in commissions for collection of
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public funds. This appears, actually, under vote 51, "Commissions on Collection of Public Funds and Allowance for Doubtful Revenue Accounts." I find there is something under Ministry of Transportation and Highways, and we have a figure. I am wondering what the net proceeds were of that $24.4 million in the year 1999-2000. If these were the commissions paid, would you know the net proceeds? Does the money that is collected by this agency or whoever does the collection come back to the ministry, or does that go into general revenue?
Hon. H. Lali: We're waiting for one more staff person to arrive with the answers that the hon. member needs. I was wondering if we may take a five-minute recess.
The Chair: Sure. The committee stands recessed until about 4:20.
The committee recessed from 4:12 p.m. to 4:22 p.m.
[D. Streifel in the chair.]
D. Symons: On some projects during or after construction, the contractor bills extra for contract changes or additions. When there are changes or additions taking place or faulty bid information
Hon. H. Lali: There are very few, and we don't have that number here. We'll supply it to the hon. member later.
D. Symons: On that same vein, is there some sort of mediation system set in place to settle payment of disputes? I get the impression that the ministry might, in these cases, have the attitude of: "Sue us. You know, we have deeper pockets than you. Besides, if you win, the ministry doesn't have to pay; it'll come out of the Crown Proceeding Act." In that sense, your bottom line is protected. I wonder if you might comment on whether this might be the attitude of the ministry.
Hon. H. Lali: The attitude is not as the member suggests. There's a complete arbitration process that is part of this. The full dispute resolution process is there for all of these kinds of disputes.
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D. Symons: I have an ad from the February 7, 2000, Journal of Commerce -- an invitation to tender by the Minister of Transportation and Highways. In rather larger print than most of the rest of it, it said: "Award of this contract is contingent upon allocation to the ministry of sufficient funding specifically for this project." In other words, you're looking for something -- funding from the TFA.
I'm wondering if it's really fair to a contractor to ask them to come in and work -- and there's expense to put together a bid -- and then have it contingent upon funding. Would it not be appropriate that before you go out for bids, you're sure you have the money there to do the project in the event that the bids do come in -- and come in on what your expected budget is? This particular contract, by the way, I gather, was cancelled a day or two later. Still the concept, I think, of asking people to come out, put in bids, and then telling them: "Well, it's really contingent upon us, the Highways ministry, receiving funding from TFA
Hon. H. Lali: It's a legal proviso that is very rarely used. Sometimes the wording of the contract is that award of contract is dependent on funding coming later. Obviously we want some of the contracts out early in the year -- especially, for instance, up in the north where they have a shorter building season. Funding is not allocated at that point in time, but it'll be subject to funding being made available then.
D. Symons: I'm assuming, then, that it's pretty certain that project will be going ahead. This particular one, as I say, was cancelled the day after the paper announcement was out, apparently.
Last summer there were three-year extensions given to the maintenance contractors who qualified, so I'm wondering what the conditions were for them to get an extension. Maybe the minister can give that response.
Hon. H. Lali: There are two conditions. First of all, the contractor had to be in good standing with the ministry. Secondly, they had to agree to a decrease in the contract price.
D. Symons: I'm wondering, also, if the decrease in the contract price allowed that they could take part of the cost of that off of roadwork. I think one-third of the cost was to come off of roadwork, one-third off the contractor's bottom line and one-third from elsewhere. Basically there has been a decrease in the requirements of the maintenance contractor in the maintenance work that he was doing in his contract area. Is that correct?
Hon. H. Lali: Correct.
D. Symons: If the contractor couldn't meet the bonding requirements, then the ministry would apply article 7. I'm wondering if you could explain what article 7 would then require. What would be the outcome of that?
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Interjection.
D. Symons: I'm saying that if the contractor couldn't meet the bonding requirements, the ministry then could apply -- and this is in the agreements
Hon. H. Lali: Article 7 does not apply to the extensions.
D. Symons: I gather article 7 basically says that the ministry would make cuts off of the road part of the contract. Anyway, we'll move on. If I'm wrong on that, you might correct me when you get up.
I have now the draft copy of the Ministry of Transportation and Highways "Corporate Performance Measures" for
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'98-99. I'd just like to run through some particular parts of that document. On page 7 of that document, if you have it there, there's a reference to: "It is expected that the ministry shall consult with other transportation providers to come up with sectoral measures for all modes of transportation." I'm wondering if the consultation has taken place, and if you have come up with the sectoral measurements for all modes of transportation.Hon. H. Lali: No, we're still working on it.
The Chair: After you respond, could you introduce the new staff.
Hon. H. Lali: To my right is Claire Dansereau, Deputy Minister of Transportation and Highways. To my left is Har Singh, the ADM for management services and motor vehicles.
D. Symons: I think my next question, then, will be no also, because it talks about communication. If you haven't come up with that, you probably won't be communicating too much. That was in the middle part on accountability on page 7 of the document.
Let's move on to another page of the document, then, page 10. Page 10 makes comment under "Lessons Learned From Other Organizations." They're saying: "Senior Management Support -- have a champion at the executive level who will stress the importance of performance measurements and demonstrate how this information will be used to make strategic decisions." I'm wondering if that champion has been appointed.
Hon. H. Lali: That individual is the deputy minister.
D. Symons: I'm omitting these sections there, so I'll leave the rest of that document for the time being.
I'm looking at "Corporate Performance Measures" from a few years back, in '96-97. On page 37 you've got a cost-per-kilometre of maintenance of kilometres of road. In British Columbia, I notice in '95 it was $7,750 per kilometre; in '96, $7,500; $7,250 in '97; and $7,000 even in '98. It seems that in each of those years, the maintenance cost per kilometre of road has gone down. I'm wondering if this might contribute to some of the conditions of our current roads today. Are you still continuing, and might you give us the '99 figure of what the maintenance cost per kilometre of road was?
[1635]
Hon. H. Lali: The figures the hon. member across the way cited are for a kilometre of road. The better figure to use is actually by lane-kilometre, and we have those figures. They're actually part of the business plan that he has a copy of. If he wants, we'd be more than happy to set up a meeting between staff and the hon. member to familiarize him.
D. Symons: I wonder if we might, then, have the figures that appear in the "Corporate Performance Measures" of '96-97 done in the same way that you're going to give them now. It would be nice to be able to have a continuation of years. When you change the manner in which you put figures down, it becomes rather difficult to compare one year with the other and see what the trends are.
Hon. H. Lali: Yes.
D. Symons: I'm now looking in the annual report for '97-98. Sometimes these annual reports come out rather late, so I know I'm using older material, but it will help here anyway. You have some highlights there, listing by month the various things that the ministry has done. In November '97 it said that the minister announced a two-year project to develop a corridor management plan for a 600-kilometre section of Highway 97 between Cache Creek and the junction of Highway 39 near Mackenzie. My question is: has that corridor management plan been completed?
Hon. H. Lali: Yes.
D. Symons: Page 24 talks about a new contract that was applied to a paving project in the Fraser Canyon, and basically the contract was an end-product specification. I'm wondering if the end-product specification contracts are now being used more often, since this was a pilot project, I believe, back then.
Hon. H. Lali: It's not a standard tool, but we use it where we feel that it's going to be suitable.
D. Symons: On page 52 of this annual report for '97-98 there's "How the Transportation and Highways Dollar Was Spent" in that fiscal year, and at the bottom it makes reference to one of the footnotes. It says: "Section 25 denotes FAA section 25 contributions from third parties." I'm wondering if you might just give me a little explanation of what that section 25 funding is. Is it used for maintenance, rehabilitation or capital costs? What is that exactly?
[1640]
Hon. H. Lali: Section 25 funding is from other agencies as well as regional districts and municipalities.
D. Symons: I'm now referring to a document which is the final audit report on the communications branch of the Ministry of Highways. I'm looking on page 9, where it has the recommendation: "We encourage the branch to finalize the strategic plan and communicate the plan to its clients
Hon. H. Lali: We primarily do performance appraisals of our employees; that's with the deputy minister.
D. Symons: I'm basically asking if you have an operating plan for the communications branch for the year 2000-2001. Has such a plan been put together?
Hon. H. Lali: No.
D. Symons: So although the ministry has had recommendations for these, the ministry has not come forth for that particular recommendation. I wonder if we might go on to page 15, which is talking about priority placements. It says: "Priority placements of untrained staff in the graphics service section have resulted in regular overtime being claimed by the
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coordinator. Two of the three staff in the graphics area are priority placements." It goes on to say at the bottom:
I'm wondering if the minister might comment, then. Why are you putting inexperienced people in on a priority basis?"We understand that one of the priority placements received a great deal of training when he was first placed in the graphics section. However, the training was provided too early in his placement, and the number of courses that he was required to take was overwhelming. Recommendation: the ministry should be aware that additional costs are incurred as a result of accommodating inexperienced priority placements."
Hon. H. Lali: Certainly there are some glitches in the system. But we try to find the best or the most suitable people, and it's a lower-cost alternative. We don't have any
[1645]
D. Symons: It talks about priority placements, which means that these people are put in ahead of others. "These include overtime costs, training costs and the cost of carrying an extra, additional full-time equivalent," it says, under the recommendations that ministries be aware of the additional costs that are incurred. The minister is basically saying: "Well, we are going to put up with those additional costs."
I read on further in this same document. On page 26, it talks about reporting of revenue. It makes a comment: "The timing and accuracy of revenue recording and reporting can be improved. Specifically, of 25 requisitions sampled, 18 were changed due to incorrect coding or excessive charges" -- 18 out of 25. What percentage is that that's wrong? "Of 25 requisitions sampled, nine had errors in recoding details from the requisition to the invoice." Nine out of 25 is 36 percent mistakes.
So I'm wondering if this goes back to the inexperienced people we were talking about in the previous recommendation getting priority. It seems you've got people in there that are not functioning properly -- not if you're having that number of mistakes made. You are dealing with over 80 percent in the first bit there. I beg your pardon -- it's more than that; it's 90 percent of the codings that were incorrect. On requisitions, in the other one, you got nine out of 25 requisitions have mistakes in them. That's a horrendous record of incompetence.
"Recommendation: printing services should ensure that the requisition invoices are accurately recorded and that complete financial information is reported to management and that revenue records are reconciled to the ministry FMIS to detect and correct errors." Well, I think the errors shouldn't be made in the first place. That recommendation should not be required. You have people that are not functioning properly within that branch of your ministry.
Hon. H. Lali: The ministry agrees with the hon. member; their errors should not have been made. That's why the audit was done: in order to identify problems and also to look at some of the specific problems. Since then we have been able to rectify the situation.
D. Symons: I'm finding on page 33 some of the original recommendations, because there were follow-ups done that weren't implemented. We find: "Printing services should survey its customers at the earliest convenience to identify where services could be improved or expanded." Basically the printing service's current status, as it says in the report you've got, and you've had this report in your hands for a few months now, is: "Printing services did not perform a marketing survey of its customers. The supervisor is in the process of developing a brochure that outlines all services available from printing services."
Now, a brochure is not a survey; in a brochure you're outlining it. But the survey really goes back and gets some feedback; it seems that you're not doing it.
The second one was: "The print shop should consider expanding its current promotional efforts." And the remark made on the status of this is, "Printing services did not conduct a marketing survey of its customers. The supervisor indicated that informal feedback he received from customers is sufficient. The supervisor also indicated that printing services has recently undertaken the following promotional activities," and it lists some.
But I think the final thing is most important here. Recommendation 5.2 said: "Printing services should ensure that employee appraisals are completed for all staff as soon as possible." And the comment made here is: "The employee appraisals have not been completed."
Now, considering the problems I read earlier with inaccurate transferring of financial information, could the minister explain to me why you have allowed the employee appraisals not to be done?
Hon. H. Lali: I just want to again remind the hon. member that it was us who had asked for the audit, and all of the recommendations are being implemented. We've also moved the print shop into the finance and administration of the Ministry of Transportation and Highways. If the hon. member chooses, then we'd be more than happy to supply him with a briefing and more detail on this whole issue.
[1650]
D. Symons: Yes, I think I'd appreciate that, because it seems that there have been some problems in the print shop. Certainly when the final audit was done to check on those recommendations that were made, a good number of them did not seem to be done. So I'm curious, if you're bringing somebody in and doing an audit, and the recommendations are made, why those recommendations have not been fulfilled. Certainly I'd like to be updated on that.
Apparently ICBC is providing $1.6 million to test new ways of reducing ice and snow buildup on main highways. They were doing this back in this past winter, I believe. They've had new anti-icers, as they call them, in the Vernon, Kamloops and Kelowna area, and they showed encouraging results. I'm curious whether the Ministry of Transportation and Highways is using this method now as part of its snow removal program.
I will just read something, so I don't have to jump up and down and have you jump up and down twice here. It would also seem that the grit -- and I'll call it gravel, rather -- that the highways authority has been using on the highways over the years has had a devastating effect upon windshields. Wouldn't the use of sand be less damaging? I've been told before that the sand blows off. But, you know, I've been in
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Saskatchewan and Alberta in the winter, and they seem to use much smaller grit material on the roads than we do.
I talked to ICBC, and I found out that in 1999 there were 205,000 claims for windshield damage. It cost $71 million in claims for ICBC in windshields, and a lot of that was gravel coming off the roads and hitting windshields in the winter months. It seems that we have to be doing something different, and I suspect that's why ICBC has put almost $2 million into looking at de-icing programs. What's the ministry doing about it?
Hon. H. Lali: First of all, we are working with ICBC -- yes, we are -- to continue to find better de-icing chemicals for our roads. As pertaining to the size, there have been extensive studies done to find the right balance between safe roads and also minimal impact on the windshields, and we feel that we have found the right balance. One of the problems -- the major problem -- with using sand as opposed to the particles that we're using right now is that the big trucks tend to blow the sand right off the road, thereby minimizing the effectiveness of using sand. We're more than happy to actually give a detailed briefing to the hon. member -- take a look at all the studies that he may need to satisfy himself.
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D. Symons: I find it interesting when I spend time in Saskatoon in January. You'd wonder why somebody goes to Saskatoon in January, but I have relatives there. They seem to do very well without the grit, the larger-sized stuff we put on the roads here. And certainly they have more winter than we do.
Further on to pavement sort of things, I note that the minister was quoted back in May of last year as saying to the effect that there are projects in the eastern United States that succeeded in creating pavement with a life span of 40 to 50 years. Just carrying on with that, apparently the city of Vancouver is trying a new type of asphalt -- they're doing it on Knight Street, I believe -- that lets the rainwater run through rather than sitting on the surface. They're looking at long-term benefits of that. What is the ministry doing? I mean, 40-50 years sounds like a considerably better life span than we're getting out of our surface. We have about a 15-year life span. What are they doing that does that? Have you looked at that? Is it cost-effective over the life of a highway to be using some new materials?
Hon. H. Lali: It's called Superpave. We've used that on Highway 1, on the HOV lanes. It costs us many more dollars in the short term, so we have to look at the cost-effectiveness, and we try to use it where it's going to give us the greatest benefit. That's where the cost of repaving is actually higher; on the Trans-Canada HOV it would be, just because of the nature of the traffic and how many cars travel there. We haven't used it as extensively as perhaps one should, because nobody's actually been able to see the effects over 40 years yet. That's one of the things. We're also ahead of the city of Vancouver, in that the old highway running through Nanaimo -- we've used that same kind of asphalt there.
T. Nebbeling: I would like to ask some questions related to the Upper Levels above West Vancouver and the highway that also goes into Horseshoe Bay and continues to go up to the Sea to Sky corridor. As the minister is most likely well aware, from time to time B.C. Ferries is allowed -- and I don't know what system is in place that allows them -- to close off a portion of the Upper Levels Highway. I would first of all like to hear from the minister what exactly the permit arrangement is that allows the Ferry Corporation to close down a legal highway and detour people onto a secondary type of ramp that clearly is not a safe situation.
Hon. H. Lali: Nobody -- not B.C. Ferries, not the ministry, even the citizens -- wants to see traffic actually backed up onto the highway. B.C. Ferries is currently planning to build more capacity in their parking lot, and that would hopefully alleviate a lot of the problem we have with cars and vehicles backing up onto the Upper Levels Highway there. The reason the ministry is involved in permitting right now is for safety reasons.
[1700]
T. Nebbeling: Can the minister give me the date the permits were issued to allow B.C. Ferry Corporation to arbitrarily decide, from time to time, to actually close off the portion of the highway -- not use it for parking as they do at another area on the highway but actually close off at that particular section between the scales and the entrance to the B.C. Ferry grounds?
Hon. H. Lali: We don't have that information right now, but we will be happy to supply it to the hon. member later.
T. Nebbeling: Would you mind repeating that?
Hon. H. Lali: We will supply that information later. We don't have that right now.
The Chair: The rapid-fire exchange has really got me excited here.
T. Nebbeling: There is little time left and so many questions to ask. Is there a permit in place?
Hon. H. Lali: We have an ongoing agreement with B.C. Ferries which allows them to close the highway periodically.
T. Nebbeling: Is that a written agreement, or is it a verbal agreement?
Hon. H. Lali: Written.
T. Nebbeling: At what time was the agreement signed?
Hon. H. Lali: We'll supply the information to the hon. member later.
T. Nebbeling: When B.C. Ferry Corporation closes off a section of that highway, what is the legal status? Who is legally responsible for what happens on that stretch of road?
Hon. H. Lali: None of us are lawyers here, so we'll have to get the answer to the hon. member in terms of the liability.
T. Nebbeling: The deputy minister actually has a legal background, doesn't she? No? She often has answers that are so smart, I really thought she had.
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Obviously the key to why I'm asking this question is the fact that these closures are becoming more and more frequent. There have been a number of situations that have created great concern for people who have to use that stretch -- for example, the people who live in Horseshoe Bay, for whom one lane is supposed to be available to enter their community. I think it is important that users of that stretch of highway know, in case something goes wrong -- an accident, whatever reason -- that they can immediately identify the right party who would be parking there
Hon. H. Lali: In terms of the liability, a lot of it also depends on the circumstances under which an accident may or may not have happened or what type of an accident it is. So it's best to research that and give the hon. member a correct answer rather than guessing at it here.
Also, staff will work with the hon. member and develop a communication plan. I know that his constituents are probably sending the hon. member queries on that. So I'd be more than happy to have staff work with the hon. member.
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T. Nebbeling: The second part of the problem that I'd like to identify and have some answers on is that it's not only that a portion of the highway actually is being closed off, but before you come to the scale, there is a milling area on busy days that is basically occupying the ramp along the highway. That line can go on for three or four kilometres from time to time.
It's unfortunate, but in the past two years we have had a fatal accident. A worker, actually, for the B.C. Ferries Corporation got killed while doing his work controlling this milling area. At that time Workers Compensation basically forced the Ferry Corporation off that milling area or eliminated the milling area opportunities. I'm surprised to see it happening again. Again, I would like to know who is liable for any future accidents, as have already happened, because it is a highway that is again being occupied for parking purposes for B.C. Ferries. That's the second issue I'd like to
Hon. H. Lali: The solution lies obviously in finding a solution to the parking issue, and B.C. Ferries is working on that. We'd be more than happy to work through the hon. member to pressure and work with B.C. Ferries to realize that solution, and I'd like to have the hon. member join in that.
T. Nebbeling: I have in the past written letters of my support in finding solutions and have made some recommendations. However, nothing has happened; nothing has changed. Two years later we're still having the same situation there. It is a dangerous situation; we have to understand this. This is not just an issue of convenience that maybe should not be tolerated. This is dangerous.
One of the questions I really need answered here is: how is it that the government can violate, so to say, a WCB rule that has said -- of that fatal accident -- that you cannot use the ramp along the highway, if you go to the soft area, for parking purposes to accommodate traffic for the ferries? But it goes on.
So again, is the Highways ministry liable, or is it B.C. Ferries? That is again a question, because if something goes wrong the next time, it is important that people know who to go after. That's number one.
Number two -- I may as well bring this into discussion as well -- the Minister of Highways has in the past recognized the seriousness of the potential danger in that crossing of traffic to get to the ferry base and has actually stipulated to B.C. Ferries that in order to continue closure of Highway 99 or the Upper Levels Highway, a secondary route has to be built to go onto the Sea to Sky corridor.
It was two years ago that the demand was made. I've seen the plans. The cost at that time was $5 million to $6 million. I do not understand why these closures continue to go on while the one remedy for the dangerous aspect of these closures -- that's what I'm focusing on -- has not been acted upon. Why is it that the Ministry of Transportation and Highways doesn't say to the B.C. Ferry Corporation: "Stop until you have fulfilled what we have put in as a requirement in order to do these closures of the highway section."
[1710]
Hon. H. Lali: The alternate route plan was actually just one of the options put forward. Our preferred option is the option of greater parking spaces at the B.C. Ferries. I agree with the hon. member that safety is the main issue here. We want to continue to work with B.C. Ferries to alleviate the whole issue of parking so that they don't end up parking on the highway itself.
If the hon. member wants to go into this in more detail, one of the suggestions I've been making is the estimates of B.C. Ferries, to see what plans they've got in store over the next little while to get rid of this situation so that we don't have these problems arising.
T. Nebbeling: Just to conclude, I agree that we will have some questions for the B.C. Ferry Corporation as well. However, it is a Ministry of Transportation and Highways responsibility. It is your liability, your highway.
What I would like to see from the minister, hearing that he does recognize that indeed the situation is serious and that B.C. Ferries doesn't seem to take it too seriously as far as remedying the problem
I can also say that from the volumes of parking that have been developing over the last year and the fast ferries obviously not being part of the long-term plan for Horseshoe Bay, there will never be enough holding area on site. There will always be the need for additional space during the peak hours. Hopefully, I can get the minister to support the communities in their quest to have a safe passage through that area.
Hon. H. Lali: Obviously we do recognize the significance of this whole issue. We have been working with B.C. Ferries
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and the municipalities over the past number of years to help to try to find a solution, and we'll continue to work with the municipalities and B.C. Ferries.
T. Nebbeling: That was not my question. My question is: would the minister be part of a drive to prohibit the use of this stretch of highway until such time that we see, indeed, the initiative by B.C. Ferries to spend the money to remedy this dangerous situation?
Hon. H. Lali: The hon. member is asking if the ministry will put pressure on B.C. Ferries to stop ferry traffic, basically. That's not something that is viable, and it is not something that we intend to do in the future. What we intend to do is to find a solution, and in that regard, we would continue to work with B.C. Ferries and with the municipalities to find a solution.
We feel that the solution lies in the whole issue of parking -- to find more capacity in the parking so that we don't have backups. But I don't think that it helps anybody to say we are then going to prohibit traffic coming to use B.C. Ferries, because that's not in the best interests of anybody. It's not in the interests of the people who commute back and forth between the Island and the mainland; it's not in the interests of tourism; it's certainly not in the interests of commercial traffic that is also using B.C. Ferries.
[1715]
The Chair: I have to figure this one out all over again. It's the member for North Vancouver-Seymour on vote 46.
D. Jarvis: Minister, I want to ask a question with regards to
As you probably know -- I'll keep on while you're talking -- the auto industry is actually crying out for programs such as this. What they're going to do is
Hon. H. Lali: I'll direct staff to have a look at that whole issue and also to work with the hon. member to find some solution. I don't have all the details for that one.
J. Reid: I have two questions. One I tried to address earlier. I want to assure the minister that I have talked to ICBC, I've talked to the regional district, I've talked to the local fire protection areas about this, and it always comes back to the ministry. I presume that at some point in time planning was done on the part of the ministry and that provision was made to address this problem.
Along the new Island Highway on Vancouver Island there are areas that the highway goes through that are not covered by local fire protection districts. In those areas that are not covered, there has been provision along the old Island Highway with volunteer groups and the local fire protection authorities to deliver emergency services such as the Jaws of Life. But on the new inland Island Highway there is a problem that some of these vehicles are not allowed to leave their fire protection district to be able to provide the services such as Jaws of Life without coverage of a fire truck, which unfortunately can't leave the district. I ask the minister what provision the Ministry of Highways has made and whether there's any funding available to provide for these emergency services to the new highway.
Hon. H. Lali: Access points for emergency services to enter the highway are something that the ministry has been able to provide. Also, the ministry facilitated access to the new route by providing keys to the access road gates located along the route.
The funding of emergency services is the responsibility of the Ministry of Attorney General and the provincial emergency program.
J. Reid: It is not an access problem that this particular question surrounds, but that there has been no provision made in the planning of this to take into account these emergency services. Certainly the question will be addressed to the Attorney General, but it might come back to Highways again, because for some reason that circle seems to keep coming around.
My second question has to do with the railway on Vancouver Island and the role that the ministry is or should be playing with those railway services. We know that there has been changes with the railway service, and certainly there are still the complaints about VIA Rail. Two questions: what's the role of the minister in ensuring that the province's interests are being looked after? The other part is whether there's any provincial jurisdiction over rail bed issues.
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Hon. H. Lali: In terms of the rail, the responsibilities are divided between the Ministry of Transportation and Highways and the Ministry of Municipal Affairs when it comes to issues such as safety and permitting. On the E&N line, that responsibility lies with the Minister of Community Development, Cooperatives and Volunteers.
J. Reid: If the ministry does have a part in this, then what has the minister been doing over this last year? How has that interest actually been expressed?
Hon. H. Lali: We cosigned the safety certificates with Municipal Affairs when the line was actually sold last year.
J. Reid: Does cosigning the safety certificates give the province any say in what is being negotiated, or is there any influence that the province has for the direction of the rail line on Vancouver Island?
Hon. H. Lali: There were no negotiations around the safety certificate that I mentioned earlier. Any negotiations would have been around the sale, and they would have been done before the transfer took place.
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J. Reid: I still haven't gotten any sense of how the minister is representing the provincial interest. I'd ask the minister: what would be the greatest concerns of provincial interests that the ministry is wanting to promote?
Hon. H. Lali: The provincial interest component lies with the Minister of Community Development, Cooperatives and Volunteers.
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J. Reid: I just want clarification. I understand that in the past, the former Minister of Community Development, Cooperatives and Volunteers was involved. To ascertain whether it stayed with that minister or whether it's moved over into the
Hon. H. Lali: The ministry.
D. Symons: I think those questions are quite valid questions to be asking the Minister of Transportation and Highways, because rail is an alternative to highways. If we can get commercial goods, particularly, to go by rail, or if we can get a commuter rail operating on the E&N lines, I think we can cut down on the need for building new highways, and so forth. I don't know how involved you are with this, but certainly that discussion is something I think the ministry and the TFA should be getting involved in because of the wider concept of various modes of transportation that's involved here. So I would encourage the ministry to get involved in that if they aren't already.
I wonder if I can change topics a little bit here and go into the inland ferry issue. Apparently a directive went out last summer, I believe, where there was supposed to be a reduction in the operating cost of $240,000 in the marine branch over the next fiscal year. People were concerned that basically the route taken was to chop an hour off the service day. I'm wondering if you can give me an idea of what has happened with that particular initiative to reduce the cost of the marine branch.
Hon. H. Lali: We found the savings elsewhere.
D. Symons: Good. The trouble is that people pass on information to you but they don't pass on what the solution has been later on. I appreciate that answer.
Getting onto the Island Highway for a moment
Hon. H. Lali: We don't have the traffic counts here, but we'll certainly supply the hon. member with them.
D. Symons: Thank you. I could name the topics -- here are some other ones -- while you're working on that particular answer. South of Duncan, in an area that's called the Whippletree area, the highway has a number of bends and no median barriers, and this creates a safety hazard. I'd like to know what plans are made for there. If you happen to know that, fine; otherwise, you can give it to me at a later date.
Hon. H. Lali: There are three parts to that particular stretch of the highway. We're working on two of them and not the other.
D. Symons: The next one I will just make reference to. It's the Black Creek area. There are two options for the connector there, and there are community concerns over those. Maybe I could have a briefing at some time on that topic, rather than discussing it at length now. There are also safety concerns over the Enns Road and the Island Highway intersection due to funding cutbacks, supposedly. A left-turn lane isn't there now. Again, we could discuss that at a later date.
The one I do want to get into a little bit now, if we can, relates to the south Courtenay connector and the groundwater problems that have been an outcome of that particular connector being put in. Certainly it would really seem that the people there have had their water
There has been a proposal put forward that the regional district could supply water out there. It's fairly expensive to put that system in, but it might be less costly in the long run to put the system in now rather than continue with drilling wells and trying to find alternative sources for water for them.
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Hon. H. Lali: We are providing water of equal or better quality. In some cases, we provided cisterns and wells. I also want to point out to the hon. member that the issue is actually before the ombudsman to determine if we're dealing with it in a fair way, so I don't really want to comment too much on that.
D. Symons: I'm very glad to hear that it's there. I was going to ask two questions left on this, and you've answered the last one, which is: would you please submit this to an independent, expert arbitrator? I suspect the ombudsman would be about as independent as we can get, I would hope, and they would probably bring in some experts to do that. Is it actually being investigated by the ombudsman? Or is it just currently in the intake stage where they are looking at it to see whether they are going to work on it or not? What stage is it at with the ombudsman?
Hon. H. Lali: It's being investigated.
D. Symons: Very few questions left. I have here a memorandum of understanding on technology exchange and cooperation between the Shanghai Highway and Transportation Society and the British Columbia Ministry of Transportation
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and Highways. I am curious. This was signed a couple of years ago on November 4, 1997. Can you give me an idea
Hon. H. Lali: Primarily we are providing linkages for private companies here on intelligent transportation systems so that our companies could have an easier access into the Shanghai and Chinese markets.
D. Symons: Have there been discussions? I notice, by the way, that this document is signed by Mr. McArthur, deputy minister to the Premier, rather than somebody in the ministry, so it seems to be an initiative that was initiated by the Premier's Office. Would you tell me exactly what technology you have supplied them? What has taken place? How many meetings have you had, and what has been discussed?
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Hon. H. Lali: One of our employees has gone over to Shanghai in the past and brought back some information and provided it for our companies here in British Columbia. It's a high-level exchange of information.
D. Symons: The reason I ask the question is that we've had a number of trade delegations go, particularly to the Pacific Rim countries, and we have announcements when they come back that there have been MOUs signed on this, that and the other thing. I tried to follow them up a few years later to see what came of them, and in every case they say that they never tracked these, and apparently nothing ever came of them. It makes a great announcement: "We've got MOUs for this amount of business." They put a dollar sign on it, and nothing ever comes from it. This is something that is still in the works and possibly will have some benefit for British Columbia.
Hon. H. Lali: Yes, the companies we are working with are quite happy with the amount of information that we have been able to bring back and supply to them for their future needs.
D. Symons: I have here the "Provincial Net Debt Summary" out of the province reports -- the reports that came with the budget. On page 153 it has British Columbia Transportation Finance Authority under "Economic development Crown corporations and agencies." They have the debt for the Financing Authority here. I'm sorry; I see you still have somebody there. In 1997 it was $921 million; in 1998, $1.089 billion; the next year, $1.433 billion; the next year, $1.834 billion -- that's the revised forecast for the year 2000. The estimate for the next one is $2.351 billion. It is going up by roughly $500 million each year.
The question I asked at the beginning of all of this procedure to do with the TFA was that somewhere or other when this debt keeps going up and you keep adding debt year after year, what is the debt management plan that's going to enable us to manage that increased debt and the increased cost of paying the debt service charges? Surely there must be a plan at some point where you are saying where this is going to level off, or we're going to be in trouble. I don't think you can keep this up. These figures would seem to indicate that that's getting there. Where is the roof on this?
Hon. H. Lali: I believe we answered some of the questions the hon. member raised under the TFA. We are now on to the ministry estimates, but we are the revisiting the TFA. Surely we can provide that information later to the hon. member.
D. Symons: With that, I would entertain a motion from the minister.
Hon. H. Lali: I would like to move that the committee rise and report completion
The Chair: The vote has to be called.
Vote 46 approved.
Hon. H. Lali: Now I would like to move the motion that the committee rise and report completion of the estimates.
D. Symons: He didn't ask that the committee ask to sit again
The Chair: The question before you is resolution of vote 46.
Motion approved.
The Chair: Okay. Then we're adjourned, I suppose.
The committee rose at 5:40 p.m.
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