Hansard -- Volume 19, Number 25 -- Wednesday, May 31, 2000

The following electronic version is for informational purposes only.
The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

C. Hansen: We're very honoured today to have an exciting group of young grade 5 students from Crofton House School in the riding of Vancouver-Quilchena. They're accompanied by their teacher Ms. Harris and accompanying chaperons. I hope the House will make them very welcome today.

Hon. G. Wilson: Hon. Speaker, as many will have read in the paper, fresh from the success of getting imitation cheese on the Ontario market -- which is good for all the lactose-intolerant -- and looking at the imitation Liberals opposite, I'm delighted to have two genuine articles with us on the floor today: Mr. Allan Warnke and Mr. Bob Chisholm. They are here -- the genuine article as Liberals. They are accompanied by their wives Geraldine Warnke and Janet Chisholm.

I would also like the House, please, to make welcome a guest who is in the galleries, Ms. Lynn Primeau-Charman, who is the president of Primeau Communications, Victoria. Would the House please make all of these welcome, and certainly our colleagues from the past.

G. Farrell-Collins: I just want to extend my and our welcome to our former colleagues sitting on the other side of the House. There are now three of my former colleagues on the other side of the House. Two have gone the way that this one will eventually, but we welcome them to come back at some time in the future and sit on that side of the House, when there's a different government perhaps.

Hon. P. Priddy: In the precincts today are grade 11 students from Enver Creek Secondary School, a new secondary school in my constituency. These are honour students who are here with their social studies teacher. They've been studying governance and political ideology and classical definitions of politics and parties, and so on. They're accompanied by their social studies teacher Mr. Nahli and another of their teachers, Mr. Bill Piket, who is a friend and colleague of many people in this Legislature. I would ask people to please make them welcome.

L. Reid: Members of this House will know that some months back I raised the issue of the Child Services Equality Act. Members will know that it's day 7 of a 90-day petitioning period for signatures to be collected so that children in the province will not sit on wait-lists. The proponents of this initiative are in the gallery today: Mr. Jim McDermott and Ms. Penny Kellett. I would ask the House to please make them welcome.

Hon. H. Lali: Joining us today are some visitors representing the B.C. Cycling Coalition. They are John Luton and Megan Klassen of the Greater Victoria Cycling Coalition; Jim Alix, past-president of the Nanaimo Cycling Coalition; Alan Dunlop, the Nanaimo Bike Week 2000 coordinator; Kari Hewett of Better Environmentally Sound Transportation in Vancouver; Allan Callandar, provincial biking coordinator; Francis Van Loon, president of the B.C. Cycling Coalition; and Colin Brander, B.C. Cycling Coalition, Vancouver area. These good folks are here today to help us celebrate the importance of cycling in B.C. Would the House please join me in welcoming all of these good folks.

J. Wilson: Today I have the pleasure of introducing 13 students from the McLeese Lake Elementary School in my riding. They're accompanied by their principal Michael Franklin, a teacher, Kristy Davis, and two parents, Marie Beck and Kim Atchison. McLeese Lake Elementary School is one of the elementary schools that is facing closure in my riding. It is an important part of the community there, and Marie and Kim have worked tirelessly to persuade the minister to keep the school open. They're here again today to try and have the minister address any possible inequities in the funding formula for school district 27. I ask that the House make them welcome.

T. Stevenson: First I'd like to thank the member for Peace River South for the prayers for the man of the cloth from Coquitlam-Maillardville. I understand there were excommunication procedures beginning in the United Church, and I think these prayers will be very helpful for him.

I would also like to introduce a large number of young people from the Wellington Elementary School in Woodinville, Washington. They are accompanied by their teachers and a parent, Mrs. Krivanek. They're here, of course, to watch some of the procedures in the House today. I hope all members will make them welcome.

R. Neufeld: It's a pleasure for me today to introduce to the House a lady who now lives in Fort St. John and used to live on Vancouver Island. She is Lisa Hofmeister, who works part-time with me in my constituency office.

Hon. J. Kwan: I have the honour to introduce three special guests today. They're representatives of Power-Pets of B.C. Residents. They are Julian Benedict, Pavlik Stooshnoff and Poroersca Kirchner. They were here earlier, at around noon, in front of the Legislature presenting a petition calling for changing the Residential Tenancy Act to eliminate discrimination against pets in rental accommodations. Would the House please welcome them.

G. Farrell-Collins: About two years ago a young gentleman came and worked in our research department in the Liberal opposition as a researcher responsible for the finance area and a few others as well. His name is Michael Goehring. He is absolutely a top-notch researcher and individual. He has been a huge asset to us and has done a great deal of service to the people of British Columbia. But he's leaving us today; today is his last day after two years. He's off to Vancouver. The reason he's going to Vancouver is because he is getting married. He will be moving to be closer to his spouse, something that all of us, I think, could relate to.

The reason why that's relevant is that I had the pleasure of having dinner with him and his fiancée and my fiancée -- the four of us -- in Amsterdam last September. Little did we know at the time that he was embarking on his way to Morocco to get engaged, and I was embarking on my way to France to get engaged. Neither of us knew that.

That's relevant, too, because today in the gallery with him is his future father-in-law, Pat McGuire. I just want Mr.

McGuire to know that he's lucking in here. He's going to have a wonderful son-in-law, someone who he can always be proud of and who has done good service to the province of British Columbia, and we hope he will continue to do that in the future. Would you please make them welcome.

B. Penner: I too would like to acknowledge the presence of my predecessor the former MLA for Chilliwack, Bob Chisholm, as well as the former member for Richmond-Steveston, Mr. Warnke. Perhaps they're sitting on the government side of the House because the government needs all the support it can possibly get.

Also, I'd like to extend a warm welcome to a number of people who are in the precincts today: Mayor Sylvia Pranger from Agassiz and four other members of the district of Kent council who are here meeting with a variety of government officials. I had the pleasure of spending some time with them this morning. I ask that the House please make them welcome.

D. Streifel: It's not often that folks from the Agassiz-Kent area of my constituency come down. I would like to join the member for Chilliwack in welcoming the councillors from the district of Kent and, in particular, Councillor Ted Westlin, who's a longtime friend of mine. I bid them all welcome.

Introduction of Bills

Hon. J. Doyle presented a message from His Honour the Lieutenant-Governor: a bill intituled Forest Statutes Amendment Act, 2000.

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

Hon. J. Doyle: As this government promised in the throne speech a couple of months back, we are working to reduce costs for industry and government while we at the same time ensure sustainable use of our forests in British Columbia.

Bill 11 contains a number of modest amendments to the Forest Act, the Forest Practices Code of British Columbia Act and the Range Act to accomplish this goal. Some of those are measures to enhance sustainable forest management, and those will be modest and beneficial to the environment. Other amendments are part of our cost-driver streamlining project that was started in other years by the previous minister. Those will produce cost savings for the forest industry and for government.

As with all of the cost-driver measures, we insist that the natural environment of British Columbia's forests and the integrity of the Forest Practices Code continue to be maintained. The changes in this bill build on this government's commitment to reduce costs and maintain a healthy environment. I move that Bill 11 be placed on orders of the day for second reading at the next sitting of the House after today.

Bill 11 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Hon. J. Sawicki presented a message from His Honour the Lieutenant-Governor: a bill intituled Protected Areas of British Columbia Act.

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

Hon. J. Sawicki: It does give me great pleasure to introduce this bill today, one that confirms yet again British Columbia's international leadership in the establishment of protected areas. This new legislation, entitled the Protected Areas of British Columbia Act, begins the process of building a statute that reflects our commitment to preserving and managing protected areas in our province.

The bill does several things. First, it establishes 29 new class A parks and six new ecological reserves. As well, it makes additions to 13 existing class A parks. Together these new areas encompass more than 264,000 hectares or about 1,000 square miles. The creation of these new areas is the result of the dedicated effort of many British Columbians from all walks of life who participated in land use planning tables. For the information of members, the office of the Clerk and each caucus will be provided with the copies of maps, for their review, that depict the boundaries of the new areas.

Secondly, this bill provides a very important step in the preservation of protected areas by consolidating existing parks and ecological reserves under this one act. Bill 17 transfers 169 existing class A parks and 136 ecological reserves previously established by orders-in-council to schedules in the new act. This transfer will provide permanent legislative protection to these areas. The consolidation of these areas into one act is the first step towards a new legislative framework for the protected areas of British Columbia.

British Columbians have made their voices heard. They want parks and protected areas and ecological reserves to forever preserve outstanding ecosystems that represent this province's exceptional diversity of wildlife, fish, vegetation communities, geographical wonder and recreational opportunities. This government has listened. We've worked hard to ensure the protection of some of the most ecologically significant and breathtakingly beautiful parts of our province. Hon. Speaker, I'm very proud to present this bill to the House today. I move that this bill be placed on orders of the day for second reading at the next sitting of the House after today.

Bill 17 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

The Speaker: Members, it appears that the time of year has arrived when the Chair feels compelled to bring to the members' attention certain guidelines relating to oral question period. Members on both sides of the House continue to be disorderly during oral question period, to the point where it's difficult to hear the question asked or the answer being given.

As has been the practice in the past, the Speaker is reluctant to continually intervene, bearing in mind the short dura-

tion of our question period. But unless members on both sides of the House exhibit some self-discipline, the Chair will have no option but to intervene.

There has been an increasing tendency to interfere with the Chair's conduct of question period by both sides of the House, in that the government interjects with a call for "Question, question" while a question is being posed by the opposition, and the opposition interjects with "Time, Mr. Speaker. Time, Mr. Speaker" while the question is being answered.

I'm certain that both sides of the House in so interjecting are simply exhibiting a conscientious concern for application of the rules, but I would ask all members to accept the assurance of the Chair that such interjections are counterproductive and tend to exacerbate disorder in the House. I am therefore asking members on both sides of the House to refrain from such interjections. The Chair will be the judge of whether a question is too long or an answer is too long. In that regard, members may be interested in knowing that questions and answers are timed on a daily basis, and the tally varies from day to day and week to week. If members are interested, these tallies are available in my office or the Clerk's office.

The Chair has also examined the Blues from yesterday's question period, which demonstrate a classic example of the abuse of question period guidelines when an hon. member persisted in questioning on a matter which had been taken on notice, despite the fact that the member had characterized his supplementaries as a new question.

The Chair can do little to improve on the statement delivered in this House on April 8, 1999, relating to the conduct of question period. For the assistance of members who wish to refresh their memories on these guidelines, I've had a copy of that decision placed on the members' desks.

It's hoped that the members themselves take these suggestions seriously and improve the quality of question period, but the Chair proposes to intervene if the guidelines are being consistently ignored.

M. de Jong: Today we've learned that the Sechelt band have made a decision to abandon negotiations in favour of referring their claim to the courts. I think it's disappointing and it's regrettable.

But I'm also troubled by statements I've read attributed to the Minister of Aboriginal Affairs, where he says that the government is still prepared to consider improvements to the AIP that was signed last year. We've seen these deal sweeteners in the past, and they've ended up costing millions and millions of dollars. In fact, in the last few months we've seen the government already agree to pay millions more money and increase the land quantum that was originally set out in the AIP.

The question for the minister is: will he assure this House and British Columbians that the government won't continue to succumb to these kinds of negotiating pressure tactics and will hold firm to the agreement that was signed, presumably in good faith, last year?

M. de Jong: The difficulty I have with the answer is that it doesn't equate with what I've seen happen over the past several months, where the amount of money is increased and the amount of land is increased. And it doesn't equate with the comments the minister has made in the press. Remember, the opposition lent its support to this AIP last month. But people want some assurance that the government won't succumb to these negotiation pressure tactics.

Hon. D. Lovick: I'm pleased that the member obviously demonstrated some self-knowledge in the beginning of question period, but sadly, it is true that a little learning is a dangerous thing. If he had attended the press conference this morning, he would have heard the very clear explanation I gave at that time -- namely, with regard to the Sechelt band. I will quote the release: ". . .any negotiated final agreement must be based on the provisions of the Sechelt agreement-in-principle and the proposed treaty." We have said -- and I said this morning and other times as well -- that there is not going to be more money put on the table, nor will there be more land. This is as good as it gets. I have made that point very clearly. I can't think of a more emphatic or clear way I could put it than I just have.

The Speaker: The hon. member for Matsqui has a further supplemental question.

M. de Jong: There has been precious little to celebrate from a substantive point of view with respect to the Treaty Commission process. If this development today -- this very sad development -- is, as many people are suggesting, a signal that the Treaty Commission process is coming unravelled, then the question that I think begs asking of the minister and the government is: what's plan B? What's the contingency, if increasingly these claims are going to be referred to the courts? If the process isn't working, what's plan B?

Hon. D. Lovick: Mr. Speaker, I'm placed in an awkward position, I think. The question is indeed hypothetical, so I have to be a little careful in terms of how I answer, because the process is not dead. There is no question, however -- and I am the first to acknowledge -- that what happened today is indeed very significant and, to use the member's words, regrettable and unfortunate.

Our intention is to continue our discussion with Sechelt, if we can. The chief of Sechelt today said that as far as he was concerned, the window or the door was still a little bit open, and we have said the same. However, within the parameters I already sketched out -- namely, the provisions of the existing agreement -- we can tweak it; we can fine-tune it. But the basic substance of the agreement is there. That's the first part of the question.

The second, in terms of plan B -- where we go from here -- I am meeting today with the task group from the First Nations Summit. The First Nations Summit is, of course, the group involved in the treaty process on behalf of aboriginal people in B.C. We're going to obviously talk about these matters. Nobody else has left the treaty process at this point, albeit the other first nations are all further back in the process than was Sechelt.

I'm not giving up on the process, because the alternative to negotiating treaties is, quite frankly, unthinkable -- either litigation or confrontation. I hope the members opposite will join us in that conclusion.

J. Weisgerber: My question is also to the Minister of Aboriginal Affairs on the same topic. It seems to me that Sechelt being the only agreement negotiated under the Treaty Commission process, the first treaty in the southern mainland and a treaty which doesn't involve the Nisga'a self-government model, all make it particularly critical. If indeed the minister is going to stick by the agreement-in-principle, can he tell me, then, what action he plans to take to get this treaty back on track? I don't think watching the band walk away and simply saying, "Well, they'd be the first to go," is good enough. A few days ago we passed the McLeod Lake agreement, where the province did in fact incur significant legal expenses, as did the band, before talks were restarted.

Perhaps the minister can tell us what plans he has to get these talks with the Sechelt back on track. And if you can't get a deal with the Sechelt, what hope is there anywhere in British Columbia of getting a deal?

Hon. D. Lovick: I know that my colleague from Peace River has some experience with negotiation, and he will understand that the two steps forward and one back, or the reverse thereof, is pretty standard practice, quite frankly.

I would remind him that this is not the first time the Sechelt have done this. We've had two different sessions of going the litigation route to be reconsidered.

Sechelt, I would remind the member -- and all members of the House, for that matter -- is the first out of the gate. This is the first modern treaty following the B.C. Treaty Commission process. Sechelt is accordingly under huge pressure from other first nations, especially those who perhaps are not enamoured of or committed to the B.C. treaty process.

I'm sorry that the Sechelt band has decided to take the action they have. I don't think it's necessarily the final action in this particular drama. I think we may well discover that we have an opportunity to go back to the table. I have said to the first nation, as well as to the public, that in my opinion our door is still open to meet with them. I gather they have also given us a signal that they may also see that door as still open.

The Speaker: The hon. member for Peace River South has a supplemental question.

J. Weisgerber: My supplemental is to the Premier. The Finance minister is reported as saying that there is going to be more money for land claims settlements, resulting in "refreshed offers for existing negotiations." British Columbians have been led to believe that cash for land claims negotiations comes from Ottawa, and British Columbia provides the land. If indeed British Columbia is now providing both land and cash, we should tell British Columbians about that. But, Mr. Speaker, it seems to me that rather than throwing more money at this problem, perhaps it's time for the province to stop negotiations, step back and rethink this whole process.

Hon. D. Lovick: Mr. Speaker, I had a brief consultation with the Premier and my colleague the Minister of Finance. We all have some part of this, but we have agreed that I will answer the question. We have been working very hard for some time now -- and I think it's no secret to anybody -- to do what we can to accelerate and improve the treaty process.

One of the conclusions that I have presented to my cabinet colleagues, and indeed to my caucus colleagues, is that first nations perceive that the provincial government's contribution to final offers or to settlement offers is significantly less than is our federal counterpart's. And they are correct; they are correct in drawing that conclusion. They can do the math as well as anybody else.

What we have said is still bound by the existing Treasury Board and Planning Board guidelines of this government. We are going to do whatever we can to see if we can perhaps find some more resources to make certain that those negotiations work better.

It's not about Sechelt, by the way, because that's beyond that; that's in the AIP stage. We're talking about stage 3 and 4 of negotiations, rather. And the member, I think, knows that we've tabled -- what? -- four or five different offers in the last two months, all of which have been peremptorily rejected and indeed have been dismissed as insulting, essentially.

Now, I don't agree with that conclusion. But I do know that if we want treaties in the province, we will have to look at ways to improve our offer somewhat -- however, still within our own budgetary guidelines.

C. Hansen: At the start of last year the NDP government promised that there would be 400 new nurses hired in 1999. Well, the numbers are in, and statistics from the Registered Nurses Association of British Columbia show that during last year there were only an additional 104 new nurses employed in this province. When the NDP do not live up to their promises, real people get hurt, like the people of Quesnel who are facing a closure of their ICU at G.R. Baker Memorial Hospital this week. Will the minister admit that his failure to deliver on the promise of 400 new nurses is compromising patient care all over British Columbia?

Hon. M. Farnworth: In fact, hon. member, what I'd like to say is that we are working very hard to address the nursing shortage in this province, as we are right across the country. It's a situation not unique to British Columbia. We have hired

nurses last year -- clearly not as many as I would like, but towards the end of this year and coming into the next quarter. . . .

Hon. M. Farnworth: And I'm expecting that in the next update you will see a considerable increase in the number of nurses that have been hired. We are also working with nurses and HEABC to identify ways of attracting more nurses back into the profession to meet some of the immediate challenges. That's why in this year's allocation of 400 nursing spaces, hon. Speaker, 75 percent of those spaces are allocated for refresher courses to bring nurses into the system. That will result in a throughput of about 150 new nurses, on that particular part of the allocation alone, entering the system in the province of British Columbia this year.

The Speaker: The hon. member for Vancouver-Quilchena with a supplemental question.

C. Hansen: The minister is missing the point. They made a promise last year in the budget speech that there would 400 new nurses hired. They failed to deliver. They only delivered 104, which is nowhere near close. And now they've got the gall, in this year's budget, to promise that there's going to be an additional 600 nurses hired. Why should the people of British Columbia believe one word from the Minister of Health when they failed to deliver on the commitments that they made over a year ago?

Hon. M. Farnworth: The money and the commitment to hire new nurses in this province are in this year's budget. We recognized the challenges that we faced last year, and we made a concerted effort to go out and hire new nurses. As I've said, is it enough? No. But do we have a strategy in place? Absolutely.

1. Aggressive recruitment practices are currently underway in terms of hiring new nurses to meet the needs and challenges right now.

2. Do we have money in the budget for the training of new nurses, which is what nurses have been asking for? Absolutely. Those spaces will be in place September 1 of this year.

3. Are we recognizing the challenges facing nurses who want to come back into the system, in terms of getting new training so that they can come back into the profession, because we're finding an increased desire to do that? Yes, that's in place -- 75 seats, as I just said a moment ago, which will result in another 150 new nurses coming in.

4. Are there changes that need to be made? Those are in place and are being worked on with the nurses' association and HEABC.

The Speaker: The hon. member for Vancouver-Quilchena with a further supplemental.

C. Hansen: What the minister is trying to take credit for are actions that this government should have taken four years ago when they first knew that this nursing shortage was looming. Not only does this nursing shortage negatively impact on the ability of people to get access to the patient care they need, but it is costing hundreds of millions of dollars in extra overtime costs around this province. In every hospital in this province we are facing overtime costs because of the fact that this government did not deliver on their promises. Will the minister confirm that their failure to deliver on last year's promise is costing many, many millions of dollars in overtime costs, which are eating up the very extra dollars that the minister was talking about?

The Speaker: Members, the time for question period has expired. I'll ask the minister to give a very brief answer.

Hon. M. Farnworth: It's amazing that this opposition, after four years, has all the answers. They must be brilliant. Just imagine how many answers they'll have and how brilliant they'll be after another four years in opposition.

The Speaker: Question period has ended. I recognize the hon. Minister of Health.

Hon. M. Farnworth: I rise to answer a question that I took on notice yesterday.

Hon. M. Farnworth: The question was raised about the appropriateness of a government contract around lubricant and the requirement for that and what the purpose was. The member for Matsqui asked two questions, and I'd like to respond to them, because I now have the information that he requires.

In my hand I have a condom and a packet of lubrication. It cost 15 cents. It's used to prevent the spread of sexually transmitted diseases and HIV infection in this province. Fifteen cents of prevention, which is what that contract is about, results in someone not being infected, someone's life not being devastated and savings to the health care system of $145,000 for treating that individual if they're infected. That's what the contract is about.

I have in my hand the same thing from the province of Ontario: 15 cents to save someone's life and save the health care system the cost of $145,000. It doesn't matter whether it's an NDP government in British Columbia or a Conservative government in Ontario. We both recognize that often the most effective means of prevention regarding health matters and the transmission of sexually transmitted diseases is 15 cents of prevention to save $150,000 worth of extra costs in the health care system, but more importantly, to save someone's life.

Ministerial Statements

Hon. H. Lali: It gives me great pleasure to announce that the Hon. Garde Gardom, the Lieutenant-Governor of British

Columbia, has proclaimed June as Bike Month in this province. As Minister of Transportation and Highways and minister responsible for the B.C. Transportation Financing Authority, I support this proclamation.

Cycling is a low-cost, environmentally sound method of transportation. It's an activity that people of all ages and backgrounds in all regions of our province can enjoy. By setting aside June as Bike Month, we help cyclists celebrate the many benefits of their transportation choice.

Since an interim cycling policy was introduced in 1992, the province has been working with municipalities and non-profit groups to improve cycling conditions. The results are reflected in a number of major projects, like the various cycling-related improvements in the lower mainland, the lower mainland's Pitt River Bridge counterflow project and the Vancouver Island Highway project.

In February of this year the ministry's new cycling policy was implemented. As a result of extensive consultation with cycling groups, the ministry has established a process to ensure that cycling needs are considered when planning and upgrading highway projects is done. In recent years the ministry has ensured that wherever possible, road-paving projects include improvements to road shoulders, which help accommodate cyclists and other users.

Since 1995 the BCTFA cycling network program has shared the costs of cycling projects 50-50 with local governments. In that time we have invested almost $11 million creating over 500-lane kilometres of cycling routes in 52 communities throughout B.C. Past projects under this program include the Selkirk trestle, which is a major link in Victoria's Galloping Goose Trail, the Green Timbers bike route in Surrey, bike lanes on Garden City Road in Richmond. . .

. . .the Burnaby Mountain Urban Trail in Burnaby, the Lakelse Lake Drive bike path in the Kitimat-Stikine area and, of course, the Thompson River Pathway in Kamloops. And there are many others, too many to mention here today.

This year the cycling network program is investing more than $1.7 million for 44 cycling projects in 27 communities throughout British Columbia. A list of those projects would include phase 2 of Enderby's bike route, the eastern extension of the Portside Bikeway in Vancouver, the Cotton Road-North Boulevard Bikeway in North Vancouver, shoulder bikeways along Kalamalka Lake, Kalamalka Road in Coldstream, and bike lanes along Military Row in Comox on Vancouver Island.

These projects and many others like them are making cycling a more viable transportation option in this province. Bike Month will give people throughout British Columbia an added incentive to try out the cycling facilities. By participating, we can all help make Bike Month a success and encourage other British Columbians to consider using this healthy, non-polluting transportation choice.

D. Symons: I thank the minister for a copy of his statement earlier in the day. And being one who bikes a bit himself -- and my family and a son who's actually biked all the way to Calgary and back, and I'm amazed at my son, but he does these things -- I can certainly appreciate the fact that we are really addressing the issue. I give the government full credit for looking at the issue of cycling on the roads and particularly in communities where they're helping the communities put in cycle paths. We have the one in Richmond and another one in the works, I believe.

It's important, besides putting in the paths that people can use and the road allowances to remove them from the traffic, that we also consider -- and maybe at this time in Bike Month -- cycle safety from the viewpoint of the automobiles and the bikes sharing the roadway. All too often, I think, drivers don't give cyclists the due and the right that they have to be on the road. All too often, cars just move slightly aside and go quite close to cyclists as they pass them. I don't think that most drivers in the province of British Columbia realize and, I suspect, people in this House do not realize that, as far as the law goes, when a cyclist is in a lane, that cyclist has the right to the whole lane, not just the little portion you might leave them when you go past them. Too often, in going past cyclists, people go too close to them.

So I think one of the important things we might remember during Bike Month is that the roads are there for everybody who uses them, automobiles and cyclists as well. Let us all take more care of each other on the road as we share the roads in British Columbia. I think Bike Month is a good way of heightening people's awareness to the fact that there are cyclists on the road. They're there legitimately and should be considered, taken care of and watched carefully, so that we don't have any accidents.

Hon. J. Smallwood: I would like to rise today to make a ministerial statement. In doing so, I'd like to thank my critic for acknowledging very short notice and a bit of a breach of protocol. We have an agreement in this House that we will work together and let each other know about ministerial statements and provide the information in advance, and I was unable to do that.

My ministerial statement today has everything to do with an article that is on the front pages of the newspapers this morning. I have to say, in first looking at that article, that I felt a physical reaction, a true sinking feeling. I felt sick. I think that a lot of women in this province felt the same way. As the story goes, hon. Speaker, a woman, Karen Miller, was last seen on May 21. While I'm sure we all hope that Ms. Miller is found in good health, I believe the community and the women of this province are fearful that she may be another statistic.

The statistics show that between 1977 and 1996 there were 2,038 victims of spousal assault; 75 percent of that total were women; 67 women were killed in 1998 alone by a current or ex-boyfriend or spouse, an average of one to two women every single week. I've been in this post for three months. At the rate that I have just quoted, 17 women will have died while I have been in this office.

Violence against women -- whether stalking, wife assault, or murder -- is a constant before us. It's obvious that as a society we have yet to come to grips with this horrendous issue of violence against women in relationships. Women are dying in a pattern that is too outrageous for us to ignore.

Women feel frustrated that society does not seem to realize the implications of this situation. Women are looking for more of a reaction. We need change. We need to save the lives of women that are yet hanging in the balance. And we need to make sure that women who have died simply do not fade into history.

When a child disappears or is found murdered, society and the media focus appropriately on the tragedy, and we're outraged by that loss. Action is often mobilized to change the system in order to increase protection for other children, and that is altogether appropriate. Years later we still see posters of children who are still missing. These posters help us remember these children, to find them if they are still alive and to remind us of the vigilance that is needed to protect our children from a similar fate; and that is appropriate.

We need to do the same kinds of things for violence against women. Women wonder where the outrage is that more than 20 women have disappeared from the downtown east side since 1978. Women look for the anger for all women who have been systematically hunted down and brutally beaten and murdered by ex-husbands and boyfriends. Women are waiting for a significant reaction from society for all the victims of relationship violence.

Why is it seemingly so impossible to protect women, even those who have taken all the appropriate steps they can to protect themselves? What other group in society can we name with such statistics as victims of violence?

The B.C. government is an acknowledged leader in bringing about change in preventing violence against women. Recently the provincial government called on the federal government to increase the maximum sentence for criminal harassment from five to ten years. This will allow dangerous-offender status to be applied in cases where it is evident that that is required. We're pleased that federal Minister of Justice Anne McLellan is proceeding with this change; it will no doubt save lives.

However, given the persistence and severity of this issue, I believe that we must take national action and see this as a national priority. We will be calling on the federal Minister of Justice to establish an advisory group on violence against women in relationships that will report to that minister. This advisory group would spotlight best practices across the country, with a focus on prevention, policing and prosecutorial approaches.

We in B.C. will continue to show leadership, but because this issue of violence against women in relationships is of national importance, the federal government must also provide leadership. We want the federal government to declare its concerns and initiate action on these issues. We will ask my partners at the upcoming meeting of the federal-provincial-territorial status-of-women ministers to join me in putting violence against women in relationships higher on the national agenda.

We also want to explore avenues for input from women's groups and advocates into thorough training of all parties in the justice system, and we want them to fully understand the nature and dynamics of violence against women in relationships. I ask the members of this House to participate in asking for and supporting this measure. Women can live violence-free, raise their children in safety and go about their daily lives without fear. If we act together, I believe that we as a society can truly make a difference in bringing about women's equality.

L. Stephens: I do want to thank the minister for the notice, even though it was short. I do appreciate receiving a copy of her statement. I am also pleased to join with the minister in bringing to the attention of the House the disappearance of another woman in British Columbia. I want to assure the House that the official opposition is committed to using whatever means possible to stop this violence against women that we are experiencing on a very regular basis.

Now, the federal government is acting, particularly on the issue of criminal harassment, but more can and should be done. And the provincial government must take a leadership role by putting in place those best practices the ministry talks about, because they are well known. Much has been written about what needs to be accomplished in this province and certainly across the rest of Canada, and that's something I encourage the minister to move forward on.

There are also many provinces that have domestic violence legislation, and this province does not. So I would also encourage the minister to take the appropriate legislative action for British Columbia. That would be appropriate for us, and it would be a good place for us to start -- for her government to demonstrate to all of British Columbia that her government is indeed committed to stopping the violence against women.

Tabling Documents

Hon. S. Hammell: I am pleased to submit the annual report of the Public Service Employee Relations Commission for the period of April 1, '98, to March 31, '99.

Hon. C. McGregor: It's my pleasure to present the Property Assessment Appeal Board's annual report for 1999.

Orders of the Day

Hon. D. Lovick: I call, in Committee A, Committee of Supply, estimates of the Ministry of Agriculture, Food and Fisheries. And in this chamber, Committee B, I call the estimates of the Ministry of Energy, Mines and Northern Development.

ESTIMATES: MINISTRY OF ENERGY
AND MINES AND MINISTRY RESPONSIBLE
FOR NORTHERN DEVELOPMENT
(continued)

R. Neufeld: Yesterday we left off at the question about the Beaver River gas pool, and I'm just wondering if the minister has any of that. . . . He said he would get that information for me and give it to me. Or should we just wait a few minutes for staff to arrive? Would that be better?

Hon. D. Miller: I haven't actually asked the question of my staff. They may have it, so let's see what happens when they come in. If they don't, we'll see if we can get that today. If not, you will get it.

R. Neufeld: I'll just put the questions back on the paper and leave it at that, and they can get the information back to me. It's the three-year royalty exemption for the Beaver River gas pool that the province joined in with Wascana Energy and Beaver River Resources. I read the background papers that said: "The pilot project could produce up to 400 million cubic metres of gas without being considered commercially successful. If the project is successful, the amount of royalty exempted would become payable in subsequent years." I want to know if the 400 million is the target -- 400 million cubic metres over three years -- that's going to be exempted. If it's under that, the province just writes off the royalties it would have received. If it is over that, if that is the benchmark, then over what period of time will that be payable back to the province? I'll leave that with the minister.

Hon. D. Miller: I'm advised that we don't have the detailed information. But just very briefly, I'd like to put some context on the question. There are two areas, really, where we dealt with Wascana. One was the Beaver River area. In that situation, while there were considerable gas reserves identified, they were ones that were very difficult to extract commercially because of a lot of water. The simple premise we looked at was: if we institute a royalty holiday in order to encourage Wascana to make their best efforts to extract that gas, the upside for the province -- and obviously for Wascana -- was that if that inducement worked, it would see that amount of gas put into production. So I'll try to get the answer on that.

The other was in the heavy oil sector where we made changes to the heavy oil royalty, because we simply had not addressed that question for many, many years. Again, we think that will assist in the development of a significant heavy oil find on the B.C. side of the B.C.-Alberta border.

R. Neufeld: I appreciate that response. I'll wait till the minister gets the information.

The second part of the question is dealing with Canadian Occidental and Wascana with the Hay River and the heavy oil. Can the minister tell me whether the work that has gone on to produce that heavy oil is serviced out of British Columbia or Alberta? I mean the service work, like the people that work on the jobs, the equipment it takes to do the jobs and those kind of things. Is all that work originating out of Alberta, or is some of it originating out of British Columbia?

Hon. D. Miller: Again, I'll certainly attempt to get that information. You'll appreciate, though, that it's not normally the kind of data that my ministry would collect. We're in the business of trying to ensure that there is more activity in the oil and gas sector in B.C. We've worked very hard through the commission, etc. But I don't believe we do track issues or details like where precisely all the workers come from or where precisely all the service people come from. That would be a statistical job that I don't think we ought to be engaged in that much.

We do have a more broadly based approach in northeastern British Columbia, which seeks to maximize the benefits in British Columbia to provide more opportunities for British Columbia-based firms. In that respect, the member referred to the competitiveness study that we have done in the region. All of that, of course, is an attempt to ensure that when you're working in British Columbia, it's competitive with the competing or neighbouring jurisdiction of Alberta.

R. Neufeld: Well, I'm a bit disturbed at that response. I thought the ministry would be concerned about whether that work is actually originating out of British Columbia or Alberta. If we're looking at Beaver River, which. . . . I know where it's at; it's in a totally different part of the province than the Hay River, which borders on Alberta. In the minister's own strategic plan for year 2000-2001, there's a performance plan page on trying to get more work, or more companies out of British Columbia being able to access the work that's going on in British Columbia, in the oil and gas industry.

I have a pretty good feeling that the Hay project is actually serviced out of Alberta. We're in there as a province giving a royalty holiday to that company. The government wants to do that; I guess they can do what they want with that issue. But I would think that part of the issue is that if you're going to give a royalty holiday, you would at least ask them to use as much British Columbia expertise -- meaning people, equipment. . . . That's what the people in Fort St. John and Fort Nelson and British Columbia expertise, that meaning people, equipment. . . . That's what the people and businesses in Fort St. John and Fort Nelson make their living at. That's how they do it.

I know that the report that's been done on the competitiveness study is actually no new news; we knew that a long time ago. We've been saying that. The pools in British Columbia are bigger. It costs more to drill in British Columbia for the drilling companies, those being the Essos and PetroCans and Shells and all those. They get a bigger return, and there's more volume coming back, so that's competitive.

What I'm talking about is the people, the men and women, that actually go out there and do the work. That's where you get your personal income tax from; that's where you get the revenue from. That's where we get the stability in the province and in northeastern British Columbia and the communities that I've lived in, both Fort Nelson and Fort St. John. That's the issue that I'm trying to bring forward. That's why I asked. Is the Hay project being serviced out of Alberta or British Columbia?

Hon. D. Miller: I did indicate that we do view the issue of retention of work and opportunities for work by British Columbia firms as an important question, and to that extent we've undertaken significant work. I reference the competitiveness study, which I think is an important piece of work, actually. It's one that I'm really proud of. I'm proud of the technical expertise of the people in my ministry who put that project together. It's interesting that its baseline data is now being used by the CAPP people as well. I think it was very quality work.

The member talked about what we are doing to try to enhance opportunities. I don't know that we need to quarrel about this. I was in the member's constituency last Friday. I did announce the first phase of a $103 million expenditure on northern roads. I could reference the article of May 26 in the Alaska Highway News that reported that announcement. I

could reference the fact that the $103 million in road improvements ought to result in an additional $440 million in added oil and gas revenue. That's just revenue to government. That doesn't even talk about the opportunities in the region for British Columbia companies, which I think are quite capable of being competitive with Alberta companies for this kind of work.

The proposed road network for the Fort St. John area will serve 54 oil and gas fields in the area. Improvements this year will include paving the last seven kilometres of the Milligan Creek-Peejay Road, replacing the Peterson crossing bridge northeast of the city, paving the gravel sections of the 101 Road to Prespatou. In addition, Buick Creek Road and Beatton River Airport Road will be prepared for paving, and paving will be completed on the Beatton Park Road east of Charlie Lake.

By the fifth year of the improvement program, paving will be completed on the entire Milligan Creek-Peejay Road, the 101 Road, the Beatton River Airport Road, the Anderson Road, the Montney Highway and the Buick Creek Road.

I could go on and on and on. All of these, as the member well knows, are efforts aimed at improving opportunities for people who live and work in northeastern B.C. There will be more coming. There's more good news for the Peace River. Just wait -- wait until next week.

So I don't think we need to get into this kind of exchange. I don't think the member needs to chastise me or the ministry for not looking at the situation and not paying attention to it and not trying to create opportunities for people who live and work in northeastern B.C.

Beyond that, I'll give you my own philosophy in terms of how I approach these questions. I don't attempt, as a minister of the Crown, to dictate to private sector companies how they run their business. The member may want to do that; I don't. I think they're the experts; they know their business. We try to create the conditions. That's the philosophy of my ministry -- to create the conditions where the opportunity exists not only for these companies but for all of the contractors.

I talked to Bob Fedderly, who is the head of the oilfield contractors in Fort St. John, last week. In fact, he interviewed me for the cable network. He is quoted in one of these articles saying: "B.C. contractors are going to be hard-pressed to keep up with the amount of work available." That's his direct quote. So don't try to lecture me about opportunities for people who live and work in the region. It seems to me they're doing quite well.

Hon. D. Miller: That's not a bad suggestion. Okay, so we know what we're talking about here. I think we've resolved that question.

R. Neufeld: Actually, we haven't resolved it. I mean, you never did answer the question, and that's typical of this minister. The question was whether the Hay River field, where you gave a complete royalty discharge to the company, is serviced out of British Columbia or Alberta. You still haven't answered that question.

Now, I know that we've talked about the money in highways in Fort St. John and Fort Nelson. I stood in this House yesterday and commended the minister. I commended the minister for spending that money and for finally, after all these years of being in government, realizing that there's something up in northeastern B.C. and that it does provide revenue to the province of British Columbia. Like I say, it's unfortunate that it took you eight or nine years to figure that out. But you finally did, and we're happy about it.

So we can spar back and forth as much as you want. I'd like to get through this process, and I'm just asking some fairly straightforward simple questions. We can either deal with it that way, or we can stand here and banter at one another all day.

I don't intend to dictate to private enterprise. If there's a group in this House that likes to dictate to private enterprise, it happens to be that side of the House. What I'm trying to ask the minister and what I'm trying to do is in fact go along with your performance plan. This is your plan. We're not supposed to use props, but this is your plan. And part of it is to enhance the development and utilization of British Columbia-based service companies providing benefits to the local economy. That's what I'm talking about.

Now, when you talk about CAPP -- and the minister knows he's splitting hairs on this one when he talks about CAPP -- yes, the competitive study does prove that whether CAPP being the people that drill for the gas and oil. . . . Whether they're drilling in northern Alberta or B.C., it's almost the same thing. What I'm talking about here and what we're getting around to is the people who actually do the work.

Mr. Minister, I live in Fort St. John, and I lived in Fort Nelson pretty well all my life. I worked in the oil and gas industry all my life, in one form or another. I talk to lots of these companies and to these people. Yes, there is a lot of work going on. But maybe what the minister should do is talk to some of these individual companies who didn't really get busy until February and finish work at the end of March, because there were so many Alberta companies in northeastern British Columbia. I have some documentation right here in my notes that shows where the 7 percent sales tax. . . . People from Dawson Creek went out and looked to assess what was going on in the northeast in the oilfields. They found vehicles from Saskatchewan, people from Saskatchewan and all over Alberta who were working in the northeast in the oil and gas industry and not paying their share of taxes.

Now, I can't imagine why that should be so difficult for the minister to respond to. Maybe the minister is a little bit touchy on this, because there are some impediments to operating in British Columbia for these smaller companies. There

are, and you have to realize it. I know we'll never level the playing field totally; I don't think anybody is asking for that. I think what people are asking for is a little better playing field, so that they can actually compete better with their Alberta counterparts who have headquarters in Hythe, Beaverlodge and Grande Prairie and operate out of there on a constant basis. The minister is aware of that, I'm sure he is. If he isn't, I'd be surprised. I think those same people that tell him that, yes, it is busy. . . . Yes, it is. There are more wells going to be drilled, and there's more money to government, and there's more money for roads in the northeast. But there are companies who have. . . . I'll give you the name of one: Swanberg Bros. contracting, a company that has been in Fort St. John and Dawson Creek since the war. It still operates, but guess where its head office went to a year ago? Grande Prairie. Grande Prairie, that's one -- a huge operation. This family runs a big trucking operation; they left their trucks in Fort St. John, and a dispatch unit, and moved their whole head office to Grande Prairie.

That's what we're talking about: level playing fields. I give the minister all the credit in the world for the Fair Share program, which was lobbied hard for by the northeast. I give him all the credit in the world for the $100-and-some million that he just announced; that's great and that's good. It will help; there is no doubt about it. It will help with what we have to do. I'm not trying to pick apart what the minister is trying to do; I have given him credit. I have given the government credit where credit is due.

But what I am asking about now -- because the minister, I guess, will get me the response about the Hay River field -- is how we level the playing field a little bit more, so companies that actually operate out of Fort St. John and Fort Nelson will continue to stay there, continue to grow, expand, employ more people full-time, year-round, pay taxes into the province of British Columbia, and all the things that go along with it, and raise their families. Those are the things that I think we want to touch on now.

So if the minister is willing to stand up and talk a little bit about how we're going to go about doing that -- because it is in the strategic plan and I'd like to discuss it a little bit -- we can get on with the estimates.

The Chair: Thank you, member. Just an interruption to make an introduction: there are again a number of students here, grade 6 students from Wellington Elementary School in Woodinville, Washington. They've come to view the proceedings today. Would all members make them welcome, please.

Hon. D. Miller: Mr. Chairman, I'm sorry. If I appear touchy, I'll back off and try to be a little calmer here.

But really, as the member is well aware -- and we've talked about that and canvassed the issue -- we've put in place now two major initiatives for the oil and gas sector. I cited the increases. It's interesting to see, in terms of direct revenue to government in the 1998-99 fiscal year, that the revenue to government was $362 million. In the subsequent year, '99-2000, the revenue to government was $660 million. That's a pretty simple statistic that tells you that the level of activity in British Columbia has increased in a staggering way. We're looking, just in terms of the drilling applications, at a 62 percent increase over the previous year.

While I well appreciate that there are still and probably always will be differences between British Columbia and Alberta -- northern B.C. and northern Alberta -- as there are differences, no doubt, between northern Alberta and northern Saskatchewan and on and on, we have created the conditions and are continuing to work to create the conditions to induce investment into British Columbia.

We have a well-established service sector in British Columbia; I've spoken to them. They know their business. I don't tell them what their business is; they know what their business is. When I said we don't. . . . And it's not, quite frankly, the ministry's job or the commission's job to go out on every jobsite and say: "Where are the workers from? Are they from Saskatchewan, or are they from Alberta?" I don't want them to do that. I want them to work on the substantive issues and process applications and make sure that we implement on the ground all the things I talk about here and in other places; that's their job. We're going to continue.

The member knows, and I spoke about it again in Fort St. John, about the potential for an MOU with the Northwest Territories. I've just received a letter -- in fact, I think I've got it in here -- from one of the major companies, thanking me personally for our support. It's from Paramount Resources, May 8: "Dear Minister: I wish to personally thank you for your efforts and support on both the Paramount drilling program and the. . .pipeline."

That's the kind of atmosphere we're trying to develop in this province, so that these companies feel there's a welcome environment in terms of making investments. They've got a ministry that understands the business, that they can work with. And I've every confidence in the world -- every confidence -- that British Columbia companies, regardless of their size, are quite capable of competing and beating competitors. I don't care if they're from Alberta, Saskatchewan. . . . I don't care; I know we have the expertise, and those people can do it.

It's not my job to babysit every truck that comes across the border and check its licence plate; there are tax people who look at these kinds of questions. That's not my job. My job, and the ministry's job, is to create the condition in your constituency that will bring more investment, more jobs and more opportunity, and that's what we're doing.

I hope the member appreciates the position I've tried to outline here. I want British Columbia companies and British Columbians to get those employment opportunities, but I'm not going to hold their hand. They're quite capable of doing it themselves. We'll do our best to make sure that we are as competitive in B.C. as any other jurisdiction in this country -- and I think we can be. We're going to continue that kind of stance. I've said to the industry: "I'll do oil and gas 3." If we can identify a range of initiatives that will even further enhance opportunities in this province, then I'm quite prepared to go ahead and try to put those together under oil and gas 3 -- and 4 and 5 and 6, for that matter. That's the position we take, and I think it's going to create opportunities for your constituents.

Again, I would repeat, in talking to the minister federally last week. . . . He didn't raise the issue with me. Maybe he didn't have time. People up there know they can talk to me anytime they want. As to what we've done up there. . . . Again, I guess politicians tend to get into bragging, right? So I'll try not to do that, but you know, truth be truth, when I

talked to some of the mayors and council members last week in Fort St. John, they said to me directly -- and I won't quote any individual. . . . They said to me directly: "Your government has done more for this area in two years than has been done in the last 20 years." That's a direct quote from people, quite frankly, who are not New Democrats, who will never, ever vote New Democrat. That's what they said to me.

The only reason I'm pleased is that we're getting more investment dollars into this province, and it's paying off. That additional $300 million in revenue, quite frankly, is needed; it's needed to support health care and education, social programs, construction of roads, schools, hospitals -- all of those things. We're increasing the revenue; we're increasing the size of the economy in B.C. I think we're on a very good road to do that. I'm quite happy to say to the member that anytime you've got some ideas how we can do an even better job, how we can provide more opportunities for British Columbians, I'm quite interested in sitting down with you, or with anybody else from the region, to explore those opportunities. But I'm not going to be the kind of minister. . . . I'm not having my ministry check licence plates.

R. Neufeld: Obviously. I don't really know what you're driving at this afternoon, Mr. Minister. But if I was a mayor in northeast B.C. -- and I have been -- I would be saying the same darn thing to you. I would be saying: "Yes, you have done something; yes, the activity has increased; yes, in the 1980s there were about 100 rigs drilling and now there about 130, so you have increased it."

I think, if you look back a little bit further, there have been some things that have happened in the past also that weren't that bad. I haven't stood here and bantered with you about what you've done. I am standing here and asking you about things we can do to work. . .in your strategic plan -- your own plan, put out by your own ministry, put out by you, signed by you. And you're asking me for some ideas about how we could make it better, so that we can retain the Swanberg Bros. Trucking companies in the northeast, in Fort St. John -- companies that have been there since the war, that have moved their head office to Grande Prairie because it is a bit cheaper there?

I'm not saying that we should even match Alberta. What I've been saying is that we should be trying to make the playing field a little bit more level, so that those companies can stay there -- disregarding CAPP. I know the difference. I'm quite well aware of it. I know the issues too. I'm quite well aware of the competitiveness study; I'm happy with the competitiveness study. I don't have any problem with it because of what it shows. What I am talking about is trying to -- and I use the words directly out of your strategic plan -- "enhance the development and utilization of British Columbia-based service companies providing benefits to the local economies."

Now, I know that when we increase the economy, when the number of wells goes up. . . . And apparently there's going to be more wells drilled this year than last year, which is good for British Columbia, which helps all of British Columbia. Maybe I'm a big hoggish, but I would like to see the companies that actually have their head offices in Fort St. John and Fort Nelson get their fair share of that work.

Now, that doesn't mean that I ask the minister to stand at the border with his people and count trucks, but somebody ought to be able to look at it. Maybe what I should do is read into the record a little bit so that the minister understands the severity of it and the tax implications about people going out to Helmet on a two-day trip from Finance.

I know the minister is not responsible for Finance, but maybe we should start looking at working together with Finance. Maybe your ministry ought to work together with Finance instead of just giving them money. Let's look at the other areas where you can actually enhance local people to invest in British Columbia and keep their head offices in British Columbia.

I think this gentleman made one trip into the Helmet area from the tax department in Dawson Creek. And I'm going to read just the last sentence: "He would guess that this visit would generate somewhere around $200,000 of revenue but will give us a more accurate figure later on." This is just a couple-days trip. That's not counting licence plates. That's trying to level the playing field a little bit, Mr. Minister.

It's about saying: if you want to come from Saskatchewan or from Alberta with your equipment and work in British Columbia, you're quite welcome to do that. I agree that we have the expertise, we have the knowledge and we have people. We have people with the ability, the tenacity to be able to compete out there in that world. But when you have one group up here and the other group way down below in their input costs, there's going to be some casualties.

Maybe we should just read into the record a couple more casualties that there could be. Let's take, for instance, WCB rates. I know, again, that this is not the minister's responsibility, but it has an effect on the service companies that can work in British Columbia. It's for, again, a Fort St. John company that moved their office, or moved part of their office, to Grande Prairie. It's called Brandl construction -- and I'm sure the minister has talked to Vic Brandl on many occasions. He's been a businessman in Fort St. John for a long time. He's got a 93 percent claim rate, so he doesn't have very many accidents -- very good.

In British Columbia the rate is $4.34. In Alberta it's $2.08 -- less than half. Those are the figures. That's for service companies. Now, in the drilling industry it's a little bit different, because it's about the same, and that's where the competitiveness study comes in. But when you come to the service companies, those are in fact figures given to me by that company. I have no reason to disbelieve them. It's one issue around WCB. There are a number of others.

Those are the issues that I would like to be able to have the minister recognize to a certain degree and start dealing with. Or the 7 percent sales tax. . . . I guess we've always had a sales tax. We'll never get rid of that. How about the 7 percent tax on labour, so people take their equipment to Alberta to get it fixed, because they don't have to pay the tax on the labour? How about the corporate tax? How about the insurance costs for vehicles? How about the fuel taxes, personal income taxes? Or if somebody wants to come into British Columbia on WCB in the oil and gas industry and work. . . .

I'm just going to read this briefly: "Companies or individuals from other provinces can come and work in B.C. without paying WCB if they work for less than 15 days." They can work 14 days, go home and come back and work 14 more days. That's consistent. That's what's done.

Now, I don't know if there's an easy answer to dealing with these issues, but that's where part of the unlevel playing field comes from. And when it's twice as much for the same kind of work in British Columbia as it is for Alberta, there is a marked difference in competitiveness.

Maybe the minister can tell me about some of those things or the labour standards. Now, I know there was an adjustment made to the labour standards. That's another question. Where did the labour standards adjustments apply to? In fact, Mr. Fedderly just told me about that. Talking about Mr. Fedderly, he said it is so difficult to try and figure out the labour standards for some of these companies. It's almost impossible, because there's no one to administer them. There's no one to look after them. But when they do, they pick on a British Columbia company instead of someone from Alberta or Saskatchewan.

So a grader, for instance, that Mr. Fedderly told me about was out working on a new road and had to grade the road on an existing road out there. The labour standards board went out and caught him. This is a British Columbia company. So the labour standards -- the stringent ones -- apply on the old road; the oil-and-gas adjusted ones apply on the new road. I mean those kind of things.

Those are issues that I'm talking about, not about the competitiveness of the Amocos, the PetroCans, the people that represent CAPP -- the big drillers, the rangers, all those companies. Somehow we have to be able to get to a more level playing field for those people, so we can continue to have them build in British Columbia. I'm sure the minister would love to have them in British Columbia. I would, and I'd love to be able to retain the ones that we have.

So those are a few areas. Maybe the minister would like to comment on how we can go about, collectively, between the two of us, dealing with the Ministry of Labour, dealing with the ministry that handles WCB, the 7 percent tax. . . . How about the sales tax on service vehicles that happens to go up when it goes over $30,000? That's a standard vehicle in the north. Maybe there's some way we can deal with that. Those are the issues that I'm talking about.

Maybe the minister would like to comment on those and see if there is some way that we could work together collectively for the betterment not only of the province but of the people that live in northeastern British Columbia, so that they can have a little better playing field to work on. They don't expect that it's ever going to be totally level; I want the minister to know that. I'm not saying that they want it totally level. They want it a little bit closer. We're not talking about the drilling industry; we're talking about the service industry that the minister's talking about in the strategic plan.

Hon. D. Miller: I've tried to outline the efforts we're making. It appears to me from the statistical evidence that they're paying off. You're right; we're never going to get rid of every single difference between us and Alberta. But you know what? I just don't get too worried about it. When you're trying to make some changes and produce a result, you've got to kind of focus on what you're doing. You know, you can always identify some area -- maybe there's a marginal difference in WCB -- but on balance, there's not a heck of a lot of difference. On balance, there's not a heck of a lot of difference -- right?

So there's got to be some level of confidence that British Columbia companies have that's not always based on looking at somebody else in some other province and saying: "Oh, it's better over there; it's better over there." Where's the confidence in themselves as a British Columbia company, to state, notwithstanding a marginal difference on a WCB rate or some other area: "I'm here, I know my business, and I can compete"?

Why is it that government. . . ? You know, I'm constantly, constantly, as a New Democrat, attacked by people who say the New Democratic Party always wants to intrude. They're too interventionist. I don't think it's my job to try to fix every tiny, tiny problem that some individual has. We create the conditions -- and have created the conditions by the member's own admission, by the statistics -- for real opportunity in the Peace River country. And when I say there's more coming, hold onto your hat. Wait till next week. There'll be even more jobs and more opportunity in northeastern British Columbia.

In relative terms, it's one of the most successful initiatives that this government has undertaken. It's paying off handsomely. You can't scoff at $300 million additional revenue. Particularly, you can't scoff at taking some of that revenue and pouring it back into the northeast in terms of a significant road project.

I think we're on the same wavelength. Occasionally we seem to clash over issues we agree on -- maybe that's just a personality issue -- but surely we've canvassed this issue enough.

R. Neufeld: I agree; we have canvassed enough. I can see that the minister is not willing to really look at the issues in the strategic plan that he put forward for some real input and some valuable help that's being offered by the opposition to be able to enhance competitiveness in the province of British Columbia. In fact, I guess the minister doesn't think that some of the things that I outlined -- and those were just a few of them -- are any problem in the province of British Columbia. Again, the province says: "We're drilling more wells, and the government treasury is getting hundreds of millions more dollars; the rest of it doesn't matter." If that's where we want to leave it, that's quite fine with me. I'll take that back and give it to the construction firms in Fort St. John and let them know what the position of this government is on those issues.

With that I'll move on to the MOUs with the Treaty 8 bands. I would like to ask the minister. . . . In the briefing we talked briefly about it, and I know that by May 28 -- or I was told by May 28 -- they may be cancelled. I'd like to know what's taken place and what process there is in place to deal with it if they have been cancelled.

Hon. D. Miller: The MOUs are in place. There has been, over the last year or so, lots of correspondence. Sometimes there's a level of unhappiness about them, and sometimes they seem to be okay, but they are in place. Under the agreements we are flowing revenue to the first nations, trying to assist them in developing capacity and trying to really say that there's a future for them in the oil and gas sector. We have flowed considerable money, well over $5 million, to the first nations that have signed MOUs. We're open to completing the MOUs with a couple that haven't. I said as much in the speech I made in Fort St. John last Friday.

We think we actually have the right approach here. It's one that recognizes their position and tries to assist them in developing capacity. There are issues that we still need to try to resolve. The issue of traplines particularly has been an issue that we have yet to come to a conclusion on. To some degree I think the model is one that is an interesting one and might have applicability beyond the Peace River country. We've also agreed with them that we're prepared to take our place with the federal government if there are unresolved treaty issues that need to be negotiated. So we've tried to maintain that kind of position. I'm not sure; the member may have some more specific questions.

R. Neufeld: None of the MOUs, then, have been cancelled. Is that what the minister's saying? It was anticipated they would be cancelled or would end on May 28. So none have been cancelled? They're all still in place -- right?

Hon. D. Miller: That's correct. The member may be aware -- I'm not certain what kind of correspondence has been made public -- that there have been some ups and downs with respect to the relationship. But they are still in place, yes.

R. Neufeld: The other issue that the minister briefly touched on -- and it's in a letter from the deputy minister to Chief Carylin Greatbanks of West Moberly first nation -- is in regard to the trapping issue. I know that there's an ongoing process in dealing with trapping issues. Maybe the minister could just bring me up to date on where we are in that process, what's taken place and when we anticipate to try and have some of these issues settled around the trapping issues. That seems to be one of the hotter issues in the northeast in the drilling industry.

Hon. D. Miller: As indicated, the trapping issue is one. We do have a working committee on the issue. We're trying to develop some solutions to the concerns that have been identified. We'll continue to work on that and, hopefully, develop those solutions.

R. Neufeld: I'd like to go on and just touch briefly on the Oil and Gas Commission. Before I start with the Oil and Gas Commission, I'd just like to say to the minister, so we can get this out on the table before we start, that I am quite happy with how the Oil and Gas Commission works. I think it works well. I meet on a regular basis with Mr. McManus and discuss issues. He keeps me informed on what's going on with the Oil and Gas Commission. So we don't have to go through a long process about the Oil and Gas Commission. But there are just a few questions I have about it.

One is about the annual report. I have the first annual report from October 23, 1998, to March 31, 1999. I don't know; maybe there hasn't been one delivered yet. Or is it soon to be delivered?

Hon. D. Miller: We do have a draft, but we're awaiting completion of the audit. I think that should happen fairly quickly.

R. Neufeld: The other issue, I guess, with the Oil and Gas Commission -- and Mr. McManus says that they're working on it -- is the length of time to process, on average, well authorities and permits. It's a little bit longer, and it takes a few more days than he had hoped. I think the target was to try to get down to about ten days for the average ones, understanding that some of them are going to take a lot longer because of the areas that they happen to be in. Everybody understands that that gets to be a little more difficult.

Maybe the minister could tell me whether he anticipates that the commission will be able to meet the ten-day turnaround by the end of this year.

Hon. D. Miller: I appreciate the member's comments with respect to the commission. I think they have done remarkably well. It was the area that I had particular concerns about when we developed the commission, because often, with the best of intentions, you don't get the desired result.

They have made a fairly dramatic difference. They used to be in the 30-to-40-day range. They're now down to a 14-to-15-day range. They've promised to try to get to 12. Given what I think is, again, a remarkable success story, I have a fair amount confidence that they will. I guess the only thing you should point out is that sometimes you can be a victim of your own success. In other words, as a result of both the oil and gas initiatives, the level of activity is up dramatically. Of course, that always strains the resources you have. So that's their target -- to try to get it to 12.

R. Neufeld: I realize that it does strain. . . . But as I understand, the industry funds the Oil and Gas Commission, so there's obviously a bit more money coming in if there are more wells being drilled -- and be able to facilitate movement of some of those well authorities more quickly. I'm pleased to hear -- or did I hear the minister say? -- that by the end of the year, they hope to be down to 12 days from the 15 days. I think that, at least in my discussions with industry, they'll be quite happy with that.

At the present time, are all the positions in Fort St. John filled -- the transfer of positions from Victoria to Fort St. John? Are they in fact filled? And has everyone been transferred there or moved there or been hired and filled those positions?

Hon. D. Miller: Yes. I understand that there may be two or three that are yet to be filled. Just for the member's information on the well application process, I'll go back to October. This is in the '99-2000 period. They were looking at about 22 days. This is just on well applications. In fact, by March they had reduced that to just below ten. Then we saw a slight bump up in April, and obviously that's due to more activity. So I think they're on top of the turnaround time.

R. Neufeld: The other issue is -- speaking again of a familiar voice; we've talked about Bob Fedderly -- the alternative dispute resolution process. Where is that at? Are the guidelines there? They have some issues that they have to deal with, and we're wondering whether that's completed.

Hon. D. Miller: Yes, I understand that the advisory committee has been doing its work and that there are regulations being drafted with respect to the alternative dispute resolution process.

R. Neufeld: Can the minister provide to me when he believes the regulations will be drafted? As I understand,

there are some issues that they're trying to deal with. But with no regulations, they're obviously having some difficulties. I'm certainly not trying to advocate that we should hurry something along and make mistakes, but I'm just wondering if there's some time frame that they can get those regulations so they can deal with these issues.

Hon. D. Miller: Yes, as I indicated, they have been drafted. There is a period of consultation taking place now -- we think maybe in the 30-day range. Once that's been completed and the issue's been finalized, they'll be brought to government for finalization.

R. Neufeld: So in 30 days they'll be drafted. Then they're brought to government for your approval. What kind of a time frame are we looking at after that?

Hon. D. Miller: I've done remarkably well in my short political career by never being boxed in by a date. [Laughter.] We always try to do our best as quickly as possible. Clearly I think I've given the member a general sense of the time frame. There are always things that happen in government that throw you off that time frame. So as quickly as we can do it, we'll get it done.

R. Neufeld: Okay. Well, I'll take that back to Mr. Fedderly. I guess probably the last issue. . . . There are some other issues with the Oil and Gas Commission, but saving some time, I'll deal with those with Mr. McManus.

This is no reflection on the deputy commissioner -- none whatsoever -- but the travel that the deputy commissioner incurs. . . . I guess he lives in the south and travels to the north on a regular basis to do the job. I have just heard from some people that they wonder about the cost of that and whether there is an idea within government of locating that job permanently in Fort St. John or trying to find someone that can do the job who lives in the northeast.

Hon. D. Miller: Any travel expenses have to conform to various rules and regulations we have about that, and I'm sure they do.

R. Neufeld: I don't want to drag this out. But I just wonder if there's. . . . Is there some. . . ? I know that they have to fall within the guidelines. I mean, my goodness. I'm not exactly sure what's going on here, but I think all travel has to fall within a guideline. I want to know -- or I think people want to know: is this going to continue? Is it planned within the ministry? Does the minister intend to continue having the deputy commissioner live in Vancouver or Victoria and travel to the northeast on a regular basis to do the job?

Hon. D. Miller: Again, Madam Chair, any travel is for business purposes, we think. And I appreciate the member's comments earlier that he thinks, as well, that the commission is performing reasonably well. Any travel is travel that's required in order to ensure that the commission is functioning properly.

As the member well knows, we've had issues raised in this House in other areas or sectors. It is often difficult to recruit. Just in talking to the private sector, firms in some parts of northern B.C. find some difficulty in recruitment. But I think all the expenditures are justified. They're public at the end of the day and are required only for the functioning of the commission.

R. Neufeld: Maybe I'll talk a bit about some other issues around that with the minister privately, rather than do it in the Legislature. That's basically all the questions I have with the Oil and Gas Commission. If you have people here dealing with that, they're free to go. I want to move on to the offshore oil and gas.

I know some of the studies that are taking place and the present one that's taking place. There were two, unless I'm mistaken. One was completed, and we're on the second one now, through the northern commissioner's office. Maybe the minister could brief the House on where we're at with the second study on offshore oil and gas. Because he's so bullish on what's happening in northwestern British Columbia. . . . He's talking about all the oil and gas that's there, and knowing that there's a tremendous amount right off the coast where the member lives out at Prince Rupert. There are some tremendous opportunities for the northwest to benefit and for the province to benefit.

We talked about the amount of revenue that the northeast has brought to the province through oil and gas royalties and such. Probably the revenues that could come out of offshore oil and gas would be huge. Maybe the minister could just brief me on where we're at with that issue and how he's personally feeling about drilling for oil and gas offshore.

Hon. D. Miller: There is, as the member indicated, a second contract in place that ends at the end of June. There's been extensive consultation on this question. Interestingly enough, I spoke to the Coastal Community Network conference. I think your colleague the member for Saanich. . . . Your Environment critic was in attendance, so no doubt he may have reported on my remarks.

The initial opinion I'm forming about the topic is that there is some significant interest, and at the same time some significant caution, about the potential for offshore drilling off the coast of British Columbia. I don't know if the member had an opportunity to view comments made by the Opposition House Leader on "Voice of the Province." I've circulated that video to Mr. McGuigan in Prince Rupert, who is a very active promoter of the concept. The Opposition House Leader took a very, very. . . . In fact, he was even more careful than I usually am. It may be an issue that, like ourselves, the opposition party really hasn't formulated a substantive concrete policy on. I appreciate it if that is the case, because this is an important question.

I have stated my own personal opinion on the issue. I've tried to say it this way, and I'll repeat it for the member. If we can demonstrate to British Columbians with a degree of confidence that it's safe to drill for oil and gas off the coast, if we can assure British Columbians that there would not be any adverse impact on the marine environment, etc. -- those kinds of questions. . . . If we could ensure -- particularly for people who live in the region -- that the opportunities for them would be there, and if we can discuss these issues with first nations and have, again, a level of confidence about both

the protection of the marine environment and economic opportunities, then I think it may happen. In my view, we're a long way from it happening. There needs to be, even if we were to take a decision to say that in principle we wanted to move forward. . . .

I think, really, what people up on the North Coast are telling us is: "Don't proceed to lift the moratorium. If we're going to look at it, then we want to be involved in evaluating all the questions that would flow from that: what kind of oversight? What kind of regulatory regime? There needs to be a federal-provincial agreement." So there are a host of questions. But at the end of the day, given the volumes that exist, according to the Canadian geological survey branch, particularly in the Hecate basin, particularly gas. . . . That's actually kind of an interesting issue. I think the experience of the Exxon Valdez, which is still being felt in Alaska, has made people, quite frankly, shy away from oil.

Yet my sense is that the real opportunity offshore is in gas. Gas doesn't have the same environmental problems associated with oil. My own view is that if we were to move ahead at some future date and develop those reserves, the potential for piping that gas ashore and then looking at using that both to fuel new industries and as a potential export commodity is very, very significant.

Finally, you'll appreciate that while in your particular constituency there's a bit of a boom going on, quite frankly, in the coastal communities in the northwestern part of British Columbia, I think they've been the most economically depressed and hit hardest by the fundamental change that's taken place in some parts of our industrial sectors. The forest sector on the coast is hurting badly. Shipments of coal and grain. . . . Coal, now, with the closure of Quintette, has significantly affected the port of Prince Rupert. Grain shipments -- it's a long story that I won't get into -- are down dramatically, notwithstanding the fact that we have an outstanding terminal.

So people are looking to develop an economic base, and they're looking at new opportunities. By the way, that also extends to the aboriginal communities who also, historically, had very good economies based primarily on the fishing sector and the forestry sector and are now seeing those evaporate and are wondering how they're going to sustain their communities and provide opportunities for employment for their young people. So there's a level of interest there. People are pretty cautious about it, but there is, I think, a good level of interest.

There was a significant conference at Simon Fraser University two weekends ago. I couldn't attend, but I understand it was well attended. We had representatives from my ministry give factual presentations on the resource itself. There were a number of speakers both from eastern Canada and from other areas who spoke about their experience in developing the offshore resources.

All of that, of course, is really intended to try to inform people and to have an intelligent discussion and debate around these questions. My personal hope is that that will lead, at some future point, to the lifting of a moratorium and the development of these resources in a way that benefits the people who live in the region and the rest of British Columbia.

R. Neufeld: I appreciate the response that the minister gave in regards to the benefit it would be to the people who live in the region. I totally agree with. . . . I have visited the Prince Rupert region a number of times, the northwest, and I know that there are some difficulties with development and jobs and those kind of things. It's unfortunate, really, because it's a great part of the province.

So I would like to see some activity take place there, and it was refreshing to hear the minister say that he would like to see a lot of that activity stay in the northwest. I'm assuming that he means jobs and contractors and those kind of things -- the same issues that I was arguing about just a little bit ago about the northeast and trying to retain that kind of economic development in the northeast. So I'm appreciative of that.

Maybe we could just dig a little bit of deeper into where we're at. In fact, I've been on record as saying that where I come from, I know the oil and gas industry fairly well and that we can do this work offshore in a good environmental fashion. But there has to be -- and I think the official opposition has been very careful to say -- a good buy-in from everyone. That means the aboriginal community, and that means the people who live in the northwest -- before you would facilitate any of that work. So I appreciate that, and in fact, I appreciate that the northern development commissioner has kept me informed to a certain degree on what's been taking place with those studies as they've progressed. And I appreciate the minister's response -- that he's in favour of doing offshore oil and gas too, as long as it's done in a way that meets with the desires and wants of the people who live in the region and that there is agreement.

On the second study, can the minister tell me when we intend or when the ministry intends to have that study finished and will be putting it out for the public to have a look at? Or maybe it's already gone to the public, and I'm not aware of it.

Hon. D. Miller: The group will report to Mr. Backhouse at the end of June, and he will report to me. Of course, we'll make that public as well. I know the member is strongly interested in, and he speaks with some passion. . . . In fact, that led to a bit of conflict some moments ago between us with respect to job opportunities for people who live in his constituency, and I want to say that I bring the same attitude to mine.

I was pleased, on another unrelated topic, to see a release put out today by the Skeena Cellulose company. Of course, that's been highly controversial with, I would say, severe criticism coming to the government from the opposition benches saying, in effect, that we should not have intervened to save that company. These are always difficult questions, but I'm pleased to report -- if the members have not already seen the release put out by that company -- that there has been a bit of a turnaround. In releasing their first quarter results today, the company indicated that in the first quarter of this year they have in fact made a net profit of $15.8 million.

I know the member will appreciate what I'm saying, coming from a small community and having faced in the past some pretty severe downturns in the region. I recall the issues up in the northeast in the eighties, etc. I'm very, very happy and very pleased that it appears the decision to intervene to assist Skeena Cellulose in staying alive, notwithstanding the call from your leader to shut the pulp mill down, has resulted

in a company that has now reported a profit of almost $16 million for the first quarter of this year and has secured, in a much better way, 6,700 direct and indirect jobs in the forest industry from Smithers through to Prince Rupert.

We keep trying, as I indicated the other day in the House, to look at new industries. But let's not forget the existing industries and where government can play a productive role and assist to try to get companies stabilized and, in this case, now reporting a profit. Perhaps the member. . . . Well, he may or may not wish to comment on that, but I don't want to put him on the spot. I know that over the years he's expressed strong feelings about jobs in northern British Columbia and perhaps would agree with me that, in hindsight, the decision to make that investment to protect these jobs appears to have been a prudent one, given the results we're seeing today.

R. Neufeld: I'm appreciative of the minister bringing forward issues that I think should be dealt with in the Ministry of Employment and Investment. I believe Skeena Cellulose falls in that area. It's always interesting to listen to the minister respond to some of the questions and. . . . He gets a little carried away and starts talking about other issues and other ministers' responsibilities. But when we ask him questions that have to do with other ministers, he's not so willing to respond to those.

So maybe I'll ask one question about Skeena Cellulose: did the government live up to their commitment to put all the money into Skeena Cellulose that they promised, to bring it up to a standard that they demand of the rest of the pulp mills in the province of British Columbia? Have you put in the millions of dollars that you promised quite a number of years ago to bring it up to a standard?

Hon. D. Miller: The answer is yes. The work isn't finished yet, so it's not all out the door. I think there's another $30-odd million yet to go with respect to the cap-ex program. Significant boiler work is going to be done in June or July, and that will result in even more efficiencies and a better mill all round. As I say, all and all I'm quite pleased standing here today, having taken a fair amount of criticism both from members opposite and from others. I wear it as a badge of honour in Prince Rupert, but I know that people outside of Prince Rupert and the northwest, who are not sort of directly impacted, may have been quite critical.

When I look at my colleague from Bulkley Valley-Stikine, and with all due respect to my colleague from Skeena who is undergoing his own significant trials and tribulations right now. . . . I know we're all very, very pleased with the stability that this investment has created, seeing people work in Carnaby and Hazelton and Terrace and Prince Rupert and in the woodlands.

Not that all the problems have been solved, by the way. There are significant areas and problems with respect to the forest sector up there. The economics of forestry in a very tough area with overmature timber. . . . There are lots of issues, lots of problems to solve. But taking that dramatic step, making that investment despite the criticism. . . . I think it's important that all British Columbians know that this company, which was criticized so much, has recorded almost a $16 million profit for the first quarter of this year and that 6,700 direct and indirect jobs have been retained.

I must say this, Mr. Chairman; I have to say this. I'm compelled to say it, if for no other reason, to remind people -- because I think a sense of history is always important -- that it was the Leader of the Opposition who said in this House and outside of this House as well. . . . "We shouldn't have done it; we should have shut the pulp mill down," were his exact words, quoted everywhere. I have them in print. In fact, I tend to forget about that, but every time I go home my constituents remind me.

Hon. D. Miller: I know the member for Peace River North will join me, if only in saying that he's pleased that those employees who are working today still have a job, as opposed to being unemployed if we'd followed your leader's advice.

B. Goodacre: In the gallery today to observe the estimates the Ministry of Northern Development is a group of school children from Chandler Park Middle School, Smithers, and some parents and teachers. I would like the House to please welcome them to this session of the Legislature.

R. Neufeld: I just would like to remind the minister that he did make a promise to Skeena Cellulose to bring it up to a standard that's environmentally acceptable in the province of British Columbia -- I guess he's not willing to make that admission -- but he hasn't done that yet.

Getting back to offshore oil and gas, I've seen in some notes from the Ferry Corp that there were some discussions about some of the activity that maybe the Ferry Corp -- CFI or something like that -- could work and find some work in the offshore. . .if something happens in the offshore. In fact, Mr. Rob Clarke, the VP of finance and corporate services, in a meeting in early March asked some questions about what effect allowing offshore oil and gas exploration off the coast of British Columbia would have on the shipbuilding industry. It's interesting that even the Ferry Corp is looking at what benefits could accrue to the province through CFI, if something did go ahead. It's just a matter of interest that I put forward to the minister. I don't imagine, not being responsible for B.C. Ferries anymore, that he's probably read the minutes. But it's an interesting comment from the B.C. Ferry Corp, which is good.

I will pose to the minister, though, a question about offshore oil and gas and ask him how he will deal with this issue, if everyone agrees that we should be going ahead with offshore oil and gas, and if there is a willingness to go ahead and an agreement. The present Premier, during the leadership campaign, put on his web site some interesting issues, one of them being offshore oil and gas.

I'll just read into the record -- and this, again, is coming from the now Premier, when he was running as Premier. . . . Of course, you were the Premier at the time; you were the interim Premier, Mr. Minister. But I quote: "We must take strong action on climate change and endangered species and maintain the moratorium on offshore oil exploration."

It's an interesting comment, and that seems to me to be what we talked about just a while ago. In fact, we had quite a

heated argument about consultation, when the minister talked about the Leader of the Official Opposition not consulting before going out and making statements. I remember that clearly from yesterday and in fact a little bit today, when the minister chastised me to a certain degree.

I'm not going to chastise the minister, but I'm going to ask him how he is going to deal with this, because we have an ongoing process taken on by the northern development commissioner -- I think an excellent process. I think it's working. I think it's the way we should be doing it to make sure we get buy-in from everyone before we go ahead. Yet the Premier of the province just arbitrarily says no, without even saying. . . . He puts it on a web site.

I can see the Premier being scrummed out behind the door here and not being able to respond to it correctly. But to put in a web site something that is absolutely opposite to what the Minister of Energy and Mines is trying to do -- and, I think, trying to do right. . . . And here we have the Premier just arbitrarily saying, without even listening to the people of the northwest, without listening to the aboriginal people: "No, we have to make sure that they maintain the moratorium on offshore oil and gas." So I ask the minister for his comments on that.

Hon. D. Miller: Again, it's fortuitous. It's nice to see a group of youngsters down from northern B.C., and no doubt some of their parents may even be employed by Skeena Cellulose. The member might take this opportunity to apologize for the position that the opposition took on that particular topic.

Hon. D. Miller: Oh yes, here is a guy who knows all about the private sector -- and the pulp industry too. Thanks.

I referred just a few moments ago to comments made by the Opposition House Leader on the "Voice of the Province" program. And if the member didn't watch that particular program, I can get a copy of that video and send it to him because his comments appear to me to be directly at odds with what he's been saying publicly on the topic of offshore.

So I did say, when I referred to that -- and I also said that I offered a personal opinion -- that I don't think your party has grappled with the issue and formulated a position. I think that's fair to say. I don't think that you have, and as a result of that. . . . I know you've made certain statements, and I know that other members of your caucus have certain statements. Quite frankly, they contradict each other, because we're still in the position of Mr. Backhouse, who is the northern commissioner, responding to a request from northerners that he use his office to investigate a certain issue. He's doing it and -- I was pleased to hear the member say -- doing it in the right way.

Ultimately -- and my caution is this -- it's easy to play politics with this issue, but we might all be better off if you didn't. You want to try and stick in comments made by the current Premier; I can throw back comments made by the Opposition House Leader. My view is that it doesn't add one whit to the debate, because it all appears to me like a couple of politicians trying get one up on each other. I think the public are fed up with that. This is a serious issue, and I think people can look at it.

It's interesting to see that there's even been a change of heart at the Vancouver Sun. The Vancouver Sun wrote an editorial last year saying: "Don't you dare." I phoned Judy Lindsay and said: "Judy, you're a business editor. How come we can't even look at it?" I understand they've changed their minds recently, and they wrote an editorial saying we ought to take a look at it. So I think you've got to get that kind of debate on this topic in British Columbia. I think it's an important and serious question and one, ultimately, that I believe this Legislature is going to have to come to grips with. No doubt in looking at that, there will be a variety of opinions, yea or nay, on the topic.

What we're doing right now is trying to get the view of people who actually live in the region, the people who presumably have to deal with the negative consequences, if there are negative consequences, or who may be interested in developing a regime that allows them to maximize their opportunities. We can all play the political game, but the important thing is that we look at this resource in an intelligent way, in a careful and thoughtful way, and hopefully bring it to the point where we can then debate that both publicly and in this Legislature and make the right decision -- because the benefits, in my view, are significant for the province.

R. Neufeld: Actually, you know, the minister should know that it was he who put forward remarks made by the Opposition House Leader when we started talking about offshore oil and gas. I didn't bring forward anything about the Premier until the minister wanted to start that little argument again. I'm not too sure if we shouldn't take a five-minute break, and you can go have your cigarette. But in any event, it was the minister that brought forward the Opposition House Leader's position and talked about Skeena Cellulose. It wasn't me that baited him into that and, to be quite frank, I wasn't going to make an issue out of it.

You give me no other choice than to bring forward a demand or a position by your Premier which totally eliminates what you've been trying to do. He flatly states that he wants to maintain the moratorium on offshore oil and gas. I guess the question I have for the minister -- and I don't want to go on for long, because we do want to finish these estimates tonight -- is: did the Premier consult with you -- not with the people of the northwest, but with you -- before he put this on his web site?

Hon. D. Miller: To be rhetorical, did the Opposition House Leader consult with you -- you're the critic, but I don't think so -- before he went on "The Voice of the Province" and said what he had to say? So, you know, we could keep it up, my friend. You might recall that yesterday I issued a bit of a caution about the political dynamics in British Columbia. I think it's fair to say that increasingly. . . . I'll use one example to make my point. The president of the Liberal party in Prince Rupert -- that constituency. . . . He's a decent guy; I've known him a long time -- Garry Rabel. I don't know if he's still the president or not, but he was. He's a decent guy. He works in the local hardware store. I've known him for years; he was on council. He said: "I went to the Liberal meetings in Vancouver, and I pleaded with the Leader of the Opposition to stop saying: 'Shut down Skeena Cellulose.' " I think he was almost on his knees pleading for some understanding, and he didn't get it.

Often you'll find that people in the north have different opinions, different ideas. That member had better watch it, because who knows what changes may come? And who knows what battles that member might have to get people to recognize that things may be a little bit different in the Peace River, as I do sometimes in saying things are a little bit different in Prince Rupert.

R. Neufeld: I appreciate that. I guess we'll wait for that day, and the people of the province of British Columbia will decide when the government of the day finally gets enough nerve to call the election. We'll go out to the people with all of our different positions on different issues, as I said yesterday, and be questioned about them.

So that's future policy, I guess, on both sides of the House, but I look forward to that day. In fact, I really look forward to that day. I'm quite excited about an election. I always get really pumped and excited for an election. I can hardly wait to go out there and talk about some of the other things, actually, that have been done by your government to the province of British Columbia.

Just a few questions around the northern development commissioner's office. Again, I received the business plan just recently from the commissioner, and it's pretty self-explanatory. But I want to go to the legislation. As I understand, there's supposed to be an annual report provided by the commissioner's office. I believe the commissioner was appointed July 17, 1998. Unless, again, it hasn't hit my mailbox, I haven't seen anything. I would almost think there should be two by now. But maybe the minister can. . . . Maybe you're combining right from July 1998 until March 31, until the fiscal year end, in one annual report. If that's so, I guess that's pretty straightforward, and I can imagine it'll be out within a couple of days. If we end our debate tonight, we'll have the report probably by next week. Would that be correct to say?

Hon. D. Miller: It's at the printer's. It will be a combined report for the entire period, and I think it will be very, very soon.

R. Neufeld: That's great, and I guess we're waiting for some pulp from Skeena Cellulose.

Also in the legislation. . . . Like I say, I'm not going to go into a lot of the things the commissioner has been doing. He has quite a few issues that he deals with in the development plan, and he's quite available to me -- or has made himself available to me -- to talk about those issues. But there are some parts in the legislation where the minister can request reports from the commissioner on different issues. I just wonder if the minister's office has made any of those requests of the northern development commissioner.

Hon. D. Miller: No. I think it's safe to say that the commissioner and I meet on a monthly basis. He brings a list of issues to me, and we discuss those on a monthly basis. So I have not requested reports from the commissioner. I think it works a lot better to sit down face to face once a month and run through the issues.

R. Neufeld: Again, as I understand in the legislation, the minister would request the commissioner's office to take on some work and then get a report back from the commissioner and take it to cabinet for approval. Have any of those things happened? I guess what I'm asking is: has anything that the commissioner has worked on. . . ? This is not a reflection on the commissioner, but anything that the commission has taken on -- have they actually finished it? Has it been finished? Is there a report, somewhere in your office or in the commissioner's office, that would show the public that yes, this in fact has been started and finished, remembering that the commissioner was appointed in July 1998?

Hon. D. Miller: I think the report -- which is really to the end of 1999, by the way -- will illustrate the issues that the commissioner has been working on. Certainly, as I say, we discuss those issues. Just to illustrate the point, recently he was successful in bringing together interests in the Houston area who are desirous of developing a cogeneration plant. That had been kicking around for a long time, and as a result of Mr. Backhouse's intervention, he has finally got the parties and B.C. Hydro together. That's typical of the kind of work he does. The work in the Nass TSA and other studies that are now being undertaken with respect to the potential for a road from the Kemess mine site out to Highway 97. So there's a range of those, and I think the report will outline those for the member.

R. Neufeld: Just a couple of other quick questions on the northern development commissioner's office -- three things, I guess. Tumbler Ridge -- what's taking place in Tumbler Ridge with Quintette's closure. Another one is Pacific Iron and Steel with the pig iron plant that was proposed for the minister's hometown, which would, again, add some jobs to the northwest. Maybe he could just brief me briefly on those two.

Hon. D. Miller: With respect to Tumbler Ridge, the issue is under the purview of the Ministry of Community Development, Cooperatives and Volunteers. As the member is aware, I went to Tumbler Ridge with the member for Peace River South. We have instituted a process through the Ministry of Community Development under the leadership of Mr. Hal Gerein, the deputy minister. I met, just by accident, with Clay Iles, the mayor of Tumbler Ridge, in Fort St. John last Friday. He has been very positive. He's thanked me again for the support that we're giving him. There is a process in place, and it is continuing. It's not as though the northern commissioner. . . . In fact, the northern commissioner was there. But we have not seen, or I've not seen, that as something the commissioner should deal with directly; rather, that's a line ministry function.

With respect to the pig iron proposal, I want to say that I was a bit dismayed. I've met on a number of occasions with the proponents -- in fact, as far back as two or three years ago, when it was being proposed by an agent for a company at that time called Tondu, out of Texas. I recall, when I was the Minister of Employment and Investment, meeting with that individual. I recall taking the time, when I was in Taiwan, to visit a Mr. Ho of a major steel company in Taiwan, along with representatives of Cleveland-Cliffs, which is a large American firm in the steel and iron business.

The issue is this: the proponents are saying that they want government to fund a feasibility study. They want government to give them the money to do a feasibility study on

whether or not this project is something that could be achieved. I've explained directly to them, as has the minister responsible, that government does not provide that kind of funding. They've said to me that they have the greatest project in the world. I said: "Well, if you've got the greatest project in the world, then it ought not to be real stretch to go out to the money markets and pick up two or three or four million dollars to conduct a feasibility study. But we are not going to fund that kind of feasibility study."

I hope the member would agree with that approach, because if we were to do that, then how could we possibly say no to any other company or individual that came forward? "I've got a great idea. Would you give me the money to see if I can prove it?" We can't -- government can't -- be in the business of providing that kind of financing. We have indicated that if they can get this project moving, we as a government would participate in the infrastructure development and would be prepared to participate in terms of a power-for-jobs deal. There are significant advantages, we think, that can be brought using that approach. But we will not fund feasibility studies.

R. Neufeld: I appreciate the minister's response. Actually, I wasn't aware that they had made that request to the minister. I can only say that I concur with that kind of approach to those issues. I mean, if it can fly and it's viable, go out and get the money in the private market. That's what's going to make it fly. If you're after government, it's going to fail. Usually when government subsidizes some industries, it sometimes. . . . And I'm not going to mention any names; I don't want to say anything like that. But when government gets too involved in some of those issues, they sometimes backfire and don't work that well. I'm glad to see that the minister is starting to understand that that free market system has to be where they go out to get the money.

I guess another question I have is the rural Internet services in rural B.C. It's something that was promised by this government as far back as 1993 under the then Premier Harcourt, and I think we're still working on it. I believe that the northern development commissioner is doing some work on it. Maybe you could just tell me briefly where we're at and when we think we'll complete this program that we started seven years ago.

Hon. D. Miller: I do apologize, Mr. Chairman. I don't have extensive information, but I'm prepared right now to say that we'll give you a briefing. I'll ask Mr. Backhouse to prepare a briefing. I was intrigued by this, because I had met. . . . The member for Bulkley Valley-Stikine had been very, very instrumental in trying to put together a proposal with the private sector company owners. The name escapes me for the moment. I ran into the gentleman up in Canyon City -- Gitwinksihlkw -- during the signing ceremony for the Nisga'a treaty a number of weeks ago. I was delighted, because some personal friends of mine, the Bob family, are from Telegraph Creek. They're Tahltan people. At a gathering in Prince Rupert a number of weeks ago, kind of a family gathering for the Bobs, I was informed that the installation of the wireless Internet service is working wonderfully. The fact is that, before, using the hard wires, there was limited access or limited service into that community; now there's a satellite Internet service, which was described to me as working very, very well.

I think maybe the key for the north is going to be in that kind of innovation. I do believe that there is still a significant challenge, though, with respect to how that is funded, but we're trying to assist in that kind of development. I will ask Mr. Backhouse to either forward it to you or make himself available to give you more extensive briefing on what's taking place.

R. Neufeld: I appreciate that, representing an area in the north that I guess in some aspects is much the same as yours -- through the Chair to the minister -- where good communications are not always available. It certainly adds to the cost of doing business. The ability for people just to access information that they need in their lives, to run their daily lives. . . . I see that a year ago, in fact, the regional district of Bulkley-Nechako had written a letter to the minister in regard to those issues. I know that even in the north along the Alaska Highway, there are some real issues about communications, where people don't have good communications.

In fact, right around Fort Nelson and just north of Fort St. John, there are some real issues with communications, not just Internet. I appreciate that that, again, is the private sector, but sometimes government. . . . I don't think it has to get in there and fund it to a certain degree, but maybe it has to put a little pressure on the private sector to live up to their commitments, through the CRTC, to provide those services to the people that live in those areas. They need that service also.

Hon. D. Miller: Again, it's interesting when you talk about the issues we have in common as representatives of northern B.C. I think I said last year. . . . I haven't heard whether or nor there's been a response from the CRTC, but we made a presentation to the CRTC hearings in Prince George a couple of years ago. We advocated that on a straight investment-and-return basis, what's happening in the small markets -- in the regional and small northern and rural markets -- is that the companies, whether it's Telus or any other company, won't make the investment because the population is so small that they don't get a return.

So what's the solution to that problem? What we advocated was that every telecommunications company that was providing service ought to develop a fund, a pool of money, so that whether it's residents of Fort Nelson or some of the smaller communities in your constituency or my constituency or other small, remote communities, they ought to be treated like every other Canadian and ought to have access to modern telecommunications. I have not heard a response from the CRTC. I think their initial response didn't really meet those expectations.

We've tried to lever development of infrastructure through the purchasing power of government -- the electronic highway accord is the example of that -- but we really haven't solved the problem. I'm interested, really, in trying to create a louder voice for northern British Columbians on this question and on another important communication question, and that is airline service.

I challenged Lou Sekora at the Coastal Community Network a month or so ago, because I saw him on the television attacking Milton of Air Canada, decrying the state of affairs with the merger of Canadian and Air Canada and the changes in service and the fact that a lot of people were unhappy. I challenged Lou Sekora. I said: "Here's what your government

has done, Lou. You have abandoned I don't know how many airports in this province. Where the federal government used to support the Fort Nelson airport, the Prince George airport and the Terrace, Smithers and Prince Rupert airports, you have abandoned those people. There's an operating loss for those airports."

Harry Clark, the mayor of Fort Nelson, said to me: "There's only one reason the airport is still there in Fort Nelson and operating. It's because the Ministry of Forests maintains a forest fire fighter tanker base there."

Hon. D. Miller: Well, thanks to you, Thanks to both of us. Let's pat each other on the back. And let's agree: we've got a problem.

And now what's happening? In my hometown, where the city has to subsidize the ferry travel to the airport to the tune of $650,000 a year -- that's local taxpayers who are suffering because of the decline in the economy -- it has had to put on a $28 landing fee at that airport. The same is true in Kelowna, and the same is true in the rural parts of our province. And at the same time, Vancouver International Airport, which has a board created with a right to tax -- those fees you pay every time you go through the airport -- sends back to the federal coffers, each and every year, over $60 million. So they're taking $60 million out of British Columbia and sending it back to the federal coffers, and small towns around B.C. are being shortchanged with respect to air service. It's adding to the cost, and the service isn't there.

I offer to all regional members, regardless of party: we've got to make some more noise to get the federal government to pay attention to this issue. I've raised it directly with Mr. Collenette, the federal Transport minister. I made a heartfelt pitch on behalf of Fort Nelson and these other communities, and I've never heard a single word back. Mr. Sekora, for all his trumpeting about how tough he's going to be on Air Canada, has never got back on the one thing we have asked for with respect to these small regional airports.

Penticton has seen a shift of service to Kelowna, if I'm not mistaken. You're going to see continued shifts. So maybe we regional members, in a bipartisan way, ought to be trying to assist these small communities and making a little more noise and getting some rightful attention to the communications-transportation problem they have with respect to air travel.

R. Neufeld: I fully agree. It's always been a problem travelling out of the north. It's not just the reduction in service; it's the cost. When you have to buy a plane ticket from Fort St. John to Victoria return, it's about $1,200; Fort Nelson is about $1,600; and you can fly from Vancouver to Europe for $399. One begins to wonder just what's going on and if it really is that expensive in British Columbia to carry on business. So I would like to see an approach. In fact, the previous Premier. . . . When the federal government was downloading airports, I made a proposal to the previous Premier -- the member for Vancouver-Hastings -- about. . . .

R. Neufeld: As you say, it's three Premiers ago -- just a couple of years ago, by the way.

Anyhow, I made a proposal that the amount of money. . . . What your government should be doing is proposing to the federal government that they return the amount of money that the Vancouver airport sends to Ottawa, because that would fully fund every one of the rural airports that you need as feeders into the Vancouver airport. I don't know where that went, because I never got a response. I never got a copy of a letter. I never got an invite to write a letter or to even be part of that; but I did ask for that, and I guess it works both ways.

One can never underestimate what can happen if we do work together to try and resolve some of these issues. I know the rural Internet service and just plain telephone service. In my constituency I have two telephone companies: Telus and NorthwesTel. Fort Nelson and Whitehorse are two profitable centres in the NorthwesTel system. When you put it into the whole Northwest Territories, you can see where NorthwesTel is, trying to provide phone service -- and they have to: to all of the Northwest Territories. So guess who pays -- Whitehorse and Fort Nelson. They don't enjoy any of the 20-minute yack or $20 yack stuff or anything. It's all about twice as much as what we pay on the Telus system. So there are some tremendous inequities in the province of British Columbia that I would like to work with the minister on trying to resolve, one of them being air traffic. That would be great.

One other question on the commissioner's office: what involvement does the commissioner's office have with the northwestern ministers' strategy for northern economic trade? What involvement does the commissioner's office have with that?

Hon. D. Miller: I'm not quite clear on the question. The commissioner is. . . . In fact, we talked earlier today about an initiative that he's working on that I think has some significant promise. That is a delegation called the Japanese Business Forum -- the commissioner has arranged a tour of the north. He showed me the itinerary earlier today. It looks to me like an outstanding opportunity to expose some people of influence with respect to potential investments and trade to northern British Columbia. I'm sure the commissioner will be doing something to publicize that itinerary.

But the specific question I referred to. . . . Perhaps the member might rephrase it or ask some more questions on that.

R. Neufeld: Maybe in looking at the time and some of the issues that we still have to deal with. . . . The northwestern ministers' strategy -- and I think you've been part of it -- for economic trade in the northwest, all across northwestern British Columbia. . . . I'm just wondering what involvement the northern commissioner's office has in that. Or is that strictly with the minister's office? If the minister wants to leave that and let the commissioner brief me on that at the same time that he briefs me on the other issues, that's fine with me. I notice the minister nodding, so we'll do it that way.

One last question, I guess, about the northwest and its support. With Quintette shutting down and the coal ship-

ments obviously slowing down -- I have a news article from May 12: "Star Shipping Pulp Carrier Pulls Out of Fairview Terminal Saturday" -- and those kinds of things, what's being done through the northern commissioner's office or your office to try and deal with some of the issues that are happening in the port of Prince Rupert, specifically, with grain, with pulp and with the coal? These are. . . . I'm not saying that I have the answer; I'm not trying to say that. I'm just wondering what we're doing to try and offset those losses and the economic downturn that it results in, in the port handling tonnage.

Hon. D. Miller: It's been very frustrating trying to look at those discrete sectors and trying to develop solutions, whether that's the coal. . . . The member's quite aware, as is the member for Peace River South, of our efforts to try to ensure the continued operation of the northeast coal mines. Quite frankly, Teck made their own decision at the end of the day. That's unfortunate.

I formed, with the then Minister of Transportation in Alberta, Walter Paszkowski, a working group to look at how we might increase traffic on the northern corridor -- both rail and truck traffic. We reached agreement with B.C. Rail. My instruction reached an interchange agreement with CN Rail in Dawson Creek and Prince George to facilitate for shippers, whether they were shipping to the coast, Prince Rupert, down south or whatever. At the same time, CN Rail was short lining the Northern Alberta rail lines, which flew directly in the face of what our strategy was -- that was to try to collect the grain from the Peace River region of Alberta and B.C. down out through the port of Prince Rupert, which is the cheapest and quickest way to get it to the export market.

We were frustrated in that endeavour. The working group between B.C. and Alberta was expanded. Saskatchewan was brought in. Eventually, they went and expanded to cover the whole coast, and I said: "Well, look. My effort, or our efforts, are really aimed at northern B.C."

The federal government developed -- after some studies and conferences -- the Northwest Development Corridor Corp. The commissioner regularly attends that corporation, whose mandate is to try to find some longer-term solutions to those issues that you mentioned.

I've discussed the issue of grain with Mr. Klein, the Premier of Alberta. The government of Alberta is the biggest equity holder in the terminal in Prince Rupert and clearly would like to see better utilization of that asset.

And all our efforts have not produced any significant results. The decline in the pulp traffic was the loss of a Western Pulp contract out of Alberta. So, we are working -- and many, many people are working very, very hard -- to try to find longer-term solutions. And I can tell you, it's very, very frustrating, and I can't say that we've reached any significant breakthroughs at all. We did, as a result of changes in federal legislation, finally get the opportunity to appoint people to the port corporations, which are federal bodies. I appointed a very knowledgeable individual, a transportation economist. I know that the port of Prince Rupert, the port corporation, is working very hard as well to try to attract additional volumes. I suspect that that work is going to be ongoing. I suspect there is going to be a level of frustration.

At the end of the day, we've got a transportation corridor and a port in the north that's second to none. In fact, it's better. As a longshoreman told me over coffee last weekend: "We're a far more efficient port, whether it comes to loading lumber or. . . . You name it; our turnarounds are faster." And yet, they're frustrated, because they can't get the work at that port.

So we'll continue with our efforts, both the northern commissioner and myself as the Minister for Northern Development. And I know all northern members will want to make their contribution to that, and hopefully we can see some improvement over the years.

R. Neufeld: That's basically all the questions I have that deal with the northern commissioner's office. I would maybe like to move on to B.C. Rail. I don't know if the minister. . . . Yeah, we'll take a little break.

R. Neufeld: I'm sorry; I'm just going to have to ask one quick question that has to do with the Oil and Gas Commission. I'm sure the deputy has got the information that I forgot.

They're upgrading a computer system -- and maybe it's already happened -- so that the bids can be done through electronic mail and that kind of issue. And I see in the estimates book that there was a fair amount of money expended on equipment. I am just wondering if that's what it's for. Or is there some other equipment that they were spending money on?

Hon. D. Miller: We'll try to forward maybe some more information. But we are working on that and in fact my deputy advises me that we're actually capable of doing that now. Somewhat perversely, the land men in Calgary would all rather come out to the sales and deliver their cheques.

Hon. D. Miller: Maybe they like to travel? I don't know. Maybe they like to go to Fort St. John, but. . . . Maybe that's one time when the member might not dislike Albertans coming to British Columbia.

R. Neufeld: You're right. If they're coming from Alberta, and they're spending money legitimately in British Columbia, bring 'em on. They can bring all they want. We'll take it. In fact, it's quite comical, but the saying in the north is that B.C. stands for "bring cash." As long as they come with lots of cash, it's good. So I'll wait and hear from the minister later on about that.

We'll go on to the B.C. Rail part of the estimates. I appreciate the strategic business plan that was provided to me by your ministry. Probably one of the biggest questions. . . . I know it's dealt with -- in fact, many of the questions I'll ask are touched on -- in the strategic plan, but maybe I can just get it from the minister on the record here. What is plan B, now that Quintette is going to quit shipping coal? It's such a major part of the revenue for B.C. Rail. What process are we

taking to try and alleviate that problem, along with some of the other mills that have closed down in the past? In 1998 we saw a number of mills close down -- and some mines. Obviously it has a dramatic effect on B.C. Rail. The opposition and I want to make sure that B.C. Rail remains a viable entity and provides the good service that it does to the province of British Columbia. There must be some kind of a plan in place. Maybe the minister could just brief me on that.

Hon. D. Miller: In the business plan you'll see reference to a number of issues that clearly require ongoing work. The railway really has been the core business, but the B.C. Rail group of companies obviously is greater than that, with both the property division and the marine division. I was delighted, for example, to be at the opening of the completion of the new Vancouver Wharves project, in which in excess of $100 million was on time and on budget. Hopefully we'll be able to attract more shipments to Vancouver Wharves.

The railway has been looking at ways. . . . Obviously you always look at ways in which you can reduce operating costs and try to improve your efficiency. They've been reaching agreements with individual shippers, some of whom have been in some difficulty -- Highland Valley and others come to mind -- to try to develop a business arrangement whereby product continues to flow. Over time, there are more opportunities on the coal side in northeastern B.C., But I think we won't see much in the way of development until we see a better supply-demand balance internationally for coal, so we don't want to close the door completely on that.

Clearly, looking at the list in the business plan, the railway wants to deal with the subsidy they supply right now on the passenger service. There's a feeling that the railway shouldn't have to absorb that. It's an issue that has not been resolved. It requires me to continue to try to push forward in Treasury Board to get some recognition of that.

There's a whole issue of the debt equity position of rail. Because they are a Crown, they can't attract new equity partners. Given the decline on the earnings side, particularly the rail side, that represents a problem that government is going to have to deal with. I think we are clear now on a dividend policy. Finally, the property division may have some opportunity to dispose of assets, which would bring some much-needed revenue into the corporation.

That's kind of a thumbnail sketch, really, across a number of initiatives that the railway is looking at to ensure. . . . The member and I agree on this: we want to ensure that B.C. Rail remains a commercial Crown corporation.

R. Neufeld: For this past year, 1999, maybe the minister could list for me any mines that have reduced shipments or actually curtailed them, or forest companies that have reduced shipments or actually curtailed them, in favour of trucking. Has that happened at all with the B.C. Rail service? If so, how many and who are they?

Hon. D. Miller: I'm advised that with respect to B.C. Rail's market share, there may in fact be a slight improvement in '99 over '98. I mentioned in the House yesterday that the forest sector is starting to look a little better. The net results in the first quarter of 2000 versus the first quarter of 1999. . . . Going from memory, I think there was either a $59 million profit or loss net at this time last year versus about a $250 million net profit this year. Based particularly on the strength of the pulp market -- which is in the $670 range now and which, as I indicated, was a significant contributing factor to Skeena Cellulose's profitable position now. . . . With that resurgence and that commodity price, there's been a strengthening on shipments. Highland Valley was down for several months, and clearly that represented a loss of commodities for that period.

With respect to the rail-truck issue, B.C. Rail is also in the trucking business. Some have criticized that. But if we're going to maintain this important Crown and particularly the service it provides to northern British Columbia, then the company has to be aggressive in terms of all of their divisions to ensure, at the bottom line, that there's profitability.

R. Neufeld: I'm pleased that it's anticipated that there will be an increase in car loadings, as the minister stated, and obvious revenue in this year coming up.

Are there any companies that were in distress, where B.C. Rail went in and gave a lower rate to be able to keep them operational, and that were able to come back to a full freight rate position? I'm not sure how many there are in distress that were given a bit of a break on rail rates. I'm not asking how much the rate break is, because I understand the commercial Crown. What I'm wondering is, is there quite a few of them? And with prices increasing for commodities, is there any anticipation of coming back to the full rate they were paying previously?

Hon. D. Miller: Based on the strength of improved commodity prices in some sectors, I think Rail is starting to claw back some of the concessions that were offered, which I think actually makes sense. Clearly you're a partner if you're the major shipper for a gold-copper mine which is in distress. If you can sit down and make out business arrangements that might see you take a reduction over the short-term while waiting for prices strengthen, it does make sense. Interestingly enough, Highland Valley is an interesting case, because part of our package with Highland Valley was some fairly decent concessions on energy prices. But given today's copper price, in fact, I don't think in total -- using it to illustrate the point -- that there's been a loss of revenue on the electricity side.

I note from the numbers I've got that we've seen about a 1 percent increase in Rail revenue, '99 over '98. That indicates there is a bit of a strengthening.

R. Neufeld: I'm not sure if those contracts that are signed, those distress contracts, which I agree with. . . . If you're the major shipper and you can help in some way to keep that going and it's going to mean something in the end, then I think those are good business decisions to make, when you look at it in the long run.

When B.C. Rail signs some of those contracts -- or those agreements, I guess; they're not a contract but an agreement with whomever -- is there a time frame put in there, or does it flow with the commodity price? How is it determined when B.C. Rail can actually get their rate back up to what it should have been before the company went into distress?

Hon. D. Miller: It really does vary, depending on the circumstance. The model that the member just outlined is one

that could be used. In other words, based on commodity prices, it's an agreement that as they go up, Rail revenue would also go up. But it's an individual issue that's determined between B.C. Rail and whoever the shipper happens to be -- whatever makes sense or whatever the parties can agree to from a business point of view that appears to makes sense and allows them to reach that kind of agreement. We may offer development rates, for example, for new enterprises in order to attract that commodity. So it does vary.

R. Neufeld: Are there some companies right now that have a reduction agreement with B.C. Rail that has a fixed date? Or would they all be. . . ? And I don't know how many. When I say "all," there could be two, for all I know. Or do they work on the commodity price?

Hon. D. Miller: We didn't bring any details on those kinds of questions, but I'm advised by the president that he'd be happy to try to supply some information to the member.

R. Neufeld: The next question I have is the dollars worth of property that was sold in 1999. I don't know whether that will be in the annual report, which I guess will be forthcoming fairly soon. The number of dollars for property in 1998 was given to me last year. I just wonder if the minister could provide to me, for this last fiscal year, the number of dollars in property and assets that B.C. Rail disposed of -- how many dollars that is.

Hon. D. Miller: There's been an increase in the real estate division for '99 over '98 in about the 9 percent range. We haven't got it broken out between sale of property and revenue from utilization of property. But it's perhaps in the $2 million range.

R. Neufeld: Okay, so it's about 9 percent more than 1998. Can the minister tell me what is anticipated to be sold in both property and. . . ? I understand through the report that properties will be sold that have no tie to rail or port operations. If there are some equipment or some other sales anticipated, can you give me a target figure of what kind of money that's going to be?

Hon. D. Miller: The railway estimates that they have property with a book value in the $100 million-plus range. Ideally -- and certainly I would like to see that -- you always try to get more than that, so the target will be higher than the book value.

R. Thorpe: Just following up on that, would it be possible to get a list of what target assets you're attempting to sell?

Hon. D. Miller: We are developing a package of the assets, and that will be made public, I think, in the fairly near future.

R. Thorpe: I thank the minister for that. Would it be possible to have a briefing on that, within say, the next two weeks? Obviously if you've set a target -- and the minister wanted to surpass that target -- you must have some idea where you're going. I would think that with the aggressiveness and the commitment that the minister stated over achievement of that goal, obviously there must be something almost at the printers. So would we be able to get that briefing within the next two weeks?

Hon. D. Miller: I'll consult with the railway to see if that's possible, and I'll get back to the member. But really, put simply, the railway has property assets that they intend to dispose of, and they'll do it in a professional manner. The railway disposed of their telecommunications asset a number of years ago and retained outside consultants -- I think it was Nesbitt Burns, if I'm not mistaken -- to manage that. They'll take that same kind of businesslike, professional approach to this issue as well. So I'll consult to see what might be possible.

R. Thorpe: When the sale of those assets does take place, where will those funds go? Will they go directly to pay down the debt of the corporation, or is it the intention to flow those through to government?

R. Thorpe: I know I should have been a little bit more specific. I don't want to be cute with the minister, but I assume that's the direct debt of B.C. Rail that we're referring to. Is that correct?

Hon. D. Miller: That's right. You know, the revenue to government. . . . Typically, in a commercial Crown situation -- use B.C. Hydro -- there's a dividend set by government. We've done that in the past with B.C. Rail. We've done a great deal of work, particularly in the last year or so, trying to develop sort of a dividend policy that makes some sense. We recognize that Rail has gone through a very, very difficult time. All of us -- and the critic as well -- want to ensure that B.C. Rail retains its commercial Crown status. The worst thing that could happen is for that to be lost. So the revenue from these sales will clearly be used by B.C. Rail to improve their position.

I talked about the dividend policy earlier in response to a question from the critic and indicated that we are developing one that I think is rational and makes some sense both for B.C. Rail and the Crown.

Hon. D. Miller: I don't have a specific date, but it's an issue that has been worked on for some time. I'm hopeful that we'll see that resolved fairly soon, but I don't have a specific date.

R. Thorpe: Could the minister advise who is the 4-C committee? I understand that the chief executive officer had been talking with the deputy to the Premier's office with respect to dividend policy on or around about February 7 of this year. It makes reference here, in setting dividend policy: "I've asked the 4-C committee for direction on dividend policy." I just want to know who the 4-C committee is.

R. Thorpe: So is this dividend policy with respect to B.C. Rail part of a governmentwide dividend policy, or are you just looking at a dividend policy in this particular instance for B.C. Rail?

R. Thorpe: With respect to the write-down of assets, when was the decision -- the $617 million write-down -- made by B.C. Rail to pursue that?

Hon. D. Miller: Again, I don't have the exact date, but Mr. McElligott advised me -- I was the Premier at the time but also the minister responsible -- and my then-deputy, who's still the deputy to the Premier, Mr. Halkett, of the advice of the external auditors to B.C. Rail that the breakdown was necessary to avoid a qualification. So it was the prudent and fiscally and actuarially -- from accounting principles -- responsible thing to do, and it was done.

R. Thorpe: That write-down was based on a report by KPMG. Based on that write-down of $617 million, do you believe. . . ? When we look through to the three-year strategic plan, up to the year 2002, do you believe that write-down reflects the entire adjustment to the assets of B.C. Rail that was required?

Hon. D. Miller: I think it's important to understand that the advice with respect to these questions is based on advice you receive from a professional accounting firm, whether that be KPMG or anyone else you may engage.

The basis for a write-down is. . . . Without going into the long and, I suspect, in some way tortuous history of the development of the northeast coal fields, members are generally aware that significant public expenditures occurred at the federal level, at the provincial level and through B.C. Rail to develop the infrastructure for the northeast coal mines. The port of Prince Rupert and all entities involved in that enterprise have had to take significant write-downs. CMHC, currently with a book value of about $60 million, I think, in housing in Tumbler Ridge, is having to take a $60 million write-down, I think.

The principle is very simple. If you've got certain investments -- in this case, in infrastructure -- and you can't show that you'll have a revenue stream to support that amount of debt, then you're required by auditors to acknowledge that. It's something that's used in the private sector and, in this case, by a commercial Crown in exactly the same way that it's used by the private sector. Those are historical realities, historical facts, that led to the position of B.C. Rail today. I'm not apologizing for it; I'm not condemning anything. I'm just stating a fact: that's the basis for the actions taken to date.

R. Thorpe: I thank the minister for that. The reason I'm asking the question. . . . I just want to make sure, as I'm sure the minister does, that this is the best situation out of a bad situation. We have to face the reality of what's going on.

When I read things dated February 4 from senior finance officials -- "We will continue to push to see if there are any scenarios where we could avoid this" -- and then when I look at drafts from KPMG that have numbers up to $746 million and $726 million, I just want some comfort, as I'm sure the shareholders of B.C. Rail want, that there's not another surprise going to come. Like, this is the pill that's had to be swallowed, and the swallowing of this pill is all reflective, based on this business plan for the next three years going out. That's the question.

Hon. D. Miller: The advice of KPMG to B.C. Rail as transmitted to me and my deputy at the time was fully implemented, so I don't. . . . I'm not an accountant; KPMG is. I presume they know their business, and I presume, when they give advice with respect to this, that they're giving accurate advice, and we fully implemented the advice that was given.

R. Neufeld: I had some questions around the dividend policy, and you've basically answered those. The policy hasn't been developed yet, and I guess we don't know whether the policy is just for B.C. Rail or whether it's for all the Crown corporations.

The other point that's made in the plan is the need to decide on future and unprofitable passenger car services. Maybe the minister could bring me up to date on what kind of plans are there. Is there a plan to curtail? As I read the report, much of the equipment is -- the report says so, anyhow -- in disrepair or needs a fair amount of money to bring it up to a good standard. Along with the questions that my friend just asked, if we go ahead with that, is that going to add an awful lot more debt to B.C. Rail so that at some point in time we're going to be looking at dealing with that issue also? I'm just not too sure where the government is coming from on that point.

Hon. D. Miller: If there's a parallel, it's with B.C. Ferries. B.C. Ferries provides, at the request of government -- and has done so historically at the request of government -- certain concessions that might be termed subsidies or put under the heading of social policy. At B.C. Rail, for example, seniors have significant discounts. There is transportation of school children. If I recall correctly, the cost to Ferries for that was somewhere in the $8 million to $9 million range -- something in that order. Similarly, B.C. Rail provides passenger service and transportation of school children. There is an annual cost in the $4 million to $5 million range for that, which we estimate may escalate in mid-2000 to as high as $8 million annually.

The question is: should that be funded in a different way? Or should we simply say: "B.C. Rail, you're a Crown corporation, and you will have to absorb those costs"? We've never in the past really dealt with these questions. I find more and more, because of changing economic circumstances both with Ferries and Rail, that we're having to deal now with things that were taken for granted and that no one ever questioned 20 years ago. That's really the issue.

If we're going to continue to provide the passenger service, there is a capital requirement. There has to be capital investment in terms of the cars. They're old; they're outdated. So it's an issue that we're going to be wrestling with. I can't say when we'll come to a conclusion on that question, but that's really the fundamental issue.

R. Neufeld: I guess the corporation is having some discussions with government on these issues. Do we see some time frame? I know the minister doesn't like to put himself in

a box, but is there some kind of time frame where government will actually wrestle with these issues and try to come up with some kind of a plan on how we deal with them?

Hon. D. Miller: I don't, really. We've taken the significant decision with respect to the write-down. We're working on these other issues. Rail is working very aggressively. I want to commend Mr. McElligott and the staff, because there is no question that B.C. Rail, in my view, is a very well run Crown corporation. It's important for British Columbia with respect to the kind of rail service it provides up in the northern interior. It's important, I think, now that it's operating in a much more significant way on the marine side, both with Vancouver Wharves and the stevedoring company. It provides a valuable service as well as makes a significant contribution to the economy of the province. I mentioned the $100 million-plus investment in Vancouver Wharves, which added significantly to the capacity in the Port of Vancouver and to North Vancouver communities as well, who sometimes don't appreciate it.

So it's a well-run corporation. We've got these issues; we've laid them out. They're issues that we're grappling with. From experience, as I said earlier, I find it more prudent not to say that I'll have the problem solved by next week unless I'm absolutely ironclad sure that I will have it solved by next week. We'll just keep working on it, and hopefully we'll come up with a solution to these problems in good time.

R. Neufeld: I should add our support too. Mr. McElligott does a very good job of running B.C. Rail. I think it's a well-run Crown corporation. We are happy with the things that B.C. Rail has done. We know it's an integral part of our transportation system, and we need it in the province of British Columbia because of our resource industries. For those reasons we're concerned, and that's why we're posing the questions we are about the viability and the ongoing viability of B.C. Rail.

That's basically all the questions I have on B.C. Rail. Unless the minister wants to take a few minutes break to bring in the B.C. Hydro staff, we're ready.

S. Hawkins: I understand we are now at the Hydro portion of the minister's estimates.

S. Hawkins: The minister will have to be patient. I know he's had this file on and off for quite a few years, and I'm still familiarizing myself with quite a few of the issues.

The first order of business I'd like to deal with is the business plan. What we did get from B.C. Hydro. . . . I want to thank the officials at B.C. Hydro for providing us with briefings and accommodating us with documents when we needed them. However, the business plan that we asked for arrived, and it is basically the public document. It is the eight-page plan that was put out to the public. I'm just wondering where the detailed business plan is and when we can get a copy.

Hon. D. Miller: We put out a business plan; I think the member has it. In addition to that, there is extensive reporting through annual reports.

S. Hawkins: There was a recommendation and a requirement through the Enns report that Crown corporations put together detailed business plans. They are three-year plans. This document tells me that this is a summary of the strategic plan and that this summary outlines a strategy set way back in 1997. It was changed in 1998 and again in 1999, and there is a detailed version.

I can understand the sensitivity around confidential and commercial information. Could the minister advise me, if there is a detailed plan -- and I'm sure there is -- if we could see a copy? Perhaps we could do it in a confidential briefing. That would be acceptable to the opposition.

Hon. D. Miller: As the member correctly points out, and similarly with B.C. Rail, there are issues of commercial confidentiality which require that any plan we put forward doesn't inhibit the corporation in terms of any business opportunities that they're engaged in. There are extensive reports, and I'll ask B.C. Hydro to forward those to the member: the integrated electricity plan, the environmental social economic plan -- any number of plans. In addition, I would recommend that the member pursue annual reports. I think all of the information is there.

S. Hawkins: I've seen the annual reports. I've seen the documents that Hydro puts out to the public. I was under the impression that under the new era of transparency and accountability and the government's commitment to the Enns review we would perhaps be seeing a little bit more than this eight-page summary that came out. It appears that's not going to be the case.

I'm also interested in this summary. There is an area here that speaks to performance measurement. I'm wondering if the minister can commit to getting us a copy of the performance measures for the fiscal year 2000-01 that are mentioned in this document. It talks about a tool called a balanced scorecard; and it says that accountability is achieved "through the development of performance measures around our company objectives." And I wonder if the minister will commit to getting us that.

Hon. D. Miller: Mr. Costello is on his way as we speak. I don't think he'd have any difficulty with that, but I will consult with him to see if that can be arranged.

S. Hawkins: I wonder if the minister would also commit to advising us how often Hydro measures or reports against these measures and to whom the reporting is done. I would take that commitment as one in writing, if the minister wants to put that in writing, or as a briefing later. If we could get that information, either in writing or in a briefing later, we would be happy with that.

Hon. D. Miller: Well, as I said, I will consult with Mr. Costello. He may be here momentarily and can give you a more fulsome answer.

S. Hawkins: The member for Port Moody-Burnaby Mountain has a constituency issue that she would like to address, so perhaps we can do that at this time, until Mr. Costello enters the chamber.

C. Clark: Well, we'll see if the minister requires the presence of Mr. Costello in order to answer these questions. I don't know. So we'll test him here: can the minister tell us the status of B.C. Hydro's plans to supply and service large padmount transformers?

C. Clark: Well, hon. Speaker, I believe it will require the presence of Mr. Costello in order to advise the minister on this issue. It's an important issue in my constituency. Perhaps we should recess for a moment or two until the minister is able to answer the questions that are put to him.

C. Clark: All right, we'll go on, then. Maybe I can explain this for the minister. B.C. Hydro has produced small padmount transformers for a number of years. They limited the upper level to 500 kilovolts intentionally, I understand. Now they've decided that they want to go and get into the business of producing even bigger ones that go up to 1500 kVA. Now, that is going to have a huge impact, a significant impact, on a lot of local businesses that currently produce these. What we're seeing is B.C. Hydro, a monopoly Crown corporation, expanding its business and, in the process, putting out of business a whole bunch of private sector companies. My question is whether B.C. Hydro is continuing to pursue this proposal or if they've shelved it.

Hon. D. Miller: Well, my understanding is that they are continuing, and there are some good, sound reasons why. My deputy may be able to find the note, but if he can't, we'll get into it at some point. But I have read the briefing note on it. I think that Hydro's position is quite defensible, and as far as I know, they are continuing.

C. Clark: Well, here's the situation where we've got a big monopoly Crown corporation using its monopoly position to be able to go out and put all these little guys out of business. One of the businesses which is in my riding is called Synergy Engineering. Before B.C. Hydro embarks on this plan, I'd like to find some comfort in the fact that B.C. Hydro has gone out and done an analysis of the number of jobs that they will cost British Columbia's economy by pursuing the plan.

Hon. D. Miller: Well, not to be too harsh, but that sounds like utter claptrap to me, describing a Crown corporation that has been one of the primary development tools in this province, that's owned by the people of this province. . . . B.C. Hydro, which is well regarded by the people of this province, has some of the lowest electricity rates in North America. The member is describing it as some big bad monopoly Crown corporation. She has no sense of the history of this organization. Quite frankly, I think the questions are rather silly.

G. Farrell-Collins: Given that the staff isn't here and the minister is unable to provide real answers to any of the questions, and given the time, I move the committee rise, report progress, and ask leave to sit again.

YEAS -- 59
Evans	Doyle	McGregor
Sawicki	Kwan	Lali
Hammell	Pullinger	Bowbrick
Brewin	Boone	Orcherton
Calendino	Zirnhelt	Robertson
Sihota	Cashore	Conroy
Smallwood	MacPhail	Dosanjh
Petter	Lovick	Priddy
Ramsey	G. Wilson	Farnworth
Waddell	Gillespie	Streifel
Walsh	Kasper	G. Clark
Hansen	C. Clark	Farrell-Collins
Abbott	L. Reid	Neufeld
Coell	Chong	Sanders
Jarvis	Anderson	Penner
Weisgerber	Goodacre	Weisbeck
Nebbeling	Hogg	Hawkins
Coleman	Stephens	Thorpe
Symons	van Dongen	Barisoff
J. Wilson		McKinnon
NAYS -- 2
Miller		Randall

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

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

Private Members' Statements

B. Goodacre: The topic that we are addressing tonight is the merger of Air Canada and Canadian Airlines and the effect it has had on service to rural British Columbia. The recent merger of Canadian and Air Canada, as we all recognize, has lead to serious reductions in service to airports outside the lower mainland.

For example, the flight from Cranbrook to Vancouver used to be a direct flight, taking about an hour and a half of

flying time. Now the flight is routed through Penticton and takes four and a half hours. Statistically, seats available on flights within B.C. have fallen by 18 percent. The number of flights originating from Vancouver airport this summer is predicted to be 40 percent lower, from 1,000 down to 610. Of course, rural British Columbians are faced with fewer options for air travel, which impacts not only local residents but tourists and business travellers as well.

Penticton and Victoria have both experienced serious reductions in the number of flights into their airports. When we combine the effects of the merger on airline services with the effects of federal downloading of airports to many rural municipalities, the impact intensifies. At a time when ecotourism is the fastest growing segment of our tourism economy, rural British Columbia needs opportunities to improve access to our communities. Instead, we are faced with increased costs and poorer service.

In my constituency of Bulkley Valley-Stikine, Smithers is the only community with scheduled air service to Vancouver. Before the merger, Canadian and Central Mountain Air both operated out of Smithers Airport, which is the home base and head office of Central Mountain Air, an affiliate of Air Canada. Residents of Smithers are concerned because Central Mountain no longer has flights to Vancouver from Smithers. Another issue in Smithers is the large price gap between Canadian flights out of Smithers and Canadian flights out of Prince George, where WestJet provides low-cost competition. A farmer from Smithers chose to fly to Victoria from Prince George to attend Ag Day in Victoria a couple of weeks ago, despite the five-hour drive each way, because the saving was close to $500. His story is far from unique.

The federal downloading of airports has put extra pressure on local government. In Cranbrook the airport needs to expand to meet the growing demands of the tourism industry. Each year the federal government takes about $60 million from the Vancouver airport, yet refuses to make this money available to the many feeder airports around the province.

The tourism impact of reduced service and higher fares affects communities throughout British Columbia, from Victoria to Penticton and Fort St. John. One tourism operator in the Smithers area, CanTrek, showcases the Bulkley Valley around the globe, offering combination air, accommodation and recreation packages. Since 1997 Kamtrek has been a local leisure air wholesaler for Air B.C. and Central Mountain Air. As of May 2000 they are no longer allowed this opportunity -- a serious blow to their business. The new merged airline's refusal to respect existing partnerships to promote local business is clearly detrimental to the tourist industry in our area and across rural British Columbia.

Another growing industry in our region is consulting services. Most consultants require an opportunity to travel back and forth to the city. The higher prices and the reduced service is causing a lot of these people to reconsider whether they're going to locate in rural British Columbia or whether they are going to choose to locate outside of our areas.

Now, the reliance that we have in small communities on our air service and the cost that it has imposed on us is something that is becoming more and more of a concern to the people that live there. What we've seen with the merger is that you no longer are seeing extra seats available where you can get lower prices when they come, so virtually most of the seats are high-priced seats. We're not getting opportunities to get the traffic back and forth to our communities that we're going to need as we develop and grow. The tourist industry in particular is faced with an undue burden in most of our areas. In the fall, especially, we have a large group of people coming up to hunt and to fish. This has become a regular part of our economy in the region that I live in. As these people are faced with higher and higher costs of getting there, these industries are, of course, going to suffer from that fact.

One of the things that we would certainly like to see is the federal government and the provincial government working together with the airlines to seriously look at the way we provide airline services in this province. What we really want to see is an expansion of the kinds of things that I was talking about with CanTrek, where we actually work together with operators in small communities to provide tourism opportunities for people from around the world.

We clearly need to have workable partnerships with the airlines in order to make something like that work. Airlines like WestJet really help keep the prices down in big airports like Prince George, but we're never going to see them coming into areas like Dawson Creek and Smithers or even Terrace, for that matter. The threshold that they're looking at in terms of communities that they will go into is apparently 25,000, a number that very many of our airports do not see. We are hoping that the provincial government will act as a catalyst in moving this issue forward with the federal government, and. . . .

R. Thorpe: I would like to thank the member for Bulkley Valley-Stikine for his words. As he mentioned in his opening comments, Penticton and the South Okanagan is an area that has been put at risk with respect to the cutbacks and the result of the merger. I can remember the evening in February when I was watching the 11 o'clock news on CBC, and the president of Air Canada came on. He said: "You name the community, and I'll tell you something good that's happening in it." I was quite angry. Obviously he didn't know where Penticton was, because we had received significant cutbacks. In fact, I was so angry that I got up at 6 o'clock B.C. time and placed a call to Mr. Milton's office in Montreal.

I must say that they did respond. I called back three times. Finally, I had the pleasure of having head office staff at Air Canada confirm that they would travel to the South Okanagan and meet with the community leaders of the South Okanagan to see how we could address this issue. In fact, on March 21 that meeting took place in Penticton. We had a senior vice-president of Air Canada, the director of government affairs for Air Canada and a sales manager for Air Canada come to our community. I must say that they did come to listen.

Our community, the South Okanagan, is poised for future growth. It will be a hotbed of growth in the very near future in

the province of British Columbia. Our airport is a key economic lever, especially for building in the future. And I, like the member for Bulkley Valley-Stikine, believe that the federal government has some obligation to work with the rural communities of British Columbia, especially with respect to the $60 million that's being taken out of the Vancouver airport, which is being taken from people like myself and the other members of this House and the travelling public of British Columbia as they pass through that airport.

Out of this crisis situation in our area, the South Okanagan, we were able to bring together for the first time all of the elected officials from Summerland, Osoyoos, Oliver, Keremeos, Princeton, Naramata and Penticton. As the mayor of Oliver, Linda Larson, said, sometimes we need issues like this to bring our communities together. The airport is so important to the South Okanagan, because the Penticton Trade and Convention Centre is the second-busiest convention centre in British Columbia. Our summer hockey school is a world-class facility. Apex Mountain is rebuilding and growing steadily year after year. Ironman -- the only ironman activity in Canada. . . . We have the jazz festival in September, which is growing, and of course we have the world-renowned Okanagan Wine Festival. We have rock climbing off the Skaha bluffs and, as the other member said, ecotourism. We have new hotels being built, and we have the Canadian Helicopters training school. And we are looking at high-tech development.

What we have to do is work together as communities. We have to understand that for companies to survive there have to be profits, and they have to be able to compete in the global marketplace. What we also have to understand from them is that they have received their growth and their future from the rural communities in British Columbia and the rural communities of Canada. So they have an onus to work with us.

We asked them quite simply: "Are you committed to working with the South Okanagan community?" They said yes. We asked: "Are you committed to working to develop the Penticton regional airport?" They said yes. So slowly we are building a relationship with Air Canada and the former people from Canadian Regional. Our expectations are that we are going to be able to re-establish Dash service to Penticton and that we have to have competitive pricing, as other members of the House have said.

This is an issue that all members of this Legislature should work together on. It's an issue that affects all the rural communities of British Columbia. It's important for us that if an organization is going to have a monopolistic right in this province, they have moral obligations to the people of all the communities of this province. I have, in talking with Air Canada in Montreal this afternoon, garnered another commitment that they will travel to Penticton in the last two weeks of June, again, to work with our community. We are currently serviced by Central Mountain Air and have one flight with Canadian Regional. But working together we can -- and I would be pleased to work with the member for Bulkley Valley-Stikine on trying -- resolve this issue for all British Columbians.

In closing, the government of British Columbia has outlined three objectives that are needed to be met as part of the restructuring of Canada's airline industry in order to protect the travelling public, B.C. communities and Canadian airline employees. Those three points are that: (1) the regional services and infrastructure would be protected and remain viable by ensuring that a restructured airline industry would include a commitment to provide affordable and quality services to regional, northern and remote areas of British Columbia; (2) the jobs of B.C.-based employees working for Canadian and Air Canada would be protected; and (3) the interests of consumers be addressed by way of a competitive airline industry that guarantees access, affordability and frequent-flyer points and privileges.

Clearly the federal government has not ensured that the public interest of British Columbians or the travelling public as a whole was protected in this merger. Flights have been reduced by 20 percent across the country. Air Canada has admitted that it specifically targeted western Canada for service cuts. It is the regions of our province that are being most negatively affected, and this hurts B.C. communities.

B. Goodacre: The member tells me that it's 40 percent in British Columbia, and that is the number that we have used in this commentary.

I think, taking up on the comments of the member for Okanagan-Penticton, the work that they're doing in their community with Air Canada is something that we should be duplicating across the province. It's something that I believe the provincial government can play a significant role in.

I look forward to an opportunity for us, for a change, to act in a totally non-partisan fashion to actually do something that we all agree is the best thing to do for this province.

The Speaker: Thank you, member. For the second private member's statement, I call on the hon. member for Vancouver-Langara.

V. Anderson: History that is ignored is history that is lost. History indeed is his story, or her story, of how people have lived, loved, worked and died within a specific time and place. Every community has its stories, which need to be recorded and preserved. In Vancouver-Langara, the stories of the senior residents there are fascinating -- both the seniors, who can tell us of some of the original developments of our community, and their descendants, who can pass on the stories of their pioneers.

Of course, the earlier settlers of this land were the aboriginal peoples, whose history is recognized but largely yet to be recorded and restored. Hopefully a greater effort will be taken by all of us in this regard. For the Vancouver community, for instance, the aboriginal history goes back thousands of years, as reflected by the Marpole midden and the records of the Musqueam nation, among others.

Around 1882 the first non-aboriginal persons settled in the area of the Fraser, off Marine Drive at the foot of what is now Hudson Street. The first post office was named after the owner of the store where the post office was located -- Mr.

Eburne -- and so it became known as the Eburne community. That was also the railroad station. Until the time came for changes and new bridges to be built, the old Eburne community was changed and became the Marpole community.

The Marpole Museum and Historical Society is now gathering historical records, photos, artifacts and stories from these earlier days. They are also restoring a 1912 heritage house as a central point for displaying this history and sharing it with the future generations as a living historical showplace.

The importance and fascination of such historical redevelopment is shown by another unique B.C. project, which I had the opportunity to visit on the May 24 weekend in Port Alberni. This is the McLean Mill National Historic Site. Here we have the only working, steam-operated sawmill in Canada. It is a national historic site to celebrate the history of forestry in British Columbia. It is operated both as an educational and as a tourist resource, educating the public on past and present sawmill operations and as a means of doing contract work for specialty wood products to serve the surrounding community.

The McLean Mill, about ten kilometres from Port Alberni, was operated by the R.B. McLean family from 1926 to 1965. The equipment for the mill was donated to the Port Alberni community by the family, and the land to maintain the mill on its original site -- some 13 hectares -- was donated by MacMillan Bloedel Ltd. The site contains 35 existing buildings and structures, including a mill pond and a fish ladder. This operating mill was opened again to the public, with guided tours four times daily, on May 20 of this year, when my wife Joyce and I were pleased to be present. The mill and its setting are both impressive, including the 20 rabbits -- white, brown and black -- which play around and make their home underneath some of the buildings.

But the historical storytelling is also impressive, for one has a guided theatrical experience by a troupe of actors, mostly from the Port Alberni area, who interpret in verse and song the very aspects of life in a community lumber camp. This troupe of enthusiastic actors, called the Tin Pant Theatre, is worth the visit itself. It's led by Bill Mackwood, who has prepared a detailed, entertaining and informative historical presentation as one walks through the mill's area. The tour includes a cutting demonstration using some of the largest cutting saws, 52 inches in diameter, able to cut logs up to 45 feet in length.

Though the McLean Mill is already open to the public seven days a week, 10 a.m. to dusk, the big official opening is July 1, 2000, as has already been announced here by the MLA for Alberni. And what a bargain -- $6 for adults, $4 for seniors and youth, $13 for a family of four and, better still, an annual pass for only $25.

The McLean Mill is operated by the city of Port Alberni in partnership with the Alberni Valley Museum, which itself has an exceptional historical museum in Port Alberni. The collected items bring back many memories and highlight the many changes and developments over the years.

Combined with the restored Alberni railroad station and the Alberni Pacific Railway, there is much to see and enjoy. The railway operates an excursion steam train on weekends and holidays, along the industrial waterfront throughout the summer. The railway is operated by the Western Vancouver Island Industrial Heritage Society in partnership with the Alberni Valley Museum. Future plans are to run the train from the town to the McLean Mill.

Other historical attractions there also include the MV Francis Barclay, the MV Lady Rose, the Bamfield lifeboat and the maritime discovery centre now under development. Then, too, there is the sinking of the migrant boats for diving opportunities.

Also nearby, at Sproat Lake, is the home of the famous Mars bombers, built in 1939 and indispensable for firefighting in British Columbia.

R. Kasper: We all know, of course, that the MLA for Alberni has been involved with the McLean Mill for some years. As he told this House on March 16 of this year, McLean Mill is the last steam-operated sawmill in Canada that is fully functional and has been designated as a national historic site, as the member outlined.

Our government is proud to have supported the refurbishment of the last fully functional steam-powered sawmill in Canada with some $2.5 million in funding from Forest Renewal B.C.; $1.3 million to pave the road to the McLean Mill National Historic Site was also contributed. In addition, we have seen the provision of some $50,000 from B.C. 2000, a grant to the Western Vancouver Island Industrial Heritage Society, to operate the steam-powered passenger train from Alberni to McLean Mill site. This steam railway project will feature a fully restored 1929 Baldwin Locomotive and would -- and I stress "would" -- have created five direct jobs in addition to the spinoff benefits for tourism in the Alberni Valley.

The steam railway, which was to operate this summer between downtown Alberni and the McLean Mill National Historical Site, has been placed in jeopardy -- and that's the sad part of this story -- because of the decision by RailAmerica, the owners of the E&N Railway. RailAmerica is based in Boca Raton, Florida. They buy up short-line railways all over North America, and they operate over 3,000 miles of track throughout North America.

This company, RailAmerica, had previously agreed to let the Western Vancouver Island Industrial Heritage Society use the small 4.5-mile section of track, but they have now decided to renege on that agreement. I and other members -- including the member for Alberni, who cannot be here because he's recovering from back surgery -- have also condemned that decision.

and over 5,000 hours of volunteer labour. RailAmerica's decision to refuse the Alberni Pacific Railway permission to use the small 4.5-mile section is not in keeping with their commitment to community spirit, in particular the Port Alberni area.

This is not a good first impression for RailAmerica. In the debut of a corporate citizen here in British Columbia, I and other members strongly urge them to reconsider this decision. Not only with this decision, but they've also decided to increase crossing-fee rates to the extent of over 4,000 percent. I'm sure that my colleague from Alberni would express the same feelings that I have. However, Port Alberni is a strong and resourceful community, and they will certainly find a way to overcome this setback. The grand opening of the McLean Mill will go ahead, train or no train.

On behalf of the member for Port Alberni, I encourage anyone with an interest in our B.C. heritage to visit Port Alberni this summer and see Canada's last fully functional steam-powered sawmill that has been restored to its former glory.

I'd like to send a message to RailAmerica. There was another corporate citizen, Pacific Logging, that decided to impose fees for foreshore rights on Shawnigan Lake and Lake Cowichan two years ago. Their holdings were sold to TimberWest, and RailAmerica can learn by the example set by TimberWest when they acquired their assets. They cancelled the conditions that Pacific Logging had set on them, and they refunded the people who had paid high, onerous fees for the right to have docks on those lakes. So RailAmerica can learn by that fine example set by TimberWest.

V. Anderson: I thank the member for Malahat-Juan de Fuca for adding to the complete story. Between the two of us, we can tell the whole story, and that's greatly appreciated.

For people who would like to follow up on it, though, I think there's more story to tell. The person to be in touch with is Jean McIntosh, the director of the Alberni Valley Museum. I'll give her web address: www.alberniheritage.com. This is the modern age when we do history in modern technology.

I think it's very important, as the member opposite has also said, to express our appreciation to all of the many volunteers who contribute their time and their resources to make these historical redevelopments possible.

One of the unique things that I think more of us can do perhaps is encourage others to tell their stories. Many of the artifacts and stories that we could have are lost, because people haven't got around to cleaning out their attics. Or when they do, they simply dump them. All of that good material should not be lost.

One project that I have found very fascinating is those who take a video camera. . . . Many people have video cameras today. They sit down with an older person, and they say: "Tell us your stories." And they tell the stories into the video camera, which is a very easy and relaxed way to do it. It's amazing how important those stories can be.

One of the gentlemen in our community did exactly this. He sat down, and we recorded his history on the Prairies. He took it home with him as he went back to a Christmas reunion and played it for his grandchildren and his great-grandchildren. So they left with them this record of stories which would have been completely lost otherwise. And I can feel the importance of this, because unfortunately, I did not get part of the history of my grandparents, who came from Ireland at the end of the century. Somehow it never came up in our family, and so that's a history I've lost completely.

I want to encourage people to take part in the redevelopment of our history, of collecting our history, of sharing it with ourselves and with the future generation. Again, I'd like to thank the many volunteers across the province who work so hard and so industriously, without any recognition, in order that we might preserve our history to show it to our children and the grandchildren who will come after us.

S. Orcherton: I'd like to talk about an issue tonight that is not talked about a whole lot in this chamber or, really, a whole lot out on the streets, because it's an issue that really hasn't had a whole lot of public discussion in recent times. Many members know that the federal government has a budget surplus. Some members have argued, and I among them, that that surplus is a result of federal transfer payments cut to provinces and has impacted on our health care system and education system. And I believe that to be true.

But there's another issue that's occurred in Canada, and I'd like to take a few minutes to talk about that, and that's cuts to the employment insurance program that have taken place over a number of years. Some of you may remember that the employment insurance program used to be called the unemployment insurance program, but now it's called the employment insurance program.

In the recent federal budget the Liberal government indeed announced that they had reached a surplus position after many years of deep cuts to many programs and government services. But the federal revenue surplus, as I said, was not solely the result of those budget cuts and transfer payments and so on. It was reached on the backs of workers: workers who were denied employment insurance benefits due to severe restrictions to the employment insurance system, workers who, through no fault of their own, are without employment. These restrictions have made it nearly impossible for many unemployed workers to collect benefits from the employment insurance system, an insurance scheme that they have invested in through their entire working lives.

Since 1989 the number of unemployed workers eligible to receive benefits has fallen from 74 percent to 36 percent. This has made it possible for Ottawa to reduce the amount of EI benefits it sends to British Columbia workers by nearly $752 million. Remember: all the workers who work pay into the employment insurance program. And of those workers who find themselves unemployed, 74 percent used to receive benefits, and today only 36 percent do.

The result of these cuts has been a $20 billion employment insurance surplus for the federal Liberal government. That's $20 billion taken out of workers' paycheques, whether you're making a 6-figure salary or minimum wage. It's money,

as well, taken not only out of the employees' pockets; it's money taken out of the employers' pockets, because as members know, employers pay premiums for employment insurance as well.

I think that now that Ottawa is running a surplus budget, there's no excuse for the continuing harassment and mistreatment of workers who've fallen on hard times. Employment insurance was not created to be a tool for reducing the national debt or for fighting the federal deficit, but a tool to help Canadians who find themselves without work.

That's why I'm involved in a program that I want to share with members tonight, and that's to contact municipal governments in my area so that we might work together to convince Ottawa to enact a review of the Employment Insurance Act. Provincial and municipal governments are not alone in taking issue with changes to the employment insurance eligibility requirements. I'm indeed proud to say that in my community the Victoria Labour Council, with Colin Graham as the secretary-treasurer, is taking on this initiative in other surrounding municipalities in the Greater Victoria area.

They're calling, as I am, to broaden eligibility for employment insurance, to restore weekly benefits to 60 percent of an unemployed person's former wage and to separate the employment insurance fund from the federal government's general accounts.

As I said, employers should be concerned about employment insurance restrictions. Some employers view EI as a payroll tax. But where is this payroll tax going? It's not going toward building a healthier, more skilled workforce that could benefit employers and benefit communities. Instead, it's being diverted directly into Ottawa's general revenue.

The federal government, I believe, must reverse its destruction of our social safety net. The limits imposed on collecting employment insurance benefits have exacted an enormous toll on all those jobless individuals unable to meet their basic needs, leaving us with countless broken families and shattered lives.

Municipal governments and provincial governments have been left to repair this social damage. For example, following changes to the employment insurance eligibility rules, B.C. Benefits caseloads showed a sharp increase, reaching a high of 200,000 in 1996. At the same time, the number of employment insurance recipients plummeted to 60,000. Members probably know that most people, when they find themselves having to access B.C. Benefits. . . . The majority of folks that get welfare in this province do so for two to three to four months, and then they're back into employment. Those are the same people that used to be able to collect employment insurance benefits. B.C.'s unemployed workforce deserves better than a federal government that is using employment insurance premiums to augment its budget surpluses.

Employment insurance is not merely an issue for your next-door neighbour. Any one of us could wake up tomorrow and be out of a job and left to fend for ourselves without regular income. If such an unfortunate incident were to occur, I'm sure that you would want the unemployment insurance system to treat you with fairness and dignity. However, it's very likely that instead you would be harassed and denied benefits and be part of the 64 percent of working people who apply for employment insurance benefits and are turned away at the door and end up going to the B.C. Benefits welfare system in British Columbia.

Members, if you think Ottawa should reverse their decision, you can do what municipal councils in Victoria have done, what the municipal council in Saanich has done and what I predict other municipal councils around the province will be doing. That's to call for a review of the employment insurance program at the federal level and work with business people and labour people in your community to see if we can't turn this around and make employment insurance the program that it's supposed to be for Canadians.

When Canadians find themselves out of work and unemployed, they rely on our social safety net. They rely on employment insurance to assist them through those tough times. What they're finding so often is that they are suffering very badly. They believe they have an insurance program that looks after them. They go to make application, and there is nothing there for them.

I'll close my remarks there. I look forward to the response from the members opposite on what I think is a very important issue. We have low unemployment in Victoria -- almost 95 percent employment. But in other areas of the province there are many workers who, from time to time, rely on unemployment insurance, and they should have access to the social safety net program that has really become a mainstay of our Canadian culture and Canadian identify. It's how we look after each other in Canada, and it's being undermined.

The Speaker: Thank you member. To respond, the hon. member for Port Moody-Burnaby Mountain.

C. Clark: The member has raised, in exactly his words, a very important issue. I was tempted, when I saw the subject and saw that it was unemployment, to start out with a comment perhaps about how we might see 40 members on the other side of the House unemployed sometime very soon, if British Columbians are lucky. I won't start off with that, because this is a very serious issue.

I will do this: I will offer my agreement with the member that payroll taxes are way too high in British Columbia; it's a total disincentive for employers. It hurts workers. People should certainly be getting more back out of what they put into the system. I'd argue that if the system has got too much money, then perhaps they don't need to skin us alive for so much money every time they take money out of our paycheques.

Rather than just pointing fingers at another jurisdiction, at another level of government, what I will do is perhaps offer the member a suggestion about something that we can do at our level of government that might do something to alleviate the situation. The best social insurance program that we can offer for British Columbians is a job -- the dignity of work and the certainty of being able to go to work every day and know that you're going to have a paycheque to take home. That's the most important social insurance program that we can offer.

Government has a role to play in creating and maintaining an environment where jobs are abundant. I would argue that we haven't lived up to our duty to British Columbians to make sure that our economy operates in a way so that we've got lots of jobs for people to go to, so that they can have the dignity of work.

I haven't been unemployed. I can't imagine how difficult it must be for a miner to come home from his or her job and

say to his or her family: "You know what? I don't have work anymore." The industry is shutting down in British Columbia. Half of all the miners in British Columbia that were at work a decade ago no longer work in this province, and that's a shame. Those are people who are now forced to rely on social assistance or they've moved to other jurisdictions, and you know that's not right. Those are people that want to work. They're people that, when they're working, are contributing to our economy -- and not just to our economy and creating other spinoff jobs, but they're also contributing to our social welfare and safety net.

The more people we have working, the more people we have paying taxes. And the more people we have paying taxes, the more revenue government has to take care of the least fortunate. It's no wonder that as we've seen British Columbia slide to number ten in economic growth in Canada, we've seen British Columbia post the pathetic job growth of 0.4 percent, the worst job growth in the country. Just to show how bad it is, the second worst in Canada is Saskatchewan, and they're at 4 percent. That's how bad British Columbia is. So we've got this pathetic job growth here.

In addition, for the people that are still working, they're taking home $1,800 less a year than they were a decade ago to be able to take care of their families. Is it any wonder that in this British Columbia we've seen evolve over the last decade, we now have poverty growing at a faster rate than any other place in this country?

We've seen times when there have been more people dependent on minimum wage here than anywhere else in Canada; that is not the way to take care of citizens. That is not the way to provide certainty for families, to ensure that people are able to take of their children and their mortgages. The way to do that is to provide jobs, to create an environment where we've got healthy job growth, where we've got real investment and where people feel optimistic about the future.

That is something we can do. We don't have to just point fingers and ask somebody else to do it. My call tonight to the hon. members in this chamber is to roll up your sleeves and decide you want to do something yourself about this, not just call on another level of government to do something. Roll up your sleeves and say: "You know what? By golly, this level of government can do something about it. And darn it, it's about time."

The Speaker: Thank you, member. For the reply, the hon. member for Victoria-Hillside.

S. Orcherton: I'm tempted to thank the member opposite for her comments. Just tempted -- she seems to have missed the point. The point is that working people pay into an employment insurance program in this country. In 1989, 74 percent of the working people who paid in were eligible to collect benefits if they found themselves unemployed, benefits that would allow them to tide themselves over and tide their communities over when there was an economic downturn, either personal or in the community.

Today, the member should understand, only 36 percent are ever eligible to collect benefits when they find themselves in that circumstance. Now, I understand that as a federal Liberal there's a reluctance to attack those kinds of cuts; I understand that. But the reality is that we've had a system in this country that protects working people, that provides a social safety net for people. And that social safety net is being undermined.

When the member says that perhaps we should stop pointing fingers at others, I'm not sure where we can point those fingers, when it's a federal government -- and a federal government program that is being cut.

She says: "Roll up our sleeves and do something." That is precisely what I'm asking the member to do, all members in this House to do and municipal governments to do: roll up their sleeves and do something. The something that you need to do is to engage the federal government in a dialogue about reforming the Employment Insurance Act so that working people can access benefits through an insurance plan that they pay into and employers pay into, so that there's not an economic downturn on those people's personal economy and so that, quite frankly, there's not a drain on the B.C. Benefits side -- the welfare side -- for that short-term period of time.

Now, yes, the best solution to unemployment, of course, is a job. And you know what? I said. . . . [Applause.] Well, that's great, and everyone's happy about that. I hope they're equally as happy that in Victoria we have almost 95 percent employment, the highest employment in the history of this city and this community. We're moving unemployment levels down, down, down in the province, and that's what's occurring. And it's not helping. . . .

S. Orcherton: Look, this is a serious issue. There are workers. . . . Maybe the member opposite has never been unemployed and had to rely on employment insurance; I have. I've been unemployed, and I've had to rely on employment insurance. I know what that process is all about. Frankly, I know we're not supposed to get partisan here, hon. Speaker. But we're talking about an employment insurance program that's supposed to provide benefits for people. They pay into it; employers pay into it. And if the member can't figure out that that plan should be able to deliver on what it says. . .

S. Orcherton: . . .it should deliver, maybe she should take a little bit of time, spend some time with me. I will explain to her what it's like to be. . .

S. Orcherton: . . .unemployed and not be able to collect benefits. And, you know, roll up your sleeves, hon. member.

S. Orcherton: Get off your chair and get at it and try and achieve some. . . .

S. Orcherton: Thank you, hon. Speaker. I enjoyed the debate, at least from this side of the House. I hope the members opposite took the opportunity to learn something.

Before I recognize the speaker, I would make the comment that difference of opinion and controversy are welcome in the chambers. However, the spirit and intent of private members' statements is not to provide debate in this chamber, and I would ask members to keep that in mind.

For the next private member's statement, I recognize the member for Port Moody--Burnaby Mountain.

C. Clark: Well, the spirit of debate in this House, thankfully, is no stranger to this chamber -- to private members' statements, very frequently. I appreciate the debate that occurs.

Tonight I want to follow up on that member's comments about jobs and employment with my own comments about jobs and employment, particularly in the small business sector, an area that's been so badly hit in the last ten years that it's reeling.

My focus tonight will be on some work that's been done in my local constituency, in the Tri-Cities area: Port Moody, Coquitlam, Port Coquitlam and the two villages of Belcarra and Anmore. We have a project there which we call the small business advisory team. This project came out of an idea presented to me by the mayor of Anmore. He sat down and said: "You know, the thing about politics is that a lot of people don't want to take out a party card, but they want to be involved in some respect. They want to be able to get their views across." We sort of batted around ideas about how we might be able to get citizens involved in politics a little bit without asking them to make the commitment to a political party.

Well, after that I had another coincidental meeting with a former councillor in Port Moody named Gayle Carter. She talked about how small business needed to have a voice. They needed to make sure that their voice was heard. We decided that we would start a series of advisory committees that would advise me, as their MLA, on a non-partisan basis. Citizens' groups would come together and formulate solutions, come up with ideas for what we might do to fix the problems and also present their MLA with their views of what the problems were.

In my view, there are far, far too few opportunities for members of the public to get involved and to go out and advise their elected representatives and ask their elected representatives to bring their voices to the Legislature. The way our Legislature has functioned -- or misfunctioned -- over the years hasn't made that very easy.

That's one of the things that we've been trying to achieve in the Tri-Cities advisory groups. We've got the small business advisory team up and running very effectively now. We've got an advisory team on youth, family and children, which is up and running very effectively. We're getting one going on education, and there seems to be some interest in getting ones going on land use and transportation as well.

The one I want to talk about tonight is the small business committee, because they came together. . . . It ended up being about 100 small businesses that came together, were represented. They represent millions of dollars in revenue and hundreds and hundreds of employees. They came together, met every month. I attended each of their meetings, and we discussed the problems that were facing small business.

They decided after a few meetings that they wanted to put together a conference -- to come up with ideas together as a larger group -- that would be focused over a full day, as opposed to just a morning meeting. That culminated in a report that they called "Keep It Simple, Keep It Fair." It was the result of a full day's work, and I want to take the opportunity tonight to present that to the Legislature.

They talked about, most importantly, reducing or getting rid of the overlapping government jurisdictions they have to deal with. They wanted to create one-stop shopping for all regulatory requirements for small business. They said: "Legislate a balanced budget." They said: "Reduce taxation, get rid of the corporate capital tax, change the Labour Relations Code so that it better reflects the changing workplace, insist that Crown corporations stay within their mandates, cut the size and cost of government and establish a uniform Building Code."

C. Clark: You know, the member across here talks about: "Is this the business summit?" No, it's not. This is the small business community in my riding, and as their MLA, it's my duty to represent their views in this Legislature. They produced this report for free. They came together. They took time out of their business so that they could spend a Saturday putting this together. For members on the other side to somehow suggest that this is the product of some big corporate conspiracy to bring the government's downfall is ridiculous.

What this is, is the product of a full day's work that people volunteered their time for -- took it away from their families and their businesses, which they can ill afford to do -- to come up with solutions for government. And as their voice in this Legislature, I'm taking the opportunity to present that tonight.

They suggested restoring secret ballots for certification and establishing equal representation for business and labour on the Workers Compensation Board. They said: "Get rid of the Fair Wage Act." They said: "Eliminate the protective interprovincial trade barriers." They said: "Eliminate subsidies to business and industry like Skeena Cellulose." They said: "Restore an open tendering process in the province."

They talked about all those issues in the context of what was actually happening to them on a day-to-day basis. They talked about how it was affecting their ability to employ people and their ability to survive day-to-day. Some of them talked about how government changes -- just the stroke of a pen -- meant that they had to stay awake nights wondering if they were going to be able to make payroll the next day. They talked about how changes in the Labour Code and the Employment Standards Act have in some cases made it very, very difficult for them to survive.

And most of all, they talked about the fact that it looked as though, if they had to continue operating in the environment they currently are forced to operate in, they didn't think they could make it. They said they can't take another four years of this kind of environment. A lot of them talked about how they might have to take their life's dream and move it to Alberta, move it to Ontario, move it to Saskatchewan or, worse yet, shut it down altogether.

As their representative in this House, I'm proud to be able to present their views about what should happen. If this government won't listen to what they'd like, I tell you, the next government will.

M. Sihota: It's too late. This government has listened, is listening and is taking action to deal with the challenges, which are difficult, that are faced by small businesses across the province. I would hope that the member, when she mails out her mailer, will mail out my response back in terms of that mailer to her members.

The small business community said, "Look, it's tough for us to make ends meet, to show a profit and a positive bottom line at the end of the day," and we said as a government: "You know, you're right. So what are we going to do? We're going to reduce small business taxes." And we reduced them, first, to the lowest level in western Canada, and now, in this budget, to the lowest level in Canada, at 4.75 percent. New Brunswick had to come in and try to undercut us. And you watch, hon. Speaker: in due course, we'll be ahead of them as well. Not one member opposite, not the member who just spoke, ever stood up in this chamber and said: "We want the government to reduce taxes for small business." She never advocated for them then. We stood up and advocated for them, and we've delivered for small business in terms of one of the lowest tax rates in the country.

We said: "Look, there ought to be opportunities for young people to get into small business and to take their entrepreneurial ideas and their skills and make them happen." We started the YouBET program to try to attract young people, to give them the skills and the capital to be able to access small business opportunities. We started the Job Wave program. I ask the member opposite to talk to the Council of Tourism Associations or to her critic from Penticton. They endorse the program, saying it's a wonderful program to help people make the transition from welfare to productive small business opportunities so as to allow them to take their ideas and their entrepreneurial energy and make things happen in the small business sector.

To help diversify opportunities for the small business sector in this province, which creates most of the jobs, one of the things that we did as a government was introduce a tax credit for film to attract that industry here, to prevent it from going to Ontario, to prevent it from going back to Hollywood -- to stay right here in British Columbia. You know what? That tax credit -- which cost us, I think, about $10 million a year -- has now generated hundreds of millions in opportunities and purchasing power in the hands of consumers and small businesses.

We recognize the enormous potential of this province in the tourism sector, and the beneficiaries in that sector are particularly the small business sector. You know what? To help that sector out, we've now seen tourism go from about a $3-million-a-year industry in 1991 to $10 billion. This government's standing up and diversifying the economy, creating new opportunities for small business.

Every year we have reduced the capital corporation tax the member alludes to. Now 90 percent of the businesses in this province do not pay the capital corporation tax. But I tell you, hon. Speaker, there are differences between the member opposite and members on this side of the House. I'll tell you what they are. We believe that there ought to be balanced labour legislation in the province. And we're proud to say that since we brought forward a new Labour Code for this province in 1991, we have seen the fewest days lost to strikes since the Second World War. We introduced some changes that the member doesn't support, like secret ballot, but I remind her that the business representatives on the Labour Code panel supported that recommendation and said it would bring about, as it has, stability in labour-management relations.

They supported our initiative to prevent the hiring of scab or replacement workers, because they thought that it would bring stability back to this province in terms of labour relations matters. And it has -- the second fewest days lost to strikes in this province. So when you add it up, small business in this province is doing well. How well? We have one of the highest growth rates of small business in the country, increasing at a rate of 6.5 percent, year in and year, out since 1991, when we came to office. It is a myth that the members opposite want to perpetuate that only they advocate and stand up for the interests of small business.

Not once have they asked us to reduce tax rates for small business. We reduced them. Not once has the member opposite stood up in this House and asked for tax credits on the film sector to help small business on that side -- but we did it. Not once has she stood up and said: "You've got to do more for tourism." Again, $10 billion in activity. . . . Not once did she stand up in this House and say: "You've got to invest in young people so they can access entrepreneurial opportunities." Not once did she stand up. But we did it. Time and time again when it comes to standing up for small business, we've been there and the member opposite hasn't been.

The Speaker: Order, members. To reply, the hon. member for Port Moody-Burnaby Mountain.

C. Clark: Well, nice of the member for Metchosin to drop by tonight. You know, the way he adds, he might be in line for promotion to Minister of Finance, given his mathematical skills. You know what? I will send out his response, with my comments, to every member that attended this small business thing. And I will send it out with a response form they can send to his office. I'll ask them to put down their comments on his comments and send it back to him. You know what they'll say? There'll be two words at the bottom of that. They'll be: "Ha, ha, what a joke."

What a joke to see this member stand up and claim somehow that he supports or that this government supports small business. That is a joke, and it's a cruel joke. This member would know something better about what he was talking about if he would take time to actually listen to the small business people in his constituency. When those people listen to the litany that he spread out tonight about how great this government is, they're going to look at it and they're going to go: "What does he mean? What is he talking about? This doesn't reflect my daily life. This doesn't reflect what's happening in my business."

This minister stands up and says: "Boy, the Labour Code is sure working for small business." Gee, I wonder where he gets his ideas? When he stands up and says, "We've got a tax regime that works for small business" -- boy, it sure doesn't work for the small businesses in my riding. When he stands up and says, "The regulatory burden is so light that they can barely believe it," they're going to say that doesn't operate that way in the Tri-Cities. It doesn't operate that way for most small business people that I know.

The real life they experience includes a world where they are being crushed by payroll taxes from this government; where they are being crushed by WCB payroll taxes and WCB regulations; where they are constantly, constantly under siege by the changes that this government has made to the Labour Code and the Employment Standards Act; where they are being crushed by the tax burden; where they can't find skilled employees anymore, because they won't work in British Columbia because the tax rates are too high; where they can't find an educated workforce here anymore, because we educate them here, we pay to educate them here, and then they don't stay a day after they graduate. People won't work in British Columbia in the kind of environment that this government has created. That's the problem.

We've got a brain-drain; they can't find employees. That's if they can afford to hire the employees, with the added payroll taxes that this government has loaded on. It's easy for the minister to stand up and make these claims about how great his government is. But you know what? Those small business people. . . .

C. Clark: My apologies, he's not a minister anymore. But I think he's still a member of the government. He supports them sometimes.

It's easy for him to stand up and say that, but you know, it's not so easy for those small business people who have to struggle every single day to see if they're going to make it. They have to wonder every single night when they leave the premises of their small business if they're going to be able to continue to employ people, if they're going to be able to continue to live out their life's dream that they've invested all their money in.

Hon. Speaker, we're going to make a change; we're going to listen to these folks. All we have to wait for is the next election.

The Speaker: I'd like to thank the members for their private members' statements. The Chair would also again remind members to review standing order 25A, and reflect on whether their remarks tonight were partisan or not.

Hon. D. Lovick: Thank you, Mr. Speaker. It's always nice to listen to a touch of non-partisan debate in private members' statements.

I'm pleased now to call Committee of Supply. In Committee A, we will be continuing the debates on the estimates of the Ministry of Agriculture, Fisheries and Food. In Committee B, in this chamber, we shall be discussing the estimates of the Ministry of Energy, Mines and Northern Development.

ESTIMATES: MINISTRY OF ENERGY
AND MINES AND MINISTRY RESPONSIBLE
FOR NORTHERN DEVELOPMENT
(continued)

C. Clark: I'll pursue the line of questioning we were pursuing before we broke for a recess. What is the status of B.C. Hydro's plans to supply and service large padmount transformers?

C. Clark: Has B.C. Hydro done any analysis of the impact on jobs that that will have in the private sector?

Hon. D. Miller: Well, there is an analysis. We don't have the job numbers, but there is a shift to other B.C. suppliers. So we think it'll probably be a wash.

C. Clark: Can the minister expand on that a little more? I mean, we're talking about. . . . The plan is probably going to put four or five companies out of business that provide about 40 or 50 jobs -- and all the ancillary jobs that go with that. I'd be interested to get a little more detail about the supposed analysis that he's got in his hands.

Hon. D. Miller: They'll be shifted from the current suppliers to other British Columbia suppliers.

C. Clark: Cam Tran is an Ontario company that has set up a B.C. arm solely for the purpose of supplying B.C. Hydro. Is the minister assuming that this Ontario company is going to replace all of the jobs that will be lost as a result of putting these other private sector companies out of business?

Hon. D. Miller: Well, I don't care where they're from. They're located in B.C., and they're going to be supplying the transformers, and there's a higher B.C. content.

C. Clark: Oh, I do care where they're from. We've got companies that are employing people currently that have existed for many, many years that the government, with the stroke of a pen -- or a government-owned corporation, with the stroke of a pen -- is going to put out of business. And it is also going to import a company from Ontario to create a subsidiary here so that they can try and replace the jobs. Is that acceptable to the minister? Does the minister care about that? And will they be creating the same number of jobs that Hydro will be putting out of business?

Hon. D. Miller: Well, there'll be a higher B.C. content under the new arrangement, and I guess it's of some concern. But B.C. Hydro's customers, which are B.C. businesses -- which I assume the member, given her passion on this, seems to be concerned about -- will save about $3.5 million annually. So it seems to me a good strategic move.

C. Clark: B.C. Hydro makes this argument that they want to get into this business because there's this huge pent-up customer demand. But it seems to me that the private sector, in most circumstances, is normally quite capable of filling those customer demands. So, you know, if the private sector never filled the demand, I only have to assume that there wasn't much demand there. Can the minister inform us about how much demand they've had from customers for this change? Or is it a change that has been solely driven by B.C. Hydro?

Hon. D. Miller: The facts are that the customers wanted this change -- B.C. Hydro's customers, which are businesses in British Columbia. They will save $3.5 million as a result of the change. The transformers will be manufactured in British Columbia. Regardless of whether it's a company that's got a base in Ontario or not, they'll be manufactured in British Columbia. The British Columbia content will increase from 40 percent to 45 percent.

You know, things do happen in the business world, hon. member. Occasionally, there are shifts of suppliers and the like. These things do happen and sometimes, you know, the world just never stays the same all the time. There are sound reasons for making the change. It seems to me that there is a positive net benefit for British Columbia. And while we regret that certain existing suppliers are impacted by the change, those are things that happen in the normal course of events.

C. Clark: We're talking about a big government-owned monopoly that is using its monopoly position to go out and corner a whole area of the market that is now being filled by the private sector. It's not just a question of: "Well, things change in the private sector." What we're talking about here are companies like Synergy Engineering, for example, which operates in British Columbia and has its base here but operates in lots of other jurisdictions around the world.

They use the technology and the expertise and the research that they do partly because they have contracts in British Columbia. They use that to apply to their international contracts. There's nothing keeping them here. If they don't have contracts to do transformers for commercial customers, they might as well go to Calgary; they might as well go to Chile. The jobs will be gone forever. And all the other ancillary jobs that depend on them will also be gone. And all that other economic activity that they create by creating jobs, by investing in other jurisdictions, will also be gone. There are whole other arms of their businesses that have nothing to do with B.C. Hydro and that will just leave the province altogether.

My question for the minister is: where is the proof of this big customer demand? Or is it just a demand that was invented by B.C. Hydro in order to justify their move into creating large transformers?

Hon. D. Miller: I find it almost inconceivable that a member of this House would stand and make a statement that is fatuous at best -- that B.C. Hydro has somehow manufactured this change for some presumably nefarious reason. It's really quite silly, hon. member.

B.C. Hydro conducted a survey across Canada. Nine utilities, both public and private, have all done exactly the same thing. It really is a shift in terms of trying to respond to customer demand, which I assume you would want a Crown-owned utility to do. The customer is saved a significant amount by doing it. The manufactured content of B.C. goes up under this proposal.

Yes, of course there's an impact whenever you make these kinds of changes. But it's justifiable. Nobody invents anything just for the sake of inventing it. How silly to say something like that.

C. Clark: B.C. Hydro created a gap in the market that they didn't fill when they said that they weren't going to build or manufacture transformers over 500 kilovolts. That's what they did. The private sector moved in and filled that market quite ably. They created a lot of jobs, and a lot of people made a ton of investment in creating those jobs. They put a lot of work and time into that. For B.C. Hydro to just say, with a stroke of a pen, that they feel like going out and changing the goalposts and wiping all those businesses out because -- what? -- they want to prepare for a deregulated environment eventually, so that they can be more competitive in case they're put on a different footing? Is that what this is about?

That's what the people in the private sector seem to believe. They think that B.C. Hydro's reasoning on this is just so that they can limit the competition if they ever get privatized. Why else would they want to wipe out these private sector companies? It doesn't make any sense at all. To suggest that it's customer demand, when the minister can't produce one iota of proof that there is customer demand out there, is pretty hard to believe, coming from this government.

I'll ask him again: can he provide us with the proof that there has been customer demand, that there's some kind of pent-up demand for B.C. Hydro to get into this business, so that I can at least provide some proof back to my constituents who are deeply, deeply concerned about this issue?

Hon. D. Miller: I've really tried to answer the question. B.C. Hydro's prepared to meet with the member to try to deal with her concerns. I think I've answered the questions.

S. Hawkins: Maybe I'll start around the business plan again. Hopefully we've all had a chance to have a bit of a break and a rest and cool down a little bit.

I'll start again by thanking the Hydro staff and executives for providing us with information and briefings. We appreciated that. And the documents. . . . I did receive the summary of Hydro's business plan. And before the break I had asked if it was possible. . . . There is a detailed plan, and I'm wondering if it's possible to get a copy. I understand that there is sensitive material in there. Is it possible to have a confidential briefing with that plan?

S. Hawkins: Under section 4 of the summary business plan, under "performance measurement," we were interested in a tool called the balanced scorecard. We're also wondering if we can get a copy of the performance measures for the fiscal year 2000-2001.

Hon. D. Miller: I'm advised they'll be finalized soon, and we'll make that available.

S. Hawkins: When that document is being prepared, could we also be advised as to how often one reports against these measures and to whom the reporting is done?

S. Hawkins: I'd like to move on to the integrated electricity plan, if I may. I reviewed the document that was given to us. Hydro put out their integrated electricity plan; it's an update from the 1995 plan. I'm interested in it, because in the 1995 plan, I understand, there was considerable public consultation. In the plan that was put forward for 2000, B.C. Hydro made assumptions and conclusions that the 1995 plan still held. I assume that they think the public consultation for that plan stands as well, but we know there have been a lot of changes in the market and a lot of changes in public opinion as far as energy and green energy go.

So my question to the minister, first of all, is: why was there no public consultation process? And if there was, what was it? I'll leave it at that; maybe you could answer that first.

Hon. D. Miller: A lot of fundamentals haven't changed. It's really an update. I think BCUC has had a briefing on it, and people are certainly free to comment.

S. Hawkins: Well, I have to disagree with the minister, because I understand there is public concern about the plan and some of the plans that Hydro has for implementing measures in the plan. Why would the minister not consider public consultation? What's the public policy behind not considering public consultation with this energy plan?

I don't think it's fair to just say that nothing's changed and everything's going to go as planned. That's not good enough. The public is concerned. This plan is five years old. If it's just an update from the old plan. . . . People have changed their opinions in five years. They've changed the way they think about energy needs and clean energy. I'm wondering why the minister and Hydro wouldn't put it out to public consultation?

Hon. D. Miller: Well, we certainly invite. . . . I think that at the time this was put out, we invited public comment. BCUC had a public briefing on it. So it's all there for people to comment on.

S. Hawkins: I'll move on, because I don't think we're going to get. . . . We've agreed, apparently, to get this section done in a couple of hours. I'm not going to have petty arguments with the minister. I'll agree to disagree on that point. I think the public didn't get enough consultation with that. There's room to have those discussions with the public, but obviously Hydro has chosen not to do that.

The B.C. Hydro and Power Authority Act states that all power generation projects must be tendered publicly. I'm wondering: will there be a competitive bidding process for the new sources of energy supply that are listed in the Hydro plan?

Hon. D. Miller: Well, the two IPP projects -- a significant one that's well underway in Elk Falls, and Alberni, which did not proceed, at least under the original terms -- were publicly tendered. I think all the green proposals will be as well.

S. Hawkins: I just want to ask the minister as well. . . . He mentioned the green policy or the green energy sources, and Hydro is embarking upon this new green energy plan to help meet future needs. I'm just wondering what the public policy is, then, or what the minister thinks of Hydro trotting out this new green energy plan and, at the same time, increasing its reliance on Burrard Thermal. Obviously that's not good news for the lower mainland, and it's not good news for the Fraser Valley. I'm wondering: in terms of public policy, how does the minister reconcile this?

Hon. D. Miller: I don't think there are any inconsistencies. Burrard is being shifted from the summer to the winter. It has been described to me as our battery. Obviously any commitment to try to obtain new green energy sources is part of the plan that Hydro has presented.

S. Hawkins: In Hydro's plan, they talk about moving more towards clean energy sources and green sources for energy. At the same time, the plan seems to say -- and I think I get this from my briefing as well -- that we're going to rely more on Burrard. Somehow that doesn't fit. Either you're going to move away from that and get into more sources, or you're not.

Burrard is already a source of angst for people that live in the Fraser Valley. They've got a lot of air quality issues there, and I'm just wondering. . . . The minister is telling me it doesn't matter. Why wouldn't it matter? Why wouldn't it matter for those people? They want a plan that shows a reduction in that, and I don't think we're getting that in this plan.

Hon. D. Miller: Well, Burrard exists, even though some members may not like that. It does exist. There has been a considerable amount of work in terms of improving Burrard significantly. Ninety percent of the NOx has been taken out. A catalytic converter has been installed in all six. It exists there to supply power to British Columbians, and I don't think the member is saying: "Don't use it."

At the same time, we're looking for new energy supplies and, under the plan, 10 percent from new green initiatives. It's also interesting to note that around the world, particularly in North America, gas is seen as quite green.

S. Hawkins: I'm trying to understand what the minister is saying: it's okay to use it as much as we have because we've got it there. I think we either move away from those kinds of sources. . . . We move towards clean energy, and we try and decrease that and not pump it up more, when we say we're moving towards a green plan.

I'm going to ask some specific questions on Burrard, because Hydro did tell us in briefings that they're going to rely on Burrard more regularly in the future. That's the understanding I have. I'm wondering if the minister can inform us how many petajoules of gas are forecast to be consumed by Burrard this year and what the forecast is for next year.

Hon. D. Miller: For the edification of all members, 31 gigajoules equals a petajoule. For '98-99 it looks to me like 31.8 million gigajoules, and projected for '99-2000, 20 petajoules. We don't have the figures for the subsequent year.

S. Hawkins: With the rise in the gas price, the spot gas price has more than doubled in the past five months. I'm wondering if the minister can tell us what it's going to cost to run Burrard this year.

Hon. D. Miller: It's hard to give an accurate number, since we don't really know what the water flow is going to be like.

S. Hawkins: One of our FOI documents showed that it costs $15 million a year just to operate Burrard Thermal. That's without the gas costs. Hydro, in their business plan, must have some kind of estimates. I wonder if the minister can give us an estimate.

Hon. D. Miller: Again, given the variables -- the price of gas, how much is utilized, water flows, those kinds of things -- it's fairly difficult to put a number on that.

S. Hawkins: Thank you for that answer, minister. Will Burrard generate electricity for export?

Hon. D. Miller: Again, exports are from surplus from the system. You try to look ahead and see what kind of water flows you anticipate, but we don't think we're in a big export year. It comes from the system.

S. Hawkins: So is it anticipated that Burrard would not be used to generate electricity for export? Is that a policy of Hydro? Is that a policy statement that we can count on?

Hon. D. Miller: As I explained, you've got to look at the entire system in terms of exports. Exports are generally driven, in B.C., by water. A typical scenario, a very simplistic explanation, is that in a year when you've got significant water flows, you have more electricity to export into that spot market. But we don't allocate exports to any facility; we talk about the systems as a whole.

S. Hawkins: I understand that the water flow for next year isn't as high as in the past last couple of years. It's expected to be lower. If it was lower -- assuming it was -- would Burrard be used as a place to generate electricity for export? I know what the. . . . He's going to stand up and say he doesn't. But is it possible that it could be used?

Hon. D. Miller: As I've explained, we're not anticipating above-average. The feeling is that there will be limited exports. We don't export from a single facility. We look at the entire system and the needs of British Columbians; anything that's surplus to that is exportable.

S. Hawkins: I'll move on. The integrated electricity plan speaks as well to the new load growth with new green resources. I'm wondering how B.C. Hydro arrived at a target of 10 percent for new green resources. Why the number 10? Where did that come from?

Hon. D. Miller: Through canvassing in the marketplace. It was B.C. Hydro's estimate that this was achievable.

S. Hawkins: Is there some background information that we can have on how they arrived at that number?

Hon. D. Miller: I'm certain there must be, and I'll ask Hydro to make whatever they have available.

S. Hawkins: The integrated electricity plan also stated that the new green portfolio will have higher costs than the Vancouver Island co-gens. I'm wondering if the minister can inform us how much higher these will be in terms of kilowatts per hour. Is there something that's been calculated?

Hon. D. Miller: No, we don't want to put any numbers on that. It's based on experience, but obviously these would be tendered projects, so you don't want to give it away at the front end.

S. Hawkins: It also appears there will be an employment increase with the new green portfolio. I believe the integrated electricity plan says it will increase employment by 2,023 person-years. When does that start? Does that start next year or in 2010? Does Hydro have studies to back up that assertion?

Hon. D. Miller: These are just estimates, not targets. Obviously we'll have to be looking at the numbers constantly as the capacity comes on.

S. Hawkins: How are these numbers generated? Who generates these numbers, using what calculations? How do they back up these numbers?

S. Hawkins: Can we get their background information on how they arrived at these numbers?

Hon. D. Miller: Well, given their extensive experience as a big, bad monopoly, I'm sure they can come up with some kind of rationale for the numbers.

S. Hawkins: I'm sure I can count on their rationale much more than the minister's.

I'll move on to. . . . On April 17 of this year, Hydro put out calls for proposals from power developers for the green energy generation projects. I'm just wondering how many responses Hydro has received and how many projects are currently in the planning stage.

S. Hawkins: What kinds of business arrangements is Hydro planning on having with these green generation developers?

Hon. D. Miller: Generally, the terms of reference that went out described the range of possibilities, ranging from Hydro as an equity partner to a straight takeaway deal at a fixed price. So it depends on the project and the arrangement that's subsequently agreed to.

S. Hawkins: The B.C. Hydro and Power Authority Act stipulates that there has to be public tendering. How come there is no public tendering on these bids?

Hon. D. Miller: I believe I've responded to that question. This is public tendering.

S. Hawkins: A couple of the members want to talk about constituency issues, and I think I will let the member for Chilliwack have the floor for a minute.

B. Penner: I'd like to thank my colleague the member for Okanagan West for giving me this opportunity to address a number of concerns directly to the minister.

It's almost two months ago today that I wrote to the minister with respect to a proposal by an American corporation to build a gas-powered generating station just south of the Canadian border at Sumas, Washington. I have not yet had the benefit of a reply from the minister with respect to my concerns on behalf of my constituents. On the same date that I wrote to the minister, which was April 10, I also wrote to the chairman of B.C. Hydro, Brian Smith, and I've also not yet had the benefit of a reply from him.

For the benefit of those who are following this debate, I'd just like to summarize what this project entails. A company knows as Sumas Energy 2, or SE2 for short, has a plan to build a 660-megawatt power fossil fuel-burning station in Sumas, Washington. And that is just a stone's throw south of Abbotsford, British Columbia. The plan by this company is to connect to the North American grid by attaching itself to B.C. Hydro's grid at the Clayburn substation near Abbotsford. The company has plans to construct two 115-kilovolt transmission lines across the border to facilitate this access. I'm told that B.C. Hydro has the capability to accept and wheel the power but at present has no firm plans to actually purchase the power -- at least not yet.

Many of the concerns in Abbotsford have centred around the power lines and whether or not they pose a health hazard. I have additional concerns. Our air quality in the Fraser Valley is already poor on many days in the summer, and I am convinced that this plant will make matters worse. According to documents prepared by the Washington State Energy Facility Site Evaluation Council dated March, 2000, the SE2 power plant will emit nitrogen oxides, carbon monoxide, volatile organic compounds, particulate matter, sulphur dioxide, ammonia, benzene, formaldehyde and lead.

The report further states: "Decreased visibility in scenic areas could occur." SE2 admits the project would increase air emissions but maintains that no significant adverse air quality impacts would occur.

Hon. Chair, I'm at a loss to understand how visibility could be affected and all those other particulates could be emitted into our air without having an impact on air quality. The B.C. government to date has not taken a formal position opposing this project, and that is something that has caused considerable distress amongst Canadian citizens in the Fraser Valley and amongst my colleagues in the official opposition. The B.C. Liberal Party believes that the province should have sought intervener status with the Washington State regulators in order to directly relay our concerns about this plant.

Now, in terms of questions that I had put to the minister in my letter to him dated April 10 of this year, I asked whether or not there were any international agreements that limit B.C. Hydro's discretion in terms of allowing SE2 to connect to B.C. Hydro's grid near Abbotsford. I'll take my place and await the minister's answer.

Hon. D. Miller: Most refreshing. At least the member wasn't getting up to complain about the new manufacturing that's taking place in his riding -- the padmounts that so distressed other members. But the job gains, I'm sure, will be welcome.

There was a fulsome briefing, I understand, to members of the opposition from B.C. Hydro on this project. And if there's not been a follow-up in terms of response from me, I'll get on that right away.

As the member indicates -- and it's been well canvassed -- the plant is in the U.S. It has to go through their process in terms of environmental approval. B.C. Hydro can't arbitrarily refuse to allow the plant, if it's ever built, to connect to the B.C. Hydro grid. Although B.C. Hydro has been. . . . I think there was an interview on CKNW, if I'm not mistaken, where Hydro voiced some concerns with respect to the air quality issues. That's not really Hydro's issue to deal with, though. It's more fitting that the broader issue in terms of environmental questions ought to be directed to the Minister of Environment.

As a utility, they're obviously bound by the kinds of rules and regulations that govern their activity. In particular, the question of access to the grid would seriously compromise Hydro's ability on the export market, if they were to refuse. Abbotsford, I think, has been granted some status with respect to the project, and the National Energy Board is the agency under the federal process that will determine the environmental questions in Canada and British Columbia.

B. Penner: I can assure the minister that I will be directing some questions to the Minister of Environment when it comes time to debate her budget estimates for this year. However, because of B.C. Hydro's involvement, this minister has something to answer for as well in terms of B.C. Hydro's response to this issue.

It's true that on May 1 of this year I did receive a briefing from a number of officials from B.C. Hydro. What I was told at that time was that there may not actually be a legal requirement that B.C. Hydro allow connection to their grid, but that for practical purposes there might be an obligation to do so.

I have not yet seen any record, document, treaty or agreement that would require B.C. Hydro to allow a new connection to be established to their grid. I understand that there may be some form of legal commitment on the part of B.C. Hydro to allow U.S. energy producers to run their power through existing connections to the B.C. Hydro grid. But that is something different than allowing or requiring a new connection to be established where there isn't one already. That, I think, is an important distinction.

In the briefing that I received, I was told that B.C. Hydro would have 60 days from March 20, 2000, to respond in terms of cost analysis and technical considerations to SE2's application to the U.S. Federal Energy Regulatory Commission. I may have the name of the agency wrong, but I was told that they would have 60 days to provide a response. Now those 60 days have come and gone -- if my math is correct, about 11 days ago. I'm wondering if the minister is able to tell us whether in fact B.C. Hydro did give its views or make its position known to this agency and whether the minister is prepared to share that with us.

Hon. D. Miller: The member was provided with a copy of the wholesale transmission tariff and was offered a full

explanation, I'm advised, with respect to this issue and the reasons why B.C. Hydro could not refuse to allow access to its grid. It really is very simple: it would threaten the power marketing certificate. The hearing time, I understand, has been extended to July.

B. Penner: Well, I'll go through my file. But I have my file right here with me -- everything I've ever received with respect to the SE2 project, including the position of B.C. Hydro -- and there's nothing in here that the minister just mentioned -- no document like that. I would certainly appreciate receiving a copy at the earliest convenience.

I wonder if the minister can tell us now what concerns or considerations B.C. Hydro is going to put forward to this regulatory agency. British Columbians have a right to know what position B.C. Hydro is taking. We heard the minister say not that long ago that B.C. Hydro is something that the vast majority of British Columbians support -- after all, they own it. I think that as shareholders, British Columbians have a right to know what B.C. Hydro is saying.

Hon. D. Miller: That's a slightly better and refreshing change. It's described as a company that is owned by the taxpayers, as opposed to being a big, bad monopoly.

I've tried to explain that Hydro itself has no role with respect to the development, or potential development, of the plant in the U.S. In our view, it is obliged to not put itself in a position that would refuse access to the grid. We would obviously supply whatever technical information with respect to the cost of access and tie-ins and those kinds of questions, but that's the limited role that Hydro has.

B. Penner: Can I receive a commitment from the minister that when B.C. Hydro does present a formal response to this agency, the official opposition will be provided with a copy of that document?

Hon. D. Miller: Well, it's simply a cost estimate to connect to the grid. I don't believe it's a public document. I think the member also asked a question that I didn't answer before. B.C. Hydro has absolutely no plans to purchase any of this energy.

B. Penner: I believe that B.C. Hydro has no plans to buy the power tomorrow, but I'm not willing to wager a single dollar that B.C. Hydro will never, ever purchase power from SE2, and I dare the minister to take me up on that wager. I bet you a dollar that B.C. Hydro will, in the not too distant future, want to access power from SE2 if that project goes ahead.

We were told in the briefing that B.C. Hydro considers itself self-sufficient, in terms of electricity, only until 2006. Well, in terms of the time it takes to build and get online new projects, that's a blink of an eye. I suspect that one of the reasons this government has been strangely silent on the whole issue of SE2 is because someday B.C. Hydro hopes to access the electricity produced by that fossil fuel-burning plant at Sumas.

I stand to be corrected, but I've been struggling -- and my colleagues in the official opposition have been struggling -- to understand why this government has not taken a position opposed to SE2. All we can come up with is that it must be that B.C. Hydro is hoping someday, somehow, to avail itself of the power that will be available just a couple of miles away from the Clayburn substation near Abbotsford. Or perhaps it's because the government is embarrassed by the emissions of the Burrard Thermal generating station and feels that it would be hypocritical of them to take a position opposed to the SE2 plant, which may end up being a cleaner plant than the existing Burrard Thermal plant.

I would love to be proven wrong, and I would love to have to pay the minister the dollar that I just wagered. But something tells me I won't have to. In fact, I'll be the one entitled to collect from that wager.

I note that the chairman of B.C. Hydro is not here tonight, but I did have a number of specific questions addressed to him in my letter. . . .

B. Penner: The minister would like to respond at this time, and I'll give him that opportunity.

Hon. D. Miller: Well, I'm not a betting person, Mr. Chairman. But if I was and I felt very strongly, I'd be sure to bet more than a buck.

All I can say with respect to the various conspiracy theories that the member has put forward is that I've learned long ago that overanalysis often leads to wrong conclusions.

Finally, Mr. Chairman, I'd like to advise the member that indeed I have in my hands a letter that I sent to you on today's date, and I'll make sure you get it as quickly as possible.

B. Penner: I have every confidence that that letter will arrive shortly after these estimates are passed. That would not surprise me at all. So much for conspiracies.

I had also addressed a number of questions to the chairman of B.C. Hydro, including: was there any option for B.C. Hydro to refuse the connection to SE2? What I've been led to believe from the proponents of this plan is that if the project is not economically viable, it would not proceed. That makes sense. Why would a private investor want to go ahead with this project if they couldn't make money on it? If they are not able to connect to the B.C. Hydro grid at Abbotsford, they would have to build a much longer extension or connection in the vicinity of Bellingham, resulting in higher costs. And if the costs of the SE2 project are sufficiently high, they will not proceed.

So a lot of people in my community, who live downwind of Sumas, are hoping that B.C. Hydro will say, "No, you cannot connect to our grid," and that the private investors in Sumas will decide that it's not economically viable to proceed, and our air will not get any worse in the Fraser Valley.

That's what it's all about. It's about air quality as far as we're concerned. I'd like to know from the minister, unequivocally: is there a strict legal requirement for them to allow this connection? Yes or no?

Hon. D. Miller: In answer to the question, I indicated -- as Hydro, in an extensive briefing, I understand, in the Liberal caucus for those members who are interested in these issues has indicated that their best advice is that they cannot -- that in fact it would jeopardize the certificate they have, their power marketing certificate. And that would not be a desirable result.

Beyond that, I understand and share the member's concerns with respect to the potential impact of the plant. I note that it's also an issue in Washington State, and frequently cross-border issues do arise where people on one side of the border may feel quite strongly about a proposed development on the other side of the border.

Governor Locke has taken action with respect to the veto of a tax break, but he's also said quite clearly -- and really it's not my job to tell the Governor what to do -- that he'll make his decision subject to the very strict, I think -- they must have some confidence in their processes -- process that they have within Washington State to determine whether or not this project is desirable. No doubt, I would suspect, there are also Americans in the vicinity who may also have strong feelings about that.

So I think there is sufficient concern. I think the issue's been raised with respect to the air quality impacts. I've tried to explain, as Hydro has tried to explain, the position they're in with respect to the single issue, really, that impacts on Hydro, and that's access to the grid or connection to the grid. Beyond that, with respect to the broader question of environmental impacts and air quality and those kinds of things, I'm really not in a position to comment, given that it's not really in my portfolio.

B. Penner: I still remain suspicious about what the ultimate objective is of the minister and just why it is that the Minister of Environment has been so silent on this project. But I suppose I'll have to save those questions for her.

I'll just note before concluding on this that the adjudicative hearings before the Washington State regulatory agency are set now for July 24 to 27 and July 31 to August 3. And I will be following those very closely. Following that procedure, the National Energy Board here in Canada will, I believe, be conducting hearings with respect to the construction of the power lines. There may be another regulatory hurdle yet within British Columbia, but that remains to be seen.

Finally, I'd just like to let the minister know that literally hundreds of people have come to my constituency office to sign a petition opposing this project and calling on the B.C. government to do whatever it can to keep our air quality from getting any worse in the Fraser Valley. With that, I will yield the floor.

R. Neufeld: Just a few brief questions in regards to the plant in Fort Nelson that was actually put in operation -- a year ago or just over a year ago. It's a project that was completed between TransAlta, one of those Alberta companies, and B.C. Hydro to generate hydro in Fort Nelson. And having lived in Fort Nelson for as many years as I did and attempting to get B.C. Hydro to finally deal with the issue of hydro, I know the people who live there are happy with the project and glad that we do have the project completed and on line.

I just want to ask a couple of questions. The anticipated cost -- what the press release says, actually -- is $30 million. What was the projected cost at the start of the construction of that plant? And what was the final cost? As I understand, there were some cost overruns. What was that a result of?

Hon. D. Miller: Everybody's trying to get some of this information. The project was announced at $30 million. The price was $42.4 million, and I understand that the rationale for that is that the plant was actually built bigger than was originally announced -- more capacity.

R. Neufeld: Anticipated at $30 million. It cost $42.4 million, and that's only a result of building a plant with larger capacity. I'm not sure, but if it is a larger capacity, then what was anticipated under the $30 million -- how much larger?

Hon. D. Miller: The original projection was $30 million for 30 megawatts. The decision was to go to 45 megawatts, so the price was $42 million and change. I am also advised that the construction was accelerated because of the outstanding energy market. In fact, that expenditure has been recouped because of the very good energy market.

R. Neufeld: As I understand and as I remember, the project had to go through a complete environmental assessment, and it actually made the construction a lot later than was anticipated. I believe the construction was planned on going ahead -- or they had hoped to go ahead -- during the summer months, and they actually had to build most of the plant in the winter months. In fact, they built a huge tent around the plant and heated it so that they could build the plant. That must have added a fair amount of dollars to the construction of this plant. I just wonder if the minister has an estimate of how much more it cost.

I know that at the time I tried to convince the Minister of Environment not to apply the assessment process, because it was going to make it a lot later in the year and was going to cost a lot of money. I think B.C. Hydro was of the same opinion, as was the community of Fort Nelson. Lo and behold, we were right. It costs a lot more to build in 40-below than it does in 20-above in the north. Maybe the minister could tell me: do they have an estimate on how much more it cost because of going through that environmental process?

Hon. D. Miller: No. But I do recall my involvement at the time not only with respect to the municipality but with one of the large private sector companies, Slocan, up there at the time. This was a 50-50 partnership with TransAlta.

I've already explained that the magnitude of the project increased because the marketplace was very, very good. Construction was accelerated. I am advised by Hydro -- and I think this would probably be true, as well, of TransAlta -- that they thought the cooperation they received from EA was outstanding -- very, very good.

Because of the market situation -- the very good prices in the market -- those costs have been recovered. We had some exchanges earlier about Alberta, but this is kind of a neat tale, because the expenditures have been recovered by exporting surplus into the Alberta market. So I think that, all in all -- and again I don't know all the details about tents or anything else -- the project was completed larger than originally anticipated. It was actually an important project for Fort Nelson at a time when the marketplace delivered a pretty nice return.

R. Neufeld: I appreciate that explanation. I know there had to have been some costs associated with building a plant in the dead of winter as compared to summer. That's only common sense, and I think the minister could only agree with me on that. There must be some estimate on that cost.

I wonder if there's any movement within Hydro to provide electricity along the Alaska Highway. We send it to Alberta, but we have residents and businesses in smaller communities up and down the highway, both between Fort St. John and Fort Nelson, that are serviced by diesel generation, and from Fort Nelson north that are serviced by diesel generation. I wonder if there's any movement in B.C. Hydro to look at that route. Or maybe even looking a little bit further afield and sending hydro as far as Watson Lake -- which is totally diesel-generated -- as a way of making money and selling hydro into the southern Yukon. . . . I think there could be a good business case made there to provide Watson Lake -- the southern Yukon, like I say -- with hydro and to provide British Columbia residents and businesses along the route with hydro.

Hon. D. Miller: The corporation has looked at it. I think there is an MOU with the Yukon, and that was one of the subjects that we were going to investigate -- whether or not we could extend the grid. All the analysis indicates that the recovery on that is just not there. There is some feeling that with technological change and innovation, fuel cells and those kinds of things may be more applicable in some of those kinds of areas. The shorter answer is no, there's no plan to extend.

S. Hawkins: Just a few short questions on the Port Alberni co-gen project. ATCO was at the table negotiating with B.C. Hydro for, I believe, about six years. I wonder if the minister can explain to us why negotiations with ATCO Power of Alberta failed with B.C. Hydro.

Hon. D. Miller: Essentially they failed because of the inability of the parties to reach an agreement based on price. I became involved during the time I was Premier and talked to Mr. Ron Southern, who I respect greatly as an entrepreneur and, actually, a gentleman. I committed to him that I would have the issue looked at by my deputy at the time to ensure that all negotiations or dealings were aboveboard. The advice I got back was that the deal they wanted was not in the interests of B.C. Hydro or British Columbians, and for that reason the deal never came together.

We are quite open, though. We still think there may be some utility with respect to the development of that co-gen. We have moved ahead. I'm not sure where our policy is at the present time. It's always a bit of a struggle trying to put these deals together, and I certainly hope that one can take place in Alberni. But it essentially failed. I think that at the end of the day, we offered the exact same terms and conditions to ATCO that were offered to Elk Falls, and even that wasn't good enough.

S. Hawkins: What's the current status, then, with any partners or contenders with the Port Alberni co-gen? Are there people at the table talking about partnering for this project?

Hon. D. Miller: There are five new proponents, and Hydro's currently meeting with them.

S. Hawkins: I understand that there is an alternate site for this co-gen project, and it happens to be Duncan. We understood that in the briefing. I'm wondering what the rationale is for planning this as a backup site.

Hon. D. Miller: There was some reporting to the effect that B.C. Hydro could develop their own co-gen at a site in or near Duncan. B.C. Hydro has no plans to do that, and obviously we're back at it with five -- including EPCOR, by the way; EPCOR's one of the five.

That would be the best result, in my book, because we did a great deal of work. John Allan did a great deal of work at the time. When the proposal calls were put out, there were a number of submissions made for IPPs on Vancouver Island. In addition to the co-gen, there were at least four or five, I think, Hydro related types of projects. Those were all short-listed. That would be our desire -- to do the Alberni project.

At some point, though, we have to look to the future in terms of the energy requirements on the Island. Part of the rationale at the time was the avoided cost for replacement of transmission cables to the Island from the mainland. Since that time, it's quite interesting. The demand for gas, which originally was very weak and required the Crown to massively subsidize the construction of the initial pipeline, and customers on the pipeline, has grown to the point where there are now plans, as the member no doubt has read, to develop a second gas transmission line to the Island.

At some point some serious thought's going to have to be given to developing that capacity, but our focus now is with the Alberni site.

S. Hawkins: My understanding is that Duncan has been identified as an alternate site. It's a more economical site. I'm wondering if there are any documents or. . . . Is the minister not aware that this is being considered as an alternate site?

Hon. D. Miller: Well, that's not the case. I guess one of the risks you run in trying to look down the road is that by doing that, you're accused of having some plan -- not with regard to my friend, who I accused of overanalyzing. So, in other words, if you look at anything, somehow you're doing something wrong, and if you don't look at anything, you're not planning. So I don't know. Sometimes you're sort of caught between a rock and a something-or-other.

I draw the member's attention to page 30 of the integrated electricity plan. It really, in very broad terms, looks at the options, one of which -- interestingly enough -- is to repower Burrard. Never mind building capacity on the Island; go back to the issue of the transmission line, repower Burrard and use that to supply electricity to Vancouver Island. I suspect, from what I've heard from the member for wherever -- Burrard, I think -- that she doesn't like that idea, and I suspect there are probably a few other people who don't like that idea.

I understand as well. . . . I did read that there are people who don't like the idea of doing it in Duncan. On the other hand, I know that the MLA for Alberni has been outstanding in terms of lobbying and working very, very hard to see if we can make this project a reality in Alberni. That's why that is, for my terms, at least -- and for Hydro's -- the favourite location. But at some point, people have to make decisions, and they're based on whether or not we can be successful in Alberni, and we'll see what comes.

S. Hawkins: I don't really want to prolong this, but this was a topic in a Canadian Press article which identified that an internal B.C. Hydro document identified Duncan as a contingency. So I just wanted to see if the minister would put it on the record that it was something that was being considered.

But that's fine if he doesn't want to confirm that. I believe, from our briefings, that it was mentioned that perhaps, if the Alberni plan did fall through, Duncan was something that Hydro was prepared to look at.

I also want to ask a couple of questions about the Georgia Strait crossing -- the Williams pipeline. It of course is generating a lot of interest on the Island here as well. I'm wondering if the minister can tell me what the nature of the business arrangement is between Hydro and the U.S.-based Williams Gas Pipeline West?

S. Hawkins: Can the minister just tell me how the risk is being apportioned between Williams pipeline and B.C. Hydro on the project?

G. Farrell-Collins: Just a couple of quick questions, and I apologize if this information has been sent over at another time. Just some quick questions.

Can the minister tell me what the estimated cost is for Hydro to replace the underwater cables that currently link Vancouver Island with the mainland?

Hon. D. Miller: I'm not certain we have the number, but they're looking to see. As I recall. . . . I don't know if the member's had a chance to look at. . . . These are technical documents, but the Allan report talked about the avoided costs. In other words, Hydro's view was that they had to replace under a certain time schedule. Mr. Allan conducted an extensive look at that question -- hired external consultants to review that -- and came to the conclusion that Hydro did not, in fact, have to replace -- on the schedule that they had at the time. That was part of the justification for the development of the co-gens that we've been speaking about. So if we come up with a number here. . . . If I can't get it tonight, I'll certainly endeavour to get it to the member as quickly as possible.

G. Farrell-Collins: I'll certainly await that. I may have it somewhere, but it's been a while. So I can check and see myself.

The lines that are there currently: is there a capacity problem with them as well as an age problem? Are they underserving the island as it develops?

Hon. D. Miller: We're getting technical, but I think the simple answer is probably yes. In other words, there's age, and the age factor led to a reduced capacity. I suspect that in technical terms, that's a gross oversimplification. But I think the answer is yes.

G. Farrell-Collins: What was the anticipated cost of the pipeline -- that option? I think it was the Williams pipeline that is planned for construction to the Island.

Hon. D. Miller: Total price is $120 million (U.S.). Again, it may be plus or minus, but $120 million. So clearly, on a 50-50, we'd be liable for half of that.

S. Hawkins: I'd like to just move on to another area. When we had our briefing, the House Leader asked for a copy of a survey that was done internally at Hydro -- an employee opinion survey -- and the results were sent to the opposition. Looking at the results, it's quite interesting. I must say that we were supplied with two employee surveys conducted in 1998 and '99, and the '99 survey was apparently a slightly modified follow-up to the '98 survey. Unfortunately, I don't think the results are as satisfactory as perhaps the corporation or the minister would like them to be. But if I could just run over them, if I can. . . .

The 1998 results. For 36 of the questions in the survey, comparative norms were provided from a database comparing utilities across North America. The questions found out that in general, it appears, B.C. Hydro often falls below the norms. One area where Hydro scored significantly lower than other utilities was in the area of morale. I quote from the survey: "Significantly fewer B.C. Hydro respondents are satisfied with the organization, would recommend B.C. Hydro as a place to work or would rate the organization as changing for the better than respondents in other organizations."

On the corporate management committee, when asked about the management committee's ability to provide clear direction in its visibility, only 10 percent in 1998 and 11 percent in 1999 replied favourably. Of management, only 24 percent of respondents favoured the credibility of the management committee, with a moderately favourable score for immediate managers. And I quote: "Almost 60 percent of respondents believe there is little accountability in B.C. Hydro."

On the organizational structure as well, I quote: "B.C. Hydro's organizational structure is viewed as detrimental not only to teamwork between strategic business units but also to customer service."

Here is another quote from the summary: "When evaluating overall satisfaction with B.C. Hydro, 40 percent indicate some or a great deal of dissatisfaction. Finally, 50 percent of respondents believe that the organization has changed for the worse in the past year."

The 1999 results aren't any better, and I quote: "Only one-third of Hydro's employees are satisfied with B.C. Hydro at the present time, which is similar to what was recorded in 1998. More important, we found that twice as many, 36 percent, believe that Hydro has changed for the worse, while about one-half feel that there has been no change at all."

I'm interested, hon. Chair, because compared to employees of other utilities across North America, why are significantly fewer B.C. Hydro employees satisfied with their organization? Obviously, management has had a chance to look at this. I'm wondering if they can tell us, through the minister, why their employees are less satisfied than employees in other utilities the same size.

Hon. D. Miller: Well, it would probably take some time. I'm certain the members around me could respond in a much more cohesive way than I can. Part of that may be that there is a significant change taking place in North America. There are some questions that we face in British Columbia about the role of B.C. Hydro; there's no question about it.

My view is that management will continue to have to work very hard. Obviously, to run any successful business or

enterprise, you want to have employees who have some measure of feeling of security -- that they're working for a reasonably good employer. It's interesting that on the public side, I think the public opinion surveys show that there's a fair degree of confidence amongst British Columbians about B.C. Hydro. But it's certainly an issue that they'll have to continue to work at.

For the member who asked the question with respect to the cost of the replacement of the cables, the number is $196 million.

S. Hawkins: It is concerning that, internally, employees are not very confident in the company. It's interesting that the minister mentions a change and the restructuring -- because in 1995 the corporation did undertake massive restructuring, $23 million of restructuring. We still don't see a very favourable outcome as a result of that restructuring. I ask the minister again: why does he think that the employees at this utility, our public utility, are less than satisfied or have a lower rate of satisfaction than employees at other utilities?

Hon. D. Miller: I repeat, that's something that management has to be constantly aware of. They have to try to work with their employees. We do live in a changing world, and unfortunately, that does affect how people view their employment and those kinds of questions. There were some layoffs some years ago; I think there's probably been a drag there. There's probably some unhappiness about the wage side. It's pretty well known that people are not too happy with some of the wage settlements in the public sector.

I think all of these things contribute, and management has to constantly be aware of it and work very, very hard to try to improve their performance.

S. Hawkins: I'm concerned, and I am going to ask the minister what management is doing about it. He says, obviously, that they're working at it or doing things about it. But only 10 percent of respondents responded favourably when asked about the corporate management committee's ability to provide clear direction. Only 24 percent of respondents responded favourably when asked about the credibility of the management committee. And 60 percent of respondents believe there is little accountability in B.C. Hydro. I think those numbers are absolutely incredible. It shows a real lack of confidence in the management committee and in the structure of Hydro.

Obviously we're in a time of change. The organization went through massive restructuring in '95, at a cost of millions and millions. I'm asking the minister: what is being done? Ask management to explain, then, what is being done to address these concerns. These are very serious concerns; the numbers are very low. Obviously we're not comparing favourably with other utilities that size.

Hon. D. Miller: I don't know that there was a comparison, unless the member has some. . . .

Hon. D. Miller: Okay. I'm trying to be useful here; I'm not trying to be argumentative -- come on.

As I said, my view is that management is aware of it; I think they've been working hard on it. They're looking at issues around gain-sharing, more training and development, communication, those kind of things. I think it's something that they're going to have to continue to work at. I don't know what more I can really say about that.

G. Farrell-Collins: I guess, when one sees those kinds of numbers, not just in one year, but in two years. . . . I don't know if there were other years that were done. I think that in any business, any organization, public or private sector, those are pretty significant numbers. Nobody ever expects 100 percent of employees to be happy, nor is that the only thing that management should be concerned with. But it's certainly a key component, particularly for an organization this size. If the employees don't express confidence in the senior management team. . . . If you get a 10 percent approval rating, essentially, that's not very high. They've got an awful long way to go from 10 percent to something that I think senior management should be proud of. I guess what we're trying to find out from the minister is: what specific action is Hydro taking to deal with that?

I expect that the answer to this question is part of the employee retention problem that Hydro has. I know the minister mentioned earlier that one of the problems is a wage issue which deals with retention. We know that has been addressed to some extent and, in some cases, a great extent. But there are other factors that determine whether people are happy in their work. I'm wondering what specific action the management team is taking to correct some of these problems.

Hon. D. Miller: I've mentioned gain-sharing, more communication and more training and development.

G. Farrell-Collins: Who's getting the training? Is it the senior management team or the staff?

G. Farrell-Collins: So is this new training that has been going on something that has been going on for years, or is it a new program that's in place? It seems to me that there's a fairly significant breakdown in communications between the CMC and the rest of the people at B.C. Hydro when you see a 10 percent approval rating.

G. Farrell-Collins: Can the minister tell us how much Hydro is spending on those training programs -- the marginal increase in the training programs?

Hon. D. Miller: Approximately $22 million. That's an increase of about 15 to 20 percent over last year.

G. Farrell-Collins: Perhaps the minister can characterize some of those training programs for us. Obviously you're not

spending $22 million on training for the senior management team -- at least I hope not. I'm assuming that's the whole training budget for the entire corporation, which is thousands of employees. Much of that will be technical training and upgrading, whether it's just in line skills or technological skills, etc. How much of that is management training that's going to the management team?

Hon. D. Miller: Technical training, business acumen training, management training. . . . It's obviously difficult to capture all of that. There's probably a manual somewhere. Maybe they could provide a more extensive kind of comprehensive briefing to the member. But those are the general areas.

G. Farrell-Collins: Who's accountable for these results? Who monitors them? Who determines whether or not they're satisfactory? Who monitors them on an ongoing basis to check on them? It's obviously a performance measure; it's a fairly significant performance measure. I'm wondering who's accountable for those.

One of the other items that came out of the review which was mentioned by my colleague was that almost 60 percent of respondents believed that there is little accountability at B.C. Hydro. Has management done any further probing on that to find out exactly what that means? What do they mean by that when employees give you that kind of a response in those significant numbers?

Hon. D. Miller: I gather it has to do with kind of broad-based individual performance of people who work for the system. In other words, as it's described to me, some employees may not feel that people they are working with are kind of pulling their weight, and they don't feel management is doing anything about it. That's generally the kind of area.

G. Farrell-Collins: It would seem to me that one of the things I've heard from Hydro is that one of the goals, one of the roles, of Hydro at this point -- part of their plan -- is to prepare Hydro for a more competitive marketplace for an industry that's changing.

It would seem to me that those are the kinds of things that Hydro is going to need to address if they're going to be able to respond to that type of an environment which exists in North America. And I do know that because of our large water batteries in our dams, B.C. Hydro has done fairly well over the last number of years, and perhaps that masks some underlying problems with accountability, with performance, with morale, with the confidence and with the management team.

And it would seem to me that in order to put B.C. Hydro on that footing, because I know one of the things that we're told repeatedly is that Hydro, in order to get the best people, has to pay the dollars -- has to pay the going rate. . . . And there was some pressure on salaries some time ago, and that was dealt with across government when the minister was Premier, and Hydro was one of them. Particularly the senior management team, my understanding is, all received significant increases. My understanding is that that was in an effort to put it on a more competitive footing with other industries -- not competitive industries, but with other public utilities, private sector utilities, etc. -- and that if we were going to have good people at the top, we needed to pay for them.

If these are any measure, it appears to me that there are some problems at the top; there are some performance problems and there are some management problems. When I see a 60 percent response amongst employees that there's no accountability, that's frightening. I believe that in the private sector or in other public utilities, if one were looking at those kinds of results and looking at the returns, one would have to ask whether or not the management team was performing to its capacity. I'm wondering if the minister has any comments on that.

Hon. D. Miller: Well, as indicated in one of the previous answers, training is obviously being provided with respect to business acumen, marketing and those kinds of areas, and that was right with respect to the. . . . There is almost a changing role to more of a service as opposed to a dam-building company. But interestingly enough, B.C. Business Magazine, which one ought not to quote as any kind of gospel, I'm advised -- I didn't read the particular issue; I must have missed my subscription -- rated B.C. Hydro as one of the top ten best employers in British Columbia.

Whether one wants to conclude that the argument with respect to salaries is a legitimate one or not -- and I happen to think it is; I think you have to be competitive -- there's always a difficulty, I think, in public corporations. They're always susceptible, at least in my view, to the kind of allegation that we're overpaying -- that we're paying people too much. Obviously, when you get to a senior level, these salaries are pretty high, and the average working person looks at them and says: "God, I haven't got a chance of making near that much."

That's a difficult issue to deal with publicly, and it's one that's often. . . . I think it has been debated in this House from time to time. My own view. . . . Of course, I was criticized by some, I suppose, for increasing the salaries of deputy ministers in B.C. I think it was entirely justifiable. I looked at the issue not through any political lens. I looked at it completely objectively and made a completely objective decision that there ought to be an increase, and I made it with the full knowledge that there would be lots of criticism.

But I said to myself: "If you always approach these questions on that basis -- always trying to keep somebody happy -- then perhaps you never get to do the right thing." And I think everybody agrees objectively. Everybody's agreed that raising the deputies' salaries was long overdue, timely, quite appropriate and quite correct. But, you know, there are lots of people who disagreed with that -- some of my own colleagues, people outside in the trade union movement. So you've got to try to use some judgment on these questions.

I ran into Ken Peterson some time ago, who was telling me that. . . . And you know that we do gain considerable revenue on the power trading. In fact, we're now down to. . . . I couldn't begin to fathom in any kind of depth the kind of nature of the work -- trading power, sometimes on an hourly basis. But we're pretty good at it, and in keeping with other modern utilities, we're in the game. And we're making a lot of money.

We just lost -- I think Ken told me -- five traders who were lured, I think, to Florida. So clearly these probably young hotshots are in significant demand. My view is that we don't want to lose them, so let's pay them the kind of money that our competitors are paying them and keep them here. Hopefully, we'll continue to make money for the province of British Columbia and the people of B.C.

So these are very difficult questions. It's been my experience that -- certainly in my involvement with the current management, which goes back to the time when I held this portfolio before -- they're quite competent people; I think they do a pretty good job.

With respect to the morale and those kinds of questions about employees, I do treat that seriously. I've been in positions where I've worked for corporations where the morale was terrible, and I think it affects performance. I think management constantly has to work at that question. Sometimes it's not easy. Sometimes a changing world -- changing issues -- causes upheaval that can't be dealt with that simply. And nor is it, if those conditions prevail, necessarily a negative reflection on the senior managers who are trying to deal with it.

So I think there's an earnest effort; I think we recognize the problem. It's not something that we want to continue. We'll continue to work very, very hard and see if we can improve our performance and have employees feel better about working for the corporation. I'll leave it at that.

G. Farrell-Collins: I appreciate the minister's comments. I think they're accurate in many ways. I think that employee positions, like traders, are the line people. That, I know, is another one where the corporation has had trouble hanging onto people. There are huge market demands, and if they're good people, they will get hired away. So if it's traders that we're worried about, then we may need to pay them what the market pays, if we want to keep them. That may be something that we need to deal with. And I know that's high; I know that's a lot.

But if we want to be a player and want to be in that field, and that's something that we intend to do, we should try and have decent people. I do know that it's harder to keep them here. Tax rates are part of that factor, I know. But certainly they're receiving significantly higher income elsewhere. I don't know if the senior management team is being recruited away to Florida either at this point. I guess we'll see what happens in that regard, but I don't know if there have been five senior management people that have been enticed off to Florida at huge salaries. Maybe they have; I haven't been aware of it, but perhaps they have.

Certainly there are a number of things that come into measuring the performance of the senior management team. I would expect that this is one of them. At the end of the year when bonuses, etc., are calculated, is this one of the performance outcomes that's factored into it -- the sense of what's going on in the corporation and accountability, etc.?

Hon. D. Miller: Yes, I understand that it is one of the factors, Mr. Chairman.

G. Farrell-Collins: Can the minister tell me, in this last year, how many of the senior management team received their full allotment of bonus under their contracts?

Hon. D. Miller: Just for clarification, was the question: how many received the maximum? Or how many received performance bonuses?

G. Farrell-Collins: Perhaps the minister can answer both of those questions.

Hon. D. Miller: No one received the maximum. Everyone received something. I don't have all that, but I'll certainly make it available.

G. Farrell-Collins: Can he tell me approximately what percentage of the potential, up to a maximum, they received? Was it 80 percent, 90 percent, 20 percent? And was there a wide range in that, and if so, how?

Hon. D. Miller: I'm advised that there may be a range between half and three-quarters. I'm a bit hesitant to table that as the comprehensive answer, because it is a very complex area. Obviously there's a wide range. It extends throughout the corporation. So I would prefer, if it's okay with the member, to try to tender that information in a more comprehensive way subsequent to these estimates.

G. Farrell-Collins: I wouldn't mind receiving that, particularly at the senior levels, the board level, etc. I understand the chairman has a provision in his contract, also, for performance bonuses, etc. -- incentives. I would be very interested to find out what that's been and what that's been over the last number of years as well.

Hon. D. Miller: No. I just want to reiterate my previous answer, and I would simply ask the member this. Often when we're dealing with individuals, there are matters of individual confidentiality, and I certainly ask the member to indicate that he's prepared to respect any individual confidentiality issues that may arise. We don't normally do that, I don't think. But I think the total figures are probably published. But anyway, we just want to avoid. . . . I'm quite prepared to be candid and make the information available, but I wouldn't want to compromise any individual's rights.

G. Farrell-Collins: My understanding is that employee contracts are available under FOI, as are amounts they're paid. In fact, I know that, because we've received them in the past. Employee contracts and the bonus provisions are part of that, and I think it shouldn't be a problem for the minister to disclose those. If he wants, we can go through the long and sometimes tedious process of trying to obtain FOIs, which I know creates a lot of work for the ministry or the corporation as well as ourselves -- probably more for the corporation than us. But if the minister commits to make that information available, then perhaps we can move on to other matters.

Hon. D. Miller: We'll endeavour to do our best. Contracts do describe the process, but they don't actually say what bonuses are paid at any given time. They provide the formula whereupon they can be paid. So we'll do our best to try to get you as much information as possible with respect to the question.

G. Farrell-Collins: I think it's important for this reason. I think it's important from a public policy point of view. There

are some areas where I think B.C. Hydro has done very well. There are other areas where I think it lags behind. We talked about one example of that, which I think, as the minister agrees, folds in and rolls into performance measures and calculations. There are others. But I do think it's important that the public have some comfort that when people are being paid bonuses -- and some of them are fairly significant over the last number of years at the corporation -- they're based on performance and they're based on performance that is measurable, which is something that has reflected what goes on in other public utilities in the private sector. I think it's important that that information be available, and I look forward to receiving it.

R. Neufeld: I don't want to be long at this either. When I asked the minister about the cost of the Fort Nelson plant, if I remember correctly he told me that it was planned to be a 30 megawatt plant and $30 million -- thereabouts. And what was actually built was a 45-megawatt plant, and it cost $42.5 million. The minister's nodding, so I understood the minister correctly.

Since then I've been given a press release that came out from B.C. Hydro on April 28, 1999, which states that it's a 45-megawatt plant, and the $30 million joint venture between B.C. Hydro and TransAlta is designed to meet the electricity needs of the Fort Nelson area for 20 years. So I wonder why the difference in the numbers. And I don't know either. It's significant. We're talking about $12.4 million, and I just want to know if there was a mistake in what the minister told me. Was there a mistake in the press release, or is it a mixture of both?

The second part of the question is. . . It cost $42.4 million. If it was planned at $30 million, how was the difference -- the $12.4 million -- allocated? Did TransAlta accept $6.2 million of that responsibility and B.C. Hydro $6.2 million? Those are two questions.

Hon. D. Miller: That's a very good question. Could you read the bottom of that release and tell me: was that B.C. Hydro's communications department that. . . ?

Hon. D. Miller: I'll tell you, I'm going to get to the bottom of this. It's 50-50 all the way. As I said before, regardless of the increase in cost or the anomaly with respect to the press release, I understand that given the high energy markets in Alberta, the costs have been fully recovered.

G. Farrell-Collins: I have a couple more questions. It's my understanding that at some point in the Raiwind process, B.C. Hydro provided a comfort level to Nissho Iwai, a Japanese company with regard to a $35 million project loan. Can the minister tell me if that was transferred with SNC-Lavalin when the sale took place, or is Hydro still responsible for that letter?

Hon. D. Miller: Mr. Laxton apparently did provide a comfort level. It has no legal standing, nor was it transferred.

G. Farrell-Collins: The minister's telling me that the comfort level has no legal standing whatsoever. Then why was it provided?

Hon. D. Miller: Well, not having seen any letters or anything, I understand it was provided. It was not "transferred," but when I use the term legal standing. . . . It doesn't create the situation where anybody can come to Hydro and say: "You now have to do something as a result of this letter being written." And nobody has.

G. Farrell-Collins: I know it's not a guarantee, but a comfort level exists for reasons. It gives someone assurance, and when one gives an assurance like that, I think there perhaps is a potential liability there. Perhaps Hydro has different legal advice, but my understanding is that it wouldn't be the first time in the history of business that somebody acted upon a comfort letter. I may be wrong on that; I sure don't think so, though.

I'm just curious. Apparently, to follow the stance of B.C. Hydro on this, it's of no concern at all. It's done; it's finished. We're never going to have to worry about it. We're not going to hear from the Japanese company's lawyers, given the fact that this plant still, to my knowledge, isn't running. There's been no liability or no potential set aside for it. It's just sort of out there, and Hydro is perfectly comfortable. The minister's willing to stand up and give us a guarantee that there will be no legal action, that there is no potential liability for action as a result of that letter. Is that correct?

I have a couple of other questions that I want to ask about, and it relates to Powerex and their trading system, the futures trading system, which we spoke about. . . . I think it was last year. At that time the government was putting it in place. We received guarantees; I received some documentation from Hydro on it. Can the minister give me a sense of the status of that, how it's been going, what the monitoring processes are, how comfortable he is now -- a year down the road -- with that system and whether or not there has been much of that hedging being done?

Hon. D. Miller: None has been undertaken so far. The order has not been promulgated. Yes, I'm comfortable. It's a device that's used routinely across, I think, other systems in Canada. So no, I don't have any discomfort. I'm not an expert in this, but I think it's also been used by Finance ministries or investment arms of government routinely, so I don't think there's any reason for concern.

G. Farrell-Collins: We had the debate about whether or not there is a need for concern last year, so I won't enter into that again. I still want to make sure that we keep an eye on it. The minister says that no trading has been done as a result of that. Is that correct? None of the hedging, none of those options have been exercised. Is that correct?

G. Farrell-Collins: It seemed to be an urgent issue last year; it was something Hydro needed to do, Powerex needed to do, to be competitive, to protect itself, etc. -- to hedge its positions. Can the minister tell us why it hasn't taken place a year later and why nothing's in place?

Hon. D. Miller: The member said something about it being urgent last year. I can't recall. I wasn't. . . .

G. Farrell-Collins: I understand there is sometimes a conversation. The minister didn't catch the question; I'm glad to repeat it.

Last year there was some urgency, it seemed, around this. Hydro needed to get into this field in order to hedge its positions; it was a process that was required and was going to be beneficial to Hydro. I'm just wonder why, a year later, nothing is in place. What's the holdup? Is there some problem? Is it a problem getting personnel? Is it a problem getting a system in place? Does Hydro think it's no longer necessary or not as urgent? I'm just curious what the reason is for it not being up and running now.

Hon. D. Miller: I gather it's just the routine evaluation of Hydro's risk management plans and the like by Treasury Board, and it's taken this long. I guess they'll be at it fairly soon.

G. Farrell-Collins: So the minister is telling me that it hasn't come to Treasury Board for final approval -- the risk management plan. I assume this is part of it. Is that unusual? That seems to me to be a fairly lengthy period of time for that type of issue not to get to cabinet for approval. Can the minister advise me on that?

Hon. D. Miller: I think it's just the normal review that would take place to ensure that the system that Hydro is proposing to use is the right one and works well. I think it'll happen soon.

G. Farrell-Collins: I find that unusual -- that a year later that hasn't been done. Has Hydro hired somebody to run that? Is there a director or whatever level the person is going to be? Is there somebody in there hired to run that program yet?

Hon. D. Miller: There is a risk management committee in Hydro; Powerex has hired a risk manager. I understand, though I can't recall -- I wasn't part of the discussion -- that Hydro did indicate at the time that they intended to be cautious, prudent -- you know, make sure that they get it right.

G. Farrell-Collins: I have no quibble with that. It doesn't take a year to be cautious; I don't know. Maybe it hasn't been a priority; I don't know. It just seems to me that it's the kind of thing that could have been moved upon.

We've hired a risk manager. Can the minister give me some idea who that is and what their background is, so we have some sense of confidence that the right person is in place?

Hon. D. Miller: I know the member for Peace River North won't like this, but it was an Albertan from the private sector, from the energy sector. We'll get a name to the member.

G. Farrell-Collins: I was looking. . . . I mean, the name -- I can wait. I'm also curious about qualifications, abilities. Was it a broad search? Were there hundreds of applicants? Was it headhunted? What was the process to find this person?

Hon. D. Miller: We used a headhunter -- nation-wide search. We'll get the resume to you.

G. Farrell-Collins: Thank you; I'll look forward to that. Has the person been on a long time, or is this a new person? I'm just wondering why nobody in the senior management team seems to know who he is.

Hon. D. Miller: I know the name: David Ince. He's been on about six to nine months and has been working with Hydro and obviously making sure that when we do start, we do it right.

G. Farrell-Collins: I'm glad somebody pulled his name out of a hat there. I thought we would have known who he is. It seems to me a fairly significant position.

Can the minister give us an idea what's been taking place for the last year as far as getting this up and running? What's been happening, how far along are we, and what is the time line on actually having it up and running, etc.?

Hon. D. Miller: While there's actually been no trading in derivatives for the reasons we've talked about already, there has been extensive work done within Hydro, setting up a system called Zai Net, as well as the analysis I talked about that Treasury Board has been doing. We want to ensure, when we get into this kind of hedging, that it's done right -- that the systems are there and, most importantly, I think, the risk management system. So if circumstances happen -- if there are warnings -- then, of course, we can catch them right away.

I'm not really describing it that well, but there's an extensive kind of system of checks and balances to ensure. . . . We've talked about the risk management system with Hydro to ensure that nothing can go amiss. I think we probably looked at other areas where they do this kind of work and tried to model our approach on that used by others who have been doing this.

G. Farrell-Collins: Can the minister tell me what's left to be done before it's up and running, and when we can expect it to be up and running?

Hon. D. Miller: Really, nothing. I think they're ready to roll, and I expect it's going to happen very soon.

G. Farrell-Collins: Really, all they're awaiting is Treasury Board approval. Is that correct?

G. Farrell-Collins: I think the minister said: "That's correct." How long has that been waiting to go before Treasury Board?

G. Farrell-Collins: So Hydro's done its part; it's waiting to go to Treasury Board. Hydro finished its part -- what? -- a month ago, six months ago, three months ago? Do you have any idea?

Hon. D. Miller: I don't think things have been waiting that long. Hydro may have completed their work at the end of February or early March. There's obviously some work to do on the government side, so, as I said, I expect we're going to see something happen fairly quickly.

G. Farrell-Collins: As part of this program, has the government. . . ? I assume the government or Hydro has given guarantees to Powerex, a wholly owned subsidiary. There is obviously an element of risk in this. Even if it's managed properly, there's always the element of risk of somebody going off and doing their own thing, no matter how many safety valves the government puts into this or the corporation puts into it. There is that risk. Has the government obtained any sort of guarantees or insurance for that type of a loss, if there were a catastrophic loss -- a trading loss? Or has the government and the corporation decided to just take that risk themselves?

Hon. D. Miller: I apologize. I can't give the member a comprehensive answer to that question. I think it's a reasonable question. There is some review taking place now with respect to the policy.

The province is a guarantor for B.C. Hydro. The province stands behind B.C. Hydro, but that again may be an oversimplification. That doesn't imply that the Crown is guaranteeing the risk with respect to this hedging or derivative activity.

In the absence of a really comprehensive answer, I will attempt to get. . . . But I understand there is some policy review, Mr. Costello advised me, that is taking place right now. So presumably we can have a more comprehensive answer to that fairly quickly.

G. Farrell-Collins: Can the minister tell me whether Hydro has explored what's out there, as far as catastrophic loss insurance -- if it's out there, what's available, etc. -- and whether or not that would even apply? I know the government may make a choice as to what it chooses to do, whether it chooses to self-insure or actually secure insurance. I'm just curious if they've explored what's available.

Hon. D. Miller: Hydro, in this past year, has purchased insurance against catastrophic losses, but that does not relate to this issue of trading. That's if, God forbid, a dam collapsed or something like that -- as opposed to self-insuring, which used to be the case.

G. Farrell-Collins: I wouldn't mind obtaining some sort of briefing document you've got on that, just to get a sense of how that's set up and how that works. I guess my question is, if I can narrow it: has Hydro explored what's available for trading losses in the realm of insurance or guarantees, etc. -- as to what's out there?

Hon. D. Miller: That issue is being reviewed with outside consultants, but there's been no decision taken.

G. Farrell-Collins: I wasn't so much wondering whether a decision has been made; I was wondering whether or not it was being canvassed and pursued. I guess the answer to that is yes, if it's being pursued by outside consultants.

I look forward to receiving the information that the minister has committed to send over here today. I know the critic has made some requests as well, as have some of my other colleagues, and we look forward to receiving that. And with that, we're prepared for the minister to call his vote.

If I may, while the minister is gathering that, I just wanted to send my thanks and our thanks to the members of staff who have offered their briefing assistance, etc., and again here this evening. So I just wanted to pass that along as well.

Vote 28: Ministry of Energy and Mines, resource revenue sharing agreement, $1,200,000 -- approved.

Hon. D. Miller: I move that the committee rise, report resolutions and ask leave to sit again.

Committee of Supply B, having reported resolutions, was granted leave to sit again.

The Speaker: While we wait for the Chair of Committee A, we'll have a short recess.

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

PROCEEDINGS IN THE
DOUGLAS FIR ROOM

ESTIMATES: MINISTRY OF AGRICULTURE,
FOOD AND FISHERIES AND MINISTRY
RESPONSIBLE FOR RURAL DEVELOPMENT
(continued)

The Chair: Perhaps we could get the minister to identify and introduce his staff. Would that be all right?

Hon. C. Evans: I took two questions sort of on notice yesterday. Maybe while we do this, I'll read these answers into the record.

Hon. C. Evans: One is the MLA for Kamloops-North Thompson, who asked me a question about the value of the freshwater fishery. I'm not allowed to say his name.

The second was a question by the MLA for Saanich North and the Islands. It's also a letter, and I'll skip the intro. It was regarding Denman Island tenures, yesterday afternoon, and what the landscape is going to look like in ten years. "The goal of the shellfish development initiative is to double the area in shellfish aquaculture coastwide over ten years. . . . Currently there are 430 Crown tenures covering 2,325 hectares. About half of the area is foreshore tenures, and half is deep-water tenures." Doubling that, it looks like 4,650 tenures.

There are not specific targets for Denman Island. B.C. Assets and Land Corporation is leading a community consultation process, which thus far has approved, coastwide, 66 of 68 applications for shellfish tenure expansion. It's my understanding. . . . I think this is on Denman specifically, is it not?

Hon. C. Evans: "With regard to the comment on oyster expansions on Denman Island, 16 out of 17 applications have been approved by BCAL but are awaiting approvals" -- these are expansions, hon. Chair, not new licences -- "from the Coast Guard. . .and the Islands Trust rezoning bylaw amendments."

This is Bud Graham, ADM, programs and operations; Pat Jackson, acting director, policy and legislation; Linda Hannah, ADM policy and planning; and Bill Valentine, deputy minister.

J. van Dongen: I'm going to be questioning mainly with respect to vote 15. We may make some reference to other parts of the minister's ministry, because I think there is some crossover.

I just wanted to start out with an opening statement with respect to the Fisheries section of the ministry. When I look over the past year and at the present situation, I see a sector, the fisheries sector, which is in transition and in change. I see more emphasis on conservation, particularly by the federal government, with continuing serious impacts on the commercial and the sports fishery.

In the commercial fishing sector we see a continuing adjustment in the past year -- more emphasis on diversification, value-added and consolidation. I think that individuals and communities are coming to grips with their situation and moving forward rather than looking back at what was. I know that the minister and I recently attended the Coastal Community Network conference, and I think that this year for the second year in a row that's the case, that there's an effort to look forward. There is some hope now, apparently, that ocean conditions are going to improve and that we are in the stage of the four-year cycle where the salmon run will improve again.

I note the formation of the B.C. Seafood Alliance -- including harvesters, fish farmers, shellfish farmers and processors -- and the positive work of the B.C. Seafood Sector Council to develop more value-added market development and diversification. Certainly I see both of these organizations as positive developments in a sector that, I think, for too long has been characterized by a lot of fragmentation in terms of working with government and in terms of building their markets and broadening their base of activity to a much wider range of species, etc.

In terms of the provincial government and this ministry, we've seen a change in approach to the federal government. I think this is a very important and necessary change. I acknowledge, hon. Chair, that this effort was started by yourself last year and is continuing. I think that's very critical. An active, constructive working relationship with the federal government is critical -- no gains this past year, but at least we're out of the phase of ongoing damage in that relationship. Hopefully and optimistically, federal-provincial relations will continue to improve or, I should say, will start to improve. I think there's every potential for that to happen. It's going to take effort on both sides. I'm as concerned as the provincial government that the federal government be a partner to that effort.

The commercial fishing sector and the saltwater sports sector need firm, confident and wise support of the provincial government in their negotiations with the feds and in trying to get earlier announcements on fishing plans. We've seen, in the past year, progress on the shellfish initiative, which was originally announced in November of '98 by yourself, hon. Chair. It took a lot of effort to get going on this initiative.

But we did make progress due to the concerted effort, I think, of staff of the ministry, B.C. Assets and Lands and, in particular I think, one individual within BCAL named Bill Mottershead. Hopefully, we can keep this drive moving forward. We've seen the recent announcements of expansions and need to continue moving forward in terms of new sites.

The shellfish industry at $11 million or $12 million a year is still a relatively small industry, but it does have good potential. I think one of the characteristics of that industry is that it is very labour-intensive. We need jobs in coastal communities for our people. A decision by the government on the salmon aquaculture review has been in process for a long

time. It was a modest decision, but at least it was a decision in the right direction. The ministry has set in motion new and welcome activity in terms of relocations of problem sites, testing alternative methods for technology and a lot of activity, by both the government and industry, in developing a code of practice for fish farming, monitoring of environmental concerns such as waste disposal and a continuing focus on issues such as fish health, food safety and continued efforts to eliminate and manage waste.

One of the disappointments in the past year has been in the area of transition programs, specifically for older workers. The federal government had set aside $20 million for a program, together with the provincial government, based on a 70-30 percent split in participation. The province, for some reason, decided not to participate. The funds have now been redirected by the federal government, and I think that's unfortunate.

The Fish Protection Act implementation -- this effort was initiated, as I recall, in 1997. This has been a big priority of the government. It's been a very difficult process, and I think limited progress has been made, although there have been some stages. It's been a long and arduous process. Issues such as impacts on property owners, homeowners, farmers, builders and developers and issues impacting local governments are all some of the critical aspects of the effort to implement a provincial Fish Protection Act.

In the recreational sector, we have seen some erosion in recent years in both the freshwater and the saltwater recreational fishery. Of course, I mentioned the saltwater fishery having been hurt by the uncertainty of federal government decision-making. Even this year, despite a lot of effort over the last number of years, the announcement on the fishing plans has been late. I also think that the weak stock management strategy being imposed by the federal government as part of its conservation plans is exacting a very high toll in terms of impacts on both the commercial and the recreational fishing sectors and the related economic activity. That is by way of introduction to this topic to vote 15.

What I propose to do is that I'll engage in a few questions on the financial aspects of the ministry. Before I got into this, I went back and looked at the enhanced accountability framework for the econo-building model that the government -- and I think rightfully -- is trying to put in place. It divides accountability into operational accountability, financial accountability and compliance. I will spend a very little bit of time on the financial aspects of this accountability framework. Then we'll get into the operational side of things and get into some different discussion.

I want to thank the minister's staff for some of the information provided. I'm looking here at a statement that says: "Key financial facts." It's labelled that way. It talks about the minister's office being eliminated and a savings of $206,000 and five FTEs. I wonder if the minister can confirm what the net impact is between last year's financial statement, where the provincial government had two offices, one minister's office for Agriculture and one for Fisheries. . . . And what is the net impact of shutting down the minister's office for Fisheries?

Hon. C. Evans: I thank the hon. member for his initial comments. In terms of his first question, the budget for the Ministry of Fisheries, minister's office, was $407,000 in the last fiscal year, and $206,000 was transferred to the Ministry of Agriculture, Food and Fisheries to offset increased costs for the new ministry of all three. The balance, $133,000, was used to offset administrative and overhead costs relating to the establishment of the third part of the ministry, which is Rural Development.

So $201,000 of the original $407,000 remains in the B.C. Fisheries budget. This was a reallocation to offset increased costs relative to salary increases across the organization, which is essentially a 2 percent increase effective April 1.

J. van Dongen: I appreciate the minister's clarification. What I'm understanding, then, is that the $206,000 is the difference between the $407,000 and the $201,000 that's now left in the Ministry of Fisheries. Would that be correct?

J. van Dongen: I want to go to page 67 of the Estimates to get some detail on the salary and benefit figures. What I'm interested in -- I don't know if the minister has it available right now -- is the average cost for salaries and benefits per employee last year and this year, just to give us a sense of the average cost per employee in each of those years.

J. van Dongen: Just to confirm, I'm looking for the average cost for all of the employees in the Ministry of Fisheries this year compared to last year.

Grants and contributions. Could the minister confirm the increase of $120,000 in grants and contributions in the programs and operations division of the ministry, and explain the reason for the increase?

Hon. C. Evans: Yes, I confirm them. The answer to the question of where do they go is essentially salmon aquaculture policy initiative, inland sports, shellfish development initiative and development and diversification initiatives.

J. van Dongen: Could the minister provide a little more precise detail on those three initiatives that he mentioned? He mentioned salmon aquaculture being one where some additional grants or contributions went. Could he give us a specific example of how those dollars were expended?

Hon. C. Evans: We're talking about grants that may not have been expended yet, so I'm going to answer the question in the way the hon. member asked it, in terms of an example. Some of the funds are unexpended. An example of expended or budgeted funds, agreed-upon funds -- and perhaps disbursed already -- is the $15,000 contribution to the fish health database, which is an initiative of the Salmon Farmers Association, the provincial government and the federal government and involves contributions from all three.

J. van Dongen: That's a good example. I appreciate the minister's example there. That helps me to understand the kind of issue that went to.

When I look at operating costs, particularly for the programs and operations division, there has been an increase of $1,859,000 in those operating costs. Could the minister explain the cause of that increase?

Hon. C. Evans: The answer is just a little bit complicated. It constitutes the program and operations component of salmon aquaculture implementation, seafood development and diversification, and inland sports fishery development.

J. van Dongen: Would it be correct, then, to consider the salary increases in the program category to be due to the same three initiatives?

Hon. C. Evans: It would be correct. However, there is also the addition of one FTE for seafood development and diversification, two FTEs for inland sport fishery development and 6.5 FTEs for salmon aquaculture implementation. If you add all three of them together, the sum plus the 2 percent increase would constitute the increase in salaries.

J. van Dongen: I appreciate that clarification by the minister. It's consistent with this sheet of key financial facts set out here.

I was a little bit taken by the figure on this sheet for a budget increase of 49.5 percent. I thought that maybe the minister wanted to flaunt this number with some of his colleagues. It maybe gives the wrong impression a little bit, so I wanted to explore that. Of that $9.5 million, could the minister confirm that $7.5 million went to Fisheries Renewal?

Hon. C. Evans: Yes, hon. Chair. It didn't constitute much interest amongst my colleagues, but I have to admit that on budget day it constituted a considerable amount of interest from the press gallery, who seemed to locate that particular $7.5 million faster than even I was able to. They asked me how we grew the ministry so fast. But as the hon. member points out, it is in the main simply an accounting difference, in that this year the money that flows to fishery renewal flows first through this vote and then is issued as a grant to Fisheries Renewal.

J. van Dongen: That would leave a little over $2 million which has really gone to operations in this ministry. I calculate that to be about 10.9 percent, which would probably still make some of the minister's colleagues envious. I wonder if he could confirm that figure?

Hon. C. Evans: Yes, I can confirm it, but I want to be careful not to take credit for it. You see, hon. member, there was an excellent person that used to have this job and who actually was able to advocate for the industry in general in spite of the fact that the size of government was being limited almost everywhere except for settlements with people in the medical profession. That excellent minister was able to get an increase of 10 percent for the people on the coast that he was responsible for. All I did was inherit the good work that had happened earlier in the year. It is, of course, my pleasure to get to administrate this experience. But please don't give me any credit for it on the record; it belongs to the previous minister.

The Chair: Surely the minister has not finished his remarks yet. [Laughter.]

J. van Dongen: I can understand that the minister would want to ingratiate himself with the Chair, given the circumstances here. But it seems to me that it could be argued that the previous minister came up quite short on the dollars for fish renewal. I wonder if the minister has any comments.

Hon. C. Evans: On the contrary, the previous minister quite strategically laid the groundwork for fishery renewal becoming a much more broadly discussed topic of conversation. I have simply stuck to the previous minister's plan and engaged a much broader group of partners in funding Fisheries Renewal, which is really the only way that fishery renewal will be a long-term part of what we do in British Columbia.

The danger to Fisheries Renewal thus far has been that while it might be the most successful government program that we have in terms of value for money -- and I believe that -- it's a secret. It takes place in places where BCTV doesn't go. Unfortunately, in this era anything that isn't sandwiched between the advertisements between 6 and 6:30 is unknown.

So the only possible way of making Fisheries Renewal survive in the long run was to follow the plan of the previous minister and engage, much more broadly, levels of government, sectors of society, partnerships, and I hope, even the federal government in the long run in the funding of Fisheries Renewal. I'm not sure it's news to the hon. critic, but we are expecting that we will have a federal member sitting on the board of Fisheries Renewal at their next meeting -- an ex officio member -- in the form of a DFO person. None of that would have happened if it hadn't been for that excellent work in laying the groundwork. So no, I have no criticism. I think it's all working out just as it ought to.

J. van Dongen: I don't want the minister to take my previous comment too seriously. I was teasing both ministers a little bit -- the former minister and the present minister. I do know that the current minister has been successful, at least in the time of his tenure, in achieving federal funding and B.C. Hydro funding -- not federal funding, but Forest Renewal B.C., B.C. Hydro and maybe one or two other sources.

That's the end of my questions on financial matters in terms of the ministry itself. We may get into a little bit of discussion on fish renewal quite a bit later in the day. Does the minister have a comment?

Hon. C. Evans: Through the excellent work of staff, we were able, in short order, to compute that the average wage -- this was the hon. member's first question a few minutes ago -- of 161 FTEs in the previous fiscal year was $56,500, and the average wage of 171 FTEs in the current fiscal year is $56,600.

I wanted to get into some discussion with the minister about the decision to reconfigure the Ministry of Fisheries and bring it back together with the Ministry of Agriculture, admittedly in a slightly different format. We noted in the financial figures that it was really only a savings of about 50 percent in the minister's office. Other than that, as I understand it, the Ministry of Fisheries has basically moved over beside the Ministry of Agriculture, with a separate deputy minister.

I wonder if the minister would like to explain the thinking of the government, the rationale and how they came to this decision.

The Chair: Before I recognize the minister, I'm just going to put a mild caution out. A decision like that is not necessarily within the administrative capacity of the current minister. I'm going to let the question go a little bit and see how far we go down the road. But generally, to keep in order, we're dealing strictly with the administrative capacity of the Minister of Agriculture, Food and Fisheries. The question, for the committee's understanding, would likely be more appropriately put to the Premier under his estimates. But let's try it and see where it goes.

Hon. C. Evans: I really appreciate your intervention there, because I might have lost my head and attempted to explain the Premier's thinking. The Chair is absolutely right. I was offered the job after the excellent and creative reconfiguration of government by the Premier.

My interpretation of the idea is that essentially we gather together those parts of the rural economy, the food-based economy, that historically have been together, add rural development and run a ministry that is an advocate for people, as opposed to a regulatory agency. Where there are savings to be had in the minister's office in administration and communications and what have you, we will attempt over future years to see to it that the amalgamation produces efficiency.

But in the main, it was to create an agency and then give it some tools with the capacity to assist people where they live. The vision, if you will, is that rather than changing society and relocating people according to society's needs, we will create a ministry that attempts to serve the needs of people where they already live and do the work that has the capacity to make money in their own community.

J. van Dongen: Would the minister confirm that this ministry does have some regulatory responsibilities -- issuing licences, etc., and monitoring the performance of, say, aquaculture under the provincial Fisheries Act?

Hon. C. Evans: That's absolutely correct. Both in Agriculture and in Fisheries we have a regulatory function. But historically we have been more an advocate for people and business than a regulator -- I would say more so than, say, the Ministry of Environment or the Ministry of Finance or what have you.

J. van Dongen: I want to say that there are aspects of the initiative that I like. It provides some consolidation of effort within rural British Columbia. I think it provides potential to help deal with some of the conflicts, actually, that we have within rural British Columbia.

In terms of environmental issues, particularly involving fish and involving farming, they are good examples of where bringing these ministries under one roof along with rural development may provide some opportunities that may have been more difficult to achieve previously. This whole area is something that I have personally spent a lot of time thinking about and working on in terms of how government, in an effort to facilitate economic development, in an effort to facilitate economic activity and jobs. . . . In ministries like Agriculture, Food and Fisheries, how do we deal with the other half of the equation, which is the environmental side, and do that effectively? I want to get into some discussion in that area.

I actually want to pick up on a discussion that we had yesterday near the end of the day involving agriculture and environmental issues and rural-urban conflict, which I know is a big thing in terms of implementation of the government's shellfish initiative or implementation of, say, expansion of fish farming. So I want to get into some discussion on that.

Before I do that, I'm wondering if there was consideration given, in making this decision, to the recommendations of Frank Rhodes, who had been hired by the government not that long ago to look at the configuration of the Ministry of Fisheries in particular relative to the Ministry of Environment. I'm wondering if that was considered at all in this decision.

Hon. C. Evans: I don't want to duck the question, but it really fits under the area of what the hon. Chair just mentioned. I wasn't there when the Premier made these decisions.

I thought that the Rhodes report made some very good recommendations. It was his submission that the Ministry of Fisheries and the section within the Ministry of Environment, combined with what's now in this minister's portfolio, should be combined, essentially, and that things like fisheries, wildlife, habitat and the conservation officer service should be consolidated in one ministry and water management left separate. I think there's a very good rationale for that. In the Rhodes report, he indicated that that's the basic pattern in about 70 percent of the jurisdictions he looked at. I probably want to get into some discussion of why I think that's a good thing, particularly with respect to a separation of water management and fisheries management.

So if I could prevail on the minister to pick up the discussion we had late yesterday when the member for Fort Langley-Aldergrove raised the concerns about conflicts in his constituency and in the Fraser Valley, I want to move from that into some of the issues we face in this ministry, which are the expansion of the shellfish initiative, which we're working on, and the fish-farming initiative.

I was interested in the minister's comments yesterday when he said that initially in his portfolio he thought it was his job to expand economic activity with no reference to the neighbours, say, in the Fraser Valley and not necessarily any reference to other ministries. I think that is an area that needs a lot of thought by economic ministries. So that's something I'd like to discuss a bit with the minister. How does he see the relationship of this new reconfigured ministry, which I think essentially has good potential, with the Ministry of Environment in terms of their mandate to protect the environment? How does he see that relationship working?

Hon. C. Evans: I see it working in really quite changing ways. The hon. member's right: yesterday I said that when I first got the job, I kind of thought, four years ago, that I was to be an advocate without regard for when you push into somebody else's concerns. If there wasn't a strong advocate driving

ahead regardless of the complexity of a question, then the agriculture or fish or shellfish community or what have you would be let down.

But I think that was based on the old model of governance, a traditional model that, without regard to political parties that has always been so. Ministries acted as stovepipes. There was the issue on the ground, and it went straight up to cabinet internal to the ministry. There wasn't a lot of dialogue with other ministries.

As life has become more complex, British Columbia has now gone through some radical changes in terms of environmental assessment, land use planning and growth management in the lower mainland area. I think that government has to change to reflect how society is changing. The appropriate change, it seems to me, is for this ministry to work with other ministries like Environment to attempt to solve problems as close to the ground as possible.

The last thing that should happen is for the Minister of Environment and the Minister of Fisheries to be trying to solve a Fraser Valley interface between agriculture and water over the issue of fish at ELUC, the Environment and Land Use Committee of cabinet or, even worse, at cabinet itself. I think success looks like the minister never hearing about the issue, because it's solved somewhere near Mission or Abbotsford by the staff of those agencies working with one another.

Sometimes, of course, it's not possible for the staff of agencies to solve a problem. It is necessary for the client groups to solve a problem. There, too, the ministries are evolving towards systems of peer review, so that you have fishermen or fish farmers or dairymen or what have you forming organizations, with the assistance of the ministries, to then speak for the sector in a rational voice. If staff can't solve the problem, perhaps they can solve the problem.

Past that point, there are interagency management committees in every region. I think those people should be fired if most of the issues that come to them wind up at ELUC to be solved. They ought to be solved as close to the ground as possible.

I don't want to talk too long and waste too much time, but it was a very philosophical question. I would like to find ways to rate the success of a minister as an administrator on the basis not of the problems that we solve but of the problems that we never hear about, because the combative relationship of historical cabinet decision-making processes ill serves land-based businesses and communities.

J. van Dongen: In response to the minister's comments, I agree that it's a bit of a philosophical discussion, but it's one that I think is very critical. I agree with the minister to the degree that problems can be solved at the front-line level. That's good.

But very, very often, in my research of these conflicts and these issues, it's critical that the leadership and direction from the elected level is very clear. There needs to be some almost common direction from ministers down the chain of management to help ensure that the right kind of decision-making and processes take place, because the reality is that in each ministry, staff have certain legislation that they are responsible for. Unless it's clear to them that there's a need for them to coordinate with other ministries, unless that's clear from the policies coming down right from the top and, in my mind, sometimes possibly incorporated into legislation, my sense is that we're running into more and more difficulties, conflicts, competition for land, various users.

We used the example of the Fraser Valley yesterday. We'll talk about that and draw a parallel with, say, the issues in shellfish. Twenty years ago we didn't need to worry about protecting fish in a stream, because there wasn't the kind of intensive farming or the intensive land use that we have now. Twenty years ago there wasn't the same kind of land use competition for a shellfish site as we have today.

We're in a changing situation. We have the multiple goals of society that were identified, I think correctly, in the environmental assessment process, for example: economic goals, social goals and environmental goals. We have those multiple goals that we're trying to achieve with these heretofore separate ministries. I can use an example on the management side that this minister together with the Minister of Environment had implemented: the ten-point committee, now called the Partnership Committee on Agriculture and the Environment.

I think that's a good effort at trying to break down those stovepipes, and it involves assistant deputy ministers -- that's a fairly senior level of management -- to help implement that. I think it's a good start. I have to say that I think we also have not cracked through some of the really difficult issues there, but I think we're going in the right direction.

I wonder if the minister could comment on the issue of leadership from the ministers -- in this case, Ag and Fish and the Minister of Environment -- in providing direction to staff and helping staff deal with their own legal responsibility for their legislation versus the multiple goals that the government is trying to implement.

Hon. C. Evans: The hon. member is quite right. Most of the people in government service grew up as we did, as the leadership did, in the era of adversarial relationships being assumed to be correct public policy.

I have had lots of discussions, say, with Ministry of Forest staff. Every few years somebody puts forward a suggestion that it would be better if there was a superministry of natural resources, so that instead of a combative relationship, Environment officials and Forests officials protecting the land or water and issuing cutting permits had the same process. There are lots of discussions I've had where public policy is served by having the two stovepipes, so that everybody knows exactly what their mandate is to look after, and the fights that take place are in the best interest of the resource.

It is correct that there is a leadership requirement now, at the time of the millennium, of anyone who has one of these jobs to try to say to those public employees: "Yes, it is your job to carry out your mandate. But the job is better served, perhaps, by trying to work with one another than it is by strictly sticking to the letter of the law."

I think there is a cultural change going on in government service which is somewhat difficult to effect. I have written down several examples of leadership in different areas that have tried to effect that change. One is the decision to amalgamate the ALC and the FLC and break down the regulatory regimes around trees and, say, agricultural crops on land.

Second is the ten-point committee that the hon. member has alluded to, where we first got Ministry of Environment

people and Agriculture people in a room only by virtue of the exertion of leadership by the ministers. Then, by going to the leadership, the UBCM got some municipal people involved, and then, by virtue of intervention by the federal minister, got some DFO people involved.

The third would be back-country recreation, where BCAL and the Ministry of Environment were historically seen as sort of enemies. It took ministerial intervention to say to the staffs: "That is not the relationship we want you to have. We want you to work together."

Next would be shellfish, which was stuck, as the hon. member has alluded to. It has taken intervention by myself and by the federal minister and by the CEO of BCAL and by the leadership even of the Islands Trust -- all these levels of government -- in order to convince officials farther down that working together is necessary.

The fourth through fifth would be the labour accord between the Minister of Labour and myself in terms of agriculture. Everybody thought that what we really liked was newspaper stories showing cops stopping buses of agriculture workers every year, and it took intervention by the ministers for the people down the line to realize that we didn't like that historical relationship.

The last that I would point out would be the hon. member's intervention personally in terms of mushrooms. Only by having an opposition person and delegated power by the Minister of Environment and the Minister of Agriculture were we able to say to our people down the line at the municipal level and the two provincial ministries and the client group that we were serious.

That's just off the top of my head. While the hon. member asked his question, I could list those six examples. I imagine we could come up with 20 more. I hope that the hon. member, in asking the question, "Don't I agree that it takes leadership to make it happen?" isn't suggesting that leadership isn't happening. I think leadership is happening literally as fast as the culture of public service can accommodate it.

I want to say one other thing. There is no matching culture change in the press gallery or, through them, the general public. I think the press hate it when we solve one of these problems, because it takes away the conflict or the picket line or the people chucking rocks, which are the only stories they know how to cover. Getting the news out that we're solving problems is way harder than solving the problems themselves.

J. van Dongen: I just want to clarify my comments. Certainly my intent is not to be critical of this minister's efforts in this regard. I think that he has demonstrated a certain amount of progressiveness in this area, which is absolutely necessary. My interest is to work with that and enhance and expand this effort, because again, as I said earlier, it is absolutely critical. I think it's critical to the achievement of economic goals to take an interest, and more than just an interest, in also making the environmental goals our goals, if you will, in this ministry.

I can look at that in reverse, when we're talking about, say, protection of fish and trying to achieve protection of fish, to look at it another way which is certainly relevant to this ministry. That is that we are not going to achieve fish conservation goals if we don't make it our interest to look at the economic side of things, which includes things like property rights. This is certainly something that I think is fundamental.

The reason I'm trying to get into this discussion -- and I know there's a number of different dimensions to it -- is because I think it's so critical. There's been good effort made. We need to keep going. We need to find better ways to fine-tune the relationship between the provincial ministries -- and I'll use Agriculture and Fish, Environment -- and local governments and the public and the industry. We need to fine-tune that relationship. We need to look at the legal mechanisms. We need to look at the operational things, because despite our best efforts. . . .

I was pleased to work with the minister on the composting situation, but we only looked after one part of it. As the minister knows, there is still a part of it that is quite unfinished -- and it's a serious part -- and that is compliance with the new regulation of some existing operations.

So when I look at these situations and try and analyze why. . . . Our first goal, I think, is to define the problem, then secondly, to continue working towards solutions. I've tried to allude to some of the things that I think are relevant.

Yesterday I mentioned to the minister some work that is being done in the Ministry of Agriculture in terms of this document that is written for farmers. It's entitled: "Conflict Prevention and Resolution: A Guide for Canadian Farmers." It is a very good document. I would invite the minister and senior staff to have a look at it. I think it's one aspect of some more work that we can do, and need to do, to try and further the efforts that I know the minister is making, again because it's so critical.

I know that the ministry is working on some MOUs for the Minister of Environment. It's my understanding that there's a new MOU being worked on by B.C. Fisheries with the Ministry of Environment. There was one that was done, I think, a year and a half ago, which I have been given a copy of. I wonder if the minister could comment on this new MOU that's being worked on.

Hon. C. Evans: Yes, the hon. member is quite right, although I'm not sure that to phrase it as a new MOU would be quite as correct as to say it's an updating or an evolution of the old one. It's my understanding that the hon. member already has a copy of the existing MOU. What is happening now is that we are trying to overlay new initiatives on top of what's already there, so that the Ministry of Environment and B.C. Fisheries simply continue the cooperative relationship that they've built up elsewhere into emerging initiatives such as, say, freshwater fisheries, shellfish and the like.

J. van Dongen: I want to get back to the existing MOU, then, with a few questions. But I just want to confirm one thing first. There's also an MOU being developed between Environment and Agriculture, as I understand it from this summary, with respect to the partnership committee. Could the minister confirm that it is a distinct and separate MOU that is being developed for that part of the ministry?

Hon. C. Evans: It's easy to get that answer. I look at the staff around me, and they have no idea what the question is about. So I would say that it is a distinct and separate process.

J. van Dongen: Very good. So we can take it from that that we'll probably end up with the development of multiple MOUs between ministries on different aspects of the ministry.

If we go, then, to the existing MOU that the minister referred to, it does set out a number of specific responsibilities or items that the Ministry of Fisheries has lead responsibility for. Items 1 and 7 are the lead responsibility of the Ministry of Fisheries. And then it sets out the Ministry of Environment, Lands and Parks having certain responsibilities to be the lead. Then there are four items that the ministry is. . . . There are some joint lead roles there. Could the minister make any further comments, if you will, about how the existing partnership is working between these two ministries, Fisheries and Environment?

Hon. C. Evans: I'm pleased to report that at the deputy level it works very well. At the ADM level it sometimes works better if I take Jon O'Riordan up in a small airplane, and we chat. But otherwise it works really well.

J. van Dongen: I find the minister's answer interesting. It was my understanding that maybe if there was a problem in that other ministry, it was one of the regional directors and not Jon O'Riordan. But I'll leave that for another discussion.

The Fish Protection Act implementation that is contemplated in this MOU, which as I said is about. . . . Well, it's actually over two years old; it was signed on May 1, 1998. Would the minister have any overall comments on how that aspect of this MOU has unfolded to date? How has it worked out in terms of the progress on the file and the coordination or cooperation between the ministry. . . ?

Hon. C. Evans: I understand from staff that it's working reasonably well, although it's generally perceived to have gone slowly. I have to admit that I prefer the slow process. As I referred to earlier, we had to build a culture of cooperation, and that has historically existed sort of on the ground level between people looking after water and, say, the farm community. So I'm happy with the Fish Protection Act moving slowly from 15 streams and trying to figure it out in a couple of pilots and trying to figure out how to allocate water for fish, before we expand it broadly around the province. I imagine staff and probably the Minister of Environment would prefer we move quicker, but moderate success is preferable, to me, to rapid trouble.

J. van Dongen: Could the minister clarify the role of B.C. Fisheries in this implementation and the involvement of the Ministry of Agriculture in this implementation? I don't want to get into a long discussion but just get some sense of their relative participation in the process.

Hon. C. Evans: I'm merely in a support role. The lead ministry is the Ministry of Environment.

J. van Dongen: We may talk a little more about the Fish Protection Act later. But in terms of this MOU, there was a big priority given to the water use planning process. The Deputy Minister of Fisheries is involved in that personally, as I understand it from this document. Could the minister describe what's involved there, what the objective is and what progress has been made on that aspect of this MOU?

Hon. C. Evans: Yes, there's a good working relationship. The initiative primarily is about providing water rental relief to B.C. Hydro in exchange for changing flows. The example is the Alouette River. The desire is to duplicate that success elsewhere.

I will say that it's good to highlight this subject, because I personally believe that water rental ought to begin to be seen by British Columbians as kind of the stumpage that relates to the fish industry. It is my hope that this initiative will get broader understanding in this building and perhaps in the general public, so people can see that there's a correlation to what you require, for example, hydroelectric companies to pay for water and how the water is used. And how it's used has an impact on downstream values, primarily fish, but also other users.

J. van Dongen: Having learned a little more about B.C. Hydro than I knew earlier, which wasn't very much, as a result of the Sumas energy proposal, hon. Chair, which you know about, I am interested in the fact that within British Columbia we have some strategic advantages by virtue of having this capability of generating hydroelectric power. I think this is a capability that the people of B.C. Hydro guard quite jealously, because it gives them some opportunity to buy power when it's cheap and store power, in effect, and sell it when they can sell it to a high bidder on the open market, very often in the United States.

I wonder if the minister could give a little more detail in terms of. . . . Is there a critical path or a list of priorities from a fish perspective in this water use planning process that has been established, which this ministry is pursuing?

Hon. C. Evans: There is a very detailed workplan, laying out the objectives of this initiative over the next few years. I will supply it to the hon. member rather than go through a long explanation of all that stuff.

J. van Dongen: I appreciate the minister's answer. In terms of an overview, an overall picture, when was this process established? And how far along into the process are we, timewise?

Hon. C. Evans: The project has been funded since August 18, 1997. It existed in the planning stages and discussion stages prior to that time without the necessity of funding. In answer to the question of, "How far along is it?" I'd say it's just getting going. With any. . . . It's not like a project that is ten years' worth of work and it's only three years into it. It's, I think, probably going to go on forever -- or I hope it goes on forever.

I mean, I have lots of thoughts on this subject by virtue of my role as the minister responsible for Columbia Power Corporation and by watching the evolution of water use planning and fish on the Columbia system. I don't think it will ever stop. In fact, I would think it would be unfortunate if we ever went back to the days where planning release dates and lake reservoir levels and the like without consideration of fish. . . . It would be horrible if we went back to that system. So I would guess it will never end.

J. van Dongen: Just one other question on that subject: having gotten into the early stages of these discussions or

negotiations, is it being found that there are sometimes some common interests or win-win solutions? Or is it being found that there are always just outright trade-offs -- that we gain one thing on the side of the fish, that we lose something on the side of B.C. Hydro or water for other uses? What are the findings in terms of the process so far?

Hon. C. Evans: I want to answer the question by going to an example I know really well. I cannot tell you whether, on the Alouette River example, it was possible for B.C. Hydro to make money at the same time as changing their release pattern. However, if you include public relations as a value along with electricity, then I think it's definitely possible to have a win-win, because as the hon. member knows, one of the issues that B.C. Hydro has to do is to show themselves as a benign influence in the environment. Whenever they are able to do so, that's good for future power production opportunities.

But I will answer in terms of an example I know better, which is partially B.C. Hydro, and that is the Keenleyside Dam. It produced no power whatsoever prior to the present moment. There's a power plant being added which will decrease the amount of dissolved oxygen in the water.

There is therefore a net gain to recreational fisheries in British Columbia and in the United States by making more power. That net gain has made the power green power, according to the cost formula in the United States, which means that you can then sell it for its value as electricity plus an added value as environmentally benign electricity, all because we discovered that it was possible to benefit fish and power generation with the addition of new technology.

Because most of the dams in British Columbia are not gated dams -- ergo there's no system to keep fish out of the turbines -- you can see that there are excellent opportunities in future, as we upgrade those dams, to add technology that is fish-benign or even fish-beneficial.

J. van Dongen: The minister talked about some public relations value to B.C. Hydro. I guess my only concern is that we want the arrangements that are made through these water use planning processes to be real; we don't want them just to be a PR thing. I'm not saying that they necessarily are; I don't know. But I find sometimes that within government generally and possibly within this ministry there is an overemphasis on PR and maybe not as much where we could put more energy and resources into actually improving the actual outcomes for fish -- as opposed to public relations, just to make that comment. If the minister wants to comment, I'll leave that with him.

The MOU also talks about the Canada-B.C. agreement, and I'm going to cover that a little later. I'm wondering if the minister could confirm that once this existing MOU is amended, he would forward a copy to me.

J. van Dongen: Just to again pick up. . . . I apologize for the maybe somewhat rambling philosophical discussion here, but I want to deal with this first and tag it onto the discussion yesterday with respect to Agriculture. The minister mentioned yesterday his support for the concept of mitigation when we're dealing with agricultural activities, shellfish-farming activities and, I think in particular, fish-farming activities. These are my words, not his, with reference to mitigation.

I want to say that I agree with him that too often in the past government and industry have resisted being as proactive as they needed to be on mitigation measures. I think that we're fast approaching situations where either you mitigate more proactively or you just don't do your industry at all. The mushroom composting issue is a very good example, where we're basically in danger of not having any mushroom composting, as the minister knows. I think that this is also critical with respect, particularly, to the fish-farming initiative -- salmon aquaculture. And it would also apply to shellfish, maybe in not as critical a way.

But I think it's an important principle that we're trying to balance: not having too much regulation ahead of the fact, as the minister referred to yesterday, but also trying to ensure that in the long term we can have these economic activities and have them in such a way that they can continue over an extended period of time, without having seriously damaging public opposition to these industries. I wonder if the minister had any further thoughts on that.

Hon. C. Evans: Yes, I concur. I would use as the best example the need for changing relationships between our industries of finfish aquaculture and shellfish aquaculture and first nations. In terms of mitigation, the best opportunities for the expansion of those industries, say between Campbell River and Prince Rupert, tends to be the territory of first nations people, who have tended to be excluded from the equity opportunities or even job opportunities that those industries offer. That's a ridiculous situation, given that to the extent that you can share value, you achieve buy-in. Even if you exclude justice as a question, I don't see any other way to expand the industries, just in terms of straight economics, without mitigating the downside of those investments for native people.

The situation is also true, of course, in terms of urban industrial activities and the need to get along with people. It's also true environmentally. In the fishing industry we have a long way to go to make people comfortable, with finfish aquaculture especially. The whole environmental assessment process, reputed to be the most extensive in the history of the world, was aimed at trying to provide mitigation sufficient to assure citizens that it was not damaging to the environment and wasn't putting wild fish at risk. Either we solve those two problems -- relationships with first nations and environmental protection -- or there won't be an aquaculture industry.

So it's not really a question of: is it a good idea or a bad idea, or what's your public policy angle on it? It's a question of straight economic investment. You do it, or you don't have a business.

J. van Dongen: We can certainly pursue the issue of first nations when we talk specifically about shellfish and find out how the ministry is dealing with that. When I was talking mitigation, I guess I wanted to address mainly the environmental impacts.

The minister's comments reminded me of an interesting concept in this handbook that distinguished between consensus, where absolutely everybody agrees -- which is, I think the minister would probably agree, virtually unachiev-

able. . . . I remember a letter that he wrote to, I think, his son or daughter in the Vancouver Sun on that very topic. It talks about distinguishing between achieving consensus and achieving what the authors here called a consent to operate. Probably the consent to operate is the practical objective we should be working for.

I think one of the things that we need to do is fine-tune our understanding and our judgment about when we have that consent to operate. That is something that over the years, the people in the Agriculture side of the ministry, which I'm more familiar with, have done a pretty good job of, I think, with a few exceptions. When you have those exceptions, they are very, very difficult and troublesome and have far-reaching impacts. Again, the mushroom-composting one is, I think, one where collectively we misjudged that concept of consent to operate. Hence we are here 20 years later trying to solve the problem. For various reasons we're still not quite there.

I agree with the minister, and I just wanted to broach the subject of mitigation again in general terms. I think it's an important part of the number of dimensions of trying to achieve economic activity in the face of environmental concerns and even the first nations concerns that the minister has raised.

One of the focuses in this manual that I think is very good. . . . And it's borne out in my own experience in the last three or four years in dealing with a lot of these environmental issues and fish protection issues and even specifically on the Fish Protection Act implementation process that we've been involved in. I think that all of these ministries -- Agriculture, Fisheries and Environment -- need to consider training for their staff in terms of facilitation and mediation skills. I think that would be a very productive direction for us to go in.

I have been involved personally in too many public meetings -- more than I care to mention -- in terms of environmental issues, but these experiences bear this out. I think that one of the constructive, proactive things that we could do is to start training staff in these ministries to work with the public, to work with proponents of projects and to work with industries, in terms of the whole process of sharing information with the public -- whether it's troubleshooting a particular situation or whether it's trying to achieve long-term goals in an industry. I've become a firm believer in what I call public information meetings. I'll use as an example. . . . When the Fish Protection Act was first passed by this Legislature, there was a very negative response from a lot of the Fraser Valley.

Actually, prior to the public process initiated by the government, the member for Langley ran her own public information meeting. I think it's important that those meetings are chaired well by a competent, respected chair, that they are managed well, and that there's a good exchange of information. I think it's important that the public servants involved in this case, primarily the Minister of Environment, are there and, depending on the circumstance, that they present or they listen. In this particular case, we had 300 people out at that meeting. These people were concerned.

Again, this stuff seems fundamental, but I think we need to do better, and we can do better. I've been involved in a number of meetings, some that dealt with flooding issues. Another one recently dealt with drainage issues but also involved fish protection, fish conservation. Invariably, we've had to encourage and virtually drag out public servants who had a responsibility in that area. In all these cases, they came and found that it was a very productive, useful meeting. That's important to get that exchange going. It's something that I think we need to work on in government.

I think the ministry has a good start in this manual. But we need to look at training of staff to give them the skills and the support from senior management and the elected level to help them do that job. I'll go a little further. The minister made an earlier reference to this joint effort that we did on mushroom composting. I think those kinds of signals to staff and that kind of support to staff help move these processes, help give them credibility, and help give both staff and the public a sense of direction. So I just put that to the minister for his thoughts and comments.

Hon. C. Evans: I think those are constructive ideas. It had never occurred to me to suggest a training component for staff in terms of handling public meetings. It may happen already; I don't know. I'll try and find out.

I will suggest, though, that because of where I live, I have tended to think that my job was to protect civil servants from public meetings. I have attended public meetings largely related to the logging industry, where civil servants were treated with the hatred and vilification that used to be reserved for racial groups or what have you in times of bigotry.

If we're going to say to our staff, "You have a job to go and present to the public an information session and to hear the people," we also have to get past this madness that I think is fed by the centralized press of the day -- this notion that people working for the government are the enemy. I see it every time I read the Sun or the Province. Every time I watch television, there's an assumption that raising your children to work for the government is a mistake. I believe that's because there are people with an interest in denigrating the state and, by extension, the people who work for the state.

So I would agree. But I would ask the hon. member to understand that as minister, it kind of gets turned around. You are kind of protecting people from a form of oppression that exists out there.

J. van Dongen: I couldn't agree with the minister more. In fact, in a recent experience we had, we tried to get some people out to a meeting, and a previous meeting involving logging was cited. Luckily or unluckily, I haven't had the experience of that kind of meeting. I know the minister has.

But I think that to the degree possible, we need to get that interaction going and get those mediation-facilitation skills in place. Certainly in my own mind, for the kind of issues that we were dealing with -- flooding, drainage, composting -- we were able to ensure that a civil, proper meeting was run and that public servants were treated with respect. I agree with the minister that that's essential. I take the view that if I'm in any public meeting where a public servant is not treated with respect, I've said that I would shut the meeting down if I was chairing it. I think that's the basis on which it needs to be done.

Certainly we've seen over and over again. . . . When we were developing the regulation for mushroom composting, it was a government requirement to have a couple of public meetings, which we did in September of '98 -- one in Aldergrove and one in Chilliwack. Some of the information

that did come out was very revealing. Some of the historical views that government had had in a couple of ministries, which had been in place for a long time, were demolished in terms of some of the evidence and testimony presented there. In thinking through all of the various forms of communication, I think that this public information meeting is one very good tool, and we need to do everything we can to make it work.

I had the privilege of reading the previous draft of this manual that Lorne Owen and Judy Carter and others have been working on. One of my initial responses was: now that you've written a manual for farmers, how about starting to write one for the people in government to help them understand farmers and, in this case, fishermen and maybe other members of the public? I'm not joking when I say that. I think there is a lot of work that needs to be done and can be done in helping staff understand their client groups better. I'm not talking so much about this ministry as I am the Ministry of Environment. In the spirit of the recognition that Environment's problems are our problems, if we're in the Ministry of Fisheries, then I put that to the minister for his consideration.

Along this theme of how we deal with urban-rural conflict, conflict within our coastal communities on land use and the conflict between environmental interests and economic interests, I think that we need to be more innovative. I say that because I believe we can be more innovative in developing better options for gaining compliance with environmental standards. We talk about going to a more results-based system, which I think is in the right direction. In that kind of a system it's clear to establish clear standards, have a way of measuring them, and have a way of communicating them to operators, for example, of a fish farm so there's a clear understanding of what the objective is. But I think that we need to be more creative in terms of how we gain compliance.

As an example, there are lots of aspects to this. What I thought was interesting. . . . This is Northern Aquaculture, April 2000, just very recent. It talked about the code of practice being developed in New Brunswick. They talked about the concept of operators signing agreements as a way to (a) help them understand what the expectations were, and (b) -- I suspect, and I don't know this for sure, but I believe -- to provide a more efficient and possibly more effective way of gaining compliance, if some kind of an enforcement action was necessary.

Again, the purpose of this discussion is not to be critical but to put on the table for discussion the whole concept of looking at more creative options to gain compliance -- administrative penalties, for example. We see other agencies in government starting to use them. I think that in the fisheries sector we've used them on some types of issues. It's a bit of a reverse onus situation, where someone who is clearly in non-compliance. . . . The requirement is on them to prove that they're in compliance or that they shouldn't be getting a fine or something. I think there's lots of things that we could do.

Again, as the minister knows, we have a very serious situation with respect to mushroom compost, where we've got interjurisdictional issues. We've got all kinds of complexities there. Yet it seems to me that there are some proactive and creative ways that compliance could be achieved, but our traditional ways of dealing with these issues are preventing us from getting there. So again, as a general suggestion, this is an area I think we need to explore.

Hon. C. Evans: I don't discern a question but an excellent suggestion in the hon. member's comments. For sure, compliance needs to be encouraged in lots of different ways. I would suggest, not utterly facetiously, that to start, one of the best things we could do in the fisheries field would be that when we approach people, we'd not be wearing a gun when we ask them to comply.

J. van Dongen: Well, it's interesting the minister came up with that example, and again, I couldn't agree more. It depends on the circumstances. We have an example in Abbotsford where a conservation officer, right out of the blue sky, approached a machine operator under the threat of a jail term, telling him to shut down the machine. This was with respect to a ditch maintenance situation, and this was really the trigger that started the current debate that we're having. Now, that was a federal officer, but it is a very graphic example of where we need to fine-tune this relationship, how we gain compliance and how we do things.

To use a term that the minister used yesterday, we need to invent new ways to do this stuff. We need to invent new ways to have people talk to each other -- people on the government side who are trying to implement the goals set out in the legislation that elected people pass, people in the industry and people in the public. So I appreciate the minister's example, because it was certainly one that was uppermost in our minds in the Fraser Valley.

I want to go now, specifically, to the shellfish initiative and the outline that the deputy has. That's No. 4. This initiative, as I said, was announced in November 1998 -- one which we support. I wonder if the minister could give us an update on the status of that effort.

Hon. C. Evans: I'm just going to rip through the numbers, and then the member can ask for areas of specific interest. There are 68 applications for shellfish expansion -- that means from a smaller farm to a larger one. Of those 68, BCAL has approved 66 of them. And it's my understanding that of those 66, 16 have been approved by all agencies -- provincial, federal and local -- and work is underway on the expansion. Of the remaining 50, 40 require federal Coast Guard approval and 28 require local rezoning. That would be 21 from the Islands Trust and seven from the regional district of Comox-Strathcona. This wave of expansions is expected to increase the area under tenure by 305 hectares, which is 13 percent in this first wave.

Then there are five new tenures that have been approved for first nations. We are in the process of establishing community-based shellfish steering committees. The Powell River area is now ready to accept new applications. Barkley, Quatsino and Nootka are close to completion and will soon be accepting new applications. The goal of the program remains to double the amount of shellfish tenure over ten years.

J. van Dongen: It was my understanding in discussions that I've had that the Coast Guard approval generally wasn't an area of difficulty but that there had been a significant area of difficulty with the habitat people in the Department of Fisheries and Oceans, or Fisheries and Oceans Canada, as they

are called now. Could the minister clarify what the expectation is with respect to the Coast Guard and what the situation is with respect to the habitat people at DFO?

Hon. C. Evans: The hon. member is correct: the Coast Guard are pretty easy to get along with. Their only concern is how you mark your tenure. But because they're part of the same agency as the Fisheries component of DFO, there seems to be some ideological trauma going on. And it becomes difficult to get the federal government to issue the paper, even though Coast Guard people seem to want to.

I want to be somewhat circumspect on what I say on the record, because I'm trying to work all this out with the federal minister, and I'm trying to work it out by being a really good person in terms of not being grumpy. He seems to be responding. He also would like to see these things advance, but there are some roadblocks here and there. I feel some assurance that the federal minister desires as much as anybody to see those roadblocks removed, and I don't think that they come at all from the Coast Guard themselves.

J. van Dongen: I appreciate the minister's answer, and certainly we don't want to do anything here that would jeopardize relations with the federal minister.

It was my understanding -- and I can't recall if it was in the list that the minister read out -- that out of the 66 approvals, 16 are in a position to actually go ahead at the present time, where they have no hangups with any other agencies. Could the minister clarify that?

J. van Dongen: I just want to reaffirm for the minister our support for the ministry's effort to deal with this federal matter. We'll point out to the minister that we have, with him, on record a letter supporting that effort and, I think, attempting to put on the record our views as to some possibilities as to how to approach that -- and certainly want to be cooperative and conciliatory but also proactive at the same time. So I just wanted to reference that.

The issue of rezoning that is required for these sites, involving 21 applications where rezoning has to be given by Islands Trust and seven by the Comox-Strathcona regional district -- could the minister advise this committee what the involvement of the province is in that effort? Is it the fact that every individual is on their own in terms of achieving that rezoning? Or is there some involvement by the ministry?

Hon. C. Evans: Our involvement is really very, very extensive -- so extensive that I know that the MLA for the Comox area is trying to assist in working out regional government's compliance or assistance in the rezoning. As I suspect the hon. member knows, the trauma there is just another one of those urban-rural interface questions having to do with the quality of water and runoff of septic tanks and the need for sewage treatment and the like.

Similarly, with the Islands Trust, I met with their lawyer, their chairperson, their administrator and maybe some other people, and staff, trying to see if we can come to some agreement on the expansions there. It was my feeling that what the Islands Trust wanted was some assurance that operators would operate to some kind of best-practices standard so that operators who, on purpose, ran a shellfish operation that was insulting to or in ignorance of the landed citizenry would change their practices -- or cease them. That seemed perfectly reasonable. Not very many people like that. . . .

In the main, what they wanted was some kind of process. They wanted to feel like they were being considered and that we weren't shoving it down their throats. Once I realized that we were going to get to yes, then I kind of backed off on my aggressive position. I truly think it will go to a rezoning with a pleasant outcome.

J. van Dongen: Could the minister advise whether or not each application is going as an individual application with a complete set of individual considerations? Or is this in essence a block application involving the provincial government?

Hon. C. Evans: I believe that the application will go forward as a block. The lead is BCAL and B.C. Fisheries working together.

J. van Dongen: I'm pleased to hear that. I think that is probably the only way that a lot of these rezonings are going to get through, at least in many situations. It's in line with my view that where we have industries like agriculture, like shellfish, like salmon aquaculture, like mining, which are industries of provincial interest, then I think it's appropriate to have some provincial involvement.

I'm wondering if the minister could advise the committee whether or not the right-to-farm legislation applies in this situation, from the perspective that the Minister of Agriculture has sign-off authority on any new municipal or regional bylaw that impacts agriculture and, in this case, shellfish farming. What is the law on that relationship between provincial government and local government?

Hon. C. Evans: Yes, it does apply. However, it only applies where triggered, just like in farming. Not every bylaw comes to the minister. But the minister could trigger some process that would. . . . Should I feel that a municipality was incorrectly using bylaws to get in the way of the industry, we could trigger the right-to-farm law.

J. van Dongen: Again, I'm pleased to hear that, because I think we need that kind of a fail-safe in support of the industry -- obviously something that needs to be very carefully and judiciously used, but I think a good piece of legislation.

The minister talked about problems in a particular area, I gather, with respect to on-site sewage disposal. I'm wondering if the minister could confirm in which area that problem exists.

J. van Dongen: Could the minister then confirm how many of these applications are in Baynes Sound? It was my understanding that there's a tremendous amount of resistance there and that, in the minds of some people anyway, it's debatable whether there may be any expansion in Baynes Sound. Could the minister give us some more detail on that?

Hon. C. Evans: We don't know the specific number. The hon. member is correct: it's a contentious area, in part, because

Denman Island is part of the Islands Trust. In part, for the reasons I explained earlier about water quality and the like, it's difficult. And we're trying to work through the process and trying to work it through in a way that doesn't come to people just outright objecting but that gets some accommodation out of the industry.

J. van Dongen: I appreciate that information from the minister. Prior to and after getting involved in politics, I spent a fair bit of time working on the issue of on-site sewage. So I may want to approach staff and throw out some ideas on that area, because I think Baynes Sound has been a problem for a number of years with respect to on-site sewage. I think that, for a number of reasons, we need to be proactive to try and deal with that issue not just for shellfish-farming purposes but also for health and environmental purposes. So I appreciate that confirmation from the minister.

Could the minister confirm that all of these new sites. . . ? As I understand it, all of them are Crown land, and that's the involvement of BCAL. There are none of these sites that really involve private land, because they could go ahead. If you're on private land, you wouldn't be dealing with BCAL or the ministry.

J. van Dongen: My understanding is that there was a court case involving a business in Squamish which went to appeal recently. I think it dealt with the ability of a local government to zone Crown land and who had an overriding authority on Crown land in terms of the use of that land. I'm hoping the minister is aware of that case, and if he can comment on the current status of it. . . . I think there was a decision rendered recently, but I'm not sure about that.

B. Valentine: You're right: the decision is under review right now. It really goes to what has been practice in British Columbia. Clearly the minister has significant authority at the end, particularly with legislation as far as the farm practices act, and the province, as far as his authority as far as zoning. . . .

But the practice has consistently been, that despite the authority, to ensure that in fact when it comes to land use issues, regional and local governments are involved in those practices and in those decisions and to avoid a situation where that significant authority actually has to be exercised.

J. van Dongen: Could the minister confirm that an appeal decision has been rendered and what the decision is? I certainly accept that the decision may be under review by government. But if the minister could just confirm whether or not a decision by the Appeal Court has actually been rendered and what that decision is.

B. Valentine: No. My best understanding -- and this is as of a current discussion that took place last week -- is that a decision is still under appeal.

J. van Dongen: I certainly want to concur with the minister's earlier comments about, irrespective of authorities, working at getting buy-in from communities and getting this level of consent that we've talked about. Is it the role of BCAL then to. . . ? They are the front line in terms of dealing with all of these issues, and there's not much involvement by the ministry itself in terms of the zoning issues.

B. Valentine: Certainly it's correct to suggest that on zoning and tenuring issues, B.C. Assets and Land Corporation plays a lead, but in fact we have established a common office to try to facilitate issues in issuing those tenures. Frequently it's not just the issuing of the tenure, but it comes down to issues, for example, associated with the concerns of residents on Denman Island regarding operational practices. So it's a good opportunity, through the cooperation of two agencies sitting down with representatives from those communities, to try to sort out the solution. From my perspective, that has been the significant benefit of bringing and consolidating these offices through the shellfish office that we have with BCAL in Nanaimo.

J. van Dongen: Again, to make reference to the need to get buy-in from the community, this is critical. One of the critical aspects of it is to simply achieve a level of confidence amongst the neighbours of these proposed operations and their local elected representatives. This is a critical aspect, again irrespective of legal authority. We've seen examples where you can have all the legal authority you like, but it falls out of bed if there isn't some confidence not only in the initial setup of those facilities but in the operations of those facilities down the road. That isn't always easy to achieve. As we know, it's always the easiest thing for neighbours and their local elected representatives to say: "No, we don't want that, because there's some risk attached to it." So, again, I think that's part of where we need to be proactive and encourage the industry to understand that, because it's a changing world.

I note a letter here by Jack Hall, the vice-president of the land management division of BCAL, to a resident in Ladysmith. There was an issue about anchoring -- netting, I think. It's something that I had looked at too, and certainly I agree with a comment in this letter that the industry, with the assistance and encouragement of government, needs to look at those kind of issues.

I want to just extend this discussion to the issue of longer-term planning and identification of potential sites. It's my understanding that the ministry has been engaged for some time now in identifying good potential sites for down the road. My first question would be: what is the status of that effort?

B. Valentine: The shellfish initiative has two components; one is dealing with the capacity of the existing industry for expansion. But you quite correctly point out that there is a whole other initiative, which has received considerable support by government and close work both with the existing industry and with new entrants. This is the expansion that is taking place and that's envisioned in the future through a community planning process.

The member may know that, for example, we've actively engaged the Shellfish Growers Association in an education program with both first nations and non-first nations communities to try to get away from a situation where we are attempting to deal with referrals at the end of the day in planning processes. We're trying to get communities to iden-

tify, before we proceed with issuing tenures, areas to take a long-term strategic look and try to provide an opportunity for this industry to bring economic benefits to all coastal communities.

The initiative has initially been, we think, quite successful. We've had the active involvement of Fisheries from rural B.C. and in fact very good involvement from both first nations and non-first nations communities. That will lay the foundation for the extension and the growth of the industry outside of its traditional areas, which tended to be more towards the east coast of Vancouver Island. It will allow for expansion and growth in the central coast, eventually in the North Coast, but most probably initially on the west coast of Vancouver Island.

J. van Dongen: It's been put to me that -- because of the kind of pressures and concerns in an area like Baynes Sound -- there may be merit in considering ways to, in effect, reserve sites for future expansion that may not be used right away. The concept is something like the agricultural land reserve but maybe with a bit more flexibility than what the land reserve offers. Is there any discussion or thought on that kind of a concept?

Hon. C. Evans: One of the wonderful things about bringing BCAL into the Ministry of Agriculture and Fisheries is that this precise kind of thing is now possible, whereas it might not have been so possible to have a coordinated response as two different institutions.

J. van Dongen: I'm not sure the minister answered my question. I appreciate the answer, and as I said earlier, I'm probably supportive of BCAL being part of the package. I guess my question is. . . . It was put to me that because of other uses, mainly residential and recreational uses, in an area like Baynes Sound, there's real concern that despite all the best efforts of the industry and the government, the necessary rezonings may be achieved and there be a cap on expansion. On the other hand, there are areas like Nootka Sound, which is remote at the present time but could also fill in with other uses.

Is there any thought to setting aside or reserving some of those sites for shellfish? Let's face it; we can't do shellfish just anywhere on the coast or anywhere in British Columbia.

Hon. C. Evans: I think I did understand the question. I meant to answer the question with a simple yes. Obviously we're not going to create the equivalent of an agricultural land reserve without considerable thought. Right now what we're trying to do is coordinate our activities and BCAL's in a kind of strategic thinking about these possibilities, and to use the LRMP process to try to effect zoning suitable for shellfish aquaculture as the coast LRMPs are going on. Our staff are attending those processes with that in mind.

J. van Dongen: On the LRMP, my understanding -- and I just seek a clarification from the minister -- is that the LRMP's objective or purpose is to provide some long-term direction but that it is not actually to be considered provincial zoning. I wonder if the minister could clarify that.

Hon. C. Evans: There's a three-stage process. There's the land use planning process, and the hon. member's quite right that that's to provide policy designation. Then there's the elevation of a land use plan, which may or may not happen, to cabinet to designate it at a higher-level plan. If that happens, it has legal status, although not the status of zoning. The third process is the community process that I described earlier, which we're engaged in with communities -- Powell River, I think, being the example I used -- where we're working with the community to attempt to effect the on-site zoning that's appropriate, that we desire on behalf of the industry and that the community desires on behalf of job creation or economic development.

J. van Dongen: To follow up on the minister's answer, the community-based steering committee process -- could the minister explain who is involved in that process? How is it determined? Who participates? And a little bit about the process that they follow.

Hon. C. Evans: It's led by sort of a consortium of the industry itself, first nations governance or organizations and municipal government. It's funded largely by about $25,000 or $30,000 grants from Fisheries Renewal, and it works off of mapping capability provided by ourselves.

J. van Dongen: The minister confirmed that he feels there is a reasonable balance of environmental interest and economic interest on the composition of those committees. I raised the question because on the central coast LRMP, there was certainly a concern there about two things -- in this case, salmon aquaculture participation and another aspect, the balance of interest there. I wonder if the minister could just comment on the composition of these steering committees from that perspective.

Hon. C. Evans: There's a bit of a difference in the LRMP process. Environmental groups actually have representatives at the table. In the community shellfish planning processes, there have been no requests from environmental groups to sit at the table. I think there's a feeling that the process is acceptable. There's thus far been no trouble that the table -- being first nations, municipal government, ourselves, Fisheries Renewal and the industry -- is an unacceptable mix to anybody.

J. van Dongen: I probably want to pursue the discussion a little more. But I'm going to leave it for now, and I'll pursue it another day with staff. I thank the minister for his answers on this steering committee process.

I just have one other question on shellfish. That is, the shellfish farmers talked about the problems they are having now where they harvest their clams; I guess they are Manila clams. A wild stock basically in-fills behind the Manila clams that have been harvested; varnish clams I guess they are called. So they have to hire people to go out and pick those out of their growing area. It's sort of like weeding a crop, in terms of my background.

But they feel that they would have the opportunity for some salvage revenue, if you will, from selling those varnish clams and have run into regulatory issues with the Department of Fisheries and Oceans. I wonder if the minister could confirm whether my understanding of that issue is correct and what the ministry is doing in terms of trying to deal with it.

Hon. C. Evans: I'm sorry for the time it took, but sometimes things are so haywire and dumb that you have to check to make sure that what you're hearing is accurate. The hon. member is quite correct: the varnish clams need to be weeded from the shellfish tenure. But the bizarre thing is that varnish clams are an introduced species, assumed to be introduced through bilge water; they're not an indigenous species.

The federal government, in their wisdom, seems to think that the conservation patina that they have applied to their own policy analysis requires them to treat varnish clams as a biological entity requiring conservation, in spite of the fact that they weren't here before. So they refused to issue a tenure so that people. . . .

It's okay to go out and weed the clams off of your licence, but if you actually enter into trying to sell them, then you need a permit. And you can't get a permit, because the federal government hasn't studied them. Of course, they haven't studied them because nobody cares about them. Until they study them, they're not going to issue a permit to let you sell them. So you can go out and weed them, but you can't sell the weeds after you put them in the bucket.

I'm sure that as soon as the federal minister turns his mind to this -- being a rational individual, problem solver and a good person -- he's going to advise his staff that they get out of the way and let the people sell the weeds, because we're not in the business of protecting species that don't belong here in the first place. Although first nations might have difficulty in interpreting everything I just said, given that they might argue that we ourselves are an introduced biological entity in their territory.

J. van Dongen: I appreciate that answer. Certainly, if this minister needs any support on that issue vis-à-vis the federal minister, I would be more than happy to give it, because it's an opportunity for growers to recoup at least a small part of their costs of dealing with it.

I said that was going to be the last question, but the minister reminded me of one other issue that I think is very critical and that I wanted to just get his comments on. And that is the relationship with first nations and the approach in terms of dealing with implementing shellfish operations on Crown lands, which I know are the subject of treaty negotiations.

Can the minister advise how that issue is now being handled in terms of our understanding of the need to consult with first nations, how that is being done and how the province, through BCAL, in those discussions, is achieving some way to move forward once that consultation has taken place?

Hon. C. Evans: This refers to the hon. member's comments about mitigation a few minutes ago. Where we were a few years ago, the last time I was minister responsible, was quite a difficult relationship with first nations. We were attempting, I would say, to impose an emerging or growing commercial opportunity on first nations territory. They had some reservations, and it was somewhat difficult. It was all on the old BCAL referral process model. First nations, quite understandably, would tend to deny the referral in order to have no impact on their treaty negotiations.

We're operating a completely different model now. We have said to native people that the foreshore that borders reserves will be held for them, if it's suitable for shellfish aquaculture. We've also encouraged first nations to apply for tenuring opportunities outside that area. In all of the community-driven processes that we're engaged in, first nations are at the table. Essentially what we're attempting to do is instead of having them be an agent of referral, have them be participants in the process. My hope is that in a growing way, native people will participate in an equity relationship with the industry and then see the industry as benign and in their interest and a job creator, rather than as some kind of invading activity.

J. van Dongen: I take it from the minister's comments that he feels that the ministry and the government are making progress in that area, and that's good news.

I want to move to finfish aquaculture. I thought I would get into this subject by reading a quote here from a columnist in Northern Aquaculture from New Brunswick. She had quite an interesting and, I think, somewhat apropos statement. She started a column here: "In many parts of Canada an aquaculturalist has a better chance of a fair trial if accused of murder rather than attempting to farm a living from the sea." That is a little bit of a strong statement but maybe not that far off the mark in terms of some people's response to this industry.

I am pleased that the government, after a long time, made a decision to at least move forward and incrementally on this issue of finfish aquaculture. I say that not because there aren't legitimate concerns, but I think it's an integral part to any effort to try and provide jobs and economic activity in coastal communities. I want to have the minister describe the status of the initiative in terms of the implementation plan for the decision that was made a number of months ago.

Hon. C. Evans: There are two parts to the question. First is the hon. member's comments about it being easier to be charged with murder than to be a fish farmer. I'm quite sympathetic, because actually before I did this work I was a logger. I thought that was probably the most denigrated profession in British Columbia -- only I vastly exceeded that when I got elected and became a politician. When I met the fish-farming industry, I thought: well now, this is quite wonderful. Here's a group of people who make me look good. I set about to see what I could do to increase their public acceptance, which I think would be a good thing.

Basically what happens in society is that all of us make ourselves feel better by deciding that somebody else is less of a person than we are. It's the essence of sexism and ageism. It's the essence of bigotry, and of late we have tended to turn that light onto professions that we find unacceptable. It seems to be more politically correct than differences of gender or race but equally, I find, distasteful.

So it is really a good thing that the previous minister hammered week after week, year after year, until the salmon aquaculture policy implementation process began. Again, I don't want to take credit for it, because although I think it is hugely important and tried to be supportive, it really was another person -- a previous minister -- who had the respon-

sibility for getting the most stuck environmental process in British Columbia unstuck. I don't know of anything that was more contentious.

Similarly, I don't know of anything that has been resolved to such great effect. That's not to suggest that there are billions of dollars floating in here as a result, and there's the old sort of cowboy capitalism gold rush attitude that was going on in Vander Zalm's time -- quite to the contrary. The hon. member used the words "moderate expansion" in his initial remarks, and that's exactly what's going on with relative acceptance.

The second part of the question was: where are we at? We established a two-year period to work with first nations and the industry itself in communities to try and resolve conflicts. The policy acknowledged that relocation would be necessary for a number of existing salmon farms, because they're in red zones or zones in traditional territories that are unacceptable. So we said we would maintain the total number of tenures at 121. We established an interagency review committee to figure out where they should go, and 11 farms have been identified to move in the first wave of relocations. We expect the first of those relocations to occur somewhere between hours from now and weeks from now.

The policy framework also allowed us to work on five freshwater and five marine pilot projects to test new technology, either closed containment or other green technologies that I hope will give people environmental assurances that we are using best practices -- in fact, the best practices in the world. But also, I hope they will create technological opportunity to sell technology to other countries. We're working, both in the freshwater field with MELP and in saltwater with all the other parties, to try to bring pilot projects to fruition within months. I think we're going to have requests for proposals out in June. I expect to receive those requests for proposals on the saltwater side by this fall, and on the freshwater side we're working with MELP to try to identify suitable sites for pilot projects. Again, we're aiming for licensing opportunities this fall.

J. van Dongen: I do have a list of the 11 farms that were identified -- or 11 sites -- to be moved in the first wave. Have the second wave and the total number of sites that need to be relocated all been identified?

J. van Dongen: The part of the policy that deals with test sites. . . . If we take, for example, the five saltwater sites, is it the intent of the policy that someone can apply and run a current technology, open-net system on one part of the site and right beside or close to it run some kind of an alternative technology system there? So in the same location, we're testing two different technologies. Is that what's intended?

Hon. C. Evans: Yes, and I think I'm right in saying it's not required. If someone desired to apply for an absolutely new technology site, that would be allowed. However, it was intended that the industry would use the opportunity to test technologies side by side. I think everybody was party to that understanding. I haven't had any comment coming to me differently.

J. van Dongen: My sense, again from reading Northern Aquaculture, is that the testing part of the policy may take some time to implement. I wonder: have there been any applications from fish farmers for the saltwater aspect of the program?

Hon. C. Evans: It's not possible for people to apply, because we haven't officially laid out the terms of reference. We have developed a draft which we shared and discussed with the advisory group. We will be issuing a call for proposals, which will say to companies what it is that will constitute a pilot. We expect there is interest because people have expressed interest; we just aren't ready for them.

J. van Dongen: With respect to the freshwater aspect of the policy, I wonder if the minister could explain the rationale there and what the connection is with the saltwater fish-farming issue.

Hon. C. Evans: It's really a zoning exercise, in the best use of the word. We often think of zoning as a regulatory process that says what you can't do. But really, if you're a developer, what you need to know is what land is zoned to put houses on -- or highrises or factories or whatever it is that you want to develop. In this case we could have opened the process wide to all of British Columbia and said: "Who wants to develop any freshwater anywhere?"

But it would have been unfair to the entrepreneurs, because we know that the Ministry of Environment is not going to let us use all those lakes and rivers, because there are lots of species alive in lakes and rivers in British Columbia. What we want to do is go through the zoning exercise first and say: "Here are the lakes that the two ministries have identified as available for application." Then entrepreneurs can look at those sites and decide for themselves whether they see value to make an application.

J. van Dongen: My understanding, then, is that it's quite separate and apart from growing fish on the salt chuck. Is this aspect of the program intended to provide opportunity for different kinds of research or different kinds of testing? Is it maybe to look at growing different kinds of freshwater species? Or is it parallel in the sense that it's intended to test open-net operations versus closed-containment operations on fresh water?

Hon. C. Evans: Two things -- if I discern the nature of the question. In the main, we're talking salmon only. The reason that people want to use freshwater environments is to raise smolts to sell to the industry.

The second half of the question is. . . . I am advised that my previous answer was a little bit misleading, when I was explaining it as assisting industry to decide which lakes are available. Of course, that too is also important. But we're also attempting to agree with the Ministry of Environment what technologies we would find acceptable, so that entrepreneurs interested in raising smelts or using fresh water for some purpose related to salmon would be able to look at the technology, and say: "Yeah, we're interested," or "No, we're not."

J. van Dongen: The salmon aquaculture implementation advisory committee was, I guess, recently announced, and they've had one or two meetings. Could the minister explain

the mandate of that committee and the membership on that committee? Were they appointed by the minister? Did they make application -- a bit about that?

Hon. C. Evans: The terms of reference, hon. Chair, are to advise on an implementation framework, review current and emerging information, advise on a pilot project selection and research priorities, serve as a forum for dialogue, serve as a liaison with key constituencies and provide strategic advice to government on future direction.

Hon. C. Evans: Oh, okay. I was going to offer to share it with the hon. member. I think his last question was: how are they appointed? Well, they were not appointed by the ministers, but they were appointed through a fairly complicated process where the group, be it the industry itself or first nations or what have you, was invited to send forward names. The ADMs of the two ministries considered the names, and people were invited to join.

J. van Dongen: I think a committee like this is probably a good thing, provided that the membership clearly understands what the mandate is. I'm wondering if the minister could just comment on. . . . I know there was an issue with respect to information and the use of information that's provided in these meetings.

I think that the province has a right to expect people to come to the table in open discussion, but not to misuse the information that's provided there, say, for political purposes, to go and fight a particular site or something else. I think that the province has a right to expect some professionalism in how people conduct themselves on this committee. There were some issues that came out of the first meeting that were the subject of some debate, I think around confidentiality or whatever. I wonder if the minister could just comment on this committee from that perspective?

Hon. C. Evans: There was a discussion of confidentiality. The people around the table engaged the issue and considered it and decided that when they were thinking about a question, confidentiality would be respected. If a decision was made, the decision would be public. That, I think, is acceptable to industry and government, because an outcome is an outcome. It doesn't assist somebody to get a leg up or start a fight; it's a decision. Of course, it's a young group, so I can't say if it's going to work real well or hasn't worked.

The Chair: Thank you, minister. The motion before you is to rise, report progress and ask leave to sit again. Is that correct, minister?

J. van Dongen: We can pick up the discussion on the finfish aquaculture program. What is the ministry's role with respect to the development and implementation of a new code of practice, which I understand is now happening within the industry?

Hon. C. Evans: B.C. Fisheries is working with the association to ensure that the code meets the minimum standards of the government, and legislation will then be developed to ensure that these standards can be enforced.

J. van Dongen: Does the code of practice that's being developed follow the recommendations of the salmon aquaculture review?

J. van Dongen: Can the minister explain the enforcement process and the various processes leading up to that, if an outright enforcement process has to happen in terms of this code of practice?

Hon. C. Evans: The code of practice will constitute a condition of the licence. The expectation is that legislation will follow, entrenching that code of practice. But because it's a condition of the licence, the steps leading to enforcement will be when there's something not appearing to be quite up to snuff. B.C. Fisheries officials will engage the business and ask them to be in compliance. If there's an outright breach of compliance, the enforcing agency will be B.C. Fisheries.

J. van Dongen: My understanding is that the program involves self-monitoring and regular sampling that will be forwarded to B.C. Fisheries. Is that correct?

Hon. C. Evans: Yes, with the slight variation that both MELP and ourselves will be involved in monitoring that sampling. And there'll be periodic audit checks, sort of similar to workers comp or something, where periodically there's a visit by your regulatory agency.

J. van Dongen: This code of practice -- is it intended to deal strictly with the issue of waste from a fish farm operation? Or are there other aspects of fish farm operations that will be covered by a code of practice?

Hon. C. Evans: All "husbandry techniques" is the term, and I guess that means escapement, waste disposal, fish health and the like.

J. van Dongen: With respect to fish health and disease control, I noted in the performance plan for Agriculture that the Abbotsford Animal Health Centre is going to be involved in monitoring fish health. Could the minister explain the nature of the change that has been made and how has it been done to date?

Hon. C. Evans: It's a happy outcome of the ministries being brought together. As the hon. member knows from his previous life, we probably have the best lab in Canada in Abbotsford. We have a Fisheries fish health veterinarian positioned there, and we're going to use the lab for fish and animal health in the future.

J. van Dongen: I take it that mortality, say, from a fish farm operation. . . . Samples will be taken and will be moved to Abbotsford to measure health. Could the minister explain. . . ? Is it the Ministry of Fisheries that has complete jurisdiction on issues of health and disease within fish-farming operations?

Hon. C. Evans: The answer is yes in respect of finfish aquaculture and the health of the animals in containment. We will be the lead, generally. However, DFO retains jurisdiction over issues associated with the importation of fish, the transfer of stocks and also potential disease transfer with native stocks.

J. van Dongen: Can the minister advise the committee how the issue of the use of antibiotics or other inhibitors is regulated for fish farms in the province?

Hon. C. Evans: The licensing of antibiotics is the responsibility of Health Canada. Sales of medications are controlled by provincial pharmacists and pharmacy operations, which are administered by ourselves. There are four antibiotics presently licensed for use in Canada.

J. van Dongen: Could the minister advise how the monitoring takes place and which agency does it? I would assume there's some kind of sampling procedure for stock product leaving the farms. If the minister could just confirm when and how that's done, and by whom.

Hon. C. Evans: If I understand the question correctly, the hon. member desires to know who's going to sample the product to make sure that the amount of antibiotic is within acceptable limits. That would be the Canadian Food Inspection Agency.

J. van Dongen: It's my understanding that the ministry has gone through a fairly comprehensive training program for inspectors under the Fisheries Act. I think that's a very good thing. I've got a copy of a number of the topics discussed. Certainly from my understanding, this was something that was designed and developed by the ministry and is, I think, an important thing to have.

I want to ask the minister: is the ministry or anybody else monitoring the potential presence of Atlantic salmon in streams in any kind of routine capacity?

Hon. C. Evans: In a jurisdictional sense, the monitoring agency is MELP, and I don't need to remind the hon. member that almost every fisherman and environmentalist and first nations group in British Columbia is also monitoring from an anecdotal standpoint.

J. van Dongen: Does the minister have any comments about the claims that have been made to date in terms of potential escapes and, say, juvenile salmon in fact being Atlantic salmon?

Hon. C. Evans: Not really. I think the nature of the issue is such that the opinion of politicians is denigrated anyway, and it wouldn't really help the discussion. What we're trying to do is to create a situation of zero escapes and make everybody comfortable that there's adequate science on the question of whether or not there's spawning capability. Our job is to see to it that the opportunity is reduced, and it's science's job to answer the question: "Is it real?"

J. van Dongen: I agree with the minister. I guess what I was trying to say. . . . I think it's important for industry and government to ensure that we have independent verification of claims that are made. That's my main concern.

A question about research into aquaculture and various issues. There was a think tank session recently at Simon Fraser University. I thought there was some good discussion that took place there. I'm wondering if the minister could verify if the province is involved in any research on some of these issues with respect to fish farming.

Hon. C. Evans: Yes, we are leading discussions with the federal government, and that's on a staff level. I have personally had discussions with the federal minister, and we're trying to ensure that our aquaculture research is in common and in the same direction. We're exploring the development of an aquaculture research and development council to help us to determine the priorities.

J. van Dongen: With respect to salmon farm escapes, could the minister confirm how many confirmed events, in terms of escapes, happened in the past year?

Hon. C. Evans: First, I'll give you something to compare it to. In the '89-to-91 period, average losses out of farms were 264,000 fish per year. We now think that average escapes are running at 55,000 a year.

J. van Dongen: One of the events in the past year involved an escape from Stolt Sea Farm -- I think in the Port Hardy area, if I'm not mistaken. I know the ministry did a comprehensive investigation into that and the cause of it. Could the minister confirm the findings of that investigation?

Hon. C. Evans: Our findings were that approximately 30,000 adult Atlantics escaped. The cause was extreme tidal currents causing the net to snag on the anchoring system that held the nets in place.

J. van Dongen: There was, more recently, an escape of about 30,000 female smolts. I'm wondering if the ministry has done an investigation into that and the possible cause and whether or not it was due to improper management or bad faith on the part of the operator.

Hon. C. Evans: The investigation is ongoing. The cause was tearing the net by the prop of a boat working in the area, and we haven't concluded our investigative work.

J. van Dongen: I wonder if the minister could confirm that there was a draft report recorded in a national newspaper making claims about escaped salmon interbreeding with wild stock. This was a report that supposedly came from somebody in Fisheries and Oceans. I wonder if the minister or staff can verify whether a final report was ever issued and whether they have a copy of that report.

Hon. C. Evans: I can't confirm whether or not there's a final report. We haven't seen it if there is.

J. van Dongen: The status of the agreement between B.C. and Washington. I know that the previous minister was in negotiations and discussions on establishing some common ground and an interjurisdictional understanding on salmon farm escapes. Could the minister advise on the status of those negotiations and discussions?

Hon. C. Evans: Well, the discussions are ongoing. What the staff of Washington State and of our ministry are trying to do is develop a management protocol with the state of Washington so that the approach to escapes is similar and in both jurisdictions we have comfort that the other folks are doing the same thing we are. We can show those systems to the public in both areas to give people some comfort that we have the situation under control. But the management protocol is not yet complete.

J. van Dongen: There's been a bit of a problem. There was a recent event, I think in Port Alberni, dealing with the issue of seals and sea lions attacking fish farms. I think that's certainly an issue in the minds of a lot of people with respect to the wild stock also. Do the minister and the ministry have any initiatives under consideration to deal with those issues?

Hon. C. Evans: The opinions of the minister on this subject are not helpful, and he shan't put them on the record.

What it says here, of a fairly neutral and reasonable sort, is that DFO is scheduling a workshop with the industry and the government to review current interactions between salmon farm operators and predators and to recommend ways to prevent predator attacks in the future.

J. van Dongen: I'm not sure that the minister's opinion might not be helpful. Probably it's more helpful than he may think.

I had a concern expressed to me by a commercial fisherman -- I'm asking this with respect to aquaculture here -- that basically he understood that Fisheries Renewal B.C. was putting some money into aquaculture and fish farming. That was in conflict with what they viewed to be the mandate of Fisheries Renewal, which was to basically develop the wild fish stock and economic activity around the wild fish stock. Could the minister clarify with respect to Fisheries Renewal money going into fish farming?

Hon. C. Evans: Can I just delay that? It's my understanding that there might be a group of questions for Fisheries Renewal, and the CEO is here. So we will deal with them all together.

J. van Dongen: Does the ministry have any position with respect to labelling of wild salmon versus farm salmon? Is there any regulatory activity in that area?

Hon. C. Evans: We don't have an official position on labelling, although we encourage sellers or producers of all products to label them in a way that is most useful to the customer and receives the highest value at the marketplace.

J. van Dongen: Just one final question on this section. It made reference earlier to the aquaculture industry's participation in the central coast LRMP. I'm wondering if the minister could update me on the status of that and if the minister has been proactive in trying to resolve that situation.

Hon. C. Evans: We're advising and requesting -- encouraging, I guess, is the best word -- the salmon farmers to rejoin the table. In the absence of their presence, the table continues.

J. van Dongen: With respect to the sport fishing sector, I wanted to give the minister an opportunity to explain the inland sport fishing development initiative. I'm personally not familiar with that. I wonder if he could just describe what's involved in that.

Hon. C. Evans: We launched the inland sport fishing development program as essentially a new economic development program as well as sort of an encouragement to try to kick-start another generation to be interested in the joys and pleasures of the recreational fishery. We are trying to capitalize on the existing hatchery program and infrastructure and to enhance fisheries opportunities, especially for rural communities.

The focus at present is on the Cariboo-Chilcotin, Kamloops and the Kootenay areas. My parliamentary secretary, Ed Conroy, is specializing in this part of the portfolio, and we think there are really very large economic benefits to be had -- diversification, essentially -- in the interior communities in the sport fish area. It's another issue where the hon. Chair deserves some credit for thinking it up.

J. van Dongen: The current minister, when he was first appointed, made a comment, and I quote the March 2 Times Colonist. With respect to the sport fishing sector, they were doing a lousy job of working with people in the community; the workers were basically imported. I should clarify that it's not a direct quote, but that's the essence of the comment.

J. van Dongen: Yeah. I wonder if the minister could comment on that. Is there a statistical basis for the comment, or was that his perception? Or was that what he was hearing in come of these coastal communities? I think it refers strictly to the saltwater fishery.

Hon. C. Evans: No, I'm pretty sure that there's no statistical basis for the comment. The moment staff get a chance, they'll straighten me out.

On January 20, 2000, a press release announced a B.C. sport fishery survey starting. I note that the initiative is well supported by a lot of interest groups. I personally wondered about the announcement and what is trying to be achieved. I think it was an attempt to build up a database of regional statistics. I'm wondering how much money is being spent on it. What will be the merits of this initiative?

Hon. C. Evans: As the hon. member may know, one of the problems with defining the value of the sport fishing sector to the economy has been the absence of statistical data that was defensible. In the absence of statistical data, you could have ministers saying almost anything. In order to make sure that in future the minister only speaks the truth, we're spending approximately $25,000 a year in order to gain the data to educate the minister so that information will reflect reality.

J. van Dongen: On the issue of economic activity generated by the sport fishery, despite the work that was done about four or five years ago where a study was commissioned -- I think involving the provincial ministry and the federal ministry -- on the economic outcomes of sport fishing and commercial sector, there is still a bit of an ongoing debate about those things. A little bit of data will help, but it will never totally solve the debate.

I want to give the minister an opportunity to make a few comments about the hatchery program and whether or not there are any changes contemplated in the coming year from the operations that we've had the last few years.

Hon. C. Evans: Speaking just generally, the fish stocking program delivers fish to 1,100 lakes and streams annually, which is really fairly phenomenal. It consists of five provincial hatcheries, producing over 50 strains of trout, char and kokanee.

The other part of the question was: were there any new initiatives? Well, this year Treasury Board increased our funding for the inland sport fishing development program by $500,000, of which $175,000 will be allocated to the fish culture program. I think it represents a recognition by Treasury Board of the value of the inland fishery, the quality of life in British Columbia and also economic generation.

J. van Dongen: Does the ministry have a set of criteria or any policy they use as a guide to decide what the level of activity of the hatchery program should be?

Hon. C. Evans: Yes. The criterion is that advice from the regional biologist is used to choose the lakes. We do not have an extensive evaluation program to determine the success of that process. An important component of the new initiatives is to undertake surveys of angler effort -- in other words, how many people go fish, how many days, where they do it and also their fishing success.

J. van Dongen: Can the minister advise whether there is much change from year to year in the lakes that get stocked and the species that are being stocked in these lakes? Or is it a fairly stable program from year to year?

Hon. C. Evans: There are relatively minor changes, and in the main it's a stable number of lakes and streams.

J. van Dongen: I want to turn now to the kokanee issue on Okanagan Lake and the mycid shrimp issue there. I wonder if the minister could describe the participation by this ministry in dealing with that situation.

Hon. C. Evans: Our role is essentially to provide technical support to the Ministry of Environment. I'm not sure if the hon. member is asking me to describe the program.

Hon. C. Evans: That's what you want me to do? In 1995 the Okanagan Lake recovery program was initiated in response to the collapse of Okanagan Lake kokanee populations. There was research to try and understand the status of kokanee and their habitat issues and what was the biology of mycid shrimp. Major issues identified were competition from the shrimp and deterioration of spawning habitat.

So restoration efforts have focused on three areas. One is the experimental harvesting of the shrimp, to reduce competition. Second is the restoration of damaged habitat; and third is improved fish flows. Results of the recovery efforts are reported annually. In early 2001 there will be a public workshop held to report on the results of the first five years of the program. Obviously the note says that there's no quick fix for the issue.

I would say that in that time, certainly one thing we've achieved is. . . . I think everybody in the interior now understands that the notion that the introduction of mycid shrimp turned out not to be a good idea, and we now have a control issue rather than an opportunity. I would suggest, as a resident of the area, that at least that part has been successful. In order to solve the problem you first had to get past mythology, and there has been so much mythology around the collapse of kokanee populations in the interior that it's difficult to get people to focus on doing something pragmatic.

J. van Dongen: I read and hear quite a bit about mycid shrimp, and I need some clarification from the minister in terms of the Okanagan Lake situation. Is the objective to take whatever action is clearly necessary to rebuild the kokanee stock, or is the objective to try and develop a commercial mycid fishery on Okanagan Lake?

Hon. C. Evans: The former, with the possibility of the latter being a side benefit. But the objective is certainly the former.

J. van Dongen: Is there work being done in other locales on the development of mycid shrimp as a commercial product?

J. van Dongen: I guess in the discussions I've had and what I've read. . . . I asked the question about objectives, because I have some concerns that there may be a lack of clarity in the objective and hence a lot of toing and froing and uncertainty about what the goal really is. So I just wanted to put that on the table for the minister's comment.

Hon. C. Evans: I was unaware of confusion. But it might very well be that what I think has been a public education

program has actually been a public confusion program, and people think we're trying to develop a commercial fishery. That is certainly not our intent, and we will try and pay attention to telling a different story. It's a case, I think, somewhat similar to the shellfish aquaculture issue the hon. member raised earlier, where a weed might also have a saleable value. It was never our intent to grow the weed, but we just hope to sell the by-product of trying to do the right thing.

Going to the next topic, which is the classified waters policy, this is an issue that I don't understand in detail. But certainly there have been efforts over a number of years to develop angling use plans on a lot of our rivers. There was a meeting called again fairly recently, and I'm told that this was about the fifth or sixth time in five years. I'm referring here to a letter to the minister dated April 17, 2000, from the B.C. Wildlife Federation -- Dave Narver -- expressing concern that there has been ongoing consultation over the years and a number of reports done and no resolution or decisions made. I wonder if the minister could confirm those previous reviews and why there doesn't appear to have been any decisions that came out of them.

Hon. C. Evans: I can confirm the existence of two earlier reviews, although they predate this ministry, and I won't comment on them. The other question was my thoughts about why they haven't resulted in resolution. My guess would be, although. . . . Perhaps I shouldn't answer, since they don't come from this ministry. It's a very difficult issue. We're engaged in it now, and I can't promise the hon. member easy resolution at this point either.

J. van Dongen: I appreciate the minister's difficulty. But could the minister confirm, then: is this a policy issue which is within the jurisdiction or within the lead of the Ministry of Environment, based on the existing MOU?

J. van Dongen: My understanding is that the conflict on the issue revolves around access by local recreational fishermen versus tourists coming from outside the province of British Columbia -- possibly outside the area -- some of them guided and some of them not guided. My sense is that the guided sector has some commonality with the fishermen that live in the area -- residents. But there is a concern about non-guided entrants. I wonder if the minister could confirm if that understanding is roughly correct.

Hon. C. Evans: I don't think the hon. member's assessment, as I understood it in his question, is correct. My understanding is that the issue is more or less like this: local fishermen and outsiders desire something that is being defined here as a quality fishing experience. I guess that means that you get to catch fish as opposed to standing by the stream. And if you do catch fish, they're of the species you desire and a good size.

There is perceived to not be unlimited access to that stream and for everybody to have a quality experience, so you're going to allocate the amount of days to a reduced number of people. And the question is: who will it be? It is being proposed that guided outside fishermen would not be allowed to fish on classified waters on weekends so as to preserve the quality fishing experience for the people who live there.

You could understand, hon. Chair, that other people who are in business of guiding people from away and see it as their only chance to make a living might have a different point of view. So it's really an allocation question. Just like DFO with the issues that they have to resolve, it becomes exceedingly difficult to be Solomon and carve up the. . . .

J. van Dongen: Is this issue being dealt with, then, on a regional basis or on a watershed basis? Is that the intent of the policy within the ministry?

Hon. C. Evans: The policy is to try to develop a policy that applies to the province and then allow regions to opt in or out according to the desires of the people and the agencies and the fishing conditions in that region.

J. van Dongen: I agree with the minister that allocation decisions can get very difficult. Could the minister comment on the outcome of the meeting in April and on prospects for getting some form of resolution, however difficult that may be?

Hon. C. Evans: The first meeting in Richmond went very well, and staff are hopeful. There are two meetings coming up in Williams Lake and Smithers. We'll see how they go. The one in Smithers, of course, might have the MLA there, in which case there's almost no chance of success. But we'll see. [Laughter.]

J. van Dongen: From what I hear about Smithers, there may be other reasons that that's difficult.

Speaking of Smithers, we want to talk a little bit about steelhead, and maybe we should talk for a moment about the situation on the Bulkley River. There's a very contentious situation there. I wonder if the minister could describe this ministry's involvement in that situation and how the ministry defines the problem with respect to that conflict. I think there's a conflict there between local sports fishermen, who want to have some kind of a catch fishery, and others -- including scientists, biologists -- who feel that it should be strictly catch and release -- if the minister could just comment on that situation.

Hon. C. Evans: The hon. member, I think, correctly characterizes the issue as one involving steelhead generally and the question of retention or non-retention. The steelhead stocks were reduced, presumably by virtue of the commercial fishery. There hasn't been a commercial fishery for a while. Stocks are increasing. The question is: do we allow people retention of steelhead or not? Those are the kinds of social issues involved.

The government problem is the kind of thing that we were talking about before dinner, where this issue always goes rapidly from a Smithers question to a cabinet issue. And we're supposed to sort out at the upper echelons of government what's correct and what's not correct, which I, at least, have a bias against. I acknowledge that that kind of decision-making has the appeal of removing the decision far enough away

from home that it allows for calm in the community, because somebody else is going to drop the hammer and decide one way or the other.

The drawback, of course, is that it comes back year after year and probably always will, because if it's someone from away, there is no coming together of local recreational fishers, first nations, outside fishermen or commercial fleet interests. So I'm hoping this time to kind of let the controversy ride a little bit and see if local people can't come up with some solutions and it doesn't get resolved in the cabinet chambers.

J. van Dongen: Certainly one wouldn't want to see all of these issues get to the cabinet chambers. But I think that when there's a conflict, then certainly the elected people have at least some role to play to provide direction. I think part of the problem there is the issue of agreement on what the science is. It's my understanding, and we can refer to it briefly when we talk about Fisheries Renewal, a Fisheries Renewal project that's been approved there, that the intent of that is to try to improve on the existing information-based database. Even that approach to researching or getting that information has got its own controversies around it, as the minister knows.

I guess I offer the thought that that's always the first line: let's try to get agreement on the data, the science. If it's inadequate, then maybe we've got to do a bit more work on that and then move it up to the political level or a higher level. I'm always of somewhat mixed views. . . . As I just said, I think the elected people have to give direction.

On the other hand, based on my marketing board experience, as the minister knows, where you have tough allocation decisions to be made, you set up a process that you think works, you assign good people to the situation, and you hope that they can help local people, both scientists and fishermen, resolve it. That would certainly be my thought on it.

Hon. C. Evans: Those are good ideas. I appreciate the hon. member's suggestion, and I am cognizant of his concern that there be leadership. I agree with him that there needs to be science-based information. I am hopeful that we will come up with a process that will reduce tensions and lead to resolution.

J. van Dongen: One final question on that issue of steelhead -- actually, there are two more: is there a provincial policy on steelhead conservation? If there is an overall provincial policy, is there room within that policy for the application of discretion on a regional basis?

Hon. C. Evans: Yes. Staff have been working on the development of a conservation policy for steelhead. The goal is to conserve the productivity of the stocks and to provide managers in the field with some rules to determine how they can define the sustainable level of harvest. The policy is still in the works, and we'll share it when it's done.

J. van Dongen: One last area, the threatened steelhead stocks on Vancouver Island. I'm looking at a press release dated March 27, 1998, entitled "Experimental Living Gene Bank for Threatened Vancouver Island Steelhead." Could the minister advise how that experimental program is going, or if it's been upgraded to a full-time permanent program?

Hon. C. Evans: There are two parts to the question. Has the program been successful? The answer is yes. It's considered to be highly successful, with survival rates at about 70 percent. The second part of the question was: is it going to become a permanent program? The answer to that is no, simply because I don't think there's enough data for staff to make that recommendation. We will continue the program in three watersheds and continue to monitor their success.

But while I'm on my feet, I would just like to say I observed that the CEO of Fisheries Renewal has been here all evening and has just stepped out. If the questions are going to carry over to the morning, then he'll have to spend the night. Or we could ask him. . . .

J. van Dongen: I'm a little bit unclear on the minister's answer. Certainly there is a lot of concern about steelhead stocks on Vancouver Island. I'm certainly not knowledgable about the specifics. I've received quite a bit of representation that this program should be maintained, at least for the foreseeable future. I wonder if the minister could just comment on the costs associated with this particular approach, this particular technology, and verify again that the program is clearly living up to expectations and is cost-effective.

Hon. C. Evans: I'm sorry. I probably gave it short shrift, but it is somewhat complicated. The nature of the program is, essentially, intervention in the spawning process, and that is not the way we wish to manage steelhead on Vancouver Island. So no, it is not going to be a permanent program. But I say that because it is our hope that recovery activities put the historic success levels of wild steelhead in natural spawning conditions back in place, and that we no longer need the program. But I want to give the hon. member assurance that we're going to maintain the program in the short run in the hope of achieving historical levels or sustainable levels of natural spawning so that we can eliminate the program. Does that make sense? Good.

J. van Dongen: We'll skip over any further discussion on Fish Protection Act implementation.

I want to get into some discussion in terms of the province's relationship with the federal government and the federal Department of Fisheries and Oceans. I guess one of the flagship agreements with the federal government is the Canada and B.C. agreement on the management of the Pacific fishery. It was my sense at the time that that agreement was signed. . . . While the federal government signed it, I wasn't really convinced there was solid buy-in by the federal government. I wonder if the minister could comment on how he assesses the status of that agreement -- not really the legal agreement that's signed but the status of the relationship and how he sees that unfolding and how he's going to work on that in the future.

Hon. C. Evans: Not wishing to make matters worse by talking about them, I would like to acknowledge the hon. member's view that when the agreement was first signed, maybe there wasn't total commitment. That was certainly my

feeling, since basically I only found out where to go 15 minutes before we did the deal. It was sort of like a secret arrangement and didn't feel at all like business as you'd like to have with your friends.

But in the last few months, because of some changes on the federal scene, I think, or perhaps because of the new Premier's relationship with the federal government -- I don't know; perhaps because of both things -- there seems to be a real effort to try to make the thing work. Maybe the groundwork was laid by the previous minister, who saw no interest in the war. Maybe there's lots of people's good work involved. But now it seems to have gained some momentum, and it feels to me like it's going to work in future.

J. van Dongen: Could the minister comment in a little more detail, then, on how he intends to approach issues of federal jurisdiction -- such as allocation and conservation measures, fishing plans, etc. -- under this agreement? Does the minister view that it's part of his Fisheries mandate to play an active role in those discussions on behalf of the province and the province's commercial and recreational fishermen? Or does the minister view that issues of federal jurisdiction should be dealt with directly by the people involved, you know, consulting directly and providing input directly to the federal government? I'm interested in how active the minister views that his role should be in that area.

Hon. C. Evans: I think the provincial government should be very active in trying to advance the interests that we have in common and not very active on those in which the federal government maintains 100 percent jurisdiction and is unlikely to countenance provincial government comment or interference. I'll just give you a couple of examples. On the subject of emerging fisheries or shellfish aquaculture, over which the provincial government has a good deal of regulatory or jurisdictional authority, I think there should be daily contact by staff and, I don't know, quarterly or something meetings between ministers to advance those issues.

On the other hand, on the subject of allocation of harvest levels between gear types, I've never seen the slightest interest in the federal government in our opinion. I don't think there should be a heck of a lot of effort put into it, because it just spins your wheels and doesn't really go anywhere.

On the subject of conservation and international treaties, I think and hope that we're moving past the use of conservation as a political tool and who's-greener-than-who contests. I hope we're past the notion of international treaties as some kind of political battleground and all that stuff that tried to make rhetorical success out of technical trouble. I hope that it's finished and that we don't have to go back there.

J. van Dongen: Does the provincial ministry have any input and involvement in the development of, say, the year 2000 fishing plan? Do we have any active role in that?

Hon. C. Evans: The advice of staff is really quite good here. Our interest in the year 2000 fishing plan is in the implications -- that is, what does it mean, and how do we deal with the human beings and communities and fish stocks as a result? Our interest is not in assisting the federal minister to build a fishing plan.

I should say, however, that I personally have -- and I think the last minister had, and I certainly did before him -- an interest in the timing of the fishing plan. Because a lot of the fishing plan requires people to make investments, even advertising in other countries or something for their intentions, we definitely attempt to have a role in convincing the federal government when they announce what they're going to allow to happen.

J. van Dongen: Well, it's nice to know from the minister that staff is making progress in giving him advice. I think the issue is very important, and I realize that it's totally federal jurisdiction, but certainly both our commercial and sports fishery last year felt they made some serious sacrifices to protect a very, very small number of stock. I think in this case it was coho stock that was considered endangered. So that's potentially a very serious impact on our two sectors.

In my opening comments I mentioned a concern about the transition program and the retirement program that had been announced by the federal government -- I think it was back two or three years ago. There was a study done this past year. It was just done. Well, I have a report dated March 24, 2000. The federal government had announced a transition program -- June of '98 -- and it included $20 million available for older fisheries workers and fishermen who were 55 to 64 years old. This program, this announcement, involved a proposal for a 70-30 split involving the provincial government.

I want to read a quote. This whole paper certainly confirms the view I have that this is an important element in any transition program. In comparing events in the tree fruit industry for a number of years -- five, ten years ago -- certainly for older workers or older fishermen, something like this needs to be considered. I want to read a quote from the report:

Hon. C. Evans: This is really interesting. This would be the critic, who belongs to the party of the federal government asking a question of the minister who is presently the minister, who was actually the minister when this decision was made. And it's going through the Chair, who was the minister who inherited my decision in interaction with the federal minister of the critic's party. Have I got that right?

Hon. C. Evans: Yeah, I made this decision. I'm responsible for this decision. I'll give you a short answer, and I'm happy to do it on the record, but I don't wish it to be interpreted by anyone reading it somewhere as a full answer to an event that happened some time ago.

On the surface of it, my decision was based on the fact that the fleet reduction plan was a federal policy decision, one that I and the provincial government attempted to moderate. I may know better than anybody in Canada the extent to which

we attempted to moderate it. Although the hon. critic may have read about it in the newspaper, I sat at the dinner table with the federal minister, and I travelled to the communities. I think lots of the attempts that we put on the table, the suggestions that we made, were excellent. I think that there was agreement. I sat with the admiral at the table, and we agreed upon the amount of change that had to happen in the fleet in terms of adapting the killing power to the stocks.

That is not where the federal government's decision went. The federal government's decision related to human beings and not to killing power, not to technology, and had nothing to do with conservation. Therefore it was and remains my opinion that the dislocation that the hon. member is talking about was an intention -- not an unintended outcome, not an accident and not an unfortunate situation, but was an intended outcome of a policy that was not conservation-based.

The notion that the provincial government would pay for such a policy struck me as inane. Some years later I came back to this job believing that all that is history, and I don't care. It doesn't matter to me if I was right or wrong then or Admiral Mifflin was right or wrong then.

Our and my philosophical bias at the present time is that it is my job to figure out ways to employ people in the fishing industry and to change the industry to accommodate the people, to change species to fish something that there is, to invent products we never thought of and to quit putting mush in a can and make something -- to change the nature of the economy of the coastal communities so that those people have a life.

To whatever extent I have money in my ministry, the idea that I would take that money and use it to get people out of the work that they do. . . . While it might be justifiable or desirable from the federal government's standpoint, it isn't from mine, because that's the only kind of work that is in most of those communities. That would be like me saying: "I'm going to put you on the dole for the rest of your life. You're no good anymore."

So if I've got a little bit of money, my job is to find ways to take money and energy and intelligence and science, and go figure out something people can do in those places and not retire them out of the workforce. Those are a few reasons on the subject, on which I would be pleased to expound for hours and feel very strongly about. I'm utterly, solely responsible for the decision.

J. van Dongen: I thank the minister for his extensive answers. I just want to clarify that the B.C. Liberal Party is a separate political party from the federal party, although we share, in part, the same name. I accept and support the minister's position that the first line of defence and the first line of action on these issues is to create other employment and other opportunities in coastal communities. I'll put something on the record too: that's why our party has been consistent in its support of initiatives such as expanding fish farming, shellfish aquaculture and other opportunities. We have been consistent in that.

I further want to say in response that I appreciate the minister's difficulty at the time the original decision was made -- the Mifflin announcement. As I recall, this was a part of that package. So I appreciate some of those difficulties, the philosophical ones, and anything else that dealt with the policies that were at play there.

I will say that, certainly in my experience in a number of situations, it's not easy and sometimes extremely difficult, if not impossible, to take an older worker who is, say, 60 years old and put him into another line of work, no matter how much training or assistance is available. I think that's the essence of this report. What I am saying is that this report confirmed my personal observation in other similar situations, where it's not a case of doing what might be considered as something done to support the federal government. This is an issue that affected workers. In fact, I had talked personally to one of the people that the author interviewed, and I had come to the same conclusion.

I just want to finish my comment on this by saying it was certainly my understanding that this offer by the federal government has remained open until really quite recently. I will reiterate my position that I was disappointed on behalf of those workers in British Columbia that we didn't take the federal government up on the offer. So that would be my response to the minister, and I appreciate his answer.

My understanding is that there's discussion going on between the federal and provincial governments on two agreements, which I would understand are subsidiary agreements to the Canada-B.C. agreement. One is a habitat protection agreement, and one is an enforcement agreement. I wonder if the minister could confirm that and describe those two agreements.

Hon. C. Evans: Yes. The habitat protection agreement is nearing final stages, and I hope it will be signed in the near future by the federal minister and myself. That would constitute success. The goal of the agreement is to harmonize and coordinate federal and provincial habitat policies and end those newspaper stories that we're so used to, where one government is blaming the other for the stock depletion, and make sure that everybody is working towards environmental stability of habitat.

The enforcement agreement that the hon. member alludes to is a long way off, and I do not expect to get to completion nearly as quickly. The obvious goal in an enforcement agreement is that. . . . The federal government has enforcement officers, and we have enforcement officers. It's just logical: the citizenry wants government to figure out how to end duplication. So if we could decide who's responsible for what and trust one another, then we could save money for people and also maybe save squabbles back and forth. We would just accept one another's jurisdiction.

J. van Dongen: On the enforcement aspect, despite indications to the contrary, certainly in my dealings with both the federal agency and the Ministry of Environment we see a lot of duplication. So I think that's a good priority to be working on.

The appointment of Stephen Owen as a federal adviser -- was that something that the province was involved in, in discussions with the federal government? Or are we just lucky that the federal government understood Stephen Owen's capabilities and picked him all by themselves?

Hon. C. Evans: In the hope that the federal government would pick Stephen Owen, I made sure I stayed a million miles away, so as not to spoil their decision.

J. van Dongen: I think that's a good strategy by the minister. Sometimes that's exactly the approach required, and I say that quite seriously.

The provincial government's position on the pilot sales aspect of the aboriginal fisheries strategy -- this has been an area of great concern to a lot of commercial fishermen. The whole issue of the sharing of the catch and how governments interpret what they think are their legal responsibilities has been and is a very serious issue for commercial fishermen. Now we see the sports sector starting a campaign to assert what they view as their right to fish. Could the minister explain what the province's position is on that issue and specifically with respect to AFS?

Hon. C. Evans: The pilot sales agreements have always caused some problem, because, of course, it has said to lots of people that it's okay to sell fish which previously had been thought not to be okay. The province's position, in answer to the critic's question, is that we don't wish to see them expanded beyond the three pilot sales that are going on right now.

However, on the subject of the AFS, which was the second half of his question, I think the federal government was unusually brave when they decided that it was necessary to, in some structural way, recognize aboriginal peoples' relationship with the harvest. Of course, I'm not saying that what they did was wise, but I think it was brave.

Had they decided not to engage in the Davis plan and then the Mifflin plan, or had they decided to engage in fleet reduction in those two times in some way that didn't aim its pain straight at native people, they might have been able to avoid the AFS. But if they're going to engage in the, in my opinion, wacko public policy of having fleet reduction schemes which almost by definition reduced the fleet at the level of the poorest fishermen first, which were native people, they almost had to come up with the AFS.

It is my desire that the objective of the province in future simply be to find resolution to these issues and not to attack the federal government for the AFS or the pilot agreements and attempt to find resolution. To have gone through the Davis plan and then the Mifflin plan and ignored native peoples being essentially eliminated from the commercial wild fishery would have been a monumental error.

J. van Dongen: I think the message there, of not supporting any expansion of pilot sales, is certainly a good signal for the longer term. I agree with the minister, too, with his statement that the objective should not be to eliminate natives from the commercial fishery. I think that if we can equalize the participation -- get it on a level playing field of native and non-native fishermen -- in the long term, we're gonna be better off. To the extent that we have two fisheries, a native and a non-native commercial fishery, built into treaties, I think to that extent we're going to have ongoing trouble. It's something that is very difficult.

But I talked recently to a halibut fisherman who indicated to me that in his fishery, if the federal government wanted to allocate some of the commercial fishery to native people, they bought licences and transferred them to native people so that they had an equal participation. The federal government funded the transfer. And everybody participated in the same fishery; I think that really should be the goal.

I wonder if the minister could confirm -- and I'm not clear on this -- if there was a provision in the Sechelt AIP on this matter, with respect to having one commercial fishery versus having two.

The Chair: The Chair really hesitates to intervene at the debate at this time, but we're moving very far afield from what's directly under the administrative control of the minister's office. I would just caution the committee that we're in danger of extending the debate to federal jurisdiction, Aboriginal Affairs jurisdiction, other jurisdictions if we follow this line of questioning. I will leave the answer this time, as I've permitted the question. I'll leave the answer in the hands of the minister to be as tight and close within the jurisdiction of his office as we could make this answer.

Hon. C. Evans: I will get the answer for the hon. member. I'm not personally familiar with the details of the Sechelt agreement -- which doesn't mean staff aren't. But I don't know the answer at this time.

J. van Dongen: I would also be interested in what the position of the ministry is in terms of its advice to the B.C. Treaty Commission on the issue of commercial fisheries and this matter of native and non-native participation.

Hon. C. Evans: We do not get involved in supplying advice to the treaty negotiators. However, we do have a role, and that is in assisting them to develop policy positions on allocation of fish resources, sales, fisheries management, trade and barter, fishing plans, licensing, non-salmon species and standards. Our role is simply that we discuss those issues and bring forward the implications of policy or negotiating positions that they might take.

J. van Dongen: I will look forward to discussing further with staff some of the detail on that issue.

My understanding is that there is a Canada-B.C. steelhead protocol agreement being developed; I wonder if the minister could just give me a little bit of detail on that. The reason I'm asking: I've got a question from a commercial fisherman who talks about a huge difference in the mortality rate that the federal agency, DFO, ascribes to gillnet-caught steelhead and the position of the provincial government on that matter. My understanding is that it really affects our commercial fishermen's ability to fish for chum and springs. So it's a two-part question to the minister.

Hon. C. Evans: I know that we're not allowed to use props, so I'm not going to use a prop. But the top line on my paper that I'm reading says: "Mortality rates for steelhead caught in gillnets." I think the hon. member would notice that the data appears to be missing, so I can understand his question. I would be as ill-equipped to answer his question as he is.

J. van Dongen: I'm confused by the minister's answer, so we'll start over. Canada-B.C. steelhead protocol -- what is being developed there? What's involved?

Hon. C. Evans: That part of the question I can answer. A Canada steelhead protocol agreement is being implemented, data is being shared, and scientific information is being

exchanged. A conservation management policy for steelhead is currently being developed, with a view of harmonizing this with DFO's wild fish policy. Mortality rate for steelhead caught in gillnets appears to be missing, so I cannot answer the question of exactly what we will decide. But the good news is that we are developing a protocol.

J. van Dongen: What I will do on the other issue is to take that up with staff to try and clarify that and get that answer for this fisherman in Delta South.

I wanted to just ask a question about the decision to drop the lawsuit in Seattle. When the decision was announced, it was suggested in the media that this was the first decision of the new minister. I wonder if he could just confirm that this decision had been made quite a bit earlier and that he just happened to become minister in time to make that good-news announcement.

Hon. C. Evans: I'm happy to confirm that the wisdom put forward by the previous minister was not damaged by the transference of the portfolio to an incoming new minister.

J. van Dongen: The Seafood Alliance, which is a new group of harvesters, processors and marketers that I referred to earlier, is very concerned about marine protected areas and the development of a federal strategy with respect to those marine protected areas. I wonder: is the provincial government involved in any active way in the development of that strategy?

Hon. C. Evans: The hon. member's question, as I recall it, was: is the provincial government involved in the federal government's development of marine protected areas? Is that right?

Hon. C. Evans: Yes, the provincial government is involved, although we are not the lead. Obviously the federal government is the lead. We went out to an 18-month review on their discussion paper, received hundreds of responses from first nations and non-governmental agencies and the like and relatively little input from the commercial industry. Since that time there have been meetings with the commercial industry.

Our role is to participate in a cooperative and joint federal-provincial steering committee to try and shape the strategy. The next step is to incorporate the comments of the public and finalize a strategy on marine protected areas for public release and to develop a process for additional candidate areas to be considered, including public review. That's the official answer, hon. member, and that is the official government position.

I will say personally that I find it highly distressing that marine protected areas are showing up in areas that first nations consider to be their traditional territory and are not chosen by them for protection, precluding commercial activity by the very people we're trying to get into the industry. I find that offensive and will do everything I can to try to keep it from happening in future, but it certainly has been part of the process thus far.

J. van Dongen: The B.C. Salmon Marketing Council. . . . There was a recent amendment to the regulation. I wonder if the minister could describe that program and the provincial involvement in it. Is the provincial ministry just setting up the legal basis for the program and for participation by commercial harvesters, fish farmers and anybody else that may be harvesting any variety of species?

Hon. C. Evans: Sorry for the delay. The hon. member, I think, is referring to a change that took place in April of this year. Let me back up a little bit. The B.C. Salmon Marketing Council has existed for some time based on a levy on commercial harvest of fish. But in April of this year we extended that levy to include those fishermen engaged in test fisheries or experimental fisheries. It's a fairly minor regulation change.

J. van Dongen: Originally, I was intending to go through the outcome of last year's performance plan and walk through this year's. We've covered a lot of the topics.

I want to make only one suggestion to the minister and his staff. That is, when I compare the format in the Agriculture performance plan in the coming year, I think it's more logical, useful and comprehensive than the one that Fisheries B.C. is using. I'm talking mainly about the format. But also, for example, if you go to page 17 under goal 1, goal 1 goes on for three pages. Then at the end of the three pages there's a little box that talks about performance measures. I think the format in the other document is more useful and more complete, in that there are a lot of strategies laid out here for which there are no performance measures laid out. So that would be my comment in terms of format. It isn't just a presentation thing. I think that as a tool for management and operations it's more useful to have it laid out in this manner.

I will just ask a few questions about Fisheries Renewal. I wanted to just confirm with the minister that, in terms of the funding of Fisheries Renewal, there was a base funding of $7.5 million that came from the ministry budget. There's been a number of top-ups -- Forest Renewal, B.C. Hydro.

Could the minister confirm that the urban salmon habitat program has also been folded into Fisheries Renewal? Could he also comment on whether or not there are any other alternative funding sources being considered, particularly a landing tax or landing fee or tax on tap water -- any of the other speculative sources that were commented on in recent months? I wonder if the minister would respond to that.

Hon. C. Evans: Yes, I can confirm that his numbers are correct in terms of the funding of Fisheries Renewal.

Yes, I can confirm that urban salmon habitat has been transferred, although delivery is being shared by Ministry of Environment, by my ministry and by Municipal Affairs, or some municipalities, and Fisheries Renewal. The reason for that is that it is interjurisdictional. And we do not wish to take apart a program that is working and is in season. So yes, we are delivering it as a partnership. Similarly, there are agreements in place between Fisheries Renewal, B.C. Hydro and Forest Renewal about which kinds of projects those institutions wish to see Fisheries Renewal deliver.

The last point is: are we considering alternative forms of funding? The answer is yes. I expect a paper some time in the near future from Fisheries Renewal of their thoughts. And of the options that the hon. member suggested, I would just say I doubt that any options considered by the government would

constitute increased taxation. I assume that what I get from Fisheries Renewal for consideration by myself will be some form of diversion, not additional tax.

J. van Dongen: I want to raise again a concern that I expressed last year, and that is with respect to the communications budget. I'm not going to belabour the point, but I will say that I didn't agree that Fisheries Renewal needed their own communications person. I think the way it was being handled earlier, when it was done through the Ministry of Fisheries communication department, would be adequate. I want the minister to comment on that. It seems to me that the release of the allocations that are made to the regional partners and the release of the listings of the various projects are really quite mechanical. I don't see the justification for an independent communications person.

I note, on the issue of communications, the terms of reference or the requirements for the regional delivery partners also include provision that they communicate. I'll read the bullet: "Communicate benefits and other results to the affected communities." I wonder if the minister could comment on both those things.

Hon. C. Evans: I'll be happy to have a look at the need for the communications person. I wasn't part of last year's estimates, so I'll take it under advisement and consider it in future.

J. van Dongen: The development and diversification program for 1999-2000 included, as near as I can tell, at least three grants, and I asked the minister to confirm that it involved the mycid shrimp project. Could the minister confirm whether or not further grants are contemplated and whether or not these grants are consistent with the overall objective of dealing with the problem on Okanagan Lake, as opposed to developing some kind of a new market?

Hon. C. Evans: There have been two grants thus far. The first one was $5,300, and it was a test fishery to learn how to avoid bycatch, so that you could do the mycid shrimp harvest without bycatch of kokanee or other species. The other was $14,000, and it indeed was to see if we could develop a market for the product.

J. van Dongen: I'll check up on the minister's answer when I have a little more time.

One of the issues. . . . I've reviewed the audit report that was done by PricewaterhouseCoopers, and I'm not going to get into the detail of that. But what is the intent of Fisheries Renewal as we go down the road? This audit did a sampling of eight regions or eight delivery partners. Is it the intent to do further audits? What will be the cost of those audits?

Hon. C. Evans: It's correct: the hon. member's information is, of course, perfect. There were 22 grants engaged in last year; we audited eight of them. The cost was approximately $100,000.

It is our intention to continue auditing in the future. The reason is that it allows you to externalize -- to move outside the institution -- the accountability function. If the opposition was ever to say, "We trust you, and we're never going to ask you any really hard questions," of course we could save you the $100,000 and stop auditing. So I'd be pleased to hear the hon. member's opinion. If he wants us to stop auditing, the CEO would report that to his board. I'm not sure I'd let them, but it might save them money.

J. van Dongen: There has been some concern expressed, and certainly there's been a range of concerns. I'm not intending to denigrate the work of Fisheries Renewal at all because there's a concern expressed.

But on the issue of conflict of interest, there have been situations where regional delivery partners have people on their board of directors or, I guess, on their executive, who in turn ended up participating in one of the contracts awarded by that board. My impression is that this happens quite often. In one case it involved a retired staff member of the Ministry of Environment. Could the minister sum up briefly what the conflict-of-interest guidelines in terms of these regional delivery partners actually say and how they are implemented?

Hon. C. Evans: Yes, in the past there have been problems, especially in small communities where everybody is related to somebody. There is a limited workforce, and we're trying to deliver a program. Probably some member of the family was on a board that said a job needed to be done, and another member of the family went to help do the work. So it's logical that it would happen.

But we're concerned that it not denigrate the program. Fisheries Renewal now sends conflict-of-interest guidelines to every successful applicant, and part of the audit process is to see to it that they comply with them. I have asked the CEO to see to it that he will give the hon. member a copy of the conflict guidelines that are now in place.

J. van Dongen: I've just got three more questions. I'm looking at a press release of November 26, 1999, entitled "Salmonid Renewal on Southern Vancouver Island" and listing a number of projects that were approved for 1999-2000. No. 2 is "Quicks Bottom Management and Restoration Plan." I'm just going to read the minister the description of the project.

When I read that, it reminds me of ditches in -- pick the floodplain -- Abbotsford, Matsqui, Pitt Meadows, Port Alberni. I'm wondering. . . .

J. van Dongen: Aldergrove wants to get in on it. I'm wondering, if the farmers in those areas of the local governments applied for a Fisheries Renewal grant to remove reed canary in their ditches for these reasons, whether or not we could get one.

Hon. C. Evans: I am unaware that. . . . No, all that the hon. member asked is: if the municipalities applied for a grant to help them remove weeds from ditches, would they get one? My answer is that I would like to encourage the hon. member to encourage the farmers to apply. Then next year we'll come back to this room and answer why they did or didn't get the money.

J. van Dongen: Well, I raise the question as an illustration of the debate around ditch maintenance. This justification for the project is exactly the justification that farmers use for cleaning their ditches. So there's a real disparity in the technical analysis here somewhere; that's why I raised it. I think it is something that seriously needs to be pursued. I raised it to refer back to the partnership program and the ditch maintenance protocol. Certainly the people I talked to say that despite valiant effort, we have not made enough progress, particularly with the federal government, on a sensible ditch maintenance protocol.

There's a couple of projects here where there are dollars assigned. This is December 17, 1999. This is on northern Vancouver Island, Nos. 12 and 13; this is for the year '99-2000 -- assignments of dollars to projects that involve the Steelhead Society Habitat Restoration Corp. I know that this situation is under investigation by Forest Renewal. Could the minister comment on the status of any projects that Fisheries Renewal has funded that involve the Steelhead Society, how that is being handled and any update on the issue generally?

Hon. C. Evans: Our partnership groups have delivered three projects in various places with the Steelhead Society. The first one is for $24,000, the second one is for $14,000, and the third one is for $5,000. All have been finished, all have been audited, and all of the money has been accounted for. So we don't feel there's any ongoing difficulty.

I want to comment, though, on the record about the member's comment about the ditch-cleaning grant, because I think it's late at night, we're giving it short shrift, and nobody's really paying attention. So why put it on the record? Maybe somebody will notice.

The hon. member, I think, is saying that we have an invasive grass. Somebody cleaned out that grass and created a ditch. Fish moved in; it became fish habitat. If you leave it alone for 50 years, the grass will invade to the point that it kills the fish. It only remains fish habitat if periodically the farmer comes along and removes the grass. If the farmer ever stops removing the grass, the habitat will be destroyed, in exactly the same way he's talking about the park.

He's asking: "During that period of time, how come it's against the rules for the person to do the work which is necessary to create and maintain the habitat, which we then use as an excuse to stop them from doing the work?" It's completely inane and an excellent example of the stovepipes and something that should be resolved. Although we're not going to fix it here tonight, you're right. During that 50 years, it's exactly the opposite. Once there's too much grass, we'll pay somebody some money to go scoop it up.

J. van Dongen: I appreciate the minister's further comment on that. He did that so well, it probably explains why he's the minister and I'm the critic. But that was very well said. That's exactly what farmers say, and that's exactly what we need to educate the federal Fisheries people to understand.

One last comment, question, concern: on April 4, 2000, there was an announcement of an allocation of dollars to the West Coast Environmental Law Association to provide a series of free fish habitat protection workshops. I guess the concern is that, on the one hand, we're providing funding for what I think is an advocacy group to promote the fish habitat concerns.

The competing interest -- the joint interest, if you will -- of the farm community for drainage doesn't get that kind of support. To pursue what we started these estimates with -- the need for balance on the economic side, the fish protection side -- I think that's the point of my raising these workshops. I don't see anywhere where the government is funding workshops dealing with the needs for drainage for agriculture in a lot of our rural areas. So I put that to the minister for his comment. That will be my last question.

Before I sit down, I want to thank staff for the information they provided. We'll look forward to follow-up on the various issues.

Hon. C. Evans: I assure the hon. member we only funded the West Coast Environmental Law Association in order to prove that you could sue the minister or the minister's logging friends in his own constituency and we'd still give you money. So there is no favouritism in this government. We play fair with everybody, including the people that mess with us where we live.

J. van Dongen: I can't resist, hon. Chair: I take it, then, that I should advise the farming community to sue the minister, and they will get all kinds of support.

The Chair: If that's the last question, I have to put the question on vote 14. Shall vote 14 pass?

The Chair: Minister, rise to report resolutions and seek leave to sit again?

Hon. C. Evans: I move that the committee rise, report resolutions and ask leave to sit again.

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