Hansard -- Volume 5, Number 4 -- Tuesday, April 2, 2002

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

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY



CONTENTS

	Routine Proceedings
		Page

Committee of Supply		2323
	Estimates: Ministry of Health Services Hon. C. Hansen J. MacPhail

	Proceedings in the Douglas Fir Room

Committee of Supply		2337
	Estimates: Ministry of Agriculture, Food and Fisheries (continued) Hon. J. van Dongen V. Roddick R. Masi

Hon. R. Coleman: Today in Section A we will be debating the estimates of the Ministry of Agriculture, Food and Fisheries, followed by the Ministry of Human Resources and followed by the Ministry of Attorney General.

In this House, for the information of members, Mr. Speaker, we will be doing the estimates of the Ministry of Health Services. I call Committee of Supply.

Hon. C. Hansen: I know that it is certainly a tradition on the part of ministers to make introductory remarks to try to create the framework around the estimates which are being presented. If you increase those proportionately to the size of the ministry, I would probably have to consume a considerable amount of time outlining the operation of the ministry, because it is such a complex ministry.

I think that rather than my trying to undertake lengthy introductory comments around the ministry as a whole, it may be more appropriate to deal with it section by section as we break down the components of the ministry. I know that in past years, when I was opposition Health critic, one of the things I tried to do at the start of Health estimates was to almost set out a table of contents for the public who may wish to follow these debates, either live or in Hansard after the fact. I know the Leader of the Opposition had indicated a few weeks back that when we got to Health estimates, she may follow through on the order or the sequencing that was contained in our website listing of programs and services.

Just for the benefit of those trying to follow the debate, as well as making sure we've got the appropriate staff on hand at any particular moment and also ensuring that we involve the Minister of State for Mental Health and the Minister of State for Intermediate, Long Term and Home Care at the appropriate times, perhaps it may be appropriate for me to ask the Leader of the Opposition to outline for us how she would like to approach these debates so we can make sure that we have the appropriate staff and resources available to answer her questions.

J. MacPhail: I'd be happy to work with the minister as we proceed expeditiously through this. I plan on talking with the Minister of Health Services first about his direct responsibilities — I know he's responsible overall for all matters — particularly in the area of health authorities, public health, resource allocation, Medical Services Plan operations, Pharmacare processing, B.C. Ambulance Service and health information systems.

Then the programs and services that follow after that…. I'm working right off the list as outlined on the website, which is fine.

The absence of general responsibilities. First is the adult mental health policy. I will be doing all mental health issues with the Minister of State for Mental Health. I will be doing all issues around community care with the minister of state for continuing care — I assume. Whatever the responsibilities are for the minister of state for continuing care, I will be dealing directly with her on those matters.

After the general responsibilities, we will be dealing with program services not already discussed. I have a few questions around surgical wait-lists. I have more questions around aboriginal health, women's health and tobacco strategy.

Under the general responsibilities for health authorities, I will be dealing with the recent appointments to the health authorities. Otherwise, there are no specific issues that I will be raising in isolation around major boards and commissions.

Mr. Chair, what I wanted to start with was to inform the minister of the questions that have already been referred to him by other ministers. I don't know whether his staff has had a chance to put that together, but I have. I would like to start by listing those questions so that the staff know that these questions have been asked and referred.

Hon. C. Hansen: That sounds appropriate. As we proceed, I hope that at the staff level we can make sure we get a sense of where we're going next so that we can have the appropriate officials available. Perhaps in conversation we can determine when to deal with the mental health and the community care component at a time that works best for the Leader of the Opposition. Certainly, when it comes to the deferred questions, I'd be pleased to deal with them. We can take them one at a time with whatever sequencing the member would like to pursue.

J. MacPhail: They're unbelievable — the number of questions that have been referred. Given our limited resources, we have just kept track of them in the order that they were referred. I will list them for the minister, and then I'd be happy to give a copy of this referred

document to the Minister of Health Services so that we can integrate them as he sees fit.

I have no idea whether the minister thinks this is an unusual way to start or not, but it is to give some sense that much of this discussion has already been tried in this Legislature. I'm hoping that the minister himself can fill in the blanks. That's the reason I'm asking to put these matters on the record at the beginning — just to get the answers; that's all.

With the minister's okay, I'll start. I'm happy, at the end of this, to literally photocopy this list I have and get it over to the minister immediately.

The first one is on abortion services. The Minister of State for Women's Equality said that this Minister of Health Services would provide a complete list of the facilities where abortion services are provided.

The next series of questions are on changes to regulations in child care, which I think will be the responsibility of the Minister of State for Intermediate, Long Term and Home Care. The questions were around changes to licensing and regulation of child care.

The next — this is very appropriate right now — is questions around immunization programs, particularly, first of all, as it's related to hepatitis C and TB.

Health authority severance matters were referred by the Minister of Health Planning to the Minister of Health Services. The actual nature of the appointments to health authorities was referred by the Minister of Health Planning to the Minister of Health Services, as were any questions about CEOs of health authorities.

RNABC concerns with the transfer amongst facilities, wards and specialties of nurses were referred to the Minister of Health Services.

All matters relating to consultation on anything to do with health were referred to the Minister of Health Services by the Minister of Health Planning.

Accountability contracts and targets set for those accountability contracts were referred by the Minister of Health Planning to the Minister of Health Services, both in the immediate term and in the long term.

Capital planning. All of the short-, intermediate- and long-term capital planning was referred by the Minister of Health Planning to the Minister of Health Services. The reason I emphasize long-term planning is that that was what we were discussing.

Mental health capital planning. There are questions, but I will refer those to the Minister of State for Mental Health.

Pharmacare. Changes to Pharmacare and the long-term planning for Pharmacare changes were referred by the Minister of Health Planning to the Minister of Health Services — both current operations and future planning. That includes the consultation that is ongoing around Pharmacare. There was quite a bit of referral.

Then the Minister of Health Planning referred long-term chronic disease management strategies to the Minister of Health Services.

All matters around Pharmacare relating to off-loading to private insurance companies were referred to the Minister of Health Services. This is substantial.

Emergency health services. The planning for changes around emergency health services was referred, specifically the impact on rural authorities as opposed to urban areas.

Any long-term changes that would change the structure of the provincial ambulance service to something other than a provincial ambulance service were referred.

Future training matters were referred in some detail, and all restructuring and salary-setting for the health authorities was referred by the Minister of Health Planning to the Minister of Health Services. That's my initial list of referrals.

I was trying to figure out in the notice period I had of these estimates what would be the most appropriate place to start in terms of getting the most amount of information out to the public without having to go through a precarious, winding path. I thought about this very carefully, and I have come to the conclusion that the area to start with is the area of the health authorities. I will explain why, and the minister can suggest whether he agrees or disagrees on this matter.

First of all, there's been a complete restructuring of the health authorities, which have responsibility as of yesterday for health matters in this province. There has been a complete rethinking by this government about how those health authorities should manage. While for previous health authorities there was an attempt to give them flexibility and the ability to manage locally, they still had to meet targeted, line-by-line funding requirements. This year, starting yesterday, for the first time there will be a transfer, almost a lump-sum payment, and the health authorities will be responsible for that.

Secondly, the restructuring of the health authorities has taken a brand-new approach to who sits on those health authorities.

Starting with those matters seemed to be the appropriate way to explain how there's a new way of doing things in British Columbia. Does that sound reasonable?

Hon. C. Hansen: I very much appreciate the approach the member is taking. I think that as we go through these various questions that were referred from earlier debates, we'll try to tick them off as we get to those subject areas. Then perhaps, as we get to the end of the estimates process, we can sort of come back and do a double-check that in fact we've covered all of those questions the member just raised. I think it's maybe more appropriate that we deal with those questions in the context of those subject areas as we come to them.

First of all, with regard to the health authorities, the member is correct. There is significant change in our approach to how health services are delivered. I think

the best way to describe it is that in the past there were many layers of administration within health care, and one of the concerns we heard from British Columbians and health care providers as we went around the province was a real frustration with the degree to which the delivery of health services was micromanaged from Victoria.

We are setting up a new structure whereby there are significantly fewer health authorities. We've reduced the numbers from 52 health authorities to six. We are putting in place, I believe, some of the best administrators we can attract, and certainly we had some very good ones there from before. They are being engaged to provide the leadership at the executive level in those health authorities.

I don't for a minute pretend that we as politicians have the expertise and the experience necessary to provide day-to-day management of the delivery of health care. We have an obligation, I believe, to the public in British Columbia to ensure that there is a stable, reliable and competent health care system there for them. We are providing the standards we expect them to deliver on. We're putting in place performance contracts, which I know the member flagged. We can certainly talk in detail about those.

Once we put forward our expectations of what the health care delivery system should look like, we expect our competent administrators to deliver on those expectations. But we're not going to tell them how to do their job on a day-to-day basis. Part of that is, yes, we are allocating envelopes of money to the health authorities. And we're giving them flexibility that they didn't have before to make sure those dollars are spent in ways that will actually achieve better health outcomes for British Columbians.

The other dimension to this change is that it's not just putting in place the expectations and the performance standards. We're also putting in place an accountability framework so that we can hold those health authorities accountable for the outcomes.

I believe that good health care in British Columbia is not about how much money you spend, how many people you employ in the health care system or how many programs you have in place. What's really important to British Columbians is that they actually can see tangible improvements in the health outcomes — that we have a healthier population.

In the past we've had crude measures such as life expectancy, which has been improving in British Columbia. Clearly, we have a life expectancy that's among the best in the world. The number of infant deaths and deaths among children is dropping significantly, and that, as well, is an important health outcome. We have to start looking at all kinds of measures, such as readmission rates and admission of people with mental illness into acute care settings which are not appropriate. We've got to measure those and make sure that we're actually going to see improvements from year to year.

That's the new direction we're going in. As the member indicated, we are not going to micromanage a line-by-line budget but instead hold them accountable for better health outcomes for British Columbians.

J. MacPhail: I fully acknowledge that this government is doing things a completely different way.

I was a little taken aback last week in question period when the Minister of Health Planning stood up and quoted something that I had said in estimates about the flexibility of health authorities. There is a very different way of doing things today. I'm not quite sure why the Minister of Health Planning thought that was an appropriate quote.

When I was Minister of Health and Minister of Finance, I acknowledged that, given very targeted funding, regional health boards and community health councils would have flexibility within the targeted funding. The difference today is that those boxes are completely gone.

The minister needs to explain to me and, I hope, to the public about what that means for British Columbians.

The order in which I will approach looking at the health authorities is: budget-making for the health authorities; appointments to the health authorities; performance contracts; then the accountability framework.

J. MacPhail: What's different today for the health authorities that wasn't there last week?

Hon. C. Hansen: They are at the start of a new fiscal year as of yesterday, as the member mentioned earlier. They are operating in a new framework of responsibility. It's not something that is a dramatic change from yesterday, compared to the day before. The increased responsibility that the health authorities have is something that has evolved over the last number of months and will continue to evolve.

The member noted that we are trying to get away from targeted dollars that are inflexible and require that micromanagement from Victoria. There are still a couple of areas where there is targeted funding, albeit in very limited areas. One of them is the targeted funding for the mental health plan dollars, which I know the member will be talking to the minister of state about.

The other area where there is still some targeted dollars is around capital. Again, we see that evolving over the next couple of years. We want the health authorities to take greater responsibility and give them greater flexibility in determining what their priorities are around capital dollars and ensure that the debt-servicing costs around capital are integrated with their operating budgets so that real priorities can be set at the local level.

J. MacPhail: The questions that I was referring to were the actual quotes from Hansard.

I am trying to do this in a very orderly way. On April 1 health authorities have a budget that is $6.337 billion — the regional health sector funding. Let's start off with: how is that divided amongst the six regional health authorities?

Hon. C. Hansen: First of all, this is the first time since regionalization was developed in this province that health authorities actually received their budgets prior to the start of the fiscal year. I remember one year — two years ago, I believe it was — where they didn't get their budgets until six and a half months after the start of the year, which really made planning very difficult for the health authorities.

The other thing we have done this year is that this is first time we've moved towards a population needs–based allocation of funding. I know this is something the previous government had looked at from time to time to get away from the ad hoc funding arrangements that had built up over a number of years. I know that it was worked on when the Leader of Opposition was Minister of Health. We did have the opportunity to implement that this year.

In terms of making sure that funding is allocated based on population as well as demographics and other factors that come in as health cost drivers, we have been able to make some significant progress. In fact, we're about 85 percent of the way towards fully implementing that needs-based funding allocation so that every region in the province can get a fair allocation of dollars, based on the available money that are there in the system. So, I hope that helps to put some of this in context, and perhaps we can get into more detail as the member wishes.

J. MacPhail: Yes. My question still arises: how much did each health authority get, out of the $6.3 billion? Also, if I could, please…. Based on the population-based funding, what would have been the old amount of money that regional health authorities got versus the new amount of money? I know there was an amalgamation of boards, but nevertheless I'm sure that work was done.

Hon. C. Hansen: I going to have to rely on my glasses for this one, because this is small print. The number that the member quoted earlier, the $6 billion-plus, also includes out-of-province coverage. So if you have a British Columbian who is perhaps travelling or temporarily living in another province and who has to access medical care, those bills come back to the province. The total amount that's actually allocated to the six regional health authorities in the province is $5.95 billion. I'll give the member a breakdown of each of those, as well as what the restated base was.

In the case of the Fraser health region, the restated base that was there from before for the previous year was $1.223 billion. That has increased. The new number for their allocation for this coming year is $1.343 billion. In the case of the interior health region, the restated base would be $0.8 billion. That increases to $0.9 billion. I can give this right down to the penny if she wants it, but I'll give it in these rough numbers. The northern health region's restated base would be $0.285 billion. Their new number for this coming year is $0.307 billion. For the Vancouver coastal health authority, the restated base for last year would be $1.536 billion. That increases to $1.647 billion. For the Vancouver Island health authority, it's $0.881 billion. That increases to $0.974 billion. For the provincial health services authority, the restated base would be $0.721 billion. That increases to $0.778 billion.

The thing that's important in this is that every health authority in the province has an increase in their funding. Not all of them go up at exactly the same percentage across the board, because of the fact that we're introducing this population funding formula to address some of the inequities, particularly in areas where there was very rapid population growth throughout the 1990s. Those health authorities, in particular, were under extreme stress trying to deal with that growing population, particularly in areas where there was significant growth in the number of British Columbians over the age of 65, which put real strains on them. The funding formula that we put in place tries to address not just the population growth they've experienced but also the changing demographics within those regions.

Those are the numbers for each of the six health authorities. There's certainly been lots of discussion around the province, in regional media, around so-called cuts to the budget. There is no health authority in this province that is experiencing a cut to its budget. As we flow additional dollars to the health authorities, they still have challenges in meeting all of the cost pressures. I guess the best way to put it is that the health authorities aren't getting as much as they would like or feel they need in order to maintain the status quo from what was there before. There are still some challenges that they have to manage, even though they're seeing an increase in their budget allocation for the coming year.

J. MacPhail: That's the issue we need to discuss here. We've already had some pretty interesting discussions in K-to-12 and in advanced ed about what protecting funding means. In both advanced education and K-to-12, it has become very clear that protecting funding does not mean protecting education, because of the increased pressures and actually the expansion of costs by the government and then the downloading of those costs onto authorities other than the provincial government themselves.

We will have a different discussion in health. There's no question about that. As the government likes to say, there's been a billion-plus dollars — I think the Premier said $1.7 billion over two years — of added money to the health system. The first $1 billion, of

course, was put in. What the government did was continue the funding that the previous government had put in of $1 billion in '01-02 and then shift some costs and expand the budget on that basis around capital, etc., and then actually add money in the year '02-'03.

What I want to do…. In order to compare what this actually means for the regional health authorities — which are the front-line services; that's what we think of as our health care service, unless, of course…. That's what we immediately think of as our health care service directly. What I want to look at is the same sort of discussion we had in Education and Advanced Education but acknowledging that we're having this discussion in the context of increased funding.

Here we have a move to a population-based funding formula, and we have increased funding to virtually every health board. Some of the increased funding is greater in certain areas than other areas because of population-based funding, which, of course, is always the dilemma with population-based funding.

I'd also like from the minister, then: what are the pressures? Let me put it to him this way. As of March 31 there were a certain number of services that the health authorities had to deliver. There was a certain wage package that the health authorities had to deliver — for doctors, for nurses, for ambulance attendants, for lab techs. There was a certain allocation for funding for capital. Could the minister please list for me, out of this increased funding, what the new pressures in '02-03 are — just the program pressures or the salary pressures?

Hon. C. Hansen: You can break down the cost pressures that we're facing. First of all, we have increases in wage costs. We also, throughout the health authorities, have inflation costs. Sometimes we talk about inflation to include both the wage pressures and the other inflationary factors that we're being subjected to. The other is areas of new demand — aging population, in-migration of individuals. Those make up the cost pressures that health authorities are trying to deal with.

J. MacPhail: Yes, and now I'd like those details if I could, please. This is actually what I'm trying to get at.

The Premier and the Minister of Health Services stand up and say: "What do you mean by 'cuts to health care'? We put $1.7 billion.…" I don't even know whether I'm using that figure correctly or not. I guess I should stop using it. It might be to my detriment. "We put hundreds of millions of dollars more into health care funding, so why are you talking about health care cuts?"

What I'm trying to figure out, and what the ordinary public means by health care cuts, is: what I could get on March 31, I won't be able to get on April 1. What I could get last year, I won't be able to get this year.

I take these as cost pressures. Wage costs. You're paying the same number of people more. That's static. There's no increased service for that. Inflation costs. I never bought into the principle — and the minister will be pleased about this — that you could just add the general inflation to the overall bill and say: "Oh, that's a real pressure." It isn't. Inflation costs can be added only when you remove the wage bill, number one. Number two, there may not even be inflationary pressures evenly over that period of time. What are the real inflation costs? Secondly, new demand. Let's just take aging population out of it. Let's just take in-migration because that's just the ordinary population having a right in Canada to get health service wherever they are.

I had a horrible discussion with the Minister of Education around this matter — about the new way of doing business for capital costs. Let's just leave that to the very last moment.

So, please, for '02-03, what's the increased costs for wages across the board, including docs? No, I'm sorry; they wouldn't be included in the regional health authorities. All increased pressures on the health authorities for wages, inflation and in-migration.

Hon. C. Hansen: I went through three estimates as Health critic and to have a budget briefing document at my disposal would have been a wonderful resource. I know that the member, of course, has it. I'm often tempted to say: "It's tab such-and-such on page such-and-such of the briefing document." I do want to take it seriously.

The pressures, as they're set out on one of the pages of that briefing document that I know the member has, set out wage pressures for the coming year of $349.3 million of increased wage pressures. The new demand is $68.1 million. Inflation provides for $48.4 million. That adds up to a total of $465.8 million.

What this would include under wages, I believe…. As the member mentioned, it does not include the Medical Services Plan, because that comes out of a separate budget, but it does include all of the collective agreement increases which we have indicated that we are honouring. Those increases took effect yesterday.

J. MacPhail: Sorry, I actually do have my document here, and I'm happy to work with this document. To be honest, we weren't expecting to do estimates of Health Services this morning at 10 a.m. I'm fine to work with it, and I don't mean that in a cheeky way either. This is a set of estimates where all I want to get at are the issues that need to be discussed frankly. This is way too serious a matter to start screaming and yelling at each other. I'm happy to work with the documents that the minister says.

The other thing is that I don't have my calculator here. So those of you who are watching from my office, could you please send up the calculator?

In the meantime, could the minister please…? He broke down the $5.95 billion for me, restated, and then '02-03. Do you have the tallies for that at the bottom, please?

Hon. C. Hansen: Yes. If you take the total allocation for regional services, the dollars that flow to the health

authorities …. Incidentally, this also includes a small amount for the Nisga'a health authority. Technically, there are seven health authorities because the Nisga'a health authority, while it works within the northern health authority much on contract relationships…. They do have their separate allocation of — let's see if I'm reading this right — $630,000. That's included in this number. If you take the restated base from last year, it is $5,449,710,000. The budget for this coming year is $5,946,310,000. Included in that is funding of $92 million for minor capital projects and minor capital equipment allocations. The increase year over year is $496.6 million, including that $92 million.

J. MacPhail: Thank you. These are exactly the numbers I'm looking for. Could the minister please explain the $92 million? I have to tell you: I don't want to go through the same debate I had before with this. It gives me a headache. It gives the public out there a headache. I want to have this discussion with the minister in a way where people can actually understand it. That's the issue around capital planning — okay? The new way of doing things.

There's a document in here where it talks about — I'll find it; maybe I can get my colleague to look for it — a new way of doing capital financing. Then we also have in this document — this is my leaked document — where there are several lists of capital projects, where it says that it very much specifies between health authorities a list of projects where some of them are going to have to fund all debt service, amortization and operating costs. Just try, if the minister could, to explain to me the $92 million for capital planning now included directly to the regional health authorities, and what that means in the new world.

Hon. C. Hansen: The $92 million that's included in the moneys flowing to the health authorities would be around minor capital projects. There would be capital improvement projects. It could be equipment. It could be information technologies. Some of the changes in here come out of the recommendations from the auditor general in recent years around the definitions of what is appropriate to be classified as capital and what has to be classified as operating dollars. There were some changes we had to make in the budget update that the Finance minister brought in at the end of July last year to reflect those changes, which I think the member may be aware of from when she was in Finance.

The other projects she mentions, which were in the back of the briefing notes she had obtained, are around the bricks and mortar, the larger capital projects. The fundamental change taking place is that capital is no longer a free good to the health authorities.

In talking to people in British Columbia and trying to explain it, the best analogy I can find is to put yourselves in the shoes of a manager of a small business. The manager is told: "You have to pay for the heat and the light. You've got to cover your payroll costs and the other operating expenses, but all of your capital is free. If you want to expand the building, if you want to get all new furniture, if you want to get new computer equipment, somebody else pays for that. You don't even have to worry about the debt-servicing side of it." The manager in that organization would make very different decisions because they don't have to worry about the debt-servicing costs.

The shift we are making is to say to the health authorities that the debt-servicing costs of their new capital come out of the envelope, the budget they're being allocated. We will increasingly get away from targeted capital moneys that say: "Here is X number of dollars that must be spent on equipment or on capital improvements." We want the health authorities to make the right decisions according to their priorities.

I've had examples as I've travelled around the province. One I remember was the case of a boiler, where the local administrators felt it was costing them more to keep this old boiler running. The maintenance costs on an annual basis were greater than it would cost to get a brand-new boiler and then cover the debt-servicing costs on the brand-new boiler.

Under the old system, the health authorities had to come to Victoria with a requisition, and it would take months and months to go through a capital approval process. The good news for the health authorities is that if it ever got approved or when it got approved, they didn't have to pay for it and didn't have to absorb the carrying charges.

The other thing we saw in many cases was capital projects that were being completed under administration directed from Victoria, and then once the project got finished, there was no operating budget to open it. There was a lack of coordination between the operating budget side and the completion of the capital projects. What we are trying to do is get away from that.

There are a lot of projects that are still in transition. There are projects, of course, that have been completed already. They will be under the old model, and we will continue to carry those debt-servicing costs. There are projects that had been contractually committed to when we made this transition, so we will continue with those under the old model.

There are also some of the new-era commitments around capital projects we had promised: the completion of the Jim Pattison Pavilion at Vancouver Hospital, the MSA General Hospital in the Fraser Valley, the Omineca Lodge in Vanderhoof as well as the provincial psych facilities that are going into Kamloops. Those are all projects we had committed to on a provincial basis, and they will be funded under the old model where we carry the debt-servicing costs.

On all of the other projects, what we're saying to the health authorities is that they get to choose what their priorities are. We still have an obligation to make sure Treasury Board is comfortable with the debt levels being incurred by the health authorities, because they have to manage those debt-servicing costs. Those debts will be reflected in the provincial government financial statements once we move to generally accepted ac-

That is the transition. There are some projects that are at different stages, but many of the projects listed in the appendix of the briefing note the member referred to are projects that will not be funded under the old model. The decision as to whether to proceed or on what basis to proceed are decisions that will be made by the health authorities in the future.

J. MacPhail: Yes, and it certainly is a different way of doing things — an absolutely different way of doing things. Let's just examine that different way of doing things in the context of the overall budget. Of course, with the person with the boiler and the decision about whether to maintain it or replace it, the CEO of that authority didn't have to decide whether they would provide heart surgery or maintain the boiler or replace it. Now they do. That's the difference under the new government: a new boiler or heart surgery. That's the change.

Basically, what we're dealing with here, if we could…. I've got it down; I've got it figured out now. For the regional health authorities, the difference between last year and this year, starting today, is $496.6 million more going to the six regional health authorities.

It's a given; I acknowledge the Nisga'a health authority. I'm extremely proud of it, etc., but I hope the minister and I can just agree that in the context of a $10 billion budget, the Nisga'a health authority, other than being a wonderful model, isn't going to have much of an impact on our discussions around the rest of the province.

We have $496.6 million here. Let's just deal with the $92 million first. The $92 million of minor capital — which is what we also used to call medical equipment, I think, as well…. Minor capital and medical equipment would be CT scanners, MRIs, etc. Am I wrong?

Hon. C. Hansen: When we talk about minor capital equipment, CT scanners and those kinds of purchases would be outside of that. In addition to the moneys that are flowing to the health authorities, there is money that has been there for the purchase of that major equipment. Currently, under what's called capital funding, major equipment is an allocation of $23 million for the coming year for those major equipment purchases.

J. MacPhail: Okay. So actually, for CT scanners and MRIs and all of that, there's $23 million for the whole province, as I understand it. Fair enough. Well, that's interesting because, of course, the pressures are much greater than that.

The $92 million that's now incorporated into the regional health boards is really what used to be paid out of the capital budget and is now classified as an operating expense. Fair enough. Okay.

Here we have $496.6 million, and already out of that the minister has told me, of $465.8 million of pressures, that is merely to say that we're standing still. That leaves $31 million — less than $31 million; about $30.8 million — of money that is about something other than just standing still around wage costs, inflation and in-migration.

That's why I'm kind of curious. Really, it isn't about $1.7 billion. Let's be clear. It's about $30 million of money that isn't going into the pockets of the same amount of people or paying for exactly the same equipment and services.

Of that $30 million of new money, now health authorities also have to pay debt servicing out of any new structure that they want. Is that correct?

Hon. C. Hansen: Actually, I think the member is probably being a little bit too conservative on this number. If you take the cost pressures I outlined earlier of $465 million and if you take out the $92 million for minor capital, you're left with about $404 million. The cost pressures that we are not funding through this increased allocation are about $60 million, so the challenge is actually bigger than I think the Leader of the Opposition outlined a second ago.

What we are saying to the health authorities is that they have to find ways of managing those cost pressures. They have to find the efficiencies in the operations. They've got to find ways of getting greater productivity, for example, when it comes to support staff. They've got to find ways of consolidating services that will find cost savings, because while they're getting more money — and every health authority is getting more money — it's still not as much as they would like to see, first of all, to manage the status quo and, secondly, to provide for the new and innovative programs they would like to do.

The member's question, specifically with regard to debt servicing, is that the debt servicing they would have to incur are projects which have not yet been committed to. Any projects that are underway or committed to contractually at this stage will be done under the old model, but the new ones will be expected to cover their debt servicing.

I also want to come back to the member's point when she said that health authorities have to make a decision whether to get a new boiler or to provide heart surgery. In many cases, what we find is that by putting in the new boiler, you actually save money. What we're saying to the health authorities is that they have to look at ways that they can better use capital. If it results in lower operating costs, that money can be freed up to provide for direct patient care.

We're also giving them the responsibility, as they manage these very complex organizations, to make sure they've got infrastructure in place to do that. You can't provide heart surgery if you don't have the facilities and the equipment necessary to deliver on that heart surgery. The disjointed process we had in the past, where somehow capital dollars magically ap-

peared and the health authorities didn't have to worry about where that money came from, is gone. Now they do have to worry about where that money is coming from and how those debt-servicing costs are covered and how the operating side of those capital projects are covered so they can actually have a cohesive and integrated health care delivery system at the regional level. We think that will result in better patient care and much more stable delivery of the heart surgery and the other procedures that people count on.

J. MacPhail: Well, I hate it when the minister stands up and says the problem is worse than what I even said. It may be kind of a ruse, because he did say that it's now $60 million worse or that there are $60 million of unfunded pressures. We will talk about that in a moment.

I want to be clear about this. For anybody who cares about our health care system, it is complete nonsense for any member of the government to stand up and say, "We've increased funding for health care," and assume that that's good news — that somehow that's solved all our problems. Today we see that in order to merely stand still in the area of regional health authorities, we're $60 million in the hole. That's what we are. By the way, I support the wage increases that all of those working people got in our health care system. Unlike the members opposite, I actually believe the people who deliver health services are our health care system. You can't separate them out and somehow attack the workers and say: "Isn't it awful that those workers are being paid big money?" It's the workers who deliver the health care services, so they are our health care.

On this issue of capital, it's very key that what the government is saying is: "Oh my gosh, all that meddling in the past has led to an inefficient, terrible health care system." I know that they raised the Jimmy Pattison tower. I agree, by the way, on the Jimmy Pattison tower. When it was built as a monument to somebody in the late eighties, it was ridiculous — absolutely ridiculous. That's a government before the last government, and some of those people have actually returned to the benches of the Liberals under this government. Clearly, they've seen their way.

Let's be clear that the nature of capital planning is long-term planning. To somehow suggest it was wrong to say to communities, "Plan your physical needs — physical needs, not fiscal — over the medium and long term," is simply ridiculous. Of course you need to plan your infrastructure over the medium and long term. That's why there was separate money for intermediate- and long-term planning, which usually included bricks and mortar — and equipment, by the way.

Now what we have is a situation where health authorities are going to have to decide, because of this government's change, between a new wing or heart surgery. The government hasn't said: "Here's your capital. You have to include your capital expenses as part of your overall plan, but by the way, we're not going to give you any more money for it."

Out of the $60 million that the government actually says is increased cost pressures, even to stand still, are the added costs of debt servicing and amortization of any new infrastructure in this province. That is a huge change. I'm wondering what discussions, if any, this government has had around the issues of infrastructure planning that are provincewide in terms of ways to handle that. We already know that in the northern health authority they've brought in outside help, outside consultants, on how to manage that. What leadership, if any, is the provincial government giving to plan for various models around the building of infrastructure with no money from the provincial government?

Hon. C. Hansen: First of all, the member was talking about how we put more money into the health care budget and somehow try to present that as the panacea to problems. We've never pretended that more money is going to solve our health care problems. In fact, we've said the exact opposite. I think the Leader of the Opposition has said on many occasions that we simply can't continue to just throw more and more money into a health care budget without change.

The member talks about "stand still." We're not standing still. We have given some very clear direction to health authorities, which I'm sure we're going to get into in these discussions, around the fact that they have to change and that the status quo is not acceptable. It's not sustainable. We have to find more cost-effective ways of meeting the health care needs of British Columbians if we're going to ensure that this publicly funded health care system survives into the future the way we want to see it survive.

In terms of capital planning, it's important to recognize that we now have six health authorities. As we were going through the process of trying to determine what the appropriate boundaries would be, we gave a lot of thought to what the critical mass should be. A health authority with 60,000 or 70,000 people living in it may have a geographic boundary that makes sense, but it doesn't have a significant enough population to allow for the reasonable medium- and long-term planning that the member was talking about. Now, with the six health authorities and their respective divisions into the health service delivery areas, it gives them the ability and the critical mass to provide for that planning on a regional basis at least.

As the member noted, when it comes to capital planning, the needs in the north are quite different than the needs in downtown Vancouver, and we want to allow for that flexibility. One size does not fit all when it comes to this kind of planning. The health authorities are of a size now that they have both the ability and the obligation to ensure they're giving that longer-term planning to their facility needs.

We have also asked that the health authorities not drive their planning process based on what bricks and mortar are in the ground now but on what the patient needs are and how we actually ensure that those needs

get met. Then let's look at the facilities we have in place to provide for those needs. This is not a continuation of the incremental process of adding new bricks and mortar into health care that we've seen over the past decades. It's, rather, a new approach that says, "What are the health care needs?" and then looks at the facilities that are needed to provide that.

The other thing, which is a very important innovation in this new structure, is the leadership council. In the past we had seen, I think, a very adversarial relationship in many cases between the provincial government and the 52 health authorities in the province. What we have in place now is a leadership council that's made up of the CEOs of the six health authorities. It includes the deputy minister and the other senior staff of the ministry, who meet on a regular basis to sort out those issues of common importance. That, I think, is going to be a fundamental tool in ensuring there is coordination on a provincewide basis so that standards of care are met, reflecting the differences in the province but at the same time making sure British Columbians, wherever they live, have access to the health care services and the facilities they need to get those services.

J. MacPhail: The minister doesn't need to worry about me looking backward and somehow defending the past. The public will do that. The communities of Fort St. John and Prince Rupert will do that themselves — about whether having their own community health council was worse than a big northern authority. The minister doesn't have to attack me on that basis, somehow saying that there was an adversarial relationship. There was certainly an engaged relationship, but I'm not sure whether it was adversarial.

Secondly, the only point I'm trying to make here is that the government, whenever they are faced with the accusation that there will cuts to health care, says: "Cuts? We put $1 billion more in health care." It happened last week. The Premier stood up and said: "Cuts in health care? What are you talking about? We put X amount more dollars into health care." All I've done this morning, whether it be useful or not, is suggest to the government that, yes, even though they have increased funding by X amount of dollars, there are going to be cuts to health care. It could be cuts in the salary of the nurse that's delivering post-operative care, or it could mean less-clean dishes on the trays of patients. But there will cuts to health care. That's all.

The Premier doesn't seem to understand that — that there will be real, unfunded cost pressures. They will lead to either a privatization model or a contracting-out model, but there will be cuts. Even in those models, there will be cuts.

On my issue of capital financing, I started off by saying to the minister that I don't want to engage in the kind of harangue we had in education for K-to-12. The minister has very forthrightly admitted that there is a new system in place. That admission is confirmed by the documents that exist. What I'm trying to have a discussion about, before we get into the details of health authority by health authority….

On the one hand, the minister claims that there has been a big step forward and that health authority funding is population-based now. The minister must have done an analysis of what the community needs are around moving to a population-based formula, because you can't just move to a population-based formula by counting heads. You have to do the nature, the demographic makeup, of that population. What I'm to figure out here is: in doing that, what plans, looking forward…?

How is the minister assisting health authorities to plan for the infrastructure needs that go along with an analysis of the population in the various health authorities? They said they're not going to pay for them, but what are they doing to help the authorities pay for them?

Hon. C. Hansen: The member went to great lengths to talk about coming cuts. I find it interesting. As I've been travelling around the province in many different communities, people will stop and say: "Well, I sure don't like the cuts that you're making to health care." I say: "Well, which cuts are you talking about?" "Well, the cuts."

When you start trying to draw them out as to what they're talking about, they can't give you examples. There's been lots of rhetoric around cuts in health care. In reality, there is more money going into health care — an extra billion dollars. We have made some changes around Pharmacare supplemental benefits, which the member may want to get into later on. Those are not substantive changes that have significant impact on individuals, particularly those who are most vulnerable.

When the member talks about cuts, cuts, cuts…. I would love to hear examples. We're adding more and more money into the budget. There are going to changes. Is somebody who is in need of emergency access to care not going to get it? Of course they're going to get it. We just have to find new and better ways of delivering on those services so that people get the service they need in the most cost-effective way.

If the fact that we're going to spend less money on a procedure and yet still make sure that the service is delivered…. That may be a cut to how much money is being forked out, but it's not a cut when it comes to service and the ability for British Columbians to get the care they need when they need it. I certainly don't accept her notion that there are cuts coming or that in fact there have been significant cuts to date.

The change we're making when it comes to infrastructure, which is where the member ended up on that point, is so that infrastructure follows service. We are looking, first of all, at the services that have to be provided. Then we're looking at what appropriate infrastructure is necessary.

The health authorities are addressing those challenges at that level. They are certainly working with us

at the ministry level. They're working with the Ministry of Finance and Treasury Board. The provincial government will continue to have a role when it comes to making capital dollars available. Even though the debt-servicing charges must be borne by the health authorities into the future, they still have the ability to come to the provincial government for assistance when it comes to the financing of these projects in the first place.

There are significant dollars that are in the budget for the coming year and the years after with regard to the capital expenditures. For the year just past, the total amount spent by the ministry on capital projects was $274 million; for the year starting yesterday, it's $273 million. That's spread throughout the province. There still is a significant part of our budget that is going to capital expenditures.

J. MacPhail: Yes, that's true. There is a significant amount. That's because the minister said you're not going to break contracts; you're going to continue to build…. Unlike the Minister of Advanced Ed, if there's a hole in the ground and partially constructed, this minister's going to continue to construct it. Yes, that's true. That's what that payment is for.

You know what, Mr. Chair? If the minister gets feedback from the public saying, "We're wrong; there aren't any cuts to health care," good. I'm happy about that. I would feel much better about living in our province as well. The minister knows that there are cuts already to home care, home support, Pharmacare, physiotherapy and podiatry. There are increased drug costs, just to name…. That's because the actual budget changes that affect acute care hospitals only take effect today.

That's what this document, the leaked document, is all about. It's what the Vancouver coastal authority planning document, the secret document released last week, was about — saying that there will be real cuts to services. I hope that by our discussion or the public's input into this, we can avoid the anticipated cuts in acute care services. But there have been real cuts in health care. The minister knows that. As he goes around the province…. Yesterday, just in the newspaper in a fairly high-profile way, there was a senior saying there are real cuts to health care affecting him.

Already, we're into kind of an esoteric discussion where the minister and I perhaps will never agree, and I'm trying to avoid those in this estimate. I'm trying to actually find the real…. I'm trying to give some assurance to the public about what the minister has in mind as he changes the way of doing business in this province.

For instance, let's just take an example of planning forward here, if we could. In the Fraser area there are…. There's a small example that we could look at, where it says that the health authorities must fund all debt service, amortization and operating costs. We have the example of the Nanaimo Regional General Hospital. It's always quite a hot point, I've always found, in terms of pressures in health care. The population is burgeoning there, both from a numbers point of view and an aging point of view. We have a project here where the ministry says that the regional general hospital has to do all of the OR — the completions — all on their own, and the project cost is about $24 million. With the Nanaimo regional hospital, isn't that a situation where a long-term investment in expanded OR would actually save health care costs? Maybe the minister could use it as an example of what that particular health authority is supposed to do to manage that new pressure.

Hon. C. Hansen: Actually, if you take what used to be the Central Vancouver Island health region and look at the population-based funding, it clearly was one of the regions that was not well served by the old model that was in place. As a result of us bringing in the population-based funding, they actually get some of those pressures addressed in ways that had not been addressed in the past. In addition, they are now part of the Island health region, which has a much greater population obviously. There's a much greater capacity to ensure that services get provided in a coordinated way. The Island health authority now has a budget of just under a billion dollars a year.

What we're saying to the health authorities is that they can determine the patient needs of the residents living in their region and then determine the facilities that are required. We're not going to go in and tell them that they have to or are not allowed to proceed or cancel any particular project. They, first of all, have to look at the requirements of delivering patient care in a systematic way, in a way that actually doesn't look just at one hospital but looks at the network of health care facilities we have in the region and how they can best deliver on those needs. We're giving them the flexibility to do that. We're including the debt-servicing costs in the budget so that they can choose how they would like to move forward. We're not going to micromanage it out of the ministry itself.

J. MacPhail: I understand that the province is not going to micromanage, but turning to the increased funding for the health authorities doesn't answer this particular question. We already have, by acknowledgment, an understanding that the increased funding to the health authorities doesn't even cover the current cost pressures. We've got agreement on that — the stand-still current cost pressures.

The minister stood up and said that the health authorities are going to have to find a new way of doing things. This is a perfect case in point. It's $24 million worth of finding a new way of doing things — can't look to anywhere else for the money. There's no money there. This is a pressure that this hospital has to manage itself. It's $24 million of capital. Will the health authority, the Vancouver Island health authority now, go out and borrow their own money to build this hospital?

Hon. C. Hansen: I guess, first of all, they have to determine whether this particular project is a priority.

As I was mentioning earlier, when I used my analogy of the small business that didn't have to worry about its capital costs, you have a lot of requests for projects that get put into the system and that don't necessarily reflect local priorities or local needs vis-à-vis other needs in the community. I'm not saying that this is or is not in this category. All we're saying is that now, for the first time, they can determine what their priorities are.

If they determine that in order to deliver good health care services in this part of Vancouver Island, they need this project to go ahead as a greater priority than anything else, then they have the ability to come back to the provincial government for assistance in providing that capital, or we can look at other ways that they can come up with the capital. At the end of the day, they're going to cover the debt-servicing costs out of their budget.

Capital and operating have to go hand in hand. You can't be dealing with them in isolation from each other. They're not in isolation. Capital decisions are not there simply to create jobs for people who are building projects. The capital projects are there because, ultimately, they have to be designed to meet patient needs.

That's what we're saying to health authorities. First of all, determine your patient needs, which is the process we're going through in terms of redesign. If projects that had been looked at previously, such as this one, are a priority, then go ahead with them. There may be new priorities. There may be capital projects that weren't even envisioned two years ago which suddenly become important. It may be important to look at equipment needs of facilities so we can actually retain the surgeons and specialists that we need in some of these communities.

There is that certainty around core services. That's part of the flexibility we're giving them.

J. MacPhail: My apologies, Mr. Chair. We were dealing with a religious matter back here.

Okay. Fair enough. It's fair enough that these are going to have to be managed by health authorities. The reason why I picked this particular one is because this is an area where population-based funding was an issue. It worked to this region's advantage, this community's advantage — a burgeoning population and also an aging population.

I'm just asking for some sort of solutions around what…. This isn't speculation; this is a real project that was on the books. Let's say that the health authority comes to the conclusion that they can't afford to build this. What are the alternatives that the ministry thinks they would have available to them that don't mean cuts in service, don't mean longer wait times for surgery?

Hon. C. Hansen: I think that's the whole advantage of having a population-based funding allocation. There's never enough money in the health budget to do everything that everybody would like to do. I think the member certainly faced that when she was Minister of Health. I have no doubt we could double the health budget today, and all of that new money would get consumed.

We're saying that there is only so much money available in the pot to deliver health services, and we've got to get the best value for every dollar. We're saying that when it comes to capital projects, there is no end of wonderful ideas, but it all comes back to priorities. It comes back to what the needs are that have to be met and how we prioritize the dollars to ensure that those needs get met.

It's not a case of saying: "Let's take 100 percent of our budget and spend it all on heart surgery." Instead, we've got to make sure there's a balance between meeting the immediate capital needs, when it's new equipment that's needed today, or the intermediate- or longer-term facility needs that are in place.

We're saying that they've got to choose their priorities so they can maintain the best possible delivery of health care services within the available allocation of funding that we have at our disposal. We've got to get the best value for every single dollar, whether it's a capital dollar or an operating dollar, because those are integrally linked at the end of the day.

J. MacPhail: Mr. Chair, I'm actually looking for some real solutions, potential solutions, here. That's rhetoric that the minister just gave. Here's why.

This will be the first year that there's no money for new programs, for expansion of services. In the past it may have been that there was just a little bit of money, but there was at least some flexibility where pressures could be relieved without always, always robbing Peter to pay Paul. I don't in any way suggest that in the past there wasn't reallocation from one needed service to another, but it's the first year where if there's any increased pressure, it's going to be to rob Peter to pay Paul — or to privatize; that's a possibility — or to delist. That's a possibility as well. That's what I'm trying to have this discussion with the minister about: the real possibilities. What is in his mind?

I don't think the minister means — or maybe he does — that where we hated the micromanaging, to quote him from the past, now we're going to turn over all of the decisions to the health authorities. Can a health authority decide to delist something? Can a health authority decide just to get out of the business of doing something in health care?

There's another difference that has occurred as of April 1, I think. British Columbians are paying another $400 million in increased taxes. That's $400 million in increased taxes through MSP premiums for health care. That's another difference.

Hon. C. Hansen: I'm totally prepared to go through all of those, because those are the challenges we've given to the health authorities — to look at how they best manage their budget.

There is no particular agenda when it comes to delisting. We're certainly following with interest the experience in Alberta, but I don't think that's the panacea to a lot of the challenges we're facing.

The bottom line, though, is that we've got a budget that is a $1 billion increase over what was budgeted last year, and we're asking the health authorities to look at how they deliver on all of the needs of British Columbians.

In terms of priority, we've given four directions to the health authorities in how they manage this challenge. The first is that they should look at revenue opportunities. Some of the health authorities are looking at some innovative and out-of-the-box ideas. Some of them may be a little too out of the box, given some of the speculation that's been in the press in the last little while.

As a second factor, we've asked them to look at a consolidation of administration and infrastructure costs. One of the messages that I clearly got in travelling around this province is front-line health care workers feeling that there was too much being spent on administration. Certainly, it's not that administrators aren't working hard, but there was so much duplication of effort with the structure of the health authorities and the relationship with the ministry itself. We've directed them to look at that area secondly: how to drive administration costs as low as is possible to still deliver good patient care.

The third area is around best practices. There are lots of innovations being brought forward around best practices that actually allow for better health care to be delivered for less money, which is a win-win for everybody, of course.

Only as a fourth level are we looking at changes to programs. The member said that there's no money for new programs. There's lots of money for new programs, but it's a case of saying that if those new programs are a higher priority than something we've been doing in the past, then it's only appropriate that we shift the financial resources to ensure that those new programs get funded. Many of those new programs not only provide better patient care but also result in cost savings to the system, and every time we get a cost saving, that's more money that can be redirected to patient care.

J. MacPhail: Well then, let's look at this example of the operating room in the Nanaimo Regional General Hospital. It's a $24 million cost, but the debt servicing on that is going to be about $2 million or $3 million a year.

Let's go through the four areas. Could this health authority decide themselves to charge fees for access to the operating room?

J. MacPhail: Given what's on the front page of the Vancouver Sun today, that's probably good news for people, knowing that in our public system they're not going to have to pay for access to the operating room.

Let's say that on just this one capital project, they have to come up with $2 million or $3 million more for debt servicing, and then operating costs and amortization costs on top of that. What has the government estimated could be saved by the Vancouver Island health authority in consolidation of administration and infrastructure costs?

Hon. C. Hansen: To answer the member's direct question, as part of the work that is being done by the health authorities, they are actually singling out how much money they believe they can save on administration costs. I don't have that number yet. That's work in progress in terms of how much they think they can save on the admin costs.

I was quite pleased: one of the health authority chairs actually indicated that he wants to make sure he has the lowest administration cost as a percentage of the budget of any of the health authorities. I think that's a healthy approach that we ensure that those costs are as low as possible.

Actually, for the first time we can measure what is administration throughout the province. In the past we had different health authorities use different standards to measure what is or is not an administration cost. We do have consistency there now, so we can compare from health authority to health authority.

Going back to her point about the renovations at the Nanaimo Regional General Hospital, it's not necessarily an incremental cost. The point we want to make to health authorities is that capital expenditures — whether it's for equipment or facilities — can actually result, if properly managed, in a decrease in operating costs in other areas.

You may wind up with an inefficient system. For example, I've seen wards in hospitals where just the layout of the nursing station meant that they had to have extra nurses on staff to provide the coverage that would be needed. By a fairly inexpensive renovation to the nursing stations they were able to provide better sight lines so that nurses could actually do better monitoring of the patients that were in those wards, which would result in a decrease in their operating budget. It's that decrease in the operating budget that actually provides for money that could be put into debt servicing to provide for the renovations.

In the past that was the disconnect that was there. They were two separate pots of money. We've combined them into one pot of money so that health authorities can do proper management. Quite frankly, outside of health care, every industry and every organization in the world does its planning by looking at operating budgets and debt-servicing costs as an integral part of their budget planning and operations. We think it's timely that it be brought into health care as well, because it will result in better decisions.

J. MacPhail: This is a real-life example, and that's why I'm using it. Don't worry; we're not going to go through every capital project to look at it this way. It's a real-life example that brings together all of the factors that the minister is touting.

Let me just set that aside for one second and deal with the issue of the minister suggesting that somehow anyone who isn't in favour of lower admin costs is out to lunch. I agree. I can hardly wait for the administration costs of the health care system to be reduced. I'll stick up my hand; I'll leap over with the minister and join him and give him a high-five if that happens.

That's the good news. That's the excellent news, but to somehow suggest that everything that everybody in the health care system has done to date has been a profligate waste is ridiculous. To somehow suggest that with the election of a new government, there's been a whole burgeoning of new ideas — gee, if only they'd been tried before, everything would be fine — is ridiculous. I don't want to deal with those kinds of situations in estimates. I want to deal with real-life examples created by his new way of doing health care.

Frankly, there isn't a private sector model in the world that suggests that we can cut operating expenses, cut capital expenses and deliver the same amount of service — not one. If you take a Ford model, if you take a Nortel model, if you take a GE model, they may admit to those things happening, but they also admit that there will be a reduction in output. That's the difference. This government wants to somehow say that there won't be a reduction in output, so I'm just trying to figure out how we get there.

The reason I'm focusing on the Nanaimo Regional General Hospital is because it's been a problem for years. There's no question about it. I grappled with it; other ministers grappled with it. Previous governments grappled with it. It has some very interesting circumstances. It's a growing population; we've already admitted to that. It's a growing aging population. It's becoming an urban centre and therefore develops a kind of resident that has urban needs, as opposed to rural needs. It has also been developed as a regional centre for health care delivery. Port Alberni relies on it. Port Hardy, Campbell River, Courtenay….

The reason they were planning for an expansion of the operating rooms is in recognition that their wait times for surgery were amongst the longest in the province. What I'm trying to figure out here is: what alternatives are available for that? Is it a two-hour…? No, I'm sorry; that's an exaggeration. Is it an hour-and-a-half ambulance drive down to Royal Jubilee? Is it airlifting over to Vancouver? Is it maybe doing more surgery in Port Alberni or Campbell River? What are the alternatives for this very real-life model, given the fact that we already know there's no new money?

Hon. C. Hansen: Well, I was actually trying to avoid getting into a specific example because I'm not sure the member would like me to, but she keeps persisting, so I will try to address the specifics around this particular case.

She mentioned that this is a project that's been on the drawing boards for many years. She's right. It actually goes back prior to the 1996 election. The previous government promised an expansion of the Nanaimo operating room. It was back in the early nineties that this was developed and first put forward as a project. In fact, after the 1996 election, this was one of the projects that the then government put a freeze on. All of these projects that were supposed to be priorities were frozen. That project still….

After the '96 freeze, there was some pretext that somehow it was coming out of the freeze, when in fact the funding was never there to proceed with that project. The contracts were never signed. That's why, by the time the last election rolled around, it still hadn't come off the drawing boards. There was no…. Well, I'm not sure if there would be a shovel in the ground in this case, but certainly the renovations hadn't started after all those years of it being considered a priority.

I think it is actually a classic example of why the previous system didn't work. If the local health authority had seen that as an urgent need, under the new model we're moving towards, they would have had the flexibility to actually get on with it. We see examples where health authorities come forward with capital projects that they don't need yet, but that they might need. They know it took so long under the previous model that they had to get it into the hopper fast. This is a project that had been going on for about eight years, and nothing was happening other than announcements and planning and promises. They had never transpired.

Under the new system, if it is a project they need to deliver good patient care in Nanaimo, if they can find ways of ensuring that the operating budget is there for it once it's completed and if they can find ways to ensure that the debt-servicing costs are provided for, we're not going to dictate out of Victoria. We're not going to tell them they can't have it, as has happened in the past just because of the lack of moving forward on it.

Instead, they now have the ability to get on with it within their budget. It all comes down to them determining what their priorities are. With the population-based funding formula we're putting in place, they get an equal share of the available health pot compared to anybody else in the province. That factors in the aging demographics, as the member mentioned.

They've got a fair share of money, just like everybody else does, and they get to choose what their priorities are. If their priority is moving forward on the renovations for the operating rooms, they — for the first time in eight years — will actually be able to get on with the project instead of seeing it continue to be delayed year after year as we've seen in the last number of years.

J. MacPhail: The minister does nothing in terms of adding that this has been ongoing for ages. I admitted to that. Try not to wound a dead horse. The horse is dead from the past. I always wonder why this government thinks it can draw blood from a dead horse.

What I'm asking for is solutions from this government. Phase 1 was done. This is phase 2. There was incremental pressure. That's correct.

The minister stands up and says that new population-based funding is the answer. This area, Kelowna and Surrey are the three areas, as I recall, of population-based pressure, but it doesn't reflect in the increased funding. It does not. What they've done is put this region in with the entire Vancouver Island health authority, which isn't even getting enough money to cover the stand-still pressures.

Yes, of course there were long-term planning schemes by various areas. Some of them made sense, and some of them didn't. This one makes sense for long-term planning. All I'm saying to the minister is that given…. I started out by asking what assistance he is giving to health authorities for long-term planning, which often involves bricks and mortar. That's all.

The answer I've received, the minister's answer — and fair enough, actually; I'm not going to get wired up about it — is that it probably wasn't needed. That's his answer. Somehow these various communities come up with schemes that may have been exorbitant. Then he also tries to say: "You didn't do it either." So what's the big deal? Dead horse. Just try to remember that analogy — all right? It's a dead horse. We understand that. We're looking for real solutions here to real problems.

Let me then ask the minister whether he's considering holding any seminars or whatever in his role as Minister of Health Services around how one can raise capital as a health authority, separate and apart from the provincial lending agencies.

Hon. C. Hansen: I do not accept what the member said — that the project in Nanaimo is not needed. What I'm saying is that we have planning professionals in the health authorities who are best able to make that determination and that it's not something we're going to make as a political decision out of Victoria.

In the restructuring, there is in this budget coming up in this year $100 million that's being allocated to capital needs around health authority restructuring. In the case of Vancouver Island, that amounts to about $16.8 million. I know it's not a lot when you look at the overall scheme of things, but it does allow them to access some capital dollars under the old model that they may need to go through this restructuring. That could be equipment; it could be facility renovations — but, obviously, small-scale ones.

There is work that is being done by the leadership council around what financing structures would be appropriate, and we're certainly trying to work with the health authorities to get them the best advice possible. Our objective is to make sure that as the health authorities look to their capital projects for the future, they get the best possible financing rates available. If the provincial government, through the Ministry of Finance, can get the best rates for capital in the future, then we will try to use that vehicle. If the health authorities themselves have access to other opportunities, then we want to work with them.

There is no one model right now, but we're trying to work with the health authorities to make sure that we put some policy framework around this new funding structure so we get the best value for the dollar into the future.

J. MacPhail: I have the health authority appointments, and I've got the announcement made March 22. I've got the announcement of the health authority restructuring in December 2001. Does the minister have a copy of this leadership council? I'm sorry; I've got it from their website. It's not there with the mandate for the leadership council, who they report to, etc. Perhaps the minister could…? Maybe I'm missing something.

Hon. C. Hansen: The leadership council, I think, is one of the really beneficial innovations that has come out of the restructuring. As I mentioned earlier, it includes the six CEOs from each of the health authorities, the deputy minister and the assistant and associate deputy ministers in Health. From time to time they will draw on other individuals to be part of the leadership council, depending on what their particular issue would be.

As to the subject we were talking about, financing of future capital projects is a subject which would lend itself to the leadership council. They could draw on expertise out of Finance and Treasury Board and even look at other models — like the Municipal Finance Authority, for example — as models that we may be able to learn from as we meet some of these challenges in the future and come up with the model that works best for Health.

J. MacPhail: Is there an announcement of it? I'm sure the public wants to know who they are. I'm just wondering: is the leadership council an internal committee, which I support, of paid officials? Or does it include the chairs of the health authorities or health authority members?

Hon. C. Hansen: No, it does not include the chairs. There is another body which we are referring to as the ministers forum at this point, which meets periodically and includes the chairs of the health…. It includes the leadership council but in addition includes the chairs of the health authorities as well as the four Ministers of Health. That becomes the body that would look more at the ranges of issues which would be outside of what the leadership council itself would deal with.

The leadership council is made up of individuals who are administrative in focus. I guess it's a policy-sensitive but administratively oriented group. In the ministers forum are those that are policy-focused and administratively sensitive in terms of how these challenges are met.

I've got a document that outlines the mandate and the functions of the leadership council. I would be pleased to share it with the member, if she'd be interested.

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

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.

The Chair: Minister, would you like to introduce your staff before we start.

Hon. J. van Dongen: On my left is Gordon Macatee, the deputy minister, and on my right is Bud Graham, the assistant deputy minister responsible for competitiveness, fisheries and a few other things. We have Harvey Sasaki, the other assistant deputy minister, and Karen Wilk, who looks after all the finances in the ministry.

V. Roddick: With the Ministry of Agriculture service plan, under the core business areas, you say that you're going to be supportive of local government and increase concern under environmental sustainability and resource development — "Increased concern over water quality, management of wastes and ability of agriculture to operate effectively within municipal context" — and, under fisheries and aquaculture management, establish a better working relationship with the federal government on fisheries management.

I would ask what plans the minister has for working with the DFO, the Intergovernmental Relations ministry here with the provincial government, and the Ministry of Water, Land and Air Protection because of the fish in our farm ditches, which were nonexistent until we put in a really good drainage system in Delta with the help of the municipality. Now we're finding constraints on that system. We would hope that you could work to make sure we can arrange a protocol so the Delta municipal biologist has input and can handle some of the situations in Delta.

Hon. J. van Dongen: Thanks to the member for Delta South for the question. It's a very critical issue for agriculture and certainly one that really came to the fore, I think, about four or five years ago, when the Department of Fisheries and Oceans, together with the then Ministry of Environment, started imposing a number of additional requirements both on local governments and farmers when they were doing ditch maintenance.

Certainly to underscore the seriousness of the issue, and our ministry recognizes that, we have other situations. We had one particular situation in Langley involving a cranberry farm, where charges were laid, I think unfairly. There was a settlement negotiated out of court, but I think it was a situation where a farmer really could not afford to deal with an issue which is very much of concern to our provincial government — that is, the relative jurisdictions between the Agricultural Land Reserve and the Department of Fisheries and Oceans, where those two authorities and responsibilities intersect.

We have certainly identified those issues generally and the ditch maintenance issue specifically as an issue of great concern for us provincially. It's an issue of great significance to agriculture, and I certainly have promoted serious concern about drainage for a number of years and within the ministry now as minister. If we don't have effective drainage, then our soil-based agriculture is in trouble. I think good and effective drainage is being seriously challenged by the imposition of some of the things the Department of Fisheries and Oceans thinks are critical.

We have identified that. We have certainly made our own representations to the Department of Fisheries and Oceans both at the ministerial level and at the staff level. I think we're in a way privileged to have Bud Graham, the assistant deputy minister who has a Department of Fisheries and Oceans background and a fisheries background, now also having responsibility for agriculture. I think in that capacity he will be in a unique position to help foster better understanding, better communications and ultimately better resolution of these decisions.

I've certainly had representation from Delta, and I'm aware of this suggestion. I think it's a very good suggestion and one that we need to pursue.

I think we would be saying: "We have a professional biologist who is recognized as a professional. Do we really need two other biologists — one from the Ministry of Water, Land and Air Protection and one from the Department of Fisheries and Oceans — to work with the local government to develop a ditch maintenance regime?" The suggestion that came from Delta is certainly one of some options we want to pursue, the ultimate goal being a sensible, commonsense approach to maintenance of ditches.

Really, if the ditches weren't there, there wouldn't be any habitat there at all. I think the evidence is that the ditch maintenance regimes we've had have been good for fish and, in fact, have provided additional habitat where none existed before.

It's a very critical issue and one that we intend to work on. All of the support from the member and other MLAs and her local government will be much appreciated.

V. Roddick: Thank you very much. We in Delta certainly appreciate that, and I know it is critical to the rest of the province.

Continuing on under environmental sustainability and resource development, you say that the ministry will support the development and implementation of local government agricultural plans. As you are aware, Delta has had some unique problems dealing with agriculture and agricultural methods that are modern. I was wondering: on behalf of Delta, would it be possible to look into covenants? For instance, when the houseboat group went in by the Westham bridge, there were covenants each purchaser had to sign that made sure they recognized fishing, recognized farming, recognized trucking — all that sort of thing.

My point is that this chicane that has gone in to block a farm road…. It actually was there as a dike as a farm road, and it had a vegetable cannery that was accessible by the farm, where there is now a subdivision. Now farmers in the large, modern-day farm equipment cannot go down that road. To try and avoid these sorts of things again, will the ministry possibly look into the idea of a covenant — it has been successful on the houseboat, which is tantamount to a subdivision in the river — so that we can try and avoid this and work with the municipality to try and make sure we have a reasonable set of agricultural plans, agricultural bylaws, so that the farming industry can continue — not unfettered in everything they want to do but to manage in a proper, businesslike way?

Hon. J. van Dongen: In response to the member, I'm not quite sure what you're specifically thinking about in terms of using a covenant as a tool in that situation. I would say that where you're dealing with issues of transportation for agriculture and, really, a lot of other issues at the local level where there is essentially a high level of local government involvement and responsibility and authority, what we try and do…. In part of this core business area in our ministry we're trying to encourage the local farm community to work with their local government, both at the staff and elected levels. In particular, we're encouraging local governments to establish agriculture advisory committees to council. I think where we can foster a constructive relationship and a recognition of the economic contribution of agriculture through local chambers of commerce and that kind of thing…. I think the Delta chamber of commerce does recognize the economic contribution of farming.

That should help to deal with some of those situations. I agree with the member that it's a balancing effort that needs to take place. Certainly no one in society should have a blank cheque, but ultimately we want to try and encourage a climate of cooperation, a climate where we can find win-win solutions. Particularly, our provincial government has a real interest in seeing agriculture as a tool for economic development and expansion.

I think some of the issues that the member raises could be impediments to that. Certainly we hope for a good working relationship with all local governments in fostering this economic climate.

V. Roddick: Perhaps I could expand upon the covenants. Obviously they wouldn't work now, in this particular instance with the chicane, because the subdivision is already there, but if any further development that is close to a farming section is allowed to be built on it…. We are working now with the Minister of State for Community Charter. Perhaps this is something that the ministry could work on with the Minister of State for Community Charter so that if such subdivisions did come to pass, we could work with the same idea — that people move there, yes, but they have to recognize the ability of farmers to maintain farming and continue on their business.

Had that been in place when the subdivision went in where the cannery was — the same as it did with the houseboat subdivision — we would not have the problem or the chicane that we do today. This is what the suggestion has been.

Hon. J. van Dongen: I do understand the concept a little better now. I think what the member is talking about is some planning tools on the non-farm side of the agricultural land reserve boundary where we try and develop a way to basically give notice to a new purchaser, someone who is buying or building a house close to the agricultural land reserve, that the land reserve exists, agriculture exists, and there are certain impacts that you're thinking about accepting when you move into the area.

I think it's a good idea. We have not, in my experience, used covenants in that situation before, but it's something that we could possibly take a look at. We're certainly trying to encourage local governments, in a general way, to think about these interfaces, and, both in their planning and implementation, to develop some form of buffer. The buffering

should not just have to happen on the farm side of the line. It should happen on the other side of the line also — where we're trying to plan some lower-intensity housing, for example, on the residential side of the ALR boundary — and hence have a good, workable interface where both sides accept responsibility for dealing with some of the impacts.

If the member wants to pursue that with us, we can certainly talk in more detail about the particular situation she's raising as an example and the concept of using that as one of a number of tools for buffering at the ALR boundary.

The next question is five and six of your core business area: industry competitiveness and agriculture, fisheries, aquaculture and food sector that is competitive in a global economy and provides economic benefit and stability to British Columbia's rural and coastal communities. Then, under corporate services: advocate for B.C. interests at the federal and international levels.

What we were hoping here was that you would advocate for farm and fisheries interests on such issues as labour, agriculture trade negotiations, fair trade, fair share of federal funding and technical support on trade rules and disputes. We have the Kyoto agreement that is out there, hugely, and they're now squabbling about the fact that we can't use trade emission credits with the U.S. if they don't sign on. We need to be very careful that agriculture isn't downloaded for these trade credits, as it may be, and that our industry — not just the growing aspect but also the agribusiness aspect through the manufacture of fertilizer, etc. — costs and the impact on agriculture are definitely looked at.

There are two other things here that come under this, which is the possibility of harvest fisheries that has been suggested by the federal government. We have pledged to have one fishery for all for Canada or certainly for British Columbia. I'm hoping the ministry and the minister will back that up and help the province with that and work with DFO, aboriginal affairs, intergovernmental affairs and anyone else we can think of.

Plus, the international trade and tariff board. We have in the last couple of years had problems with anti-dumping on onions, lettuce, potatoes and tomatoes. What we really need is a western representative on the international trade and tariff board. I would like the minister and the ministry to perhaps work with intergovernmental affairs to see, now in this spirit of cooperation with the rest of Canada, if possibly we could get a voice on that that would help our agricultural industry.

Sorry, I've sort of packed a pile of questions in there. If you want, I can ask them one at a time.

Hon. J. van Dongen: Well, I was making notes as the member went from one topic to another. I've got four topics the member raised in her questions.

First is labour. We're certainly working actively at the provincial level with two other ministries, the Ministry of Skills Development and Labour and the Ministry of Human Resources, on labour issues. We're looking at a review of the Employment Standards Act, and we're also looking at the issue of labour supply, particularly seasonal labour supply, for agriculture. We're involved with both ministries on that.

On both issues — the employment standards issues, the field inspections, and the issue of labour supply — we have federal involvement. We're working hard, mainly through the other ministries, to engage with the appropriate federal agencies — Human Resources Development Canada — on the labour supply issue.

We will also engage with various federal agencies — at least two of them, including the CCRA, the former Revenue Canada — to ensure that what we do in terms of field inspections is not going to be detrimental to the field operations or the labour supply. It will focus on the 10 percent of people who are not in compliance, who are in serious non-compliance, and will not negatively impact the field operations for people who are following the rules and treating their help properly. We've got a lot of activity on that issue, and some of it does involve federal government. We do try to involve the Minister of State for Intergovernmental Relations in those efforts.

The member mentioned international trade. Certainly, we see our job as a ministry in a provincial government as being to represent to our national government, to the federal government, the unique concerns and the unique issues that British Columbia agriculture faces in terms of our particular commodities. We have a very diverse industry, so sometimes we have commodities such as tomatoes or others that may involve only two or three provinces. It's in our service plan in a very specific way to represent B.C.'s interests in that regard. Again, we work with the Minister of State for Intergovernmental Relations to do that.

The member talked about the Kyoto agreement and the high-level negotiations going on that involve a number of countries. Our government is represented by the Minister of Water, Land and Air Protection and the Minister of Energy and Mines. Certainly agriculture has a potential role in that kind of agreement, but we as a province feel we have to be pretty careful about entering that agreement, making sure we appropriately balance the various interests that may come into play in terms of the actual decision to even enter that agreement. If and when that happens, then certainly there would be a role for agriculture. Our two ministers are being pretty careful on behalf of our government to ensure that we protect our interests as a province vis-à-vis the rest of the country, first of all, in that we have the potential role of agriculture and our forest sector in any future Kyoto agreement. We're going to rely on them to represent our interests in the foreseeable future. I think it's an issue of great concern that we have to be cautious about.

The member also mentioned the International Trade Tribunal board or commission and the concern

that we should have some western representation. Certainly, we agree that we should have some western representation and some representation from agriculture. I think that is a good suggestion, and we will renew our efforts with IGR to ensure that we push for that.

We're seeing an increased level of activity on trade issues. Given the fact that fully 50 percent of our agricultural and fish output is destined for export markets — a lot of it to the United States — that is a very serious issue for us. I think your suggestion is a good one, and we'll pursue that.

V. Roddick: I appreciate your careful consideration and comments on all of those issues, in particular that the labour and food safety, which is cross-border with the various grocery chains involved, is not downloaded 100 percent onto the farmers. I appreciate that comment.

I have several questions now under the fisheries and aquaculture management section of your strategic shifts and core business areas.

Why did the Salmon Aquaculture Implementation Advisory Committee members quit, stating that they had been duped?

I think it's important to point out that the Salmon Aquaculture Implementation Advisory Committee was formed as a recommendation of the salmon aquaculture review for the purpose of advising government on the implementation of the recommendations of the review and the ultimate lifting of the moratorium. That was the intent of the framework as it was set up two years previously.

I think there were also some misunderstandings. I should say that I was very disappointed about the resignations. We certainly talked to the members who did resign. We wrote to them and invited them to come to future meetings. We talked to them personally. I know that the Minister of Water, Land and Air Protection will be talking to them further. I think there were misunderstandings about the review, for example, of the escape management regulations. In the resignation letter they mentioned that. If you read the letter, they talk about the amended escape regulations going to cabinet. Well, they haven't gone to cabinet. They seemed to be of the understanding that they had already gone to cabinet. They have not gone to cabinet.

There was also a concern about a date on a letter apparently having been signed prior to a SAIAC meeting. This letter involved signatures by three ministers: myself; the Minister of Water, Land and Air Protection and the Minister of Sustainable Resource Management. It took us some time to get the letter signed, and when it was finally signed it actually had an old date on the letter because it hadn't been updated at the time it was signed. That was another misunderstanding that I think was unfortunate.

Certainly, we intend to continue to work with the environmental community. We had them in to a special meeting just a few days ago. Last week we were talking about the work that's being done on the waste management regulations by the Ministry of Water, Land and Air Protection. We'll continue to consult with them and invite them back to the SAIAC meetings in the future.

V. Roddick: I do hope that the discussions will continue and that the people do feel listened to.

The next question is that the 49 recommendations from the salmon aquaculture review have not been implemented. When will they be, and will you stop weakening them from the originals?

Hon. J. van Dongen: In terms of the 49 recommendations, 23 of them have been fully implemented, and 16 have been partially implemented. There are two that involve federal jurisdictions and there are eight where we have not undertaken any work to date. We are progressing through those. We do have a list of all 49 recommendations and the status of the work being done on those. We were trying to find a copy here. We don't have a copy with us, but I will provide the member with a copy of those 49 recommendations and the status of them.

V. Roddick: The next question: why won't there be around-the-clock independent observers as there are on fishing boats, not just periodic inspections of these farms?

Hon. J. van Dongen: My understanding, member, is that there is only one wild fishery where there is 100 percent observer status. That is the groundfish trawl fishery where the observers are there mainly to observe disposals off the side of the boat of live fish that maybe aren't marketable or aren't targeted, or mortalities. That's the only wild fishery where there is full-observer status. Of course, the purpose of that is to provide independent oversight for management purposes and for stock assessment purposes.

When we're dealing with aquaculture and farm fish, or finfish aquaculture, we're dealing with a private stock. It's not a common property resource such as the wild fishery. It's quite a different circumstance. There is no other precedent where we have full-time observer status for the purposes of inspection, for example. It's simply not a practical thing to have someone there as an inspector 24 hours a day, seven days a week.

We feel that we have a very good inspection program. Every farm has been inspected at least once a year on an annual inspection by our ministry. They've also had inspections by the Ministry of Water, Land and Air Protection and sometimes involvement by the

Department of Fisheries and Oceans as required. They've also had a number of random audits and inspections by both ministries, so we feel that we have a good compliance and enforcement model.

We recently have been concluding a service agreement with the two ministries so that we ensure we get maximum results and maximum value out of our compliance and enforcement staff. We are confident that we have a set of rules in place for the industry, and that those rules are going to be enforced, and enforced effectively.

V. Roddick: To the minister: thank you. These are questions from our local fishermen. Perhaps the minister, through the ministry, could provide me with the description or documentation that says what really requires round-the-clock people on these boats. The impression I've been given is that there are a lot of people on these boats watching things. The local fishermen feel that the commercial pens have no one at them at all, not just no one to, you know, inspect them. They don't have anybody looking after them. They just come and feed them twice a day and leave. They feel that the commercial fishery boats are being unfairly penalized with observers, so perhaps we could get this clarified, and I could clear it up with the constituents.

Hon. J. van Dongen: Certainly I can undertake to the member that we will give her a summary of our understanding of the observer requirements in the various wild fisheries. Just to speak to the other issue of 24-hour-a-day human presence on various aquaculture sites, my understanding is that there are a few, just a small number of sites, where two sites may be comanaged by staff. While they may not be on that one particular site, they are on a site close by 24 hours a day, seven days a week. There are a few of those, but they are very much the exception rather than the rule. There's generally always a human presence on the various individual farm sites.

V. Roddick: Are the B.C. taxpayers going to have to compensate fish farmers, when they have to slaughter their fish due to infectious salmonoid anemia or other infectious diseases, as happened in New Brunswick where the government spent $13 million? This same thing is currently happening in Maine, where $16.6 million (U.S.) of taxpayers' money is spent on compensation to farmers. Are they to be rewarded for bad practices?

Hon. J. van Dongen: I am familiar with the New Brunswick situation, having followed that, but it's important to recognize that the structure of the New Brunswick industry is quite different than British Columbia. We've seen a tremendous amount of consolidation in the B.C. industry so, basically, most of the industry is owned by about six or seven international companies. These companies self-insure for these kinds of events, such as the one in New Brunswick, and we would not expect to pay compensation in that circumstance.

The only prospect, I suppose, where that's conceivable is if we were compelled to do so by law, but these companies self-insure. They're in the business, and we would expect them to deal with that kind of an issue on their own.

V. Roddick: Good. I hope we can follow through and make sure that they are self-insured, because I think a follow-up to that from the constituents was: will commercial fishermen and fish lodge operators be compensated by the B.C. government should there be a disease outbreak from the penned salmon that prevent them from catching wild salmon?

Hon. J. van Dongen: Certainly, we've seen some precedents in terms of conservation closures, for example, in the wild fishery. There have been closures motivated by conservation. My understanding is that there never has been compensation in those circumstances.

Now, turning to the issue of disease, all of the disease that we see in farmed salmon is also present in the wild fishery. There has been no evidence, and certainly, all the scientific work that has been done basically sets out that there is a low risk to the wild stock from the presence of finfish aquaculture. We simply have no precedents. All of our scientific work and the foundation for our decision to allow aquaculture indicates that such an event will not happen, that there would be evidence of some kind of a transfer from aquaculture to the wild fishery. We're relying on the best of science for that position.

V. Roddick: I think what the concern could be here is the equivalent of something like foot-and-mouth that took place in the U.K. that affected everybody, whether the animals were healthy or not. I think the concern is that we end up jeopardizing our wild fishery, sport fishery and the fish lodge — that industry, per se. As long as the ministry is going to keep that, you know, as something that you concentrate on and look at so that these people aren't unfairly shut down because of the fish farming. I think this is what the constituents would really like to have the ministry aware of.

Hon. J. van Dongen: Certainly, we are convinced that the wild fishery can co-exist with aquaculture and vice versa. That is fundamental to our view and our plan to allow aquaculture to proceed. If we didn't believe that, we should be on a different course, but we truly believe and are committed to protecting the wild fishery.

The salmon aquaculture review, for example, which is still the most comprehensive work that's ever been done in British Columbia on all of the issues that are involved in aquaculture, made it very clear that the risk of disease transfer is a low risk. It set out a number

of recommendations for us to follow, which we are implementing to ensure that we reduce that risk even further. The major study that we did five years ago was reaffirmed by a recent study done by the University of Washington that confirmed that the risk of disease transfer to the wild salmon is a very low risk.

I just want to assure the sport fishing community and the commercial fishermen that we are very conscious of their concern. It's a legitimate concern. We are determined to ensure that the wild fishery is not only protected but is fostered, that it grows, that it continues to be an important part of our whole seafood sector and continues to develop and maintain a niche in the whole range of fish exports that we as British Columbia are putting out. Just to reassure them that their concern is legitimate, we take it to heart very seriously, and we will continue to manage to reduce what is already a low risk.

V. Roddick: Will you let the public know and have access to drug and disease records? Will you post them on your website where the public can monitor? I think, again, the concern is out there that in agriculture, when you have to treat an animal, you can contain either its own manure or whatever, whereas in the fish, when you treat for disease, the waste just goes out into the water. Or if you treat for sea lice and use cupernol or the equivalent that is recommended, that, too, is right there in the ocean water, whereas we in agriculture have our ditches and our waste and everything else monitored very carefully so that any of these pollutants are found.

I was wondering if you could give us your take on that. Will you be able to do this — have access to the drug and disease records and post them on your website?

Hon. J. van Dongen: Certainly, the issue of the use of antibiotics is an important one, and any antibiotic use in aquaculture has to be prescribed by a veterinarian. I think that's the first really important point to consider. The second point is that antibiotic use is administered, generally, through the feeds — sometimes a special feed, in the case of the medicine for sea lice — and that is all very strictly regulated by Agriculture Canada. It's important to know that only 2 to 2½ percent of the total volume of feed that is used on fish farms is medicated. A very small percentage of the feed that is actually used is medicated, and it's generally in the very early stages of the fish stock's life.

The feeding regimes and feeding equipment and feeding management have improved very significantly, to the point where there is very little feed provided to the fish that isn't consumed by the fish. Because the cost of feed is so high, the management of that feed has become much more intense. There has been no evidence in terms of the benthos — the community of living organisms under a fish farm — of any presence or remnants of antibiotics or medicine in the feed. Really, I think that's a confirmation that whatever is being administered is going through the fish stock for which it's intended.

V. Roddick: They actually do test the droppings on the bottom of the seabed and analyze them to see whether antibiotics or whatever medication is present?

Hon. J. van Dongen: The Ministry of Water, Land and Air protection analyzes the whole range of ingredients or products — things like zinc, for example — in terms of what's happening to the waste under the farm. They're analyzing for a whole range of issues, including antibiotics.

Our Ladner constituents and fishing community are concerned about how a sea lice infestation is investigated. They feel it should be investigated independently and not as it's done now. Can you comment on that?

Hon. J. van Dongen: The issue of sea lice has had some prominence since there were some allegations of a sea lice infestation of wild salmon stock in the Broughton Archipelago. I think it was last July.

I think it's important, and we follow a policy that the appropriate agency does the investigation. In the case of the wild stock, that would be the Department of Fisheries and Oceans. If there were an outbreak in the stock on a farm, then we as the Ministry of Agriculture, Food and Fisheries would be the lead agency in that investigation. We cooperate with DFO in making these determinations. In the July incident — or the July allegations — DFO did do a full investigation and issued a written report. The findings of DFO did not confirm the allegations.

Here I think it's a case of: do you have confidence in your government agencies or not? It's certainly important for all of us to be diligent and to try to maintain that confidence, because the public's confidence depends on it. If you don't rely on the Department of Fisheries and Oceans, or if you can't rely, in our case, on our ministry to do the appropriate investigation in our areas of responsibility, then we need to be analyzing why that is so. I honestly think that sometimes there are people who simply don't agree with the findings and, hence, argue for some other agency.

I've reviewed the findings in the case of the incident last July. We have people with longstanding professional reputations in the Department of Fisheries and Oceans who I think are credible and are to be believed. Ultimately that's who we rely on. If we can't rely on them, then we have to change them. I regard the investigation done by DFO as credible and professional on that issue.

V. Roddick: I think the word "confidence" says it all. I think that is one of our major hurdles, and I don't think your ministry is any different from any other

ministry. We will all work hard to bring confidence back into all sectors of our government.

The next question is on the disposal of dead salmon. When they're disposed of at sea, will you be insisting that an independent observer be on board so that we know…? Or are they allowed to be disposed of at sea? How are we as an industry going to tackle the disposals, like the one that went from Delta to Vancouver Island to a dump, finally?

Hon. J. van Dongen: For farmed fish, there is no disposal of mortalities at sea at all. The mortalities are held in totes, and they go either to a composting facility or to a reduction plant. In the example six weeks ago, where we had an IHN situation on a fish farm, the farm itself made an economic decision to dispose of those fish relatively early in the cycle. That disposal plan had been completely laid out with the knowledge and support of our veterinary staff in Courtenay and Abbotsford. In fact, all of the court activity around it really served to do one thing. The judge took a look at the plan that the farm had already laid out before any court action and that had been agreed to by the respective staff, including our ministry and other agencies. The court simply affirmed the plan that had already been put in place, which was to dispose of these fish through a reduction plant. The efforts of the critics created a lot of needless activity around that and resulted in the fish having to be diverted to composting facilities. Every mortality in finfish aquaculture is disposed of through either a compost facility or a reduction plant.

The Chair: I'll remind members to please ensure that they do address their remarks to the Chair.

V. Roddick: Yes, sir. Through the Chair to the minister: thank you for the comment. I think that this is one of the very important problems facing this industry: the public relations of it all. If it's possible to make sure that the general public is aware of the plans — the disposal plans, the feeding plans, etc. — then possibly we can sell this a lot better than we're selling it right now. People are fearful of this, of what it's going to do to the environment. If we're going to go ahead with this, we need to really do a good job in making sure people are aware.

This leads me to the next question. The prices and overproduction have devastated the industry, as we have talked about in other meetings. Why are we going ahead with this expansion? What is the prognosis for the future, when the Stolt Sea Farm, which is one of the largest in the world, posted a loss last year?

Hon. J. van Dongen: Certainly, the price of farmed salmon on the world market is in the low part of the cycle right now. As such, farms are having to watch their economics very, very carefully. The government's decision in terms of aquaculture is a long-term one. This industry has proven its ability to provide jobs in coastal communities — in communities like Port Hardy, for example, where the processing plant for farm fish is the largest employer. The government is taking a long-term view of this.

In fact, it seems to me that allowing some gradual and carefully supervised expansion at the low stage of the price cycle is probably a good thing. It will ensure that the people who embark on expansion are solid players who recognize the economics of the industry they're in, and we will see gradual expansion. If we were to lift the moratorium at the high end of the price cycle, then you would see inexperienced people rushing in, and you'd see more significant short-term expansion. We would have a situation that's actually more difficult to manage, particularly in terms of the environmental responsibilities we're expecting people to comply with.

To just establish a new site could take up to a year. It could cost up to $250,000. The people who embark on that have to be very knowledgeable. They have to be solid businesses. That's what we want in this sector.

I would actually look at it that it's probably a good time to embark on a long-term, gradual expansion that emphasizes environmental responsibility. Our role as government is to ensure environmental responsibility, to ensure that (a) effective regulation is in place and (b) we have the commitment and the capability to enforce those regulations.

V. Roddick: What is this government going to do about the findings of a Dr. Michael Easton? A respected international science journal, Chemosphere, has published the results of a pilot study showing that farmed fish contain much higher levels of pollutants, including ten times as much polychlorinated biphenyls — PCBs — as wild fish. This is from the FIS.com World News site, February 7, 2002.

Hon. J. van Dongen: This Dr. Michael Easton is someone I'm not aware of. Apparently this study was done for the David Suzuki Foundation, and there are a number of issues with the study. One is that it was a very small sample size. The study involved eight fish — four farmed fish and four wild salmon — and five samples of feed. So it was a very small sample size.

Secondly, the levels of PCBs noted in farmed salmon and in wild salmon were similar, and both were very low. That's the second point, that these levels were low. In the case of the measurements that…. I'm just going to go back here to the note, to make sure I get this right.

The action limit for most regulatory bodies, including the FDA — the Food and Drug Administration — in the United States and the CFIA in Canada…. They do not consider concentrations of PCBs less than .05 parts-per-million, because they are inconsequential. They're measuring in parts-per-million, and they consider anything less than that as not consequential. The

action limit for the FDA for fish entering interstate commerce is two parts-per-million or two million parts-per-trillion. This sample was dealing with parts-per-trillion, so it was a much lower concentration than the actionable level considered by either the FDA in the United States or the CFIA in Canada.

The third point is that there has been professional criticism of the work done by Dr. Michael Easton that was published in Chemosphere, in the form of a letter written by an associate professor at Purdue University. So apparently not all people in the professional circles agree with the work.

That's the information I have. Certainly if the member would like more information, we could get that from our staff.

V. Roddick: Perhaps you could provide the name or a copy of the article by the chap from Purdue. That would be helpful. Thank you.

Detailed sediment monitoring. This is to do with waste. Evidently industry-funded monitoring programs have been completed on all of your 91 sites, and detailed sediment monitoring of six farms is totally complete, and a report was issued last fall. What were these results? Evidently they have not been released, and the constituent concerned was wondering when and if they were going to be released.

Hon. J. van Dongen: There was a lot of monitoring done in the last two years by both the industry, in cooperation with the Ministry of Water, Land and Air Protection, and the ministry itself. All that data was shared. All the data being used to develop the chemical test that our respective ministries have been working on to provide a measure of the level of impact on the benthic community under a fish farm was released last August by the Ministry of Water, Land and Air Protection with our collaboration.

There was an intensive study done, funded by the Salmon Farmers Association, on six farms that included biological testing and the monitoring of biological activity on those six sites. That information was also used by the ministry in terms of developing the government's new set of regulations for waste management.

There is a summary of that research project on the website maintained by the Salmon Farmers Association. I can provide the member with a copy of that if she likes. That report is summarized there.

V. Roddick: These new waste management regulations being drafted by the Ministry of Water, Land and Air Protection will authorize discharges from finfish aquaculture operations, provided they comply with the new waste discharge standards.

What is going to be the regulation and the regular timing of these reviews? Would it be every year, every three years, every five years?

Hon. J. van Dongen: Every farm will be required to do at least one sampling through a grow-out cycle. That will be within a month of the peak biomass on that site. Depending on the results…. If the sample shows a level, based on the chemical standard, that is beyond a certain standard, then it may trigger additional monitoring requirements.

In a perfect situation or one that does not hit the first trigger level, there may be only one sample required at the point in time close to the time of peak biomass. There will be additional monitoring required at a number of different locations on the site once they hit certain trigger points or levels in the overall regulatory regime being developed.

V. Roddick: In other words, if the farm does proper management, it could be as long as five years before the regulation would be reviewed in this particular instance.

Hon. J. van Dongen: I want to, basically, separate two issues for the member. One is that the regulation that's being developed will be reviewed within five years. I don't know if the Ministry of Water, Land and Air Protection has decided exactly what the time interval will be, but it will be no greater than five years. That's one point. The regulation will be reviewed based on what we continue to learn through this process.

Secondly, every site will have at least one occasion during a grow-out cycle where they have to take a sample. As I said, that will be within a month of the peak biomass, and that will basically be the determinant of a couple things. One is whether additional sampling is required, as I said in my previous answer, and whether they can restock that site with a new group of fish when that particular cycle is moved out to market. Every site will have at least one inspection per cycle, additional inspections or additional samplings as required, and the regulatory regime will determine whether or not they can restock at that site.

V. Roddick: I have a request, hon. Chair. I still have quite a few questions, and my colleague from Delta North has one question. I was wondering if I could ask your permission that he ask the minister his one question.

R. Masi: Thank you, hon. Chair, and thank you to my colleague from Delta South.

Each year, minister, from 1996 on, I've posed the same question to a number of Ministers of Agriculture, and I will do so again at this point. As you know, we do have a problem in North Delta, specifically in the area of Sunshine Hills, relative to berry cannons. These cannons are extremely loud. They're intrusive. They create audio problems with shift workers, disturb Sundays and on and on. I understand, of course, that it's not unique to North Delta but is also throughout the Fraser Valley.

Again, as the growing season approaches, we expect to hear the roar of cannons on a daily basis in our area. I would like to ask the minister if in fact there have been steps taken to mitigate the situation. If so, could he tell me about them?

Hon. J. van Dongen: I guess, if nothing else, we should commend the member for persistence. He has come back every year. I want to say to him that certainly I am aware of the issue. Very shortly after my becoming minister, we decided that we should embark on a review of that situation, and we spent the last summer, really, from…. I guess we made the decision late in June to do a review of this issue. We asked staff to document all of the cases that we were aware of out there — basically, get a better sense of the issue and how things were unfolding.

In the lower mainland we have three or four municipalities, including my own community, where we have significant berry populations, significant bird populations, and we do have a problem protecting our crops. We have some issues in the Okanagan protecting cherries and grapes, and we are starting to have some grapes produced in the lower mainland also. It is an issue of some significant concern between our urban population and farmers.

The review that we did not only documented all of the known cases, but our staff did a fair bit of work looking all across the world at how this issue is being handled in other countries, including New Zealand. Certainly there is no easy answer for every situation.

Out of this process and through the fall we analyzed the results. In addition to the guidelines that we already had in place, we developed a proposed set of, I guess, minister's bylaws. I don't know exactly what the term is, but we have developed a regulatory regime now that local governments can choose to implement in cooperation with us in their farm bylaws. We're encouraging them to do so, so that we can have a simple set of rules at the local level.

There are some additional regulatory requirements for farmers, but we have looked at things we can do to at least try to mitigate some of the impacts. Obviously we won't be able to eliminate the impacts, but we have looked at startup times, for example. We've moved the guideline from 6:00 a.m. to 6:30 a.m. We've looked at frequency of the shots, both for the single shot and the multiple-shot scare devices.

We've looked at a range of those things. We've looked at identification of who owns these propane cannons. We've asked the industry to develop a registry so we know exactly who owns the cannons and where they are so that we have a local contact. Where a device is running after hours, for example, we can identify it very quickly, get someone out there, and get it shut down. We've had situations where they've run all night, and that is simply not acceptable.

We think that a combination of going to a regulation as opposed to a guideline, and working with local governments to enforce that effectively, will certainly help us deal with some of the issues. We've had particular problems where we've had absentee owners and there's no one around. The device is out in the middle of a field somewhere and no one may be able to get at it, or they would have to trespass on a property to shut it off. We're working with the industry and local governments.

I want to encourage the member to encourage his local government to work with us to get this in place. It's certainly my hope that we can get the regulatory regime that we're proposing in place in these municipalities — whether it's Abbotsford, Surrey or Delta — where we have quite a lot of our berry crops. We'd like to have that in place before the season starts, which isn't too far away. We're in discussions with these local governments. We've asked staff to get working with them.

We will implement this. We've made some other changes that we're working on. We will continue to monitor and try to find better solutions over time that will work for the farmer. Certainly farmers are in a very competitive world. There are many different circumstances on different farms. There are different sizes of farms, different types of picking operations, and we're trying to provide enough flexibility that they can stay economical, stay competitive and at the same time be sensitive to the concerns of their neighbours.

We will continue to work on this issue with the member and local governments to try to arrive at a better place than we have been in the past.

R. Masi: I want to thank the minister for his comprehensive and very promising answer. Just one related question and that's in the area of technology. I read in an article that the member for Surrey-Newton had made a technological advance in terms of cannon sound. I wondered if there was anything further on that at all. That will be my final question on this.

Hon. J. van Dongen: I'm aware of the article. I had read the article myself. Maybe the member for Surrey-Newton has some proposed new technology. He has not chosen, at this time, to share that with our staff. We're certainly open to that.

We have our staff looking very actively at the whole range of possible new technologies and new solutions. Through the agriculture environment partnership initiative, where we have a wildlife committee, we're looking — again, in a broader sense but including the berry-crop issue and the bird issue — very diligently for options.

If the member for Surrey-Newton would like to come forward and work with our staff or have our staff work with him to review the technology and see if it does the things that he may think it does, then certainly, we are very, very interested in that. We're interested in any ideas that provide options that will be less intrusive for citizens and will accomplish the goal of control of bird and wildlife damage on our berry crops. We are very interested in those ideas.

V. Roddick: Back to the "confidence" word again. I think that although there are penalties in place for escapes, people feel at the present time that no one is being penalized for escapes and that escapes are being used as a way of disposing of diseased fish or problems that occur. What, in the new set of regulations, can we look forward to that sort of makes things a bit stronger and gives people the confidence that we're going to be dealing with the situation correctly?

Hon. J. van Dongen: Certainly, the issue of escapes is one that has received a lot of attention from the industry and the government in recent years. The escape regulations that were put in place by my predecessor in October of 2000 I think certainly went some way to enforcing and reinforcing for the industry the government's commitment to reducing escapes.

Again, it's important to go back and look, first of all, at the salmon aquaculture review and other studies which confirm that escaped Atlantics are a low risk to the wild stock. There's a low risk for colonization by Atlantic salmon, and there is a zero risk for hybridization by Atlantic salmon and Pacific salmon. I think that's the first thing that needs to be understood.

Having said that, there is a clear recommendation in the salmon aquaculture review, which has been reflected in the regulations, and we have had in British Columbia for the last 11 years an agency that is responsible for monitoring escaped Atlantic salmon. This agency is called Atlantic Salmon Watch. It's run out of Nanaimo. It's a joint effort. It's run out of the Nanaimo Pacific Biological Station. It's a joint effort of the Department of Fisheries and Oceans and the provincial government.

If you go to our ministry's website, you will see recorded there the record of escapes for the last ten years. It shows a gradual downward trend in escapes, despite some much more stringent reporting requirements. All escapes of any kind have to be reported by the farm to our ministry and to DFO. That includes everything, any kind of an escape.

There have been allegations, for example, that farmers intentionally, at the time of net changes, allow small fish or undersized fish to escape. I don't believe those allegations are correct at all. Those are allegations that are not proven and not correct. If a farm was doing that, they're under obligation of law to report that as an escape, and it will be investigated.

Since October of 2000 we have investigated all of the escapes that have been reported. There have been charges laid in three cases, and there have been violation tickets issued in four cases. There are numerous investigations currently underway, some of which will probably result in charges being laid. We've got much more stringent reporting requirements. Again, I submit that there are allegations made that have not been proven, that are not valid, that are not provable. They're simply interpretations of a comment that was made at one particular meeting and was never substantiated by anybody. I think it's very, very important that on issues like this where, certainly, there are strong feelings on both sides, we try and really get the best possible information. I know that my regulatory staff who I have met with personally are diligent and committed to professionally investigating every escape and ensuring that the appropriate charges, if necessary, are forwarded to Crown counsel.

From one successful prosecution last fall we know that we need to review the penalty. The comment by the judge was that he thought the maximum penalty of $2,000 was insufficient. We are working on that. It does require a change in the act, and we have to work with the Attorney General's ministry to implement that kind of a change. We have staff in the two ministries working on that issue to ensure that the judge's comments are reflected and that we have an appropriate penalty — certainly, to underscore our commitment to ensure that the industry is regulated and that escapes are absolutely minimized to the lowest possible level.

V. Roddick: Thank you, minister. I think that, again, the confidence, if we can impart that to the people concerned…. It is very heated. If we can assure them that we are following the rules and regulations and making sure it's done properly, just like it's done properly on the land, then I think you will go a long way to getting people to recognize that this is a viable way of farming.

The Chair: Well, you could certainly go for another five minutes, and then we'll adjourn.

Starting on April 30, 2002, the province will begin accepting applications for non-salmon, finfish aquaculture sites. The concern locally is: why would applications for non-salmon be given out when we still haven't proven that salmon farms work, either environmentally or economically? Could the minister help us with that one?

Hon. J. van Dongen: In response to the member's question, it's fundamental that we believe that we can expand aquaculture and do it in an environmentally responsible way. The salmon aquaculture review was the study done that looked at the social, economic and environmental impacts of aquaculture. It was a very comprehensive study. It was done at a cost of at least $1 million to the provincial government. It did conclude, conclusively, that salmon aquaculture could be practised in an environmentally and economically viable way.

That's the first part of the response to the member. The second part is that in looking at species other than salmon, we see opportunities for the B.C. industry to diversify. We're looking at species such as sablefish and halibut, where we see opportunities on the world market. The industry sees these opportunities. Certainly, in the initial piece, the opportunities would be implemented on a smaller scale. If we don't get into those markets, if we don't take advantage of those options, then other people will. We feel that sufficient groundwork has been done and that the time has come to move forward on some of those species.

Hon. J. van Dongen: I move that we rise, report progress and ask leave to sit again.